New life-office mortality tables from the CMIB

On 28th September 2005, the CMIB published the new '00 Series' 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. Note that these figures therefore differ from the information given in the CMIB's press release, which is not weighted by pension size.

Figures are calculated using the PxA92 and PNxA00 tables and are 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 is large and has credible experience data, consider Longevitas.

Changes in mortality rates

The new tables show substantial falls in mortality rates at post-retirement ages compared with the old ones. Interestingly, for all the focus on rapid improvements in male mortality, it is the female tables which show some of the biggest improvements.

Note: The mortality rates at ages 60 and below have actually increased in the '00 Series' compared to the '92 Series', but this is because of under-graduation of the '92 Series', not because mortality has necessarily got worse at these ages.

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 older males.

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 likely figures will 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 '00 Series' tables for males and females at selected ages, and compares them with the equivalent annuity factors under the old '92 Series' tables.

It is interesting to note that the greatest increase in annuity factor is for males ages over 70. Co-incidentally, these are where population mortality rates are falling fastest, i.e. the ages at which life expectancy is increasing most quickly.

Note: Immediate level annuities paid continuously to single lives, discounted at 5.0% 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 escalating annuity factors under the new '00 Series' tables for males and females at selected ages, and compares them with the equivalent annuity factors under the old '92 Series' tables.

As well as noting the same phenomenon of the greatest increases for older 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 interest rate (i.e. actual interest rate minus the escalation rate).

Note: Pensions in payment paid continuously to single lives, escalating at 2.5% per annum and discounted at 5.0% interest per annum. If you want to calculate your own annuity factors on other bases, try our on-line calculators.