The Canadian Institute of Actuaries (CIA) has issued the first-ever mortality tables and mortality improvement scales based on Canadian pensioner mortality experience.
Previously, Canadian pension actuaries could access primarily United States-based pension mortality tables to help them arrive at their assumptions. The new studies show Canadian pensioner mortality has improved significantly faster than projected by the U.S. standard tables in recent years.
Using the old U.S. standard mortality table and improvement scale, a 65-year-old man in 2014 has a life expectancy of 19.8 years, while with the new mortality table and improvement scale, his life expectancy is 22.1 years.
For a 65-year old woman in 2014, the old U.S. standard mortality table and improvement scale indicates a life expectancy of 22.1 years, while with the new mortality table and improvement scale her life expectancy is increased to 24.4 years.
“These new mortality tables will, for the first time, allow CIA members to use tools that solely reflect Canadian pensioner mortality experience. This will allow actuaries to provide even more reliable calculations and estimates for the users of their services,” said CIA president Jacques Lafrance.
The financial impact of adopting the new tables may vary considerably between pension plans but reported pension obligations could increase by as much as seven per cent or more, said the CIA. More typically, increases may be in the range of three to four per cent while those pension plans that are already reflecting their own mortality experience could see increases in the one to two per cent range.
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