"For the third year in a row, first quarter sales exceeded
Total assets of buy-out products were over
"For the past 20 years, the number of
LIMRA SRI notes the recently passed Tax Cuts and Jobs Act of 2017 may encourage more plan sponsors to purchase group annuity contracts. The tax measure cuts the corporate tax rate from 35 percent to 21 percent, effective in tax year 2018. The new law may incent some corporations to make tax-deductible contributions as late as mid-October into their defined contribution (DB) plans for the 2017 tax year, while the 35 percent tax rate is still in effect. In addition, the new tax law enables multinational companies to repatriate profits that have not been taxed in the
"We expect some companies will take advantage of these measures to improve the funding status of their DB plans, putting them into contention for PRT activity," said Noble.
LIMRA SRI projects the pension risk market to exceed
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.
Fifteen companies, representing 100 percent of the U.S. market, participated in this survey. A breakout of pension buy-out sales by quarter since 2012 is available in the LIMRA Data Bank.
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