Plan sponsors will have one more year to use outdated mortality assumptions in calculating pension funding requirements for 2016.
That will save sponsors about $18 billion in funding requirements this year, according to estimates from Moody’s Investors Service.
In 2014, the Society of Actuaries released new mortality tables, depicting Americans’ longer lives.
The tables had not been updated since 2000.
The updated projections show the average 65-year-old male is expected to live to 86.6, an increase of two years. The average woman is expected to live until 88.8, an increase of 2.4 years.
In a note to investors, analysts at Moody’s said the IRS was expected to require sponsors to apply the new mortality assumptions this year, but that the agency is still evaluating them and will not apply the new numbers until 2017.
“The dollar impact of this change will be substantial,” wrote the analysts.
At the end of last year, the non-financial corporations that Moody’s rates had a combined projected benefit obligation of $2.1 trillion.
Applying the updated mortality tables means a 6 percent, or combined $126 billion increase in those obligations.
The delay, and the $18 billion in funding obligations that sponsors will save this year, is a “credit positive.” But Moody’s also warned the benefit to delaying the inevitable will do little for those plans facing systemic funding issues.