Society of Actuaries mortality data update could reduce pension liabilitiesReprints
New mortality data released by the Society of Actuaries Thursday show smaller improvements in longevity than previously reported last year that could slightly reduce liabilities for pension plan sponsors.
“While people still are seeing (mortality) improvements, the rate of improvements is a little bit less,” said Dale Hall, managing director of research at the Society of Actuaries, in an interview. Plans that adopt the most recent data could see plan liabilities drop up to 2%, depending on the demographics of individual plans.
The most recent update incorporates newly available data from the Social Security Administration for 2010 and 2011, which changes the improvement scale within the society's mortality table that was updated in October 2014. The new improvement scale will help plan actuaries measure obligations.
Mr. Hall said the Society of Actuaries plans to update mortality tables and improvement scales more frequently, and is looking at other sources of data, such as Medicare. “Our goal was to incorporate new data as it becomes available. We want to make sure that we have the most current information available to our members. We are actively looking to see what we can build into a more timely process,” he said.
Hazel Bradford writes for Pensions & Investments, a sister publication of Business Insurance.