IMF Working Papers

The Impact of Longevity Improvements on U.S. Corporate Defined Benefit Pension Plans

By John Kiff, Michael Kisser, Mauricio Soto, S. E Oppers

June 1, 2012

Download PDF

Preview Citation

Format: Chicago

John Kiff, Michael Kisser, Mauricio Soto, and S. E Oppers The Impact of Longevity Improvements on U.S. Corporate Defined Benefit Pension Plans, (USA: International Monetary Fund, 2012) accessed November 8, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper provides the first empirical assessment of the impact of life expectancy assumptions on the liabilities of private U.S. defined benefit (DB) pension plans. Using detailed actuarial and financial information provided by the U.S. Department of Labor, we construct a longevity variable for each pension plan and then measure the impact of varying life expectancy assumptions across plans and over time on pension plan liabilities. The results indicate that each additional year of life expectancy increases pension liabilities by about 3 to 4 percent. This effect is not only statistically highly significant but also economically: each year of additional life expectancy would increase private U.S. DB pension plan liabilities by as much as $84 billion.

Subject: Aging, Expenditure, Financial institutions, Health, Insurance, Labor, Pension spending, Pensions, Population and demographics

Keywords: Aging, Benefit pension plans, DB pension plan provider, Freedom pension plan sponsor, Global, Group Annuity mortality table, Individual Annuity mortality table, Insurance, Life expectancy, Longevity Risk, Mortality, Mortality rate, Mortality table, Pension liability, Pension Plans, Pension spending, Pensions, WP

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2012/170

  • Stock No:

    WPIEA2012170

  • ISBN:

    9781475505184

  • ISSN:

    1018-5941

You May Also Be Interested In...

Republic of Tajikistan: Technical Assistance Report-Public Investment Management Assessment with the Climate Module

November 8, 2024

Colombia: Technical Assistance Report-Report on the Mineral Asset Accounts and Carbon Footprints Mission (May 20–24, 2024)

November 8, 2024

Implementing Board-Endorsed Recommendations From The 2024 External Evaluation Of The Fund’s Independent Evaluation Office (IEO)

November 7, 2024

The Federal Democratic Republic of Ethiopia: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

November 4, 2024