For the second consecutive quarter, U.S. single-premium pension buy-out sales rose above $4.7B. It also marks the 18th consecutive quarter of sales over a billion dollars, according to the LIMRA Secure Retirement Institute quarterly U.S. Group Annuity Risk Transfer Survey.

Limra noted that second quarter buy-out sales or acquisitions were down 42%, compared with prior year results when a $60 billion contract was reported. And year-to-date, pension buy-out sales were $9.5 billion, down 2% from the first half of 2018.

But Mark Paracer, assistant research director, SRI, said second quarter 2018 sales hold the record for pension buy-out sales, and this quarter was the highest on record sincebLimra SRI has been tracking this market.

“We continue to see broad growth in the market. Our new research shows more plan sponsors are familiar with pension risk transfer options and eight in 10 are at least somewhat interested in a pension risk transfer transaction,” Paracer said.

Two thirds of the companies reported an increase in contracts sold, compared with prior year results, Limra noted. A total of 112 new buy-out contracts sold in the second quarter, bringing the year-to-date total to 190, compared with 158 contracts sold in the first half of 2018. The total assets of buy-out products increased to $140 billion, 13% higher than second quarter 2018 assets.

Paracer noted that the pension buy-in market also had a record quarter with $880 million, the highest level recorded since SRI has been tracking these sales. He said though small, the market is growing.

Limra also noted that total group annuity risk transfer sales were down 32% compared to the second quarter of 2018, but it reached $5.8 billion in the second quarter 2019. In the first half of the year, total group annuity risk transfer sales were $10.8 billion, which is 7% higher than prior year.

“Low interest rates, market volatility, increased longevity of plan participants, and rising Pension Benefit Guaranty Corp. (PBGC) premiums present major obstacles for plan sponsors who maintain defined benefit (DB) plans. A group annuity product can relieve these employers of the liability and plan management of their DB plan.”

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.