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This paper provides the first empirical assessment of the impact of life expectancy assumptions on the liabilities of private U.S. defined benefit (DB) pension plans. Using detailed actuarial and financial information provided by the U.S. Department of Labor, we construct a longevity variable for each pension plan and then measure the impact of varying life expectancy assumptions across plans and over time on pension plan liabilities. The results indicate that each additional year of life expectancy increases pension liabilities by about 3 to 4 percent. This effect is not only statistically highly significant but also economically: each year of additional life expectancy would increase private U.S. DB pension plan liabilities by as much as $84 billion.

Business & Economics --- Labor & Workers' Economics --- Defined benefit pension plans --- Longevity --- Life, Long --- Life extension --- Life span prolongation --- Long life --- Prolongation of life span --- Age --- Health --- Life spans (Biology) --- Old age --- Pensions --- Life expectancy --- Econometric models --- E-books --- Expectancy of life --- Expectation of life --- Vital statistics --- Premature death --- Compensation --- Pension plans --- Retirement pensions --- Superannuation --- Retirement income --- Annuities --- Social security individual investment accounts --- Vested benefits --- Insurance --- Labor --- Public Finance --- Demography --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Nonwage Labor Costs and Benefits --- Private Pensions --- Social Security and Public Pensions --- Health: General --- Economics of the Elderly --- Economics of the Handicapped --- Non-labor Market Discrimination --- Insurance Companies --- Actuarial Studies --- Health economics --- Population & demography --- Insurance & actuarial studies --- Pension spending --- Aging --- Expenditure --- Population and demographics --- Financial institutions --- Population aging --- United States