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 March 22, 2023

Current Benefit Plan and Audit Related News and Updates

Thursday, October, 26, 2017 / Published in Employee Benefit Plans, News and Press Releases

New 2017 Mortality Improvement Scales

In October 2017, the Society of Actuaries (SOA) released new 2017 mortality improvement scales. This is one of those good news/bad news situations. The good news is that for entities which must record pension obligations, these obligations are expected to be lower utilizing the new scales. The bad news for the rest of us is that mortality rates are up.

More specifically, in the Society of Actuaries, Mortality Improvement Scale MP-2017, October 2017 report, the age-adjusted mortality rates in the United States increased from 724.6 (per 100,000) in 2014 to 733.1 in 2015, an increase of 1.2%. This was the first year-over-year increase in the age-adjusted U.S. mortality rates since 2005, and only the seventh time since 1980 that those annual rates went up rather than down. As a result, the Scale MP-2017 mortality improvement rates are generally lower than the corresponding Scale MP-2016 rates. Starting with RP-2014 base mortality rates adjusted back to 2006, most 2017 pension obligations calculated using Scale MP-2017 (with a discount rate of 4.0%) are anticipated to be approximately 0.7% to 1.0% lower than those calculated using Scale MP-2016 SOA has indicated that it intends to provide future updates to the model annually. These tables are anticipated to be used for accounting purposes immediately, however, the IRS prescribes tables for funding purposes.

Tagged under: Defined Benefit Plans, Pension Plans

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Torrillo & Associates, LLC specializes in employee benefit plan audits, 401k audits, 403b audits, pension plan audits, and retirement plan audits. We are licensed in 7 states including New York, New Jersey, and Pennsylvania.  With firm mobility, we are also able to practice in an additional 27 states.

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