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Mortality Rates

The Mortality Rates library defines the mortality rates needed to calculate Annuity Factors and Actuarial Equivalence. The Mortality Rates Library has two general types of mortality tables: standard and dynamic.  If you are creating a new table, the New button, via the drop-down arrow, allows you to select Standard or Dynamic, where the default is to create a standard mortality table. Creating Dynamic Mortality tables are discussed at the end of this article and dynamic mortality in general is discussed in Dynamic Mortality.

Mortality rates are entered through the same (table) interface as benefit component and payment form conversion tables, and that interface is shared with ProVal. As such, there are some options that may be used to create a table that either will not be permitted for a calculation or that will be ignored during a calculation. For example, while many additional options for table creation are technically available, the mortality rates may vary only by age, sex and year of birth, and you may apply improvement scales. Many standard tables are automatically included in each ProAdmin (and ProVal) client. While some of these vary between pre- and post-commencement, ProAdmin only recognizes and reflects post-commencement mortality rates. See Table Interface for details about constructing tables and entering their values.

The following mortality tables are automatically included in an existing ProAdmin client, when the client files are updated, and in every new ProAdmin client. (Other mortality tables may be added in the future.) The tables may be hidden from the current Project; click the Unhide button to gain access. You cannot erase, or save changes to, mortality tables that are automatically included in a ProAdmin client. The tables currently available are:

The following tables are base rates only as published by the CIA Pension Experience Subcommittee February 2014 and do not have the improvement scale or any size adjustment factors built in.
The following tables are linked to the relevant base rates and include the applicable improvement scale. Note that size adjustment factors, as published by in the CIA Pension Experience Subcommittee February 2014, have been pre-filled in under the mortality linkage advanced parameters. If you wish to apply them, select the radio button to apply a database field adjustment factor, check the box to transform the values based on the spreadsheet provided. Because the table is protected, the resulting table with size adjustment factors must be saved under a new name.
Linking Mortality Base Rates

Check the Link mortality base rates box if the mortality table you are building is a modification based on previously existing underlying tables. When you check the box, the spreadsheet values and Options button will become inaccessible; click the Parameters button to specify the linkage parameters.

In the Mortality Table Base Rate Linkage Parameters dialog box, select the Mortality table that Base rates are drawn from using the list of static mortality rate reference tables unhidden in the current Project. If a sex-distinct table has been selected, specify whether you want to Transform to unisex, blending specified weights. Enter the percentage weight of male rates, and the complementary percentage weight of female rates will populate. For example, you could create a new unisex mortality table that blends 80% of male and 20% of female rates from an existing mortality table.

You may shift base rates by a specified number of years, to reflect an Age setback, again separately for Male and Female rates. Note that a negative age setback will be applied instead as a set-forward. For example, a setback of -4 will set the base rate at age 40 equal to the original rate for age 44. For no age set back, enter 0. The table can be further adjusted with a multiplicative Adjustment factor separately for Male and Female rates. For no adjustment, enter 1. If the Age setback between male and female or the Adjustment factor between male and female are different, the resultant table will be sex-distinct.

When you click OK, to return to the Mortality Rate Table dialog box, the table you are building will populate with the newly-linked values. Note that you may uncheck the box if you wish to further modify the values or examine them in more detail.

 

Mortality Projection 

Check the Apply Improvement Scale box to apply rates of annual improvement in mortality experience to the mortality base rates, to create either a fully generational table or a static table reflecting mortality improvement to a particular year (typically in the future, although you may specify a year in the past). While this section references Pre- and Post-Commencement improvement scales separately, ProAdmin only uses post-commencement mortality rates for its calculations.

Select a Pre-Commencement improvement scale from the list of scales available in ProAdmin’s Mortality Improvement Scales library, or click the button to access the library, in which you may create new improvement scales or modify existing ones. Enter the (pre-commencement) Base year (year from which you are projecting) in the text box. Similarly, select a Post-Commencement improvement scale, accessing the library by means of the button if desired, and enter the (post-commencement) Base year.  For Projection, select either Fully generational, to project mortality improvement indefinitely into the future, or To year, to project from the base year only to the specified year. See the Technical Reference article entitled Mortality improvement (generational mortality) for details about the calculation of projected mortality rates.

If a fully generational improvement scale is applied, then an arrow will appear to the right of the View button. Chose View table to display the mortality table and parameters as they were input. Clicking the View button itself will display the same as this first option. Choosing View table for an individual will yield another dialog box. Specify an age and a valuation year and click View, and ProAdmin will display the projected mortality for an individual who is that age in that valuation year.  To produce the mortality rates that ProAdmin uses, be sure to increase the number of significant digits in Format values... after clicking the Options... button. 

 

Dynamic Mortality

U.S. Internal Revenue Service guidance specifies the mortality tables to be used for determining lump sums under the Pension Protection Act of 2006 (PPA). Certain tables permissible or required in the regulations are static tables, meaning that generational projection is not applied. These static tables are updated by the IRS annually to reflect mortality improvements.

Select New/Dynamic to create a new dynamic mortality table.

Select if the IRS base rates and projection methodology should use the 2018 methodology (see 2018+ Dynamic Mortality) or the 2008 methodology (see 2018+ Dynamic Mortality).

Select the Blend type from the following three options:

  1. None. This produces a sex distinct pre/post commencement table similar to the Static Mortality (dynamic) tables.
  2. Pre/post combined (Small plan). This produces a sex distinct table similar to the Small Plan Combined Static Mortality (dynamic) tables.
  3. Unisex pre/post combined (417(e)). This produces a unisex table similar to the Applicable Mortality for 417(e) (dynamic) tables.

Select the Improvement scales as variable by calendar year. This example is the IRS 2018-2019+(MP16-17) Static Mortality (dynamic) table with an estimated MP-2018 improvement scale to calendar years 2020 and beyond.

Check the Zero out pre-commencement rates/probabilities box if you wish to set the pre-commencement rates to zero (although ProAdmin only recognizes and uses post-commencement rates).

Check the Freeze improvements in year box if you wish to freeze the improvement rates in a particular calendar year. The improvement rates will stay the same for calendar years after the year you enter.

 

Current Applicable 417(e) 

When attempting to view a dynamic mortality table, the dialog box asks What year would you like to view? Enter the desired calendar year in the parameter’s text box. If the dynamic table is also a 417(e) table, there is a subsequent option to Use the current applicable 417(e) mortality for year. Checking this box will swap the selected mortality table for the most recent available table containing the published rates for the selected year (or projection, if applicable). This is useful when checking mortality for objects that use a similar checkbox within their parameters. 

 

Click View and ProAdmin will build the static rate table associated with that year and present it for you to print, view, or file.

 
The mortality rates that are now required by the IRS for 417(e) purposes, as defined under:

If you reference any of the these tables in an Actuarial Equivalence definition for both Member and Beneficiary mortality and check the box for Use the current applicable mortality for 417(e), ProAdmin will generate the mortality rates for each annuity commencement date based on the plan years of that commencement date. ProAdmin will automatically anticipate the mortality improvements for future plan years as required under PPA without a need for the user to physically change the table each year when the new Revenue Ruling is issued. Thus for a commencement date based on the plan year of that commencement date beginning prior to 2018 ProAdmin will use IRS 2008+ Applicable Mortality Table for 417(e) (dynamic), during 2018 it will use IRS 2018+ Applicable Mortality Table for 417(e) (dynamic), during 2019 it will use IRS 2018-2019+ Applicable Mortality Table for 417(e) (dynamic), and so forth. For details on how these tables are generated please see the Technical Reference topic Dynamic Mortality.

Please note that in additional to the built-in options for freezing a mortality table "at its source", there are a few other options for controlling/limiting dynamic (and sometimes generational) mortality tables: