Session from the 2012 Enrolled Actuaries Meeting
03/28/2012 - 11:15 AM – 12:45 PM
Session Category: General Sessions
Credits: EA Core 0.90 EA Noncore 0.90 CPD 1.80
Longevity risk is the risk associated with an individual or population living longer than expected. Over the last century, general population mortality has improved significantly, and this trend appears likely to continue at least over the near term. As a result, longevity risk is a growing concern for defined benefit plans and it is increasingly important to recognize, quantify and manage it. Getting both the right base line for the mortality assumption and an appropriate trend for improvements in life expectancy is key to managing this risk. And, this risk is not only a concern for sponsors of defined benefit plans, but also governments that sponsor social security programs and individual pensioners who worry that they might outlive their money.
Presenters at this session review the recent trends in longevity and the appropriateness of building mortality improvements into actuarial valuations. In addition, a member of the Society of Actuaries' Retirement Plan Experience Committee reviews the initial results of the new mortality study, and what might replace the RP-2000 mortality table. A member of the Actuarial Standards Board discusses the recent changes in standards of practice related to mortality and mortality improvement.
Finally, there is a discussion of the impact on longevity risk to individuals and resulting developments in defined contribution plans, annuity markets, and possible changes in legislation