Some Congresscritters in the US House of Representatives are trying to be clever.
A bill pending in the House of Representatives would allow businesses with union workers to reduce their company pension obligations by billions of dollars, because statistics show that most blue-collar workers do not live as long as other Americans.
US corporations spent the better part of the 1990s raising their estimates for long term expected rates of return on their pension fund investments. When they got up to 9 and 10 percent as long term expected rates of return they entered the lunacy zone. Many have lowered their estimates somewhat but are still excessively optimistic. Markets do not grow in earnings over the long term faster than the economy grows as a whole. In fact, John Maudlin argues that public stock returns actually underperform the overall economy by about 1 percent. The US economy is not going to grow at 6 or 7 percent over the long term let alone 9 or 10 percent. Therefore actuarial assumptions about future earnings for many corporate pension funds are already unrealistic. We don't need the US Congress stepping in to provide companies another way to make their pension fund actuarial assumptions even worse.
One critic of this proposal quoted by The New York Times says that the bill does not require companies with lots of white collar workers to raise their assumptions of retiree life expectancy to adjust for the fact that white collar workers live longer. Therefore the net effect of this bill for corporations would be to lower the average assumed life expectancy they use for workers overall. If the bill really has that effect it is foolish.
There is an even more serious problem with the actuarial assumptions made by pension funds about life expectancy: the rate of advance of biomedical science is accelerating. As a consequence of the acceleration of the advance of biological science and technology the gradual rise in life expectancy which has characterized the last century will not be repeated in the 21st century. In the next few decades big killer diseases such as cancer which for decades medical science has made only slow progress against will be defeated entirely. Also, and more importantly, cell and gene therapies will be developed which have rejuvenating effects and successful techniques for growing replacements for most types of organs will be developed as well.
Simply put, the historical model of slow steady rise in life expectancy is going to be shattered by the development of revolutionary biotechnologies which will cause large rapid increases in human life expectancy. Linear actuarial extrapolations of past trends will not provide a useful guide to future trends in human life expectancy. Biogerontologists, equipped with the increasingly powerful tools of molecular biology such as DNA sequencing machines, microfluidics chips, gene array chips, and other tools and techniques will increasingly turn toward the pursuit of Strategies for Engineered Negligible Senescence to end human aging entirely. The tools at the disposal of biological engineers are already powerful enough to start working in earnest toward such an ambitious goal. Using the current armament of laboratory tools and techniques biologists now have the ability to start to develop and test some of the major types of rejuvenating therapies in mouse models. Within 20 years and perhaps even sooner many of those therapies could be ready for human trials. Therefore it seems unreasonable to expect a continuation of past trends of slowly rising human life expectancy.
|Share |||Randall Parker, 2003 May 06 01:27 AM Aging Reversal|