Many Americans today are dying at younger ages, and many corporations are profiting since they will not have to pay those pension obligations. The improvements in life expectancy over the past several years have slowed, and employees who do not live as long as originally thought relieves the burden of lifelong retirement benefits and pensions.
The grim statistics show that Americans are dying younger and companies such as General Motors and Verizon were able to reduce their estimates on what they owe their retirees. According to Bloomberg, Lockheed Martin reduced its retirement estimates by a whopping $1.6 billion for 2016 and 2017. Slides in mortality rates have allowed many companies such as Lockheed Martin to reduce retirement estimates.
Some of the biggest factors that determine what companies owe their retirees include healthcare costs, salary levels and asset returns. However, analysts speculate that sliding mortality rates will have little impact on what companies actually owe their retirees. The fact that major corporations are now considering falling mortality rates as part of their retirement estimates is what troubles many analysts.
The slide in mortality among Americans also affects social security benefits, which allowed the nation’s retirement program to revise its financial outlook for the coming years. The Social Security Administration’s estimates on longevity were far shorter than the actual numbers.
An alarming fact is death rates in developed countries normally do not rise unless there is an epidemic or a war. Some analysts believe falling mortality rates in the United States should be an urgent national issue, especially when compared to other wealthy nations. However, many experts state there is no easy answer as to why mortality rates in the U.S. are sliding. The troubling question among many economists is whether this is a short-term slide or something companies should prepare for over the long term.