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August 26, 2015 at 08:07 AM
LIMRA reported Tuesday that sales of group pension buyouts reached $3.8 billion in the second quarter of 2015, up more than 700% over the same period a year ago.
That’s a record for second-quarter sales since the early 1990s, according to LIMRA Secure Retirement Institute.
LIMRA noted that most pension buyouts occur in the fourth quarter. However, “We’ve seen a big increase in small and medium-sized companies that are looking to convert their pensions,” Michael Ericson, research analyst for the institute, said in a statement. “As a result, there is much more activity throughout the year, not just the fourth quarter.”
LIMRA attributed at least part of that 700% increase to Kimberly-Clark’s annuity conversion, which was effective June 1. The health and hygiene goods provider transferred pension obligations for about 21,000 retirees to Prudential and MassMutual, and expects to contribute between $400 million and $475 million to cover the contracts.
