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Authors: Michael Clark Joseph Anzalone James Walton

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Pension risk transfer (PRT) has established itself as an incredibly important tool in the pension risk management toolkit, enabling plan sponsors to effectively manage pension liabilities and reduce financial risk. Historically, PRT was almost exclusively attained through group annuity buy-outs, which remain the dominant strategy. However, in recent years, group annuity buy-ins have garnered increased attention.

In 2024, buy-in premiums represented only 7% of the total PRT market. Meanwhile, in 2025, buy-in premiums made up over 35% of the PRT market. It's important to note that premium comparisons can be skewed by a few very large transactions; while buy-in premiums were over 35% of the market in 2025, buy-in contracts (i.e., the number of buy-in transactions) made up less than 3% of the overall number of PRT contracts.*

Buy-outs continue to outpace buy-ins in total premiums and contracts, maintaining their position as the preferred strategy for many sponsors. Buy-outs offer comprehensive risk transfer and balance sheet reduction, as well as Pension Benefit Guaranty Corporation (PBGC) premium savings and administrative relief, making them the go-to option for those seeking to fully offload pension liabilities.

While buy-ins have gained traction, their trade-offs may outweigh their merits in many circumstances. This article explores the mechanics of buy-ins and buy-outs, the key differences between the two strategies, recent trends in their adoption and situations where a buy-in might be preferable.

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Sources

*"LIMRA: US Pension Risk Transfer Buy-in Sales Triple in the Third Quarter 2025," LIMRA, 11 Dec 2025.

Disclaimer

This material was created to provide information on the subjects covered, but should not be regarded as a complete analysis of these subjects. The information provided cannot take into account all the various factors that may affect your particular situation. The services of an appropriate professional should be sought regarding before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.

Investment advisory services are offered by Gallagher Fiduciary Advisors, LLC ("GFA"), an SEC registered investment advisor that provides retirement, investment advisory, discretionary and independent fiduciary services. Registration as an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of Arthur J. Gallagher & Co. or its affiliates or to independent contractors; such payments do not change our fee. Neither Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice.

Consulting and insurance brokerage services to be provided by Gallagher Benefits Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.