The Society of Actuaries (SOA) published new base mortality tables and a new mortality improvement scale in October 2019.
New mortality improvement scales have been published each October for the last five years. The new Scale MP-2019 has slightly lower mortality improvement rates compared to its predecessor MP -2018, and for most pension plans, will result in lower pension liabilities.
The new Pri-2012 Mortality Tables (“Pri-2012 tables”) were developed based on data collected for 2010 -2014. The Pri-2012 tables update the RP-2006 Mortality Tables (more commonly known as the RP-2014 mortality tables adjusted to base year 2006) which were developed using data from 2004-2008. The Pri-2012 tables actually update the RP-2014 tables despite the naming nomenclature. The Pri-2012 tables are based on a significantly expanded dataset and reflect shorter life expectancies compared to the prior RP-2014 tables.
Single-employer plan sponsors should consider reflecting both the Pri-2012 tables and the MP-2019 improvement scale for purposes of year-end plan accounting. Plan sponsors who have annually updated their improvement scale should generally adopt the MP-2019.
Reflecting both the new base mortality table and an updated improvement scale is expected to lower liabilities.
Sponsors should consult with their actuaries in respect to the effect the new base mortality tables/improvement scale will have on their plan valuation.
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