Observations Arising from “The Graduation of Pensioners' and of Annuitants' Mortality Experience 1967-70”

Written concurrently with the first item in C.M.I.R.3, the Faculty of Actuaries Mortality Research Group's paper determines a range within which mortality rates of Life Office Pensioners may be expected to change in the foreseeable future. Comparisons are made between the observed changes in pensioner mortality rates and those observed for the population of England and Wales, and reference is also made to the trends of mortality rates assumed in recent British population projections. From these considerations two forecasts are made, based upon “optimistic” and “pessimistic” future mortality assumptions, between which it is expected the actual future rates of mortality change will lie. In the second part of the paper the financial effects of the range of forecasts are set out, when used to project the graduated pensioner Mortality Experience 1967-70 (C.M.I.R., 2, 57). The implications are illustrated in the context of two model funds, one based upon life offices' data, and the other based upon a non-insured pension scheme for which the contribution rates vary in accordance with the levels of future expected pensioner mortality.