Will Americans Die Young Enough To Save Pension Plans?

Authored by Doug French via The Mises Institute,

“Pension fund problems worsen in 43 states” says the Bloomberg headline.

Laurie Meisler writes,

New Jersey, Kentucky and Illinois continue to lose ground and now have only about one third of the money they need to pay retirement benefits. And three states had double-digit declines in their pension funding ratios in the past year: Colorado, Oregon and Minnesota - though some of this can be attributed to actuarial changes in the way pension liabilities are calculated.

Nevada PERs is thinking about making a change, from assuming 8% investment returns to 7.5%. The higher the assumed rate, the less future beneficiaries have to contribute.  And, ultimately, Sean Whaley writes for the LVRJ,

The assumptions are used to ensure the solvency of the plan over the long term for the approximately 105,000 active members and 54,000 retired and disabled members. Because the public retirement plan is a defined benefit plan where retirees get a fixed monthly pension, taxpayers are ultimately responsible for its fiscal health.

Nevada PERS Executive Officer Tina Leiss said NvPERs funding ratio of 74.1 could drop if the returns assumption is lowered.

The good news (or maybe it's bad news) is “Americans are retiring later, dying sooner, and sicker in-between” says Bloomberg. Ben Steverman writes,

Data released last week, reports Bloomberg,  suggest Americans’ health is declining and millions of middle-age workers face the prospect of shorter, and less active, retirements than their parents enjoyed.

The mortality rate increased 1.2% from 2014 to 2015, the first time its increased since 2005 and the first time it's jumped over 1% since 1980.

Full social security benefits don’t kick in until a person is 66+ now, so,

“Almost one in three Americans age 65 to 69 is still working, along with almost one in five in their early 70s.”

That sounds okay, except, University of Michigan economists HwaJung Choi and Robert Schoeni have studied middle-aged folks and found,

“the number of middle-age Americans with ADL (activity of daily living) limitations has jumped: 12.5 percent of Americans at the current retirement age of 66 had an ADL limitation in their late 50s, up from 8.8 percent for people with a retirement age of 65.”

Then you might say, well, I might not be able to get around, but at least my mind is sharp. Except, “Cognitive skills have also declined over time. For those with a retirement age of 66, 11 percent already had some kind of dementia or other cognitive decline at age 58 to 60, according to the study. That’s up from 9.5 percent of Americans just a few years older, with a retirement age between 65 and 66.”

Maybe that’s why people are either killing themselves quickly - suicide - or slowly with alcohol, drugs, or overeating.  

This is all good news for pension plans...

As life expectancy drops - The Society of Actuaries says a 65-year-old man can expect to live to 85.6 years, and a woman can expect to make it to 87.6.

So - the group calculates a typical pension plan’s obligations could fall by 0.7 percent to 1 percent.

That's a start but it won’t do much good, in New Jersey, Kentucky and Illinois.

*  *  *

Simply put, we're gonna need a bigger die-off - or perhaps a few more years of unhealthy living will start to really help.

Comments

hedgeless_horseman Muppet Tue, 11/07/2017 - 12:09 Permalink

 Want to survive, live a long and healthy life, and fuck over the insurance and pension companies?http://www.zerohedge.com/news/2017-08-15/preparing-zombie-apocalypse-le…

The hardest step is to simply start on a path for getting physically fit.  This may be the most important step, and it will pay dividends even if the Apocolypse doesn't happen during your lifetime.  If you are not yet so fat and lazy that you rely on a "free" government scooter to move about the world, then you may still have hope.

In reply to by Muppet

HillaryOdor Justin Case Tue, 11/07/2017 - 13:06 Permalink

I have tried explaining to socialists/statists why forcing culture to view a human being as a liability rather than an asset is the stupidest and most dangerous course of action a society can take.  When the balance sheet starts looking grim the solution is immediately manifest.  It's against their religion though, so they'll never admit it or even consider it.  Hopefully the purge starts with them.

In reply to by Justin Case

Pool Shark hedgeless_horseman Tue, 11/07/2017 - 12:22 Permalink

Indeed.Why does Trump want to waste even MORE tax payer money on the so-called "Opioid Crisis"?Americans (especially the Left-Wing) are always screaming about their "personal rights" and demanding their "freedoms."If people choose to exercise their "freedoms" by ingesting toxic substances that will kill them or shorten their life spans, who are WE to deny them?[Personal Responsibility Surrenders...]

In reply to by hedgeless_horseman

Miffed Microbi… toady Tue, 11/07/2017 - 12:18 Permalink

Deaths in wars is relatively quick vs a slow death by chronic illness via Sickcare. An increase in numbers is not necessarily an increase in savings. Those who have not taken care of themselves will demand those that have pay for their care and, once again, the socialistic nature of this country is revealed.

Miffed

In reply to by toady

Mr. Universe HRClinton Tue, 11/07/2017 - 15:38 Permalink

Let's take a quick look at what they already have going shall we?GMO crap food loaded with Roundup, mmm yummy.Fluoridated water, my pineal gland loves that.Vaccines loaded with mercury and allergic reaction activators, checkFlu shots that can kill the elderly the're designed for, check.Cancer promoting chemicals every where you turn, in your environment and food. You got it!Poison to make things worse when you inevitably get Cancer. Hoo boy Chemotherapy.A corrupt financial system that destroys your savings through inflation and other taxes, making sure there is no escape.After all if you can't trust the BIS who can you trust? 

In reply to by HRClinton

AGuy Miffed Microbi… Tue, 11/07/2017 - 13:22 Permalink

"Deaths in wars is relatively quick vs a slow death by chronic illness via Sickcare. "

Yup. If I recall correctly, 90% of all medical expenses occur during the last year of life. Usually a person get sick and need extensive & expensive medical services which only delays life by a short period.

So even if they die younger, it may not reduce pension costs since most pensions include health care. The medical bills will probably be the same if they die at 65 or 85.

In reply to by Miffed Microbi…

govtsucks toady Tue, 11/07/2017 - 12:19 Permalink

Maybe they should send the over 50 crowd to the front lines. After all, it's mostly over 50 politicians that start the wars. If that generation loves war so much, let them put their money where their mouths are. You can fire a gun from a wheelchair. Why should the young be sacrificed as cannon fodder?

In reply to by toady

junction Muppet Tue, 11/07/2017 - 12:15 Permalink

Down the line, Hyperinflation will solve defined pension plan problems.  Right now, the Bush Crime Cartel (which seems to control the Carlyle Group) is doing its bit, ramping up the smuggling of opioids from Afghanistan on Air force cargo jets on midnight runs to U.S. airfields. Older people's immune systems are less tolerant to the radiation from security scanners, so the more scanners in use the better.  Those mercenaries on helicopters who sprayed the Las Vegas Harvest concertgoers with SAW fire gave a big push for more security screening devices.  Life is just wonderful as long as you die just before retirement age, according to the NWO.

In reply to by Muppet

cynicalskeptic junction Tue, 11/07/2017 - 15:51 Permalink

My thoughts.  Hyperinflation solves ALL liability issues....... gov debt, pensions, social security, whatever.  Has been the traditional solution when liabilities exceed the ability of governments et al to pay. Combined with high healthcare costs and costly food you'll have a nice population drop though not enough to meet the needs and projections of TPTB.   Not sure what the rest of the game will be but it's not going to be pretty.   TPTB have already sold their souls to insure their own survival.   The rest of us are readily disposable as far as they're concerned. 

In reply to by junction

AGuy Pool Shark Tue, 11/07/2017 - 13:25 Permalink

"When the next recession hits, there will be millions of millenials lined-up to enlist"

I don't think so. They'll go on welfare and other gov't programs. if they aren't interested in working hard (ie living in parents basement playing video games) they certainly are not going to be interested in joining the army.

In reply to by Pool Shark

GeezerGeek hongdo Tue, 11/07/2017 - 13:21 Permalink

I joined the USAF in 1969 to avoid being drafted into the Marines. If they try to draft me now, almost age 71, I'll hit them with a cane. And send some false teeth after them. And sling a colostomy bag at them. And stuff hairpieces in their asses.I still haven't decided what to use the walker for. Perhaps mount a .50 cal MG on it?

In reply to by hongdo

garcam123 HRClinton Tue, 11/07/2017 - 12:59 Permalink

Hat Tip to Paw Paw at Doin it cheap on Utube.Plastic milk jug, 3 quarts water warm, 3 cups sugar, 2 tablespoons dry yeast.......mix well, hind next to the water heater, warm....dark...7 days!  YiPEE!14% alcohol.......hooch!Have one working now, coupla more days........snuggled up covered with my router! LEAVE THE TOP LOOSE SO GAS CAN ESCAPE, or put a condom on the top so it can expand!  otherwise it will explode!And....Buck a funch of grapes.........mix it with any other drink....like koolaide!

In reply to by HRClinton

semperfi Tue, 11/07/2017 - 12:06 Permalink

the satanist oligarchs have a many-pronged approach to population reduction:toxic vaccinesGMOglyphosateopioidsheroinchemtrails (aluminum oxide - alzheimer's - and benzyne - poison)warsetc