Studies Will Lead to New Mortality Tables and Scales

By A. Kim Young, FCIA

In 2008, the Research Committee of the CIA formed the Pension Experience Subcommittee to:
The subcommittee is in the final stages of preparing an exposure draft of its report, which will propose new mortality tables and mortality improvement scales. The new tables and scales are important because they are based on recent Canadian experience. The mortality rates of the new tables are significantly lower than those of UP-94 projected on Scale AA at most ages, indicating that adoption of tables and scales reflecting Canadian mortality experience is warranted.

The Institute commissioned two concurrent experience studies in 2009. The CPP/QPP Study reviewed the experience of pensioners under the Canada Pension Plan (CPP), under the Québec Pension Plan (QPP), and in combination. For the purpose of developing mortality tables, the CPP/QPP Study reviewed the mortality experience of all persons receiving a retirement pension from the CPP and QPP for the calendar years 2005, 2006, and 2007. The results of this study are provided in a report prepared by Louis Adam, FCIA, FSA, entitled "The Canadian Pensioners Mortality Table, Information on mortality for the triennial period ending December 31, 2007, with data as at December 31, 2008".

The CPP/QPP Study also reviewed the trends of pensioner mortality experience since 1967, the first year that pensions became payable under these programs. Results of this study are provided in the Louis Adam report entitled "The Canadian Pensioners Mortality Table, Historical Trends in Mortality Improvement and a Proposed Projection Model based on CPP/QPP Data as at December 31, 2007".

The CPP/QPP Study presents 15 different mortality tables differentiated by three data sources (CPP, QPP, and combined) and by five pension income classifications. Both of the reports resulting from the CPP/QPP Study are available on the Institute’s website (here and here).

The second study, the Registered Pension Plan (RPP) Study, reviewed the experience of a number of Canadian public sector and private sector registered pension plans. The results of the RPP Study will be provided in the subcommittee’s report.

The primary objective of these studies was to build base mortality tables and mortality improvement scales that may be used for actuarial valuations for funding and/or financial reporting purposes for a broad range of Canadian pension plans. Furthermore, it was expected that such tables and scales may be considered for use under actuarial standards of practice for the determination of pension commuted values and the division of pension benefits on marriage breakdown.

The subcommittee’s report will present:

It is expected that the exposure draft will be released in July following its review and approval by the Research Committee and the Member Services Council. It is hoped that the report will generate discussion within the Institute, and the subcommittee will thereby gather constructive feedback on the mortality tables and improvement scales proposed in these studies. A national webcast focused on the results of these studies is currently under consideration for early to mid-September and the period for comment will end September 30.

A. Kim Young, FCIA, is a member of the Research Committee.
Any questions relating to the work of the Pension Experience Subcommittee can be directed to him at