Longer Life Expectancies Raise the Bar on Pensions
New life-expectancy projections will accelerate de-risking strategies among plan sponsors, including lump-sum offers.
Americans are living longer. That's good news for people--but it's creating challenges in the world of traditional defined-benefit pensions.
American men are living an average of two years longer than they were in 2000 (the last time the tables were revised), and women are getting an additional 2.4 years of life, according to new mortality projections from the Society of Actuaries (SOA). The SOA is the official keeper of the mortality tables used to calculate the value of future pension obligations, and longer lives mean greater cost for plan sponsors.