Analyzing solely traditional pension plans, the report says, a slightly higher increase of 3–5 percent might be expected, depending on the discount rate and age and gender mix of a plan population. But, it adds, “the mortality change does not affect cash balance liabilities to the same extent as traditional pension plans.”

In addition, the estimated cost of current year benefit accruals (normal cost) increases 1.6 percent, from $49.6 billion to $50.4 billion, and the estimated aggregate unfunded funding target would increase 35 percent, from $63 billion to $85 billion. Also, the estimated aggregate minimum required contributions for 2018 would go up by 11 percent, from $7.1 billion to $7.9 billion.

The study points out that many plan sponsors have made contributions that are substantially higher than the minimum requirement. It adds that, if those contribution patterns continue, 2018 contributions would increase approximately 4 percent, from $94 billion to $98 billion.

For PBGC premiums, the analysis finds that estimated aggregate 2018 premium funding target liabilities would rise by 3.1 percent, from $2.679 trillion to $2.763 trillion, and the estimated aggregate unfunded premium funding target (also termed unfunded vested benefits) would increase 24 percent, from $217 billion to $268 billion.

Estimated PBGC premiums for 2018 would increase 12 percent because of the mortality change, from $8.6 billion to $9.6 billion, again on the assumption that actual contributions follow recent patterns.

Analysis illustrates that, in the end, it costs less to fund expected longevity directly than to pay amortized losses that arise from undervaluing it; the study says that “ it’s ultimately more cost effective to fund expected longevity directly, as opposed to playing ‘catch up’ in the future to cover costly amortization payments.”