Q&A: Nationwide Pension Risk Transfer leader shares outlook for the second half of 2026

Cole: The market entered 2026 facing many of the same challenges that emerged in 2025, including market volatility, trade tensions, recession concerns and ongoing litigation. As a result, some plan sponsors have delayed de-risking decisions, leading to lower premium volume across the industry.

At the same time, we have seen a notable increase in buy-in activity. In a buy-in transaction, plan sponsors purchase an annuity contract that is held by the pension plan as an asset while liabilities stay on the plan sponsor’s balance sheet. These transactions can help sponsors lock in current pricing and protect funded status during periods of uncertainty.

During the first half of 2026, buy-ins posted sales of $993 million, an increase of 145% compared to the same period last year. With market uncertainty likely to continue, plan sponsors are viewing buy-ins as an effective way to secure rates while maintaining flexibility.

Cole: Several factors will continue shaping the market:

• Insurer capacity: The number of insurers offering PRT solutions has more than doubled over the past decade, creating a more competitive marketplace and providing plan sponsors with greater choice. More bidders can improve pricing opportunities, but they can also increase the complexity of evaluating carriers, contracts and fiduciary considerations.

• Litigation: Several cases involving PRT providers remain unresolved. Some plan sponsors may be delaying derisking until decisions are handed down. Nationwide believes in the continued strength and security of the PRT market under the guidance of the Department of Labor.

• Interest rates: Nationwide’s Office of Economics now expects the Fed to raise rates twice this year, for a total of 50 basis points by year-end. However, it remains unclear whether these increases will rein in the key drivers of inflation. Continued uncertainty around future rate moves could influence the timing and size of transactions brought to market.

• Data quality: Efficient transaction processes have become increasingly important for both plan sponsors and insurers. Accurate participant data allows insurers to provide more precise pricing and can help reduce delays throughout the transaction process. Plan sponsors that prioritize data quality today can better position themselves for future de-risking opportunities.

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.

Additionally, the funded status of the largest corporate defined benefit (DB) plans has continued to improve, another reason buy-ins have become more attractive. Milliman Inc.’s Pension Funding Index reported that the funded status of the 100 largest U.S. corporate pension plans rose to 112.1% in July, its highest level in 25 years. Well-funded plans have greater flexibility to evaluate de-risking options.

Cole: Don’t let the slower sales we’ve seen recently frustrate you. Although we have seen a year-over-year drop in premiums, the market remains active. Insurers are continuing to offer competitive solutions to sponsors looking to derisk.

Help your clients navigate uncertainty and focus on long-term objectives. If a transaction aligns with a sponsor’s financial goals and is affordable, temporary market volatility or lingering litigation shouldn’t hold them back from doing what is in their best interest.

This is also an ideal time to help clients prepare for future transactions. Review participant records, verify benefit information and ensure plan data is accurate and accessible. Strong data quality not only improves the transaction experience but can also lead to more efficient pricing and execution when plan sponsors are ready to move forward.