Men and women are living longer, and that’s a big problem for the corporate pension funds that support them.
The average 65-year-old man or woman can now expect to live about two years longer than expected in 2000, according to a new estimate by the nonprofit Society of Actuaries. A U.S. woman can expect to live to almost 89, and a U.S. man to about 87, reported The Wall Street Journal.
That’s two more years of pension funds, and represents about a 7 percent liability for most corporate plans, reported the WSJ. The Internal Revenue Service calculates the minimum funding requirements for corporate pensions and will take the new estimates into account in 2016.
Many of those pension funds are already struggling.
The combined deficits of the 100 largest corporate pension plans rose to $281 billion in August, reported the WSJ, up from $193.2 billion at the end of 2013 — in part because of a relatively weak stock market.
“Plan costs could rise simply because people are living longer,” Dale Hall, managing director of research for the Society of Actuaries, told the WSJ.