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WINDSOR, Conn., Nov. 30, 2022 —Total U.S. single premium buy-out sales were $26.1 billion in the third quarter, a 66% increase from the prior year. For the second consecutive quarter, buy-out sales hit a new record high, according to LIMRA’s U.S. Group Annuity Risk Transfer Sales Survey.  

Year-to-date (YTD), buy-out sales totaled $41 billion, 89% higher than the same period in 2021. These results exceed the previous annual record of $36 billion set in 2012. At this pace, LIMRA projects 2022 buy-out sales will surpass $50 billion.

“While several jumbo deals drove record sales, there were also a record number of contracts sold in the third quarter, signaling widespread industry growth,” said Mark Paracer, assistant research director, LIMRA annuity research. “Greater plan sponsor awareness and desire to de-risk their pension liabilities, rising interest rates and escalating costs to maintain plans are likely driving market expansion in the U.S. We expect these factors to continue to propel the U.S. market into 2023.”

In the first three quarters of 2022, buy-out and buy-in sales collectively were $43.8 billion, which is 73% higher than the same period in 2021, and sets a new record for cumulative sales.

Overall, there were 145 buy-out contracts — covering 342,870 participants — sold in third quarter, up 23% from third quarter 2021. YTD, a total of 366 buy-out and buy-in contracts were completed, 46% higher than prior year results.

There were no buy-in contracts completed in the third quarter. Through Sept. 30, 2022, there were four buy-in contracts sold for $2.7 billion.

Single premium buy-out assets reached $230.3 billion in the third quarter, up 27% from prior year. Single premium buy-in assets were $6.65 billion, 1% higher than third quarter 2021. Combined, single premium assets were $236.9 billion in the third quarter, a 26% increase from third quarter 2021 results. 

A group annuity risk transfer product, such as a pension buy-out product, allows an employer to transfer all or a portion of its pension liability to an insurer. In doing so, an employer can remove the liability from its balance sheet and reduce the volatility of the funded status.

This survey represents 100% of the U.S. pension risk transfer market. Breakouts of pension buy-out sales by quarter and pension buy-in sales by quarter since 2016 are available in the LIMRA Fact Tank.

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