Compliance August 28, 2018

SOA Seeks Input on New Public Pension Mortality Tables

The SOA’s public-sector mortality study is designed to provide public pension actuaries and plan sponsors with information to help set mortality assumptions and includes separate mortality tables for teachers, public safety professionals and general members, respectively.

Reported by

The Society of Actuaries (SOA) released an exposure draft of new public retirement plan mortality tables.

The SOA previously published private mortality tables, but developed the new tables once it was determined that public pensions have differing levels of mortality than private pensions. The SOA’s public-sector mortality study is designed to provide public pension actuaries and plan sponsors with information to help set mortality assumptions and includes separate mortality tables for teachers, public safety professionals and general members, respectively.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

While each public pension plan is different, the SOA generally found that experience data showed that higher income was correlated with lower mortality. Income was generally a more statistically significant mortality factor than job category, geographic region or calendar year.

The amount-weighted annuity values produced by the public sector teachers table were consistently larger than those produced by the corresponding public safety and general tables. Generally speaking, this means that if all else is equal, pension obligations for teachers are greater than obligations for other job categories.

The SOA suggests it is important that professionals in this field perform their own analysis to understand the impact of the SOA’s public mortality tables on their own plan, based on their knowledge of the individual characteristics and experience of the covered groups.

The SOA is soliciting comments on this exposure draft. Comments should be sent to Patrick Nolan at pnolan@soa.org by October 31. Please include “Pub-2010 Comments” in the subject line.

The Pub-2010 Public Retirement Plans Mortality Tables Exposure Draft Report, as well as other information, may be downloaded from here.
The Markets August 28, 2018

HNW Investors Pay Close Attention to Inflation as They Prepare for Retirement

Sixty-eight percent say they pay close attention to inflation as they prepare for retirement.

Reported by

High-net-worth investors’ perceptions about inflation rather than hard economic data have a greater influence on how they plan for retirement and spend their money today, according to the latest income investing survey by Nuveen Investments.

Seventy-six percent say they trust their personal experience with inflation rather than statistics calculated by the Department of Labor (24%). Sixty-eight percent say they pay close attention to inflation as they prepare for retirement, invest (62%) or spend money (57%).

Seventy-five percent correctly recognize that inflation is currently low, and 71% understand that retirees experience higher inflation rates than the norm. However, 60% incorrectly say that inflation is 5% or more or say they are not sure. Only 32% are near the real number of 2% to 3%.

Seventy-seven percent say the economic situation will make investment planning more complex. Eighty-six percent say they have experience high interest rates in their lifetime. Within this group, 79% of Millennials, those between the ages of 18 and 37, say they have experienced high interest rates in their lifetime.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Asked what they think will happen to bond values when the Federal Reserve Bank increases interest rates, 40% think they will increase, 30% think they will decrease and 30% think they will either remain the same or they don’t know.

Fifty-two percent said they would make an investment change as a result of interest rate hikes.

The Harris Poll conducted the survey of 1,000 high-net-worth investors for Nuveen Investments.

«