Methodology improvements are pushing the life expectancy of Canadian retirees and surviving spouses by roughly one year to age 65 as of Jan. 1, 2024, according to new report from the Canadian Institute of Actuaries.
It noted this increase in life expectancy means there will be an approximate increase of two per cent to three per cent in liabilities and current service costs for Canadian pension plans.
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The report includes 20 new mortality tables for Canadian retirees and survivors which, alongside the mortality improvement scale, will provide better mortality information to measure pension plan obligations when it comes to funding and financial reporting needs.
The report, which was last published in 2014, evaluated the mortality experience data of 48 pension plans from 2011 to 2021. Indeed, the report considers mortality experience linked to the coronavirus pandemic — although the mortality spikes from the pandemic were isolated.
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David Dupont, senior pension consultant at Normandin Beaudry, notes the coronavirus pandemic impacted the report’s findings and delayed its release. “[The pandemic] really caused delay because things had to be moved around to just better understand the impact of [COVID-19] at that time and how it will impact in the future.”
Compared to the previous mortality report, the latest edition doesn’t differentiate between sectors and doesn’t provide a simple mechanism to guide table selection, according to a report from Normandin Beaudry. Instead, actuaries will need to select the available tables based on plan-specific experience and the socio-economic characteristics of its members.
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