SOA Study Says Social Security Financing Would Be Relatively Unaffected By Largest Expected Mortality Improvements, But Uncertainty Persists

February 17, 1998

SCHAUMBURG, Ill. -- Social security financing in the United States and Canada is relatively immune from even the largest increase in human life span predicted by experts, a recent study concluded. However, while experts believe life span will continue to lengthen and there will be larger populations of the elderly, there is much discrepancy about the predicted rate of mortality improvement. This wide discrepancy creates an uncertainty that can and should be accounted for in mortality projections on which social security financing is based, study organizers said.

"Developments in genetic technology and other areas could ease the impact of many diseases and extend human life," said Anna Rappaport, 1997-98 president of the Society of Actuaries, which conducted the study. "In addition, we know from our research that more attention must be directed to the support of larger populations of the elderly."

Results of the project were announced at the Society of Actuaries' (SOA) session, 8-11 a.m. Feb. 17, during the 1998 Annual Meeting of the American Association for the Advancement of Science, Feb. 12-17, Philadelphia. The session, entitled "Social Security in NAFTA Countries: What if People Stop Dying?", presented the results and an overview of the SOA project "Impact of Mortality Improvement on Social Security: Canada, Mexico and the United States." The NAFTA countries' social security administrations cosponsored the project.

Phase 1 of the three-phase project was a literature review of existing knowledge of mortality forecasting. Phase 2 was the convening of an invitation-only seminar of experts and a survey of those attending. The survey included questions about expected mortality improvements, and the results served as a basis for Phase 3, a test of the impact of these mortality improvement rates on social security financing by each NAFTA country's social security administration. (Mexico's projections were not completed by press time.)

The experts surveyed stated a wide range of possible ultimate average annual mortality improvement rates, from 0% to 2%. "This indicated a great degree of uncertainty on this topic," said Michael Sze, Fellow of the Society of Actuaries (F.S.A.), organizer of the project.

Canadian officials created new mortality projections based on the experts' 95th percentile of highest and lowest projections and starting from the mortality figures for 1997. The new projected financial picture of the Canada Pension Plan (CPP) was very similar to that of existing projections. Officials then looked at the impact on the CPP tax rate of four scenarios: current assumptions about the rate of mortality and the experts' median, highest and lowest suggested rates. Less than 1% difference in the tax rate was projected.

The results were:
Officials of the U.S. Social Security Administration (SSA) also presented mortality projections for four scenarios. The necessary tax rate for the next 75 years under each scenario was:
"These results support the current range of mortality assumptions used by the Social Security Administration," said Steve Goss, SSA deputy chief actuary.

"This offers strong evidence that both the U.S. and Canadian social security plans are relatively immune to mortality fluctuations," noted Sze.

However, he said, results of the Phase 2 survey of experts indicated a high degree of uncertainty about the rate of mortality improvement.

"The experts definitely agreed that mortality improvement would continue. However, there are great discrepancies among their predictions for the magnitude of improvement," Sze said. "Also, we need to consider the inflow to the population base of each NAFTA country caused by immigration and the fertility rate. All of this could add up to much larger populations of the elderly. In addition, there are speculations that recent genetic breakthroughs could lead to dramatic extentions of human life. If such speculations were to materialize, they would add to the uncertainties that seem to grow every day.

"So it is increasingly important for retirement planners to face these uncertainties. Fortunately, mathematical processes exist that actuaries can use to identify, quantify and manage risks and uncertainties."

Project sponsors, in addition to the Society and the three social security administrations, were The Actuarial Foundation, the Retirement Research Foundation, the American Society of Pension Actuaries Education and Research Foundation and the Pension Research Council.

More information on the project is available from Judy Yore at the Society offices, 847/706-3572, e-mail jyore@soa.org. Materials from the Phase 2 seminar are available in two packages -- costs are $25 and $75 -- through the Society's Books Department (phone: 847/706-3566; fax: 847/706-3599; e-mail: bhaynes@soa.org), which can provide details on the packages.

EDITOR'S NOTE: All materials are free of charge to journalists.
-end-


Society of Actuaries

Related Mortality Articles from Brightsurf:

Being in treatment with statins reduces COVID-19 mortality by 22% to 25%
A research by the Universitat Rovira i Virgili (URV) and Pere Virgili Institut (IISPV) led by LluĂ­s Masana has found that people who are being treated with statins have a 22% to 25% lower risk of dying from COVID-19.

Mortality rate higher for US rural residents
A recent study by Syracuse University sociology professor Shannon Monnat shows that mortality rates are higher for U.S. working-age residents who live in rural areas instead of metro areas, and the gap is getting wider.

COVID-19, excess all-cause mortality in US, 18 comparison countries
COVID-19 deaths and excess all-cause mortality in the U.S. are compared with 18 countries with diverse COVID-19 responses in this study.

New analysis shows hydroxychloroquine does not lower mortality in COVID-19 patients, and is associated with increased mortality when combined with the antibiotic azithromycin
A new meta-analysis of published studies into the drug hydroxychloroquine shows that it does not lower mortality in COVID-19 patients, and using it combined with the antibiotic azithromycin is associated with a 27% increased mortality.

Hydroxychloroquine reduces in-hospital COVID-19 mortality
An Italian observational study contributes to the ongoing debate regarding the use of hydroxychloroquine in the current pandemic.

What's the best way to estimate and track COVID-19 mortality?
When used correctly, the symptomatic case fatality ratio (sCFR) and the infection fatality ratio (IFR) are better measures by which to monitor COVID-19 epidemics than the commonly reported case fatality ratio (CFR), according to a new study published this week in PLOS Medicine by Anthony Hauser of the University of Bern, Switzerland, and colleagues.

COVID-19: Bacteriophage could decrease mortality
Bacteriophage can reduce bacterial growth in the lungs, limiting fluid build-up.

COPD and smoking associated with higher COVID-19 mortality
Current smokers and people with chronic obstructive pulmonary disease (COPD) have an increased risk of severe complications and higher mortality with COVID-19 infection, according to a new study published May 11, 2020 in the open-access journal PLOS ONE by Jaber Alqahtani of University College London, UK, and colleagues.

Highest mortality risks for poor and unemployed
Large dataset shows that income, work status and education have a clear influence on mortality in Germany.

Addressing causes of mortality in Zambia
Despite the fact that people in sub-Saharan Africa are now living longer than they did two decades ago, their average life expectancy remains below that of the rest of the world population.

Read More: Mortality News and Mortality Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.