The Society of Actuaries has released its latest U.S. mortalityassumptions for pension plans, which were last updated in 2000.

The new tables show that the average 65-year-old U.S. male isexpected to live to be 86.6, and the average 65-year-old female isexpected to live to be 88.8 years of age.

That’s an increase of 2.0 years for men, and 2.4 for women. TheSOA said that could translate to a 4 percent to 8 percent cost inprivate plan defined benefit liabilities, depending on the designand demographic profile of each plan. Previous mortality tableswere published in 2000.

Rick Jones, a senior partner in the national retirement practiceat Aon Hewitt, said the increase in life expectancy is likely toaccelerate the trend of de-risking private sector defined benefit plans.

“It’s a big number, and it’s going to have real consequences onsponsors’ pension liabilities,” said Jones.

Jones said that Aon expects the new mortality rates to add anaverage of 7 percent to sponsors’ liability predictions, assumingthey were working off of the SOA’s 2000 estimates.

Based in Chicago, Aon’s national retirement practice representsplan sponsors and plan trustees in brokering de-risking contractswith insurance companies. Jones said that they are never paid byinsurance companies, but are compensated on a fee-for-service basisfrom the plan sponsor.

As increased life spans potentially motivate more sponsors tode-risk their pension liabilities, two prominent lawmakers have called for greater regulation over howsponsors, and insurance companies, execute de-risking transactionsand communicate risks to participants.

In a letter to top regulators, Sen. Ron Wyden, D-Ore., chairmanof the Senate Finance Committee, and Sen. Tom Harkin, D-Iowa,chairman of the Committee on Health, Labor, Education and Pensions,claimed there is a “lack of clear and specific rules to protectparticipants and retirees” in pension de-risking schemes.

From his vantage at Aon, Jones doesn’t foresee a regulatorystandoff over de-risking anytime soon.

“Our clients take very seriously their fiduciary obligationswhen they execute these transactions. They need to know from afiduciary standpoint whether or not they can stand behind thedecision to de-risk,” he explained.

“At the end of the day, private pensions are voluntaryagreements made by sponsors. Any movement against de-risking isgoing to be hard-pressed to garner support.”

As de-risking becomes a growing part of overall portfolios,insurance companies are tending to make separate accounts for eachacquired plan. Jones said this means insurance companies can focusa specific investment strategy for each plan, providing greatersecurity for the assets, and greater assurance of insurancecompanies’ ability to meet future obligations.

The SOA’s estimates relate solely to private pension plans. Forthis year’s report, they requested information from three majorpublic plans and found the mortality experience of public planworkers to be substantially different from private planworkers.

The data from each of the three public plans was also sodisparate that it “would not be appropriate to develop separatepublic plan retiree mortality tables” based on available publicplan data, according to the SOA.