SCHAUMBURG, Ill., Oct. 27, 2014 /PRNewswire/ -- The Society of Actuaries (SOA) released updated mortality tables today to help retirement plan sponsors more accurately estimate the financial obligations associated with their plans. The updated tables, which show that longevity in the U.S. is increasing, establish a new benchmark for mortality rates of private pension plan participants in the U.S. and were produced as two reports that include both new mortality tables and an updated mortality improvement scale.
"The updated tables and mortality improvement scale reflect that private pension plan participants are, in fact, living longer," said Dale Hall, managing director of research for the SOA. "The purpose of the new reports is to provide reliable data that actuaries can use to assist plan sponsors and policy makers in assessing the financial implications of longer lives."
The new tables, which are an update to the RP-2000 mortality tables (published in 2000) and the mortality projection scale (published in 2012) were developed by the SOA's Retirement Plans Experience Committee (RPEC) over five years and benefited from the expertise of two independent review committees and expert peer reviewers at multiple points in the process. Both the updated mortality tables and mortality improvement scale were subjected to a four-month comment period. That input was incorporated into the final reports, then reviewed and accepted by the SOA's Board of Directors at their October 26 meeting. Included with the final reports are two comment response reports which summarize feedback received during the comment period and detail how the RPEC responded to the feedback.
The SOA's updated tables and mortality improvement scale show that people are living longer. For example, the updated reports show that among males age 65, overall longevity rose 2.0 years from age 84.6 in 2000 to age 86.6 in 2014. For women age 65, overall longevity rose 2.4 years from age 86.4 in 2000 to age 88.8 in 2014. Based on the data, the SOA estimates there could be a four to eight percent increase in private pension plan liability. This average cost impact will vary greatly according to the design and demographic profile of each plan.
"Recognizing the significance of mortality tables in measuring the benefit obligations for private pension plans, we followed a rigorous process throughout the development of these tables," said Hall. "The end result reflects the collaborative efforts of many highly qualified professionals working to deliver a sound, objective analysis."
The updated mortality tables were produced using data received from private, uninsured pension plans. They reflect approximately 10.5 million life-years and 220,000 deaths between 2004 and 2008, comparable to the data set used in 2000 to develop the SOA's previous mortality tables. The updated study includes both a mortality table (RP-2014) that details actual death rates observed by private pension plans, and an improvement scale (MP-2014).
As the largest professional association of actuaries in the U.S., the SOA's mission is to provide research that furthers actuarial science. The SOA's mortality tables and mortality improvement scale have been historically used by key policymakers, including the Treasury Department, in developing pension funding requirements.
Full versions of the 2014 Mortality Tables (RP-2014) and 2014 Mortality Improvement Scale (MP-2014) are available here.
About the Society of Actuaries
The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk.
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SOURCE Society of Actuaries (SOA)