1. U.S. Social Security Administration Mortality Projections
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U.S. Social Security Administration Mortality Projections
Longevity 12 Conference
Plenary Session IV
September 30, 2016
Karen Glenn, FSA, EA, MAAA
Deputy Chief Actuary for Long-Range Estimates
Office of the Chief Actuary
U.S. Social Security Administration
This session is intended to give you an overview of the Social Security program.
We will cover the following in this session:
Brief history of the program
Who can receive benefits and the eligibility requirements
Taxation of benefits
Future of the program
Social Security Statement, and
Online Services

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Historical Data
For under age 65, we use historical deaths from the National Center for Health Statistics and historical resident population from the Census Bureau
For ages 65 and over, we use historical deaths and enrollments of the Medicare population
For all ages, we use historical information on cause of death from the National Center for Health Statistics

3. Projection of Mortality
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Projection of Mortality
Mortality is assumed to decline in the future - the rate of decline is in question
Three sets of projections (intermediate, low cost, and high cost)
Stochastic projections also
2016 intermediate projections of the financial status of the U.S. Social Security program assumed significant declines in age-sex adjusted death rates in the future, as illustrated by:
Period life expectancy at birth
Period life expectancy at age 65

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Life Expectancy at Age 0

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Life Expectancy at Age 65

6. Projection of Mortality
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Projection of Mortality
Incorporating future mortality improvement results in a new period life table each year
Assumptions as to the percent reduction in mortality rates:
By age group
By cause of death

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Cause of death

8. Method of Projecting Mortality
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Method of Projecting Mortality
Central death rates are the key variables used in the projections
Central death rates for the starting year
Rate of decline in the central death rates

9. Central Death Rates for the Starting Year
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Central Death Rates for the Starting Year
Annual historical central death rates calculated
For 21 age groups, 2 sexes, and 5 causes of death
Last year of final data (2013 NCHS and Medicare) is not used as the starting year
Starting year values are determined using the last 12 years of historical central death rates
Computed as the values for the most recent year falling on a weighted least square line

10. Rates of Decline in Central Death Rates
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Rates of Decline in Central Death Rates
Historical average annual declines in central death rates are calculated
Over the most recent 10 year period
For 21 age groups, 2 sexes, and 5 causes of death
Ultimate average annual declines in central death rates are determined by the Trustees
Reached in the 24th year following the year of the Trustees Report (2040)
For 5 age groups and 5 causes of death
Male and female rates are set equal

11. Rates of Decline in Central Death Rates (continued)
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Rates of Decline in Central Death Rates (continued)
Formula is used to transition from the average annual declines over the historical period to the ultimate rates of decline
Not a linear transition, but rapid
About 2/3 transitioned after 5 years
About 90 percent after 10 years

12. Average Annual Rate of Decline in Age-Adjusted Central Death Rates
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Average Annual Rate of Decline in Age-Adjusted
Central Death Rates
Based on the intermediate assumptions
of the 2016 Trustees Report
(Using the 2010 Census Resident Population as the standard population for age adjusting)

13. Historical and Intermediate Projections of Annual Percentage Reduction in Central Death Rates: Ages 65-84
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14. Historical and Intermediate Projections of Annual Percentage Reduction in Central Death Rates: Ages 85+
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15. Other Considerations Death rates by marital status
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Other Considerations
Death rates by marital status
Differential mortality between the disabled and non-disabled
Mortality differential by earnings levels

16. How Have Our Projections Done?
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How Have Our Projections Done?
Period life expectancy at birth and at age 65
Each year, we look at projected values compared to actual values
Beginning with 1974 Trustees Report for life expectancy at birth
Beginning with 1980 Trustees Report for life expectancy at age 65

17. How Have Our Projections Done? One Example
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How Have Our Projections Done? One Example
In the 1982 Trustees Report, we projected unisex life expectancy at age 65 to be 18.9 years in 2010
Actual value in 2010? 18.9
Cherry-picking? Maybe!

18. Additional Information in Actuarial Notes and Studies
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Actuarial Study #120 (Life Tables for the U.S. Social Security Area)
Actuarial Note #158 (Human Longevity and Implications for Social Security Actuarial Status)
See
This session is intended to give you an overview of the Social Security program.
We will cover the following in this session:
Brief history of the program
Who can receive benefits and the eligibility requirements
Taxation of benefits
Future of the program
Social Security Statement, and
Online Services