Pensioners longevity unrelated to whether they have a public or private sector planBy The IJ Staff | June 26 2017 11:30AM
Whether a retiree has a private or public sector pension plan does not affect their longevity, says a new study by Club Vita Canada released June 22. This goes against the view that public sector pensioners outlive those from the private sector.
"Based on our data and statistical modelling, we've found that a much more accurate and reliable picture of how long pensioners are living can be captured by looking at the attributes of individuals as opposed to their plan," says Richard Brown, senior longevity consultant at Club Vita Canada – a longevity analytics provider for Canadian pension plans.
Nine-year difference in life expectancy
The goal of this approach is to unlock insights into how long pension plan members are living, he says. “We have found that for a male pensioner age 65, we can explain a nine-year difference in life expectancy based on individual attributes like postal code – which helps to identify a pensioner's lifestyle and socio-economic status.”
Brown says while Club Vita Canada's approach is new for Canadian pension plans, in the United Kingdom postal codes have been widely used by pension plans for some time and are also being used by Canadian insurance companies. "By adopting a similar approach as insurers and reinsurers, pension plans looking to transfer risk can much better assess the benefits and costs of transferring longevity risk," he adds.