Q1 Might Be the Most Underrated Quarter in the Annuity Market

Most sponsors think in terms of year-end, or in terms of “next year.” There’s a third option, and almost nobody puts it on the list.

Most conversations I have about timing come down to two options. A sponsor is either working toward year-end or thinking about sometime next year. Both are reasonable. That is how corporate calendars work.

There’s a third option that almost never comes up, and it’s one of the better pricing environments in the market: the first quarter.

I’m not claiming Q1 beats everything else. Every quarter has a real case, and what fits a plan depends far more on the plan than on the calendar. All I’m saying is that Q1 belongs on the list a sponsor weighs, and in my experience it usually isn’t on it.

Every quarter has its case

Year-end is the busiest window in the market, and for good reason. De-risking decisions align naturally with fiscal calendars, board approval cycles, and year-end financial reporting objectives.

There is also a concrete, quantifiable benefit. For a calendar-year plan, the PBGC flat-rate premium is generally assessed on the participant count as of the last day of the preceding plan year, so completing a placement before December 31 removes those participants from the following year’s PBGC premium bill. For example, a transaction covering roughly 1,000 lives generates roughly $111,000 in annual PBGC premium savings, alongside the administrative savings of exiting a year earlier. For sponsors positioned to close by year-end, those are real dollars and a good reason to go.

Mid-year works well too. A spring or summer execution gives you breathing room around audit season, fits board calendars that don’t line up with December, and lets you move when rates go your way. Some of our cleanest terminations have closed in Q2 and Q3.

Q1 is the one that gets skipped, and not because anyone looked at it and passed. Once year-end stops looking realistic, people start thinking in years instead of quarters. Planning slides to spring, kickoff slides to summer, and a plan that could have placed in Q1 goes to market months later instead. None of that is execution time. It is drift. A perfectly good window sat eight weeks past the point where the conversation went quiet, and nobody looked at it.

What the Q1 market looks like

PRT volume isn’t spread evenly across the year. Something like two thirds of it executes in the second half, which leaves the opening months pretty quiet on the insurer side.

F&G sits on the buying side of these transactions, and it said as much in its Summer 2026 Pension Risk Transfer Digest. The early part of the year is quieter, with more insurer bandwidth available, and coming to market earlier can mean more engagement, potentially sharper pricing, and smoother execution. That matters most, they wrote, for plans where execution is hardest: complex benefit structures, a large deferred vested population, or meaningful New York exposure.

The reason sits on the insurer’s side of the table. As Q1 opens, every carrier resets. Sales targets go back to zero, capital allocation refreshes, reinsurance capacity renews, and business development teams start with a number to hit and an empty pipeline.

That shows up three ways when you go to market.

• More insurers can quote. They have capacity and not much competing for it. Most carriers also have a deal size range they normally bid in, and they’ll stretch outside it more readily when there is less to choose from. If your plan sits at the small or large end of the market, that can be the difference between a couple of quotes and a real field. Bid dispersion on a single case runs wide, so every additional bidder is worth real basis points.

• They have more reason to win. An insurer building toward a full year target from zero competes hard for business that shows up early. A Q1 win sets up the year rather than rounding it out.

• They can actually pay attention. Fewer deals running at once means quicker answers on data questions, more patience with unusual benefit structures, and less friction between bid and close.

More bidders, more motivated, with more time for your plan. For the right plan, that can add up to the most competitive pricing you’ll see all year.

Regardless, proactive preparation is what puts you in the driver’s seat. You can’t control where pricing sits the day you arrive. You can control whether you’re ready to move when the annuity purchase market is at its strongest.

Four to five months is what makes it practical

At Quantum, our terminations typically run four to five months from engagement to placement. Run that forward. A planning conversation this month puts you in Q1. A conversation in October still puts you in Q1, without rushing anything.

So when a sponsor tells me year-end won’t work this cycle, I don’t ask when they want to revisit it. I ask what it would take to be bid ready for Q1. For most plans, the answer is less than they expect.

What being ready requires

Start with a full termination feasibility study. It answers the three questions that decide whether Q1 is realistic.

• Expected termination shortfall or surplus. Where the plan stands on a termination basis, and what contribution, if any, would close the gap. Everything else follows from this number, and it’s the one sponsors are most often surprised by.

• Data quality. Where participant records stand today, what’s missing, and how much work sits between here and a clean bid package. Data is consistently the biggest source of both delay and insurer hesitancy.

• A formalized timeline and project plan. Who does what, in what order, with real dates attached.

None of this commits you to transacting. It’s work you need whichever quarter you land on, and it keeps your options open, including moving sooner if things line up.

The bottom line

Deciding that year-end isn’t your window is a sound call. Deciding not to have the conversation until well into the following year is a different call, and it usually gets made by default rather than on purpose.

Q1 is a real window, and an uncrowded one. Preparation is what keeps it open to you.

If you’ve got a termination or lift-out on the horizon, let us walk you through what a Q1 timeline would look like for your plan.

Source: F&G, Pension Risk Transfer Digest, Summer 2026. PBGC premium figures are illustrative; actual amounts depend on participant counts, premium rates in effect, and plan year timing. Transaction timelines vary with plan complexity and data quality, and pricing outcomes depend on plan-specific factors and market conditions at the time of placement. This material is provided for general informational purposes and is not a recommendation with respect to any specific plan.