The mortality improvement scale is expected to be lower in 2018, which could also mean lower pension plan obligations, according to a projection released Tuesday by the Society of Actuaries.
Compared to the previous mortality improvement scale, MP-2017, preliminary estimates for the MP-2018 improvement scale could reduce a plan's pension obligations by 0.2% to 0.4% for women and 0.3% to 0.6% for men, calculated with a 4% discount rate.
The slight decline in life expectancy is linked to higher mortality rates for three of the leading 10 causes of death in the U.S., as reported by the Centers for Disease Control and Prevention: unintentional injuries, which increased 9.7%; Alzheimer's disease, which increased 3.1%; and suicide, which increased 1.5%.
The new life expectancy under MP-2018 is 85.6 years for a 65-year-old male pension plan participant, the same as the 2017 scale; and 87.6 years for a 65-year-old female participant, also the same as the 2017 scale.
The SOA updates its mortality improvement scale annually. The MP-2018 update includes Social Security Administration mortality rates for 2014 and 2015, and preliminary 2016 mortality rates developed by the SOA based on data obtained from the SSA, CDC, Centers for Medicare & Medicaid Services, and the U.S. Census Bureau.
U.S. mortality improvement rates started to dip in 2010, and continued through 2018, said R. Dale Hall, SOA managing director of research, but SOA officials are also continuing to see varied mortality improvement across age groups. Mr. Hall said in a statement that it is "imperative" that industry professionals perform their own calculations with their own pension plan demographics to see how MP-2018 impacts their plans.