Estimated retiree buyout costs fell in May, continuing the trend of the previous month.
Both the average accounting discount rates and the annuity purchase rates decreased, says Milliman, fueling a drop in the lower estimated retiree buyout cost. The average accounting discount rates fell by 5 basis points (bps) and the annuity purchase rates fell by 1 bp.
As a result, says the report, the average estimated retiree buyout cost as a percentage of accounting liability fell in May from 102.4% to 102.0%. The average estimated retiree buyout cost as a percentage of accounting liability also fell in April, from 102.7% to 102.4%.
The competitive pricing trend in May fell from 100.1% to 99.7%. This marks a return for competitive pricing to the rate registered in March; the rate had risen to 100.1% in April.
Estimated Retiree Buyout Costs
| Month | Rate | Rate, Previous Month | Change from Previous Month | Change from Six Months Before |
| May 2021 | 102.0% | 102.4% | —0.4 percentage points | —0.5 percentage points |
| April 2021 | 102.4% | 102.7% | —0.3 percentage points | —0.2 percentage points |
| November 2020 | 101.8% | 102.9% | —1.1 percentage points | -- |
| October 2020 | 102.9% | 102.3% | +0.6 percentage points | -- |
- Log in to post comments