Society of Actuaries Releases 2023 Mortality Improvement Update

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Society of Actuaries Releases 2023 Mortality Improvement Update

In October 2023, the Retirement Plans Experience Committee (RPEC) of the Society of Actuaries (SOA) issued its 2023 Mortality Improvement Update Report. Typically, the report provides an annually updated mortality improvement scale for pension plans in the United States.

In the 2023 report, the RPEC noted that the most recent data available is from the 2021 calendar year. The data was strongly affected by the COVID-19 pandemic similar to the mortality experience in 2020. As a result, the RPEC did not believe it would be appropriate to incorporate the substantially higher rates of mortality experience from 2020 and 2021, without adjustment. Therefore, without new data deemed predictive to future mortality, the RPEC has again decided not to produce a new projection scale in 2023.

However, the report includes a summary of emerging mortality trends and approaches for individual practitioners that may be inclined to incorporate their COVID-19 adjustments into the base improvement scale. It was observed that excess mortality relative to pre-pandemic trends began to significantly abate after the first quarter of 2022. In the first half of 2023, mortality rates for ages over 65 were below projections based on   pre-pandemic trends, although there was still considerable excess mortality among working-aged adults.

Currently, Piotr Krekora, Senior Consultant for GRS, serves as a member of the RPEC.

The report is available here.

SSA Announces 3.2% Cost-of-Living Adjustment for Social Security Benefits for 2024

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SSA Announces 3.2% Cost-of-Living Adjustment for Social Security Benefits for 2024

On October 12, 2023, the Social Security Administration (SSA) announced a 3.2% cost-of-living adjustment (COLA) to benefits for 2024. The 3.2% COLA will begin in January 2024 with benefits payable to more than 66 million Social Security beneficiaries.

On average, Social Security benefits will increase by more than $50 per month starting in January 2024. Social Security COLAs are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Department of Labor’s Bureau of Labor Statistics (BLS).

Further information is available here. 

Commonwealth Fund Analyzes U.S. Health Care Spending from a Global Perspective

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Commonwealth Fund Analyzes U.S. Health Care Spending from a Global Perspective

On October 4, 2023, the Commonwealth Fund released its issue brief, High U.S. Health Care Spending: Where Is It All Going? The Commonwealth Fund examined U.S. health care spending from a global perspective. The study represents a preliminary step in identifying and quantifying components of excess health care spending. According to the brief, the United States spends twice as much per person on health care as compared with other peer nations.  

Based on the data available, the findings indicated that, “More than half of excess U.S. health spending was associated with factors likely reflected in higher prices, including more spending on: administrative costs of insurance (about 15% of the excess), administrative costs borne by providers (about 15%), prescription drugs (about 10%), wages for physicians (about 10%) and registered nurses (about 5%), and medical machinery and equipment (less than 5%). Reductions in administrative burdens and drug costs could substantially reduce the difference between U.S. and peer nation health spending.”  

The brief concludes, “The findings suggest that reductions in administrative burdens, drug costs, and wages for physicians and nurses have the potential to substantially reduce the difference between U.S. and peer nation health spending.” 

The issue brief is available here.

CRR Issues Brief on the Impact of Rising Debt for Older Americans

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CRR Issues Brief on the Impact of Rising Debt for Older Americans

Recently, the Center for Retirement Research at Boston College (CRR) released its issue brief, What Are the Implications of Rising Debt for Older Americans? CRR analyzed older Americans with debt in retirement to help determine the impact on those that are at high risk of financial distress due to the type and size of their debt. 

The brief indicates that the number of older Americans with debt has been increasing since the 1990s. However, the analysis found that holding debt in retirement may not always be a negative factor. Importantly, identifying the types of household debt situations is significant in understanding the implications of the increase in debt holding among older Americans.

Other key findings include:

  • The majority of older borrowers are at high-risk, but not all high-risk borrowers are identical; and
  • Those at high-risk are categorized as: 1) financially constrained; 2) credit card borrowers; 3) excessive housing burdened; and 4) wealthy spenders.

The brief concludes, “The key takeaway is the recognition that no one-size-fits-all solution exists, so understanding the diverse characteristics of high-risk borrowers is essential to developing effective policies to help older households struggling with debt.”

​The brief is available here.

MissionSquare Releases Survey Findings of Younger Public Service Workers in 2023

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MissionSquare Releases Survey Findings of Younger Public Service Workers in 2023

Recently, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) published its report, 35 and Under in the Public Sector: Why Younger Workers Enter and Why They Stay (or Don’t). The Research Institute analyzed the views of younger public service employees working for state and local governments.

The report indicated that the majority (64%) of public sector workers age 35 and younger have positive morale related to their employment and are satisfied with their job security, community service and quality of their colleagues. In addition, the report indicated that younger public service workers are facing challenges with their current financial situation and high levels of stress.

Other key findings include:

  • Respondents reported that they were attracted to public service work due to job security (32%), work/life balance (29%), health insurance (28%) and job satisfaction (28%).
  • Workers’ main priorities were to contribute to community improvement (67%), strong team dynamics (65%), intellectual engagement and alignment with personal values (64%).
  • Overall, the respondents reported that their benefits compensation was competitive in the labor market, but only 53% considered their wage compensation to be competitive.
  • About 70% consider their level of debt to be problematic, 22% consider their debt to be a major problem and only 7% are without any debt.
  • Although 77% agree they should be saving more for retirement, they indicated that the primary obstacles were other saving priorities and debt issues.
  • Almost 50% of respondents are very likely to recommend a public service career to others and 46% plan to remain in the public sector until retirement.

The report is based on a national online survey conducted by Greenwald Research in March and April 2023 of over 1,000 state and local government workers that are age 35 and younger.

The report is available here.

GRS Consultants to Present at the P2F2 Conference

Events​

October 10, 2023

GRS Consultants to Present at the P2F2 Conference

Mark Buis and Francois Pieterse will present the session “Long-term Policy Implications with an Aging Population” at the 20th Annual Public Pension Financial Forum (P2F2) Conference.

The session discussion will cover the implications of an aging population on funding and how to “stay ahead of the curve” through changes in plan design and the use of actuarial assumptions and methods.

Learn more: Conference Brochure

Dana Woolfrey serves on a speaker panel at the P2F2 Conference

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October 8, 2023

Dana Woolfrey will serve on a speaker panel at the P2F2 Conference

Dana Woolfrey will serve on a speaker panel at the 20th annual Public Pension Financial Forum (P2F2) conference for the session “The Actuarial Playbook.” The topics covered during the session will include fundamentals of actuarial valuations, funding policy, and trends in pension plan design that promote plan sustainability.

 Learn more: Conference Brochure