Monitoring pricing trends of bulk pension annuity transactions 

We monitor general pricing trends in bulk pension annuity transactions to help your organization understand how to potentially reduce pension risk across multiple countries.

As defined benefit pension plans mature, many employers look to the insurance market to potentially secure their members’ retirement incomes in perpetuity.

If positioning your plan for an insurance transaction, it is important to understand how pricing works. The cost of insuring a defined benefit pension fund is subject to movements in global financial markets and the individual requirements for the insurer that is taking on the liabilities.

In addition, country-specific pricing often trends in different directions due to domestic influences, potentially leading to windows of opportunity in one country relative to another.

We use up-to-date pricing information from each country to estimate the cost of insuring a sample plan’s current retirees as a percentage of the equivalent estimated accounting liability.

Global Pension Buyout Index

Pension risk transfer transactions increasingly involve an international element. For example, a sponsoring employer might be seeking to reduce pension risk in subsidiaries based in different countries. Our multinational buyout index, which is updated monthly, allows you to monitor the general trend in the pricing of pension bulk annuity transactions in the US, UK, Ireland, Canada, and Germany. This chart is updated on a monthly basis.
This chart is unable to display due to Privacy Settings.
The chart could not be loaded because the Privacy Settings are disabled. Under the "Manage Cookies" option in the footer, accept the “Functional cookies” and refresh the page to allow the chart to display.
The chart shows estimated annuity prices from insurers as a percentage of accounting liability in each of the five countries. For example, where a line is at the 113% level, this means that Mercer expects the average price of a pension annuity transaction for current retirees to be broadly 13% higher than the equivalent accounting liabilities.

MercerInsight® Community

MercerInsight Community curates the latest strategic research from Mercer and hundreds of third-party publishers and asset managers. While some articles are featured here, most are reserved for members. Membership is complimentary and it’s quick and easy to join.
Join the community

Contact us to speak to a pension specialist

We can help you assess your requirements and design and execute an efficient retirement program.

See our important notices

1. Data to March 31, 2024

The information contained on this page and in the report is not based on information specific to your circumstances and approximations have been used. Past experience is no guarantee of future pricing and experience may vary for your plan.