Products & Services June 4, 2025

Pension Risk Transfer Cost Drops in April

Average costs of a competitively bid pension risk transfer declined to 101.1% of a plan’s accounting liabilities in April from 102.5% in March, according to Milliman.

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Offloading retiree pension risk to an insurance company became less expensive for plan sponsors in April, according to consulting and actuary firm Milliman, which tracks the cost of de-risking pension funds with its Milliman Pension Buyout Index.

The firm estimated that in a competitive bidding process, average costs of a competitively bid pension risk transfer declined to 101.1% of a plan’s accounting liabilities in April from 102.5% in March. At the same time, average annuity purchase costs among all insurers in Milliman’s index decreased to 104.1% from 104.7%. That means the competitive bidding process saved plan sponsors an estimated three percentage points, as of the end of April.

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“April spelled good news for plan sponsors looking to de-risk, as the competitive buyout cost reached a 3% differential for the first time in nearly a year—highlighting the importance of managing a PRT project to maximize insurer interest,” said Jake Pringle, a principal in Milliman.

However, the average PRT costs in April, at 104.1%, were still 240 basis points higher than two months earlier, when the costs were 101.7% of a plan’s liabilities. Additionally, PRT volume is down this year due to both market volatility and mixed court rulings on the transactions’ compliance with fiduciary duties under the Employee Retirement Income Security Act.

Milliman’s index is based on the difference between the discount rates insurers report to price group annuities and the accounting discount rate used by plan sponsors. The discount rate in April rose by three basis points, while competitive annuity purchase rates increased by 20 basis points, according to Milliman. The firm attributed the decline in de-risking costs to the 17-basis-point difference.

To gauge the estimated costs of de-risking a pension, the MPBI uses the FTSE Above Median AA Curve as its discount rate and annuity purchase composite interest rates from nine insurance companies.

Data & Research June 3, 2025

Survey Explores Unrealized Tax Credits

A report from the New Practice Labs suggests how more low-income households can realize available tax credits.

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Among low-income households earning less than $26,000 that had not filed taxes in the past three years, 33% reported they did not file because they believed their income was too low. Yet within this group, 20% had earned income from work (including jobs with one or more employers, gig or freelance work, or self-employment), and 37% had at least one child in their household—factors that likely would have made many of them eligible for tax credits had they filed, according to a new report from the New Practice Lab.

The report, “Designed for Filing, Not for Families: Reimagining Tax Credit Delivery,” shares the results of a first-of-its-kind national survey to understand why so many households struggle to claim tax credits and receive the support available to them. The New Practice Lab is part of New America (formerly the New America Foundation), a Washington, D.C. organization that works to improve family economic security and well-being through the way social policy is designed and delivered.

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To gather insights, the researchers conducted a nationwide survey of 5,012 respondents—64% of whom had not filed taxes in the past three years, and 88% of whom had annual household incomes under $65,000. They also carried out a qualitative study with 25 low-income residents from Illinois, all of whom had applied for or received state benefits in the past year.

Trusted Messengers

According to the report, millions of low-income households—many of whom are not required to file taxes due to their income level—miss out on valuable tax credits each year because they struggle to access them through the tax system or do not realize they qualify. Unlike other public benefits, tax credits are only available to those who file a tax return, making the path to receiving them feel more like a compliance exercise than a support system.

The report underscored the critical role of trusted messengers in helping people navigate tax credits and government benefits. Survey respondents reported turning to at least three information sources, on average, with friends, family or neighbors (49%) and online searches (48%) the most used.

Other popular sources included the IRS website (42%), in-person tax preparers (38%) and online tax software (25%). Personal relationships were highly valued: Many respondents said they trust informal advisers like family members or friends due to shared experience and accessibility.

Even when using official or professional services, trust was often rooted in personal familiarity or reputations. While only 12% cited mail or flyers from the government as a source, nearly 70% of those who did claimed tax credits.

Preferences for receiving information varied: 57% preferred email, 47% mail (especially those older than 44), 35% text messages (more common among younger users) and 24% phone calls. Additionally, libraries, community centers and schools were mentioned by 14% as trusted sources.

Overall, the findings highlighted that people rely on layered, personal and accessible sources to make decisions about tax filing and benefits.

Collaboration is Key

Devyani Singh, the author of the report, is the data and strategic impact lead for the New Practice Lab at New America. She surmised that increasing tax credit uptake requires a multifaceted approach—there is no single solution.

People often do not file taxes due to legal exemptions, fear, confusion, cost or lack of awareness about available credits. Effective strategies, therefore, must reflect real-life circumstances: personalized, timely outreach through trusted messengers; simplified, connected systems; and supportive policies. A one-size-fits-all model will not make a significant difference.

State and local governments are beginning to innovate, and according to the New Practice Lab, it is partnering with them to pilot new strategies, enhance data sharing and create tools that make it easier for families to access the support to which they are entitled.

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