A recent Canadian mortality study concludes we are living longer; good news for us, bad news for pension plan sponsors!
Mortality is a key assumption in calculating actuarial liabilities for pension plans and impacts the level of funding required. Historically, industry standard mortality tables were based largely on pension plan experience data from the United States. However, after the completion of a study by the Canadian Institute of Actuaries (CIA) which concluded that Canadians are living longer than previously expected, the CIA published new Canadian Pensioners’ Mortality (CPM) tables and mortality improvement scales. The impact of adopting these new tables will vary among plans, but most can expect an increase in plan liabilities and funding costs.
PBI has published A Pension Plan Sponsor’s Guide to the New Canadian Mortality Tables that examines what impact the new Canadian mortality tables will have on the multi-employer pension plan segment of our client base. The potentially significant increase in cost that would come with the use of the new CPM tables led PBI to take a careful look at each plan’s experience, rather than simply adopting the tables. The Guide reveals how some pension plans are handling the new tables and the potential cost implications, and also provides guidance to selecting appropriate plan-specific mortality assumptions.
For more information, we encourage you to contact your consulting actuary or to email to be connected with a PBI consultant and receive a copy of A Pension Plan Sponsor’s Guide to the New Canadian Mortality Tables.