Q&A: Leader of Nationwide Pension Risk Transfer explains sales slowdown, increased buy-in activity

Cole: Although 2025 PRT sales fell 6% year-over-year to $49 billion, it was still the industry’s third-strongest year on record, behind 2022 and 2024. The market faced a difficult mix of volatility, escalating trade wars, recession concerns and ongoing litigation in 2025, and those pressures have carried into 2026. As a result, some plan sponsors, especially in the jumbo market, are delaying de-risking decisions, which have reduced overall premium volume.

At the same time, buy-in activity has surged as a result of elevated market and balance-sheet volatility – another trend we anticipate continuing in 2026. Buy-ins accounted for nearly 36% of total premium in 2025, although they typically only make up around 9% of transactions.

In a buy-in, plan sponsors purchase an annuity contract that is held by the pension plan as an asset while liabilities remain on the plan sponsor’s balance sheet. For sponsors with well-matched assets and liabilities, buy-ins can help lock in current pricing and take advantage of strong pension funded status. With economic uncertainty likely to continue, plan sponsors may look to secure rates while conditions remain favorable, making buy-ins an attractive option.

Cole: We expect 2026 to remain a slower year for overall PRT sales, but activity should increase in the second half as companies finalize balance-sheet decisions. That said, it likely will not be enough to produce another record year.

Jumbo and mega deals are no longer driving growth the way they once did. In 2025, jumbo deals represented 36% of total sales, while deals under $50 million accounted for 77% of total contracts issued. However, we do anticipate the surge in buy-in transactions to continue, which should help support market activity.

In the meantime, advisors can help plan sponsors who may not be ready to transition today but hope to do so in the future prepare by focusing on data readiness. That means reviewing benefit amounts, confirming primary and contingent annuitants and verifying key participant information. Sponsors should also digitize records where possible to make future transactions more efficient. The better the data, the smoother the de-risking process.

Cole: The funded status of the largest corporate defined benefit (DB) plans has continued to improve, another reason buy-ins have become more attractive. Aon estimated the aggregate funded ratio for S&P 500 defined benefit plans increased from 100.4% to 103.3% during 2025, while Milliman’s 2026 Corporate Pension Funding Study found the funding ratio of the 100 largest U.S. corporate pension plans rose to 103.8% in 2025, up from 101.1% in 2024. Milliman also reported that U.S. corporate pension plans recorded pension income instead of expense for the first time since before the dot-com bubble.

While no one can truly predict exactly when volatility will begin to pressure pension funding, elections have historically contributed to market swings. With the mid-term elections approaching, plan sponsors considering a PRT may want to move sooner while conditions remain favorable.

Additionally, rate cuts can create challenges for PRTs by increasing pension fund obligations and weakening funded status. Although Nationwide’s Office of Economics expects the Fed to hold interest rates steady this year, advisors should talk with plan sponsors now about de-risking strategies that can help preserve today’s positive funded positions.

Cole: At Nationwide, one way we’re simplifying the PRT process is by learning how customers prefer to receive information. We’ve found that plan sponsors, advisers and participants want materials that are clear, visual and easy to digest. Based on that feedback, we updated our welcome kits to help participants find what they need more quickly, making the transition easier and reinforcing that Nationwide supports them. It’s not just what you share, but how you share it when it comes to making a PRT transaction simple.