U.S. Pension Risk Transfer (PRT) Market - Focused Insights 2025-2030

U.S. PENSION RISK TRANSFER MARKET INSIGHTS

The U.S. pension risk transfer (PRT) market was valued at USD 49.81 billion in 2024 and is expected to reach USD 102.38 billion by 2030, growing at a 12.76% CAGR. This growth is driven by regulatory changes, favorable economic conditions, and efforts to reduce financial risk. Key factors fueling market expansion include more insurers entering the space, increased plan terminations, rising adoption of de-risking strategies, growing interest in buy-ins, and the rise of sidecar solutions. Higher pension plan funding levels—boosted by rising interest rates and strong equity markets—are also making PRT transactions more attractive. Additionally, insurers are actively promoting the benefits of pension risk transfer to expand their consumer base.

MARKET TRENDS & DRIVERS

Increasing Implementation of Risk-Mitigation Strategies

The growing adoption of de-risking strategies is a key trend in the U.S. pension risk transfer market. De-risking helps protect investments, safeguard assets, and support sustainable growth. Strategies include pension risk transfers, investment adjustments, and plan design changes. Transferring pension obligations to insurers through buy-ins or buy-outs reduces financial risk. Many plan sponsors are also outsourcing pension management to third parties for more efficient operations. Lift-outs are becoming increasingly popular for de-risking pension plans. In today’s volatile economy, regulatory changes, the need for predictability, longevity risk, and rising pension costs are driving the demand for de-risking tools.

Supportive Economic Environment

Favorable economic conditions drive the U.S. pension risk transfer (PRT) market. A growing number of insurers increase competition, influencing interest rates. Fluctuating rates make managing pension costs difficult for plan sponsors, prompting them to opt for PRT plans. Higher interest rates reduce the cost of offering guaranteed benefits, making PRT transactions more affordable. They also lower pension liabilities on company balance sheets and improve funding ratios, making PRT deals more attractive.

U.S. PENSION RISK TRANSFER MARKET HIGHLIGHTS

• By Transaction: The lift-outs segment holds the largest U.S. pension risk transfer (PRT) market share at over 63%, targeting retirees and beneficiaries already receiving benefits. Its main goal is to reduce pension plan risk and funding volatility. Unlike full-plan terminations, lift-outs involve smaller, quicker, and more efficient transactions. Their popularity is growing due to their flexibility and lower complexity. In a lift-out, only retirees are transferred to an insurer, while active employees and terminated vested members stay in the plan. Demand for lift-outs is rising as plan sponsors seek to de-risk their pension plans.
• By Plan Size: The small plan size segment is the fastest-growing in the U.S. pension risk transfer market, with a CAGR of 13.65%. Growth is driven by specialized solutions, rising awareness of de-risking, and regulatory changes. Insurers bundle multiple small plans to attract clients, while stricter regulations make PRT more appealing. Increased competition is improving access and pricing. Buy-ins are a key strategy for reducing pension risks. Demand is expected to rise, especially in southern regions with many small businesses.

REGIONAL ANALYSIS

The Southern region leads the U.S. pension risk transfer (PRT) market, holding the largest share. This region includes states like Texas, Florida, Georgia, North Carolina, Tennessee, and Virginia. Its strong base of Fortune 500 companies and tech-savvy population fuel market growth. Economic expansion has attracted corporate headquarters, increasing PRT adoption among companies with defined pension plans. The South's healthcare sector is also expanding, supported by a strong manufacturing base and numerous hospitals, with about 13% of the civilian workforce employed in healthcare.

COMPETITIVE LANDSCAPE

The U.S. pension risk transfer (PRT) market reports include exclusive data on 21 vendors. The market is highly competitive, with large, mid-sized, and small companies. Large firms dominate by offering diverse PRT transactions, but the number of insurers is growing as competition intensifies. To attract plan sponsors, insurers are offering more benefits, tailored plans, and competitive pricing. Companies are also innovating their processes and products to meet evolving client needs. Larger firms are acquiring smaller players to expand their market share, while some insurers specialize in specific PRT segments, such as transaction types and plan sizes, to capture niche opportunities.

RECENT VENDOR ACTIVITIES

• In 2024, Cuna Mutual Group Retirement rebranded to TruStage. It unifies under one brand. This includes both executive and retirement benefits. The rebrand will bring the customers to continue to navigate their required products or services. Is a company, that delivers insurance, investments, and technology solutions that are designed to help meet a diverse range of needs. It offers various pension risk transfer services in the U.S. market.