Pension Buyout Costs Down in November, Says Report

Estimated retiree buyout costs fell in November, says a recent report. This marks a reversal of October’s results, when those costs rose.
 
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 20 basis points (bps) and the annuity purchase rates fell by 9 bps.

As a result, says the report, the average estimated retiree buyout cost as a percentage of accounting liability fell in November from 102.9% to 101.8%. In addition, the competitive pricing trend fell from 100.3% to 99.4%. 
 

Estimated Retiree Buyout Costs