Post-pandemic mortality trends and accelerating medical innovation are reshaping longevity expectations in ways that directly impact pension plan sponsors. In this environment, pension risk transfer (PRT) offers an opportunity to replace open-ended longevity risk with contractual certainty.
Setting future mortality assumptions has always required judgment, but the ground beneath those assumptions has shifted in the wake of the COVID-19 pandemic.
Recent U.S. population mortality data and emerging medical breakthroughs, including anti-obesity medications (AOMs) such as GLP-1 therapies, have widened the range of plausible longevity outcomes – and signaled a meaningful shift in how pension plan sponsors should think about longevity risk.
RGA’s latest research shows a clear reduction in all-cause mortality from pandemic highs,1 while advances in cardiometabolic treatment and disease-modifying therapies create a credible pathway to renewed mortality improvement. U.S. life expectancy at birth reached a record high of 79 years in 2024, according to the National Center for Health Statistics (NCHS), reinforcing the view that the pandemic represented a disruption – not a permanent reset – in longevity trajectories.2
Research also shows that life expectancy is consistently underestimated3,4 and improvements are not uniform. Individuals with larger pensions and those in less-deprived areas tend to experience faster gains in mortality improvements than the population average.
Taken together, these signals indicate that longevity is no longer best represented by a single, smooth trend. Instead, sponsors face a range of plausible longevity scenarios, each with materially different financial implications.
For pension plan sponsors, the implication is direct: Pre-pandemic standard longevity assumptions may understate the level and the uncertainty of future longevity. Those assumptions flow straight into long-term liability values, funded status volatility, and de-risking decisions.
This article explores the evidence and outlines a path forward for plan sponsors navigating this evolving landscape.
Recent U.S. mortality experience is best understood in three phases.
RGA’s research shows that recovery has been uneven. Age, cause of death, and socioeconomic patterns differ meaningfully, and aggregate improvement can mask substantial subgroup variation. For pension plans, whose participants often differ from the general population, this distinction is critical.
Despite these shifts, many U.S. plan sponsors continue to rely on pre‑pandemic mortality tables and improvement scales built on data that end in 2019. Those baselines do not reflect pandemic disruption, subsequent normalization, or accelerating medical innovation.
GLP-1 and other weight-loss therapies highlight that longevity risk cannot be assessed by looking solely backward. Abundant clinical evidence points to significant weight loss and improved cardiometabolic outcomes, with downstream implications for cardiovascular risk and mortality.
RGA’s scenario modeling shows that even modest AOM adoption can translate into meaningful population-level mortality improvement – a 3.5% improvement in a central scenario over 20 years, rising to 8.5% under a more optimistic population-level pathway.5
Other medical breakthroughs reinforce this dynamic. Advances in diagnostics and disease‑modifying treatments for Alzheimer’s disease have the potential to delay onset, slow progression, or reduce incidence.6 Because Alzheimer’s mortality is highly age‑concentrated, even incremental progress can materially affect late‑life survival, which has direct implications for pension plans given the age profile of retiree populations. This is especially relevant for deferred members, whose longer horizon before benefits commence gives mortality improvements more time to compound.
The message is clear: The distribution of plausible future longevity outcomes has widened in recent years. Longevity expectations are increasingly sensitive to medical breakthroughs and other innovation pathways that may not be embedded in legacy actuarial assumptions.
For plan sponsors, longevity volatility translates directly into financial risk.
Even if improvements are slower or uneven, sponsors still face a wider range of plausible outcomes than before. Longevity volatility – not just longevity level – is the defining risk. The gap between the pre-pandemic baselines many sponsors still rely on and the current evidence insurer pricing likely reflects is precisely what makes transferring the risk worth considering.
Pension risk transfer (PRT) converts uncertain longevity exposure into contractual certainty.
For well-funded plans, the impetus to act now is often as much about timing as risk. After a sustained stretch of favorable markets and higher rates, many plans find themselves at or near full funding – a position that can be locked in through PRT before longevity, market, or rate movements erode it. Acting from funded strength, rather than waiting for conditions that may not hold, is increasingly the driver behind transactions, alongside the longer-term goal of reducing risk.
Beyond funded status, pricing dynamics can also favor acting now: Insurer pricing tends to incorporate updated demographic and clinical intelligence. Internal plan assumptions, by contrast, may trail current evidence. That divergence can create market windows where transferring risk is economically attractive compared to an updated internal baseline.
Paying a risk premium for certainty is often a rational trade‑off for sponsors seeking to reduce balance sheet volatility, align pension risk with corporate finance objectives, and reduce the ongoing fiduciary and administrative burden of managing the obligation.
There is also a structural reason the risk is better held elsewhere. For a plan sponsor, longevity is a concentrated, undiversified exposure sitting on a balance sheet built for an entirely different business. For a specialized insurer such as RGA, it is one risk among many – pooled across large populations, offset by diversifying exposures, and supported by capital held specifically to absorb it. That difference in where and how the risk sits is itself a source of value: The same obligation is simply more efficiently borne by a balance sheet designed to carry it and underwritten by an organization whose core business is understanding longevity.
Plan sponsors do not face an all‑or‑nothing choice.
The stakes for plan sponsors are real – wider uncertainty in longevity outcomes, evolving fiduciary expectations, and the compounding cost of delayed decisions. In this environment, transferring longevity risk to a partner with demonstrated expertise is not a concession; it is a strategic, deliberate choice that replaces open-ended exposure with long-term contractual confidence.
RGA’s leadership in longevity research and pension risk solutions provides plan sponsors with the foresight to assess their exposure clearly and act on it decisively. RGA can turn that foresight into action – replacing uncertainty with the confidence of a partner built for the long term.
Contact us today to explore how partnering with RGA can help your de-risking goals.
