The growth in life expectancy for beneficiaries of Canada’s old age security program declined slightly in recent years in comparison to the rates of the previous decade, according to a recent study by Canada’s chief actuary.
From 2010-13, the growth in life expectancy was 1.6 months per year. That compares to two months per year from 1999 to 2013.
While similar trends have emerged in the United States and Britain, it’s too early to tell if the recent slowdown will continue, said chief actuary Jean-Claude Ménard in a press release about the study.
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The dip in the growth rate isn’t very big but it’s a signal that could suggest a potential change in the coming years, says Serge Charbonneau, a partner and actuary at Morneau Shepell.
“Mortality improvement is not something that continues at a steady pace. . . . It’s a fraction of a month, so it’s not such a big deal.”
But he notes that if mortality improvement rates continue to decline, pension funds will need to review their plans and the assumptions they make in regards to entitlements to beneficiaries.
“Right now, we expect that mortality will keep improving but we need to pay attention to current and recent trends,” says Charbonneau. “Three years is small period, but if you look at the past decade, that’s what guides us to determine what happens in the next decade.”
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While the longevity growth rate slowed during the period covered by the study, OAS beneficiaries are still living longer overall. In 2013, the life expectancy for beneficiaries at age of 65 was 18.9 years for males and 21.8 years for females. That’s an increase of 2.8 years and 1.9 years, respectively, over the findings in 1999.
The study also focused on the various factors that may affect the life expectancy of retired Canadians. It found:
- Female beneficiaries live longer than male beneficiaries;
- Married beneficiaries live longer than single beneficiaries;
- Beneficiaries born outside of Canada live longer than those born in Canada;
- Beneficiaries who don’t receive the guaranteed income supplement (and thus have a higher income) live longer than those who receive the benefit;
- Single beneficiaries who receive the guaranteed income supplement have the lowest life expectancy;
- Married beneficiaries who don’t receive the guaranteed income supplement have the highest life expectancy.
The study suggests beneficiaries born outside of Canada are more likely to have a higher life expectancy than those born here in part because they need to pass mandatory health screenings.
The data will prove useful in light of the deal to enhance the Canada Pension Plan struck in June, says Fred Vettese, chief actuary at Morneau Shepell.
He notes that while the statistics don’t necessarily prove causation between specific factors and outcomes, they’re solid facts for the federal government to consider when it makes future policy decisions about retirement.
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