This week we’re proud to announce the launch of an innovative, pensions-focused research paper from the Actuarial Research Centre (ARC), the Canadian Institute of Actuaries (CIA) and the Society of Actuaries (SOA).
Trends in Canadian Mortality By Pension Level: Evidence From the CPP and QPP, funded by the IFoA, SOA and CIA, is a significant contribution to the work of life and pension actuaries. This new paper discusses Canadian mortality with an emphasis on socio-economic differences in the level of mortality and mortality improvement rates.
We believe that this research has an important role to play in addressing the challenges that many global societies face in ensuring income adequacy for our ageing populations.
By convening a global group of academics, experts and practitioners, we believe the ARC is continuing to play a unique role in delivering cutting-edge research that furthers our understanding of actuarial science for the development of pensions and safeguards the public interest.
Trends in Canadian Mortality By Pension Level: Evidence From the CPP and QPP
This important new paper explores Canadian mortality, with a particular emphasis on socio-economic differences in the level of mortality and mortality improvement rates. Funded by the IFoA, CIA and SOA, this paper is pleased to promote a significant contribution to the work of life and pension actuaries.
The paper establishes the extent of the differences in mortality between different socio-economic groups, how these differences vary with age, and whether these mortality inequalities have increased over time. The report carries out a forensic analysis of male and female mortality data by pension level from the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) up to 2015.
The authors have found a significant variation in mortality by pension level, with the widest gap at age 65, and gradually narrowing at higher ages. Life expectancy from age 65 can be as much as three years longer for those on the maximum pension relative to those on a low pension. Evidence is found that the inequality gap has widened over the last 25 years. The reasons for this are not clear and are likely to be complex.
Indirect, but strong, evidence is found for a healthy immigrant effect that distorts levels of mortality in low pension groups, especially in the CPP data. There is mixed evidence (due to sampling variation) for a slowdown in mortality improvements in recent years. There is no evidence that the slowdown has affected one group more than another. The QPP data point to a gradual slowdown rather than a sudden change.
The authors have fitted a range of stochastic mortality models to the data. The preferred model, by smoothing out sampling variation in the data, gives further insights into the data, including the healthy immigrant effect. The ‘healthy immigrant effect’ is that, on arrival in Canada, immigrants are more healthy and live longer than the average resident Canadian with the same pension level when they eventually retire.
This model provides a basis for forecasting future levels of mortality and the uncertainty around central forecasts.
Discover more about our work
We work in partnership on a wide range of innovative research projects. Find out more about our work below.