The Canadian annuity purchase market recorded $700 million in transactions during the first quarter of 2025, according to a new report by Telus Health.
It noted a “notable deceleration” in the volume of transactions after what a record-breaking year, which isn’t uncommon for the first quarter of a new year. The last quarter of 2024 achieved $5.2 billion in pension transfer deals, pushing the year-end total to $11 billion.
“Plans that transacted in the first quarter benefited from increased insurer participation in their annuity quotes, resulting in competitive pricing favourable to plan sponsors,” the report said.
Read: Pension risk transfer sales increase to $5.2BN in Q4 2024: report
The expectation for less frequent jumbo quotes in 2025 means insurers are now pivoting to prioritize small- and medium-sized plan sponsors. In response, some insurers are expanding beyond their preferred segments to broaden their reach and market annuity purchase solutions more extensively, the report noted.
Risk management has an increased importance for plan sponsors given the adoption of new guidelines from the Canadian Association of Pension Supervisory Authorities, which emphasize risk exposure awareness and structured risk management.
The report noted plan sponsors that are evaluating pension risk transfer transactions can effectively prepare by reviewing plan data, running survival audits and deferred lump-sum campaigns for vested members or conducting a feasibility study.
“While most pension plans are currently enjoying a well-funded status, it is crucial that sponsors prepare for increased future volatility. This surplus position provides an ideal foundation for evaluating long-term risk management strategies.”
Read: DB pension plan sponsors facing “bottleneck” in annuities market: expert