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New pension-scheme mortality tables from the CMI

On 7th February 2014, the CMI published the new S2 mortality tables. This page shows some sample annuity factors illustrative of life-company annuities and defined-benefit pensions. We will use the so-called amounts tables, i.e. mortality as weighted by the size of the annual pension, as this gives a better indication of the financial importance.

Figures are calculated using approximate continuous-time values where appropriate. Note that these figures are for information only, and they are provided without warranty of any kind. The annuity factors tabulated here include no allowance for future improvements, and are thus unsuitable for inference about any life-company annuity reserves, or the funding level of any defined-benefit pension scheme.

If you want to calculate your own annuity factors on other bases, try our on-line calculators. Alternatively, if you want a bespoke rating for your scheme's socio-economic mix, try mortalityrating.com. If your portfolio has credible experience data, you should consider Longevitas to analyse your experience data and create your own portfolio-specific mortality tables.

Changes in mortality rates

The new S2 tables show substantial falls in mortality rates at post-retirement ages compared with the old S1 tables. Male mortality has improved the most.

Table 1. Mortality rates per 100,000 and cumulative improvements

S1PAS2PAImprovement
AgeMalesFemalesMalesFemalesMalesFemales
65112479493471017%11%
70197313321628117217%12%
75353824372933212317%13%
80626344455308398015%10%
851071578159434736812%6%

Changes in life expectancies

If mortality rates fall, then life expectancies rise. We can see here some substantial improvements in relative life expectancy, particularly for males.

Table 2. Life expectancies

S1PAS2PAIncrease
AgeMalesFemalesMalesFemalesMalesFemales
6518.120.619.221.26.2%3.1%
7014.216.515.217.17.0%3.4%
7510.812.811.613.27.5%3.4%
807.99.58.59.87.5%2.8%
855.66.86.06.96.4%1.6%

Note: These are the life expectancies at current rates, i.e. with no allowance for any likely future improvements in mortality and life expectancy. These figures should therefore be treated as minimums, and the factors will likely be higher if future improvements are included. If you want to calculate your own life expectancies on other bases, try our on-line calculators.

Changes for annuities

Many life-company annuities are level, i.e. the income does not change from year to year. The table below shows level annuity factors under the new S2 tables for males and females at selected ages, and compares them with the equivalent annuity factors under the old S1 tables.

Table 3. Annuity factors

S1PAS2PAIncrease
AgeMalesFemalesMalesFemalesMalesFemales
6513.4214.8314.0815.204.9%2.4%
7011.112.5211.7412.885.8%2.8%
758.8410.179.4110.486.5%3.0%
806.767.947.218.146.7%2.6%
854.995.955.286.045.9%1.5%

Note: Immediate level annuities paid continuously to single lives, discounted at 3.0% interest per annum. If you want to calculate your own annuity factors on other bases, try our on-line calculators.

Changes for defined-benefit pension schemes

Many defined-benefit pensions are at least partly inflation-linked, as are some life-company annuities, i.e. the income is increased from year to year. The table below shows factors for escalating annuities under the new S2 tables for males and females at selected ages, and compares them with the equivalent annuity factors under the old S1 tables.

As well as noting the same phenomenon of the greatest increases for males, we note that the increases tend to be larger still than the equivalent figures above for level annuities. This is because the impact of increasing longevity is felt more with a lower effective discount rate.

Table 4. Pension factors

S1PAS2PAIncrease
AgeMalesFemalesMalesFemalesMalesFemales
6516.2718.3417.2018.865.8%2.8%
7013.0314.9713.8915.456.6%3.2%
7510.0611.7810.7812.177.2%3.3%
807.498.938.029.177.2%2.7%
855.396.515.736.626.2%1.6%

Note: Pensions in payment paid continuously to single lives, escalating at 2.0% per annum and discounted at 3.0% interest per annum. If you want to calculate your own annuity factors on other bases, try our on-line calculators.

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