Construction trades pensioner deaths were almost 15 per cent higher, on average, than predicted by the mortality table of the Canadian Institute of Actuaries (CIA) for private sector plans during the 2002-2012 period examined, according to a new study by Eckler.
And considerable variance was found in actual pensioner deaths among trades and individual plans, found the Construction Trades Mortality Study.
"Life expectancy has a big impact on pension costs," said Cameron Hunter, principal and leader of the Trusteed Plans Group at Eckler. "Canadians are living longer than previously estimated, and plan sponsors need a clear understanding of their pensioners' life expectancy to fund their plans properly."
In 2014, the CIA published its Final Report on Canadian Pensioners' Mortality with new Canadian mortality tables, prior to which Canadian actuaries relied solely on U.S. mortality tables to measure pension funding adequacy. The report showed Canadians are living considerably longer than predicted under the old U.S. tables.
Analysis indicated that pensioners in the construction trades have higher than average mortality rates therefore leading to the assumption of lower average life expectancies.
Eckler's study gathered essential demographic data from 43 construction trades pension plans across Canada to compare and contrast results.
"The results will help actuaries of participating plans make liability and cost calculations that better represent the characteristics of their plan or its trade. They also provide a significant baseline for future mortality experience research," said Hunter.
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.