Pension Risk Transfer (PRT) Digest
February 2024

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PRT Business Stats

Since F&G entered the PRT business in 2021, we have experienced significant growth. Here's a look at our sold premium, won deals and lives onboarded as of December 31, 2023.

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Interest Rate Update

Interest rates are a key driver of PRT transaction pricing. See how rates trended in Q4 2023 and what that means for PRT pricing industrywide.

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Did You Know?

What are the two main types of PRT transactions? Test and build your knowledge about the PRT market.

Check the Answer

F&G's PRT Business Stats1

Since F&G entered the PRT business in 2021, we have experienced significant growth. Here's a look at our sold premium, won deals and lives onboarded as of December 31, 2023.

Total sold premium:

Total number of won deals:

Total lives onboarded:

1  F&G internal PRT business data as of 12/31/2023

PRT Interest Rate Update1,2

Competitive pricing is a key component of product success. PRT pricing is correlated with changes in high-quality corporate bond yields (consistent with how pension plan liabilities are valued for funding, accounting, etc.) and changes daily based on yields available to the issuing PRT insurer. Rate increases and spread widening drive lower PRT cost — and vice versa.

Yields fell during this period, which translates to an approximately 6.0% higher PRT transaction price. 

chart illustrating changes in interest rates

This chart covers October-December 2023 and shows how interest rates decreased during that time period.

1 Information shown above is illustrative and not intended to represent F&G's actual PRT transaction pricing. Historical interest rates are not indicative of future rates.

2 Single effective rate based on U.S. Treasury yield curve and AA corporate bond spreads from sample PRT liability cash flows during the period of October 1, 2023 to December 31, 2023.

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Did You Know? | PRT Fast Fact

There are two main transaction types in the U.S. marketplace:

  1. Retiree lift-out transactions involve only existing in-pay, retired pensioners
  2. Plan termination transactions include additional active and terminated vested pensioners who have not yet commenced payments

Here are some key differences between these transaction types:

  Retiree Lift-Out Plan Termination
How many insurers bid?
More (5-6+)
Fewer (3-5)
Does the PRT contract provide for benefit optionality?
None: in-pay pension benefits fixed based on selected options at retirement
Some: non in-pay (deferred) active and term vested pensioners retain options prescribed by their pension plan (like early retirement or optional forms of payment)
What is the liability duration?
Shorter (6-8 years)
Longer (8-10 years)
Is there a remaining pension plan program to manage post-PRT transaction?
Yes
No
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F&G PRT Team Member Spotlight

Alex Grganto
Investment Analyst

PRT is a people-based business, and we're proud of the team we've built at F&G ... and are continuing to grow.  This quarter, meet Alex Grganto, Investment Analyst.

Describe your role in PRT:
As a part of the investments team, my role is to help create a well-balanced and high yielding investment portfolio to match our expected liabilities for each deal that we bid on. My day-to-day consists of communicating with the pricing team on what rate of return we can attain given capital guidelines, market conditions, and asset availability. In collaboration with Blackstone, my team is constantly following market trends and looking for attractive assets to add to our book.

What brought you to F&G?
The opportunity to join a company with significant growth potential and an outstanding culture made coming to F&G a no-brainer. The PRT team specifically is full of talented individuals with a wide variety of backgrounds which makes for an environment bound to generate success.

Favorite aspect of PRT?
My favorite part of this business is the fast-paced and strategic nature of the bidding process. From an investment standpoint, there are scenarios where we may want to be more aggressive or less aggressive on assets in order to win a deal or get a better price. 

How do you spend a typical Saturday?
I’m a big sports fan, so my weekends are often spent rooting for my local Chicago teams and the Iowa Hawkeyes (despite them setting the sport of football back 100 years). I enjoy spending time outside and am always up for a snowboarding trip or a weekend at the lake with friends and family.

Favorite book or podcast?
One of my favorite books is “Trading Bases” by Joe Peta, a true story that is a mix of sports, betting and stock trading. 

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More About Our Team

F&G’s PRT team is a seasoned group of professionals who specialize in business development, pricing, investments, operations, legal, finance and reinsurance.

Our team collaborates with F&G corporate staff and external PRT consultants and their clients throughout the year as we work to manage new and in-force PRT business activities.

We Would Love to Hear From You!

Learn more about PRT at F&G

This material is intended for informational purposes only and is only intended for use by institutional plan sponsors and industry professionals.

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F&G is the marketing name for Fidelity & Guaranty Life Insurance Company issuing insurance in the United States outside of New York and, in New York only, Fidelity & Guaranty Life Insurance Company of New York. Each Fidelity & Guaranty Life company is solely responsible for its contractual commitments.

Guarantees are based on the claims paying ability of the issuing insurer, Fidelity & Guaranty Life Insurance Company, Des Moines, IA.