Longevity for Canadian pensioners is lower than anticipated, which could be costing defined benefit plan sponsors, according to new research by Club Vita Canada Inc.
The longevity analytics firm and subsidiary of Eckler Ltd. found Canadian male pensioners are living about 1.5 years less than expected from age 65, while female pensioners are living about half a year less than expected.
“Based on our data, some DB plans are overestimating how long their members are currently living and are therefore taking an overly conservative approach to funding their liabilities,” said Ian Edelist, chief executive officer of Club Vita Canada.
Read: Growth in life expectancy slows for OAS beneficiaries, study finds
“Correcting that overestimation could reduce actuarial reserves by as much as six per cent — improving Canadian pension funds’ and their plan sponsors’ balance sheets just by using more accurate, granular and up-to-date longevity assumptions.”
The data comes from Club Vita Canada’s first annual longevity study, which spans 500,000 Canadian pensioners from more than 40 pension plans.
Read: Mandatory retirement savings touted as solution to financial, demographic challenges