U.S. pension risk transfer transactions totaled $45 billion and set a new record for number of transactions for 2023, according to a new report from Aon.

There were a total of 773 transactions, which include pension buyouts as a result of retiree liftouts and terminations, along with a small number of buy-ins in which liabilities are insured but remain with a plan sponsor, according to the report.

Of that total, there were 453 terminations, 310 liftouts and 10 buy-in transactions, accounting for $12.4 billion, $28.7 billion and $3.9 billion in volume, respectively, during 2023.

In 2022, there were a total 568 transactions throughout the U.S. PRT landscape, and a new record of $51.8 billion was set that year. Nearly a third of that volume came as a result of Armonk, N.Y.-based International Business Machines Corp.’s purchase of group annuity contracts that September from Prudential Insurance Co. of America and Metropolitan Life Insurance Co. to transfer a total of $16 billion in U.S. pension plan liabilities. It was the second-largest pension buyout transaction in U.S. history.

The third-largest buyout in history took place in 2023 when in May, AT&T Inc., Dallas, purchased group annuity contracts from two Athene Holding subsidiaries to transfer $8.1 billion in U.S. pension plan liabilities.

While total volume has been skewed in recent years due to the mega-jumbo buyout transaction, Aon’s report says the number of transactions in total have been increasing due to improved funding ratios, along with rising interest rates.

The vast majority of transactions are for smaller plans. In 2023, 696 transactions with volumes of under $100 million each totaling $9.9 billion were completed, while 77 transactions of over $100 million each totaling $35.1 billion were completed.

In a table included with the report, Aon shows how rising interest rates cause liabilities and the premium paid to insurers to fall. In 2021, a plan with $100 million in liabilities using the average 10-year Treasury rate and a liability with a 10-year duration

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