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Sunday, March 16, 2003

US Life Expectancy on the Rise

Nothing particulary surprising or shocking in the latest US CDC report. American life expectancy rose in 2001 to 77.2 years from the 77.0 years reported in 2000. This is good news all round. Except that is, for the actuaries. You may be surprised to learn that most pensions related calculations assume a tapering-off and not a continuation (much less an acceleration) in life-expectancy trends. better start getting your calculators out!!

Americans’ life expectancy hit an all-time high in 2001, while age-adjusted deaths hit an all-time low, according to a new report released today by HHS Secretary Tommy G. Thompson.The report from HHS’ Centers for Disease Control and Prevention (CDC) documents that the national age-adjusted death rate decreased slightly from 869 deaths per 100,000 population in 2000 to 855 deaths per 100,000 in 2001. There were declines in mortality among most racial, ethnic, and gender groups.

Meanwhile, life expectancy hit a new high of 77.2 years in 2001, up from 77 in 2000, and increased for both men and women as well as whites and blacks. For men, life expectancy increased from 74.3 years in 2000 to 74.4 years in 2001; for women, life expectancy increased from 79.7 years to 79.8 years. Record high life expectancies were observed for white men and for both black men and women.“This report highlights some encouraging progress, including a continued reduction in death rates from the Nation’s three leading killers -– heart disease, cancer, and stroke,” Secretary Thompson said. “At the same time, it reminds us that we need to do more to reduce the health disparities that disproportionately affect certain racial and ethnic groups.”
Source: US National Centre for Health Statistics

These kind of numbers seem to confirm what they've been saying over at the Commission on Global Aging for some time:

Our findings confirm that the population forecasts used to calculate unfunded benefit liabilities in every G-7 country assume that the demographic trends of the past half-century will moderate in ways that improve the actuarial soundness of old age benefit programmes. In general, official forecasts assume that:

• life expectancy will increase much more slowly than in the past;
• recent low birth rates will rebound rapidly toward replacement-rate levels;
• immigration will likely persist at historical rates, or possibly decline somewhat over coming decades.

Forecasts of the size and composition of the populations of all G-7 countries for the period 2000 to 2050 were prepared by Shripad Tuljapurkar, Nan Li, and Michael Anderson of Mountain View Research. The findings on longevity that underlie these forecasts were featured in an article by Tuljapurkar and colleagues in the June 19, 2000 issue of Nature. The forecasts employ a probabilistic methodology that translates historical trends in population into dynamic projections.An important feature is that they incorporate variability around past trends, and project this into the future.

The findings of this study suggest that most of the G-7 countries continue to significantly underestimate increases in longevity, while the low-fertility countries overestimate the prospects for a recovery in birth rates. Significantly, actuarial optimism is greatest among countries that have the highest per capital public debt burdens, are ageing the fastest, and face the greatest social security funding shortfalls.
Source: Commission on Global Ageing

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