16, 2013 (PLANSPONSOR.com) – Even through a waning rate environment, the
relative attractiveness of annuitizing pension liabilities stayed stable.
The Dietrich Pension Risk Transfer Index took a slight dip
from April’s 86.61, settling at 85.81 as of May 1. Declining interest rates for
the third straight month drove the change, pushing down on pension funding
levels. The index’s current annuity discount rate proxy of 2.39% continues
trending downward ever so slightly, while its spread versus Treasuries is
Rate volatility has been an issue for a while, according to
Geoff Dietrich, vice president of Dietrich & Associates. He noted, however,
that annuity purchase rates have been relatively steady. “If history repeats
itself, then we expect to see a favorable window of opportunity opening up in
the coming months,” Dietrich said. “Get prepared and stay tuned. The roller
coaster ride continues.”
The Dietrich Pension Risk Transfer Index can be found here.