Pension Buyout Costs Down in July, Says Report

Estimated retiree buyout costs fell in July, marking a reversal of the results in the previous month, says a recent report.

 

Both the average accounting discount rates and the annuity purchase rates decreased in July, says Milliman, fueling a drop in the lower estimated retiree buyout cost. The average accounting discount rates fell by 37 basis points (bps) and the annuity purchase rates fell by 22 bps.

The July results may have been a reversal of June, they mark the resumption of a longer-term trend: estimated retiree buyout costs fell in May and April too, according to Milliman.

 

 

 

Month	Rate	Previous Month	Change from Previous Month
April	105.5%	105.7%	—2 percentage points
May	103.9%	105.5%	—1.6 percentage points
June	104.6%	105.5%	+0.7 percentage points
July	102.8%	104.2%	—1.4 percentage points