In the first half of 2025, the volume of pension risk transfer transactions in Canada fell 60% from the first half of 2024, Canadian defined benefit solutions provider Sun Life estimated.
The firm reported C$1.4 billion ($1.02 billion) in transaction volume during the first six months of the year, far less than the C$3.4 billion in volume that occurred in the first half of 2024, according to LIMRA data.
In all of 2024, PRT volume in Canada stood at C$11 billion, according to Sun Life—quadrupling from C$2.6 billion in 2015.
According to Mercer, the PRT market saw $51.8 billion in transaction volume globally in 2024.
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“The first six months of 2025 have been a roller coaster of tariff uncertainty, geopolitical conflict and market volatility,” Sun Life stated in the report. “It’s no wonder that pension risk transfer took a backseat as plan sponsors focused on their core businesses.”
The firm noted that due to a slowdown in deal volume, insurers are likely to provide plan sponsors with attractive terms and pricing for annuity sales.
The yield on non-indexed annuities stood at 4.59%, as of March 31, greater than that of a duration-equivalent passive corporate bond portfolio, the yield for which was 4.41%, according to Sun Life.
“Plan sponsors are getting longevity and investment risk transfer for free,” Sun Life stated, as the yield on non-indexed annuities surpassed that of a bond portfolio before adjusting for risk and expenses.
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Tags: Canada, Pension Risk Transfer, PRT, Sun Life Financial
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