Pension Annuitization Attractiveness Rose in May

The Dietrich Pension Risk Transfer Index increased considerably from May’s value of 85.81 to settle at 88.92 as of June 1.

The 3.11 point gain was driven by increasing interest rates and pension funding levels. The index’s current annuity discount rate proxy of 2.69% raised 30 basis points over May.  

“As anticipated last month, a favorable window of opportunity has opened. Summertime typically brings a steady (or increasing) rate environment and 2013 is no exception thus far,” said Geoff Dietrich, vice president of Dietrich & Associates.“Plan sponsors who are in position to transact are taking advantage of decent price reductions; three to five percent in most cases.The Index has been telling sponsors to monitor PRT costs and many are now entering the execution phase.”  

The Dietrich Pension Risk Transfer Index tracks the relative attractiveness of annuitizing pension liabilities. It can be found at