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Rising Funded Levels, PBGC Premiums Spur Pension Buyout Record

March 11, 2020

The US single-premium pension buyout market set a record with 501 contracts sold in 2019, according to the LIMRA Secure Retirement Institute, and sales are expected to increase again this year as the markets become increasingly volatile as a result of the coronavirus.

Some of the bigger buyout contracts in recent months include a $1.9 billion pension buyout contract purchased by defense and aerospace company Lockheed Martin from MetLife, and a $1 billion pension buyout contract purchased from Athene by manufacturing company Armstrong World Industries.  

During the fourth quarter of 2019, buyout sales rose 6% compared with the fourth quarter of 2018 to $11.3 billion, marking the 20th straight quarter of sales exceeding $1 billion, and the highest quarter recorded since the fourth quarter of 2012. Total assets of buyout products increased to $153 billion, a 13% rise from the same quarter the previous year.

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