The Committee on Life Insurance Mortality and Underwriting Surveys of the Society of Actuaries sent companies a survey in May of 2019 on mortality improvement practices as of year-end 2018. The survey results were released in January 2022. The survey was completed by respondents prior to the onset of COVID-19. The present report provides an opportunity to update the results for pandemic-based changes and compare the before and after surveys. The 2022 survey was opened in March 2022 and closed by the end of April. Thirty-five respondent companies participated in this survey, with 29 from the U.S. and six from Canada. This group was further divided between direct writers (26) and reinsurers (nine). This survey focused on the use of mortality improvement and how it has changed for financial projection and pricing modeling following the initial stages of COVID-19. Details regarding assumptions and opinions on mortality improvement in general were asked of the respondents. National Association of Insurance Commissioners discussions on mortality improvement factors due to COVID-19 for reserving purposes have taken place, but this survey was conducted before any adjustments reacting to them. Seventy-four percent (26 of 35) of respondents indicated using durational mortality improvement assumptions in their life and annuity pricing and/or financial projections. Moreover, of those that used durational mortality improvement assumptions, attained age and gender were the top two characteristics in which assumptions varied. Respondents were asked to indicate the different limitations when applying durational mortality improvement assumptions. The Survey found that the most common lowest and highest attained age to which durational mortality improvement was applied were 0 and about 100, respectively. The lowest and highest durational mortality improvement rate ranged from -1.50% (deterioration) to 2.80% (improvement). The time period in which the mortality improvement rates were applied ranged from 10 to 120 years, but this varied between life (10/120) and annuities (30/120). The most common time period was 20 to 30 years for life; less consensus was seen for annuities. Analysis is provided in Appendix C for instances when highlights are shared in the body of the report.
The last 11 Trustees Reports have indicated that Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) Trust Fund reserves would become depleted between 2033 and 2035 under the intermediate set of assumptions provided in each report. If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three-fourths of the scheduled benefits after trust fund depletion. Policymakers have developed proposals and options that have financial effects on the OASDI Trust Funds. Many of these proposals and options have the intent of addressing the long-range solvency problem.
The Office of the Chief Actuary also develops estimates of proposals to change the Supplemental Security Income (SSI) program.
We have prepared letters or memoranda for many of these proposals and options. Each letter or memorandum provides an actuarial analysis showing the estimated effect on the financial status of the Social Security program and/or the SSI program.
Publication Date: accessed 4 Dec 2022
Publication Site: Office of the Chief Actuary, Social Security Administration
Excess mortality is expected to occur for all years studied with amounts varying by year and age. Although the largest mortality excess numbers for the U.S. general population are foreseen for 2022, excess mortality is expected to decline each year so that by 2030, excess mortality numbers are nearing expected levels. For 2030, mortality is projected to be 2% higher than expected for all ages except age 85. At this age, 2030 projected mortality is estimated to be 1% higher than expected.
Based on the average of the participants, generally, the amount of mortality excess is anticipated to be highest at the younger ages. For example, for 2022, projected mortality is anticipated to be 14% higher compared to expected levels for age 25, 13% higher for age 45, and 10% higher for ages 65 and 85.
An adjustment of the assumed rate of return down to 7.0% means the plan will recalculate pension debt upwards in 2023, but will also be better positioned to avoid future debt growth over the longer run. The forecast in Figure 2 compares the growth of TRS’ unfunded liabilities under three scenarios:
Returns meet TRS assumptions;
TRS experiences two major recessions over the next 30 years;
And, TRS makes actuarially determined contributions (also using the two-recession scenario).
With this actuarial modeling of the system, it is clear that statutorily limited contributions will continue to pose funding risks for TRS that will be borne by Texas taxpayers. A proposed 7.0% assumed return will readjust 2023 unfunded liabilities upwards by $6.5 billion, but the plan will suffer fewer investment losses over the next 30 years when the plan inevitably experiences returns that diverge from expectations. TRS’ unfunded liabilities will remain elevated under the rigid statutorily-set contributions. If, however, TRS was to transition to Actuarially Determined Employer Contributions (ADEC) each year, then even by recognizing higher 2023 debt (under a 7.0% assumption) TRS could shave billions off its unfunded liabilities by 2052 ($74.7 billion down from $81.3 billion with current 7.25% assumption).
The most likely scenario, says Lessler, is that children do get vaccinated and no super-spreading variant emerges. In that case, the combo model forecasts that new infections would slowly, but fairly continuously, drop from about 140,000 today now to about 9,000 a day by March.
Deaths from COVID-19 would fall from about 1,500 a day now to fewer than 100 a day by March 2022.
That’s around the level U.S. cases and deaths were in late March 2020 when the pandemic just started to flare up in the U.S. and better than things looked early this summer when many thought the pandemic was waning.
And this scenario projects that there will be no winter surge, though Lessler cautions that there is uncertainty in the models and a “moderate” surge is still theoretically possible.
There’s wide range of uncertainty in the models, he notes, and it’s plausible, though very unlikely, that cases could continue to rise to as many as 232,000 per day before starting to decline.
Forecasters are predicting that U.S. COVID-19 case counts and the U.S. COVID-19 death numbers will continue to improve over the next four weeks.
Most of the forecasters in the COVID-19 Forecast Hub system say weekly new case counts will be somewhere between 350,000 and 450,000 over the next four weeks, compared with an actual number of about 477,000 recorded during the week that ended March 1.
The forecasters are predicting the number of deaths per week will fall to about 6,000 to 8,000, from about 14,000 per week, over that same four-week period.
State tax receipts through the first nine months of the state fiscal year were $2.5 billion lower than last year, but were $1.8 billion higher than anticipated by the state Division of the Budget (DOB), according to the monthly State Cash Report released by New York State Comptroller Thomas P. DiNapoli.
Tax receipts in the month of December totaled $8.4 billion, $422.5 million above last year, and $1.4 billion above DOB’s latest projections.
Author(s): Thomas P. DiNapoli
Publication Date: 15 January 2021
Publication Site: Office of the New York State Comptroller