PRT Infographic
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39%
The 2013 State of the
Pension Risk Transfer Market
Annuity Settlement Rates
Histo
ric
al S
ale
s ($
Bil)
$2,500
$7,500
$26,000
LDI Glidepaths: increasingly used to hedge pension risk & prepare for
pension exit
Voluntary Lump Sum TV Windows: increasingly used to initiate a
pension de-risking settlement strategy
Annuity Buy-outs: over 60% of frozen pension sponsors have
transferring pension risk as their end game objective. (Source: Cutwater Asset
Management)
2.3
3.2
1.6 1.7
1.3
0.8
1.8
2.9
2.5
1.0 0.9 0.8
2.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2.01%
0.60%
2.61%
Current rate
10 Yr. US Treasury
Annuity Spread
1 Year Average: 2.79%
3 Year Average: 3.49%
Last 36 Months:
12 monthly upticks
23 monthly downticks
(Ex-GM & Verizon)
Small Contracts
75+%
of all annuity
placements
< $5 million
60+%
of total placed
premium from
< 5% of contracts
> $50 million in size
Large Contracts
Source: Dietrich & Associates
2012
Buy-out
Sales
($Mil)
3600 %
increase
vs. 2011
of pension sponsors are considering
voluntary lump sums in 2013 (source:
AonHewitt)