Americans Are Dying Younger, Saving Corporations Billions

Since 1950, death rates for Americans have improved by approximately 1% per year. 2000-2009 oversaw an acceleration of this trend with annual increases from 1.5-2%. Recently though, these gains have significantly slowed. From 2010 to 2014, death rates in American were only improving at about half a percent per year. In 2015, the first time since 1999, the US mortality rate actually increased slightly.

For most, the increasing mortality of younger Americans is bad news, but this is not necessarily the case for large companies running pension plans. The 2015 increase in the death rate has led a number of large companies to reduce the projected amount they may owe retirees. The estimated pension reduction among twelve leading companies tops a staggering $9.7 billion. This movement in the U.S. death rate is apparently significant enough for actuaries to incorporate the change into their future estimates, but the question remains as to whether the uptick is a short-term blip or a permanent shift.

See John Tozzi, Americans Are Dying Younger, Saving Corporations Billions, Financial Advisor, August 8, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.