The Society of Actuaries (SOA) released first-of-its-kind public retirement plan mortality tables, Pub-2010, which includes the individual mortality experience for teachers (school teachers, college professors), public safety professionals (police, firefighters, correctional officers) and general employees (judges, military, administrative staff).
The SOA is releasing public plan mortality tables to give pension actuaries and plan sponsors current information to assist in setting mortality assumptions. This is the first time it has studied public retirement plan mortality separately from the private sector.
Last August, the SOA released an exposure draft of the new public retirement plan mortality tables and requested comments. It developed the new tables once it was determined that public pensions have differing levels of mortality than private pensions.
The SOA’s mortality tables include 46 million life-years of exposure data and 580,000 deaths from 78 public pension plans and 35 public pension systems across the country. Analysis of the dataset reveals that teachers have the longest age-65 life expectancy of the job categories studied. Further, the amount-weighted, deferred-to-62 annuity values produced by the public-sector teachers’ tables were consistently larger than those produced by corresponding public safety and general employee tables. Generally speaking, this means that pension obligations for teachers are greater than obligations for other job categories, when comparing the same benefit amount.
The tables also suggest that higher income is correlated with lower mortality, as income succeeded job category as the most statistically significant mortality factor across all job categories.
The SOA points out that the financial impact of implementing the new public pension mortality tables will vary based on each individual job category, as well as the relative mix of member ages and other demographics in each pension plan. It encourages professionals in the field to perform their own analysis to understand the impact of these tables on their own plan. “It is ultimately up to plan sponsors, working with their plan actuaries, to determine how to incorporate emerging mortality and mortality improvement into their plan valuations,” the SOA says.