Pensio P on Pla an for the Royal R Cana adian Moun nted Policee Morta M ality Study dy No. 15 Acctuarial Stud

Ap pril 2015 Offfice of thee Chief Acctuary

ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

TABLE OF CONT TENTS Page I- 

Exeecutive Sum mmary.................................................................................................................... 4  A.  Purpose ................................................................................................................................ 4  B.  Scope ................................................................................................................................... 4  C.  Main findiings ...................................................................................................................... 5 

II- 

Development of o Mortality Rates ................................................................................................ 6  A.  Evolution of the Numb ber of Male Regular R Mem mbers........................................................ 6  B.  Data ..................................................................................................................................... 6  C.  Methodolo ogy Overview w....................................................................................................... 6  D.  Mortality Experience E ........................................................................................................... 7  E.  Compariso ons ........................................................................................................................ 9  F.  Discussion n ......................................................................................................................... 11 

III-  Pro ojected Morttality ................................................................................................................... 12  A.  Future Mo ortality Impro ovement Rattes ............................................................................... 12  B.  Life Expecctancies .............................................................................................................. 15  C.  Impact of Mortality M Asssumptions on o Liabilitiees and Currennt Service C Cost .................. 19  IV-  Conclusion ................................................................................................................................ 22  V- 

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Ap ppendices ............................................................................................................................... 23  A.  Complete Period P Life Tables - Currrent Study aand RCMP P Plan Report ......................... 23  B.  Canadian Pensioner P Mortality M Ratees (CPM) .................................................................... 25  C.  Bibliograp phy ...................................................................................................................... 28  D.  Acknowled dgements ........................................................................................................... 28 

ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

LIST OF TABLES Page Table 1 

Evolution of the Number of Male RCMP Regular Members ................................. 6 

Table 2 

Deaths and Exposures ............................................................................................. 7 

Table 3 

Crude Central Mortality Rates ................................................................................ 8 

Table 4 

Graduated Male Mortality Rates and Period Life Expectancy ............................... 9 

Table 5 

Period Life Expectancy Comparisons - Males ...................................................... 10 

Table 6 

Period Life Expectancy Comparisons - Females .................................................. 11 

Table 7 

Mortality Improvement Factors ............................................................................ 15 

Table 8 

Mortality Rates by Plan Year ................................................................................ 15 

Table 9 

Life Expectancies without Improvements after the Given Year ........................... 16 

Table 10 

Life Expectancies with Improvements after the Given Year ................................ 16 

Table 11 

Liabilities - 2002 vs. 2012 Mortality Assumptions ............................................... 21 

Table 12 

Liabilities with and without Mortality Improvements .......................................... 21 

Table 13 

Period Life Table – Current Study ........................................................................ 23 

Table 14 

Period Life Table – 2012 Actuarial Report ........................................................... 24 

Table 15 

Mortality Rates of Canadian Pensioner Mortality (CPM) – Males ....................... 25 

Table 16 

Mortality Rates of Canadian Pensioner Mortality (CPM) – Females ................... 26 

Table 17 

Current Study – Plan Years 2005 and 2013 Male Mortality Rates ....................... 27 

LIST OF CHARTS Page Chart 1  Chart 2  Chart 3  Chart 4  Chart 5 

Historical Annual Mortality Improvement Rates (Canada) ..................................... 13  Impact of Future Mortality Improvements on Life Expectancy .............................. 18  Life Expectancy of Male with Future Mortality Improvements .............................. 19  Life Expectancy of Female with Future Mortality Improvements .......................... 20  Life expectancy – 2002 vs. 2012 RCMP Plan Actuarial Reports ............................ 20 

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

I- Exeecutive Sum mmary This is th he fifteenth actuarial a stud dy to be published by thee Office of tthe Chief Acctuary (OCA A). Increasin ng longevity of the Canadian populattion puts preessure on thee cost of defiined benefit pension plans. p As a result, r mortaality rates asssumptions ussed to prepar are actuarial vvaluations oof pension plans p are of paramount p importance. The Royaal Canadian Mounted Po olice Pension n Plan (the ““RCMP Plann”) establishhed under thee Royal Ca anadian Mou unted Policee Superannua ation Act proovides retireement, disabiility and survvivor pension benefits b to RCMP R memb bers. Statutory actuarial reports on thhe RCMP Pllan are prepaared at least ev very three years pursuan nt to the Pub blic Pensionss Reporting A Act. The Off ffice of the C Chief Actuary conducts c mo ortality studiies of federall public secttor pension pplans, includding the RCM MP Plan, at least every th hree years in n order to dev velop mortallity assumpttions used inn the preparaation ory actuarial reports. Thiis study prov vides detaile d analyses oof the mortallity assumptiions of statuto used by OCA O to deteermine the fin nancial statu us of the RCMP Plan as at 31 Marchh 2012. A. Purp pose The main n purpose off this actuariaal study is to o verify that the mortality ty assumptioons used in thhe most receent actuariall valuation on n the RCMP P Plan, as at 31 March 20012, are apppropriate for the financing g of the RCM MP Plan. Thee second purrpose of thiss study is to pprovide suffficient analyssis to support the t premise that t RCMP members m exp perience low wer mortalityy than the Caanada Pensioon Plan and the Public Service S Penssion Plan of Canada C (PS Plan) popullations. The llast objectivve of this study y is to provid de sufficientt analysis to support the choice of the mortality iimprovemennt rates used d in actuariaal valuations of the RCM MP Plan. B. Scop pe This morrtality study was conductted over a 15 5-year period and coverss the mortaliity experiencce of male Reg gular Membeers only. A study s of the mortality exxperience forr female Reggular Membeers was disreegarded as th he number of female RC CMP Plan paarticipants is too small1 to produce meaningfful results. The T mortality y experiencee of Civilian Members annd disabled m members waas not included in this study. The mortality m rates for these ggroups are deeemed to be the same as those useed for the resspective grou ups in the most m recent acctuarial repoort on the PS S Plan for valuation n purposes ass at 31 Marcch 2011. In Februaary 2014, thee Pension Ex xperience Su ubcommitteee of the Reseearch Comm mittee of the Canadian n Institute off Actuaries (tthe “CIA”) has h publisheed a report tittled “Canadian Pensioneers’ Mortality y” (CPM). This T report prresented morrtality tabless developed using Canaddian pensionners’ mortality y experience and mortality projection n scale (the ““CPM-B”). T The CPM m mortality tablles were used for compaarison purposses in this stu udy.

1

As at 31 1 March 2012, th here were only 378 female Regu ular Member retirrement pensioneers, compared too 11,313 male Reegular Memberr retirement pensioners. The pro oportion of femaale contributors w was 20% as at 31 March 2012 (33,900 female contribu utors), it was onlly 5% 40 years ago a .

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

C. Main findings

1



The T current sttudy demonstrates that the t mortalityy assumptionns used for thhe 2012 RCM MP Plan Actuariaal Report aree appropriatee for the purppose of finanncing the RC CMP Plan.



The T male Reg gular Membeer mortality rates develooped under thhis study aree comparablee to th hose used in the 2012 RC CMP Plan Actuarial A Repport. The perriod life expectancy at agge 65 of 20.4 un nder the morttality basis of o the 2012 R RCMP Plan Actuarial Reeport would in ncrease to 20 0.6 based on n the mortalitty rates deveeloped underr this study.



Except E at older ages, the male m Regulaar Member m mortality ratees developedd under this sttudy are low wer than those of the Can nada Pensionn Plan and thhe PS Plan. A male Reguular Member M aged d 65 in plan year y 1 2013 is expected tto live 1.3 yeears longer thhan a Canaddian male m and 1.1 years longerr than a malee member off the PS Plann. However, this gap narrrows an nd even reveerses at olderr ages. A maale Regular M Member ageed 85 in plann year 2013 iis ex xpected to liive approxim mately as lon ng as a Canaddian male annd a male member of thee PS Plan.



At A age 55, thee life expectancy based on o the mortaality rates deeveloped in tthis study forr males m in plan n year 2013 is equal to th he life expecttancy based on the morttality rates off the CPM C Table for fo the Publicc Sector. At older ages, tthe life expeectancies bassed on the mortality m ratees developed d in this study y for males iin plan year 2013 are clooser to the liife ex xpectancies based on thee mortality rates r of the C CPM Table ffor combinedd experiencee for prrivate and pu ublic sectorss.



Based B on the Regular Meembers mortaality rates ussed in the 20012 RCMP P Plan Actuariaal Report, R womeen aged 65 in plan year 2013 2 are exppected to livve to 89.1, alm most two yeears more m than Caanadian femaales. In the absence a of siignificant moortality expeerience, it ap ppears reaso onable to rev vise the morttality rates foor female Reegular Membbers in future acctuarial valu uations to red duce life exp pectancies soo that they arre in line witth the life ex xpectancies based on comparable mortality tablees (e.g. the C CPM2014 Combined tabble).



The T liabilitiess and currentt service cossts presentedd in the 20122 RCMP Plann Actuarial Report R are baased on morttality assump ptions that taake into accoount future m mortality im mprovementts. If future mortality m imp provements were not takken into accoount, the totaal acctuarial liabiility as at 31 March 2012 2 of $18.4 biillion wouldd be reduced by $0.7 billion orr 3.6%. The current serv vice cost for plan year 20013 of $440 million, or 222.65% of thhe pension payro oll, would deecrease by $17 million too $423 milliion, or 21.777% of pensionable payroll, p if futture mortalitty improvem ments were nnot taken intoo account.



The T projected d life expectaancies in plaan year 20500 of Regular Members agge 65 based on th he mortality assumptionss of the 2012 2 RCMP Plaan Actuarial Report are aabout three yyears higher than th he current mortality m expeerience of thhe RCMP Plaan.



CIA C improvement scale CPM-B C is co omparable w with the morttality improvvement scalee used for the purpose p of th he 2012 RCM MP Plan Acttuarial Reporrt.

Any refference to a giv ven plan year in i this report reefers to the 12--month period ending 31 March of the giveen year.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

II- Deevelopmen nt of Mortality Ratees This chap pter presentss the RCMP male mortallity rates devveloped usinng the methoodology of mortality y studies of the t Canada Pension P Plan n (CPP) and tthe Old Agee Security (O OAS) Prograam beneficiaaries. As the RCMP populaation is signiificantly smaaller than thee CPP popullation or eveen the PS Plaan populatio on, the selectted observattion period of o 15 years, ffrom 1 Aprill 1997 to 31 March 20122, is longer th han what wass used in OC CA previous mortality stuudies. The m mortality ratees shown in this section were w derived for male Reegular Memb bers of the R RCMP Plan. Derived moortality rates and correspon nding life ex xpectancies are a shown an nd comparedd those basedd on other m mortality tablles. A. Evollution of thee Number of o Male Regular Memb bers The follo owing table shows s the ev volution of th he number oof male RCM MP Regular M Members. The selected years y corresp pond to published valuaation reports (as at 31 Maarch). Table 1 Evolution of the Num mber of Male RCMP Reegular Mem mbers Retired Active Total

19 998 6,6 621 13,3 389 20,0 010

2005 9,190 13,394 22,584

2012 11,315 15,315 26,630

B. Data a Individuaal data on Reegular Memb bers were ex xtracted from m past databaases used foor valuation purposes. The data ex xtracted cov vers the perio od from 1 Appril 1997 to 31 March 20012. Some records have h been ex xcluded for th he following g reasons: 

Female Regular Memberss, as the volu ume of data is not sufficcient to produuce statisticaally siignificant ressults.



Civilian C Mem mbers, surviv vors and disaabled membeers, as their m mortality rattes for valuaation pu urposes are deemed d to be b the same as a the rates ffor PS Plan ccontributors and pensionn beeneficiaries, survivors an nd disabled members froom the mostt recent actuaarial report oon th he PS Plan as at 31 Marcch 2011.



Date D of termination is beffore the startt of the studyy period.



In nconsistent date d of entry y in relation to t the date oof terminationn over the sttudy period.



Cash C outs oveer the study period.

C. Methodology Overview O Over the observation n period of 15 5 plan years, from 1 Aprril 1997 to 331 March 2012, the data was grouped by age and exposures e an nd actual deaaths were callculated. Thhe determinedd mortality rrates were deeemed to correespond to plan year 2005 5. To identiify trends, ex xperience an nalysis was also a conducteed for the thhree sub periods of 5 yeaars included in the period d of observaation of 15 years. Rates ddeveloped foor each sub pperiod were deemed to t be mortaliity rates for plan p years 20001, 2005 aand 2010. 1

For exam mple, the rates developed d for plaan years 1998 to o 2002 (1 April 11997 to 31 Marchh 2002) are deem med to be the applicab ble mortality ratees for plan year 2000. 2

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

The crud de mortality rate r for a giv ven age for any a given plaan year is thhe probabilityy that a person at that age on o 1 April off the previou us year dies by b 31 Marchh of that yeaar. To develoop crude mortality y rates, death hs and expossures were grrouped by quuinquennial ages. Crudee mortality raates for each age group were w calculateed by dividin ng the relevaant number oof deaths byy the numberr of e to th he risk of deaath over the observed peeriod. life-yearss that were exposed The crud de mortality rates r were grraduated to reflect r a com mpromise beetween smooothness and ffit. Mortality y rates were extended up p to age 104; from 105 onnward they are assumedd to be 50%. D. Morrtality Experience The follo owing deathss, exposures and develop ped mortalityy rates are based on the data and methodology explain ned above. 1.

Deatths and exposures

The death hs and exposures are sho own in the fo ollowing tabble for the thhree sub perioods of observatiion. They aree shown on an age last birthday b basiis. Table 2 Deaths an nd Exposurees Age Last 003-2007 Plaan Years 20088-2012 Plan Yearss 1998-2002 Plan Years 20 Birthday y Deaths Exposures Deaths Exposures D Deaths Exposures Less than 40 4 26,184 17 7 366,315 9 27,326 40-44 18 15,223 7 12,553 7 122,071 12 122,504 45-49 35 17,887 25 14,971 50-54 47 15,876 34 17,133 28 144,245 54 166,235 55-59 35 9,763 64 15,144 60-64 54 7,295 63 9,421 73 144,523 91 99,019 65-69 60 5,368 85 6,959 70-74 35 1,646 93 4,970 123 66,444 158 44,358 75-79 20 454 50 1,435 80-84 27 239 27 332 63 11,102 85-89 18 94 22 116 29 205 90-94 3 21 8 34 10 41 95-99 3 7 2 4 1 5 100+ 0 0 1 1 0 0 Total 364 100,055 498 110,399 656 1277,068

Total P Plan Years 19998-2012 Deaths Exxposures 33 889,825 32 339,846 72 445,363 109 447,254 153 441,141 190 331,239 236 221,346 251 113,060 228 6,246 117 1,674 69 415 21 97 6 16 1 1 1,518 3337,522

There waas only one centenarian c observed. o Ho owever, the RCMP Plann is young ass the Royal Canadian n Mounted Police P Superrannuation Act A came intoo force on 1 April 1960. Based on thhe 31 Decem mber 1982 actuarial repo ort, which is the oldest reeport that prrovides inforrmation on thhe age of rettirees, only about a 100 members m were old enoughh as at 31 Deecember 19882 for becoming g centenarians in the obsservation perriod. 2.

Morrtality Ratess

a) Crude Central Mortality M Rates R Based on n the observeed deaths and d exposures shown in thhe table abovve, crude aveerage centrall mortality y rates are sh hown in the following f tab ble by age ggroups and suub periods. T They were obtained by dividing the number of actual deeaths by the ccorrespondinng exposuree of the age group.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

Table 3 Crude Central Mortality Rates (Deaths per thousand) Age Last Birthday 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

Plan Years 1998-2002 1 2 3 4 7 11 21 44 113 192 143 455

Plan Years 2003-2007 1 2 2 4 7 12 19 35 81 189 235 548

Plan Years 2008-2012 1 1 2 3 5 10 19 36 57 141 241 190

All Years 1 2 2 4 6 11 19 37 70 166 217 387

The results for the 3 sub periods show some reductions of the mortality between 1998 and 2012. The volume of data is too small to draw any conclusion, but the results observed for most age groups show some improvement or are equal to the level of mortality observed in previous years. Section III discusses in details the assumptions used for valuation purposes on future improvements in mortality. b) Graduated Mortality Rates The graduated mortality rates by age are presented in Table 4. They were developed based on the crude central mortality rates shown for all years in Table 3 (experience observed for plan years 1998 to 2012). The graduated rates were deemed to be those of plan year 2005 (mid-point of the period of observation). They were projected to the valuation year (plan year 2013) using assumed mortality improvement factors of previous actuarial valuations on the RCMP Plan1. The plan year 2005 and the plan year 2013 rates are shown in the Appendix (Table 17). The following table shows a sample of the graduated male mortality rates projected to plan year 2013 and corresponding life expectancies without future mortality improvements (also called period life expectancies).

1

Applicable assumed longevity improvement factors from the 2002, 2005, 2008 and the 2011 actuarial valuations were used.

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

Table 4 Graduated d Male Morrtality Rates and Perio d Life Expeectancy For Plan Year Y 2013 Mortality Rate R (Per 1,00 00 individuals) Age Last y Birthday 40 45 50 55 60 65 70 75 80 85 90 95

Current Study 0.6 1.0 1.6 2.5 4.2 7.3 13.2 24.3 45.7 86.6 156.3 259.1

2012 Actuarial Report 0.9 1.1 1.9 2.7 4.6 7.9 14.0 25.7 49.8 90.4 143.5 206.3

Ratio 0.67 0.91 0.84 0.93 0.91 0.92 0.94 0.95 0.92 0.96 1.09 1.26

Period Life Expectan ncy (in years)

 

 

Exactt Age 40 45 50 55 60 65 70 75 80 85 90 95

Currentt Study 44.0 39.2 34.4 29.7 25.1 20.6 16.4 12.6 9.2 6.4 4.3 2.9

2012 Actuariaal Report 43.6 38.8 34.1 29.4 24.8 20.4 16.3 12.5 9.3 6.7 4.9 3.6

Differencce 0.4 0.4 0.3 0.3 0.3 0.2 0.1 0.1 (0.1) (0.3) (0.6) (0.7)

The grad duated mortaality rates weere extended d up to age 1004; from agee 105 the moortality rate iis assumed to be 50%. E. Com mparisons Comparisons of life expectancies e s with variou us other segm ments of thee Canadian ppopulation arre presented d in this secttion. Life exp pectancies at a age 55, whhich is the avverage age att retirement of the Regu ular Members, and at agees 65, 75 and d 85 were caalculated for the Canada Pension Plaan, the PS Pllan and using g the mortality assumptiions presenteed in the repport titled “C Canadian Pensioneers’ Mortality y” published d by the Penssion Experieence Subcom mmittee of thhe Research Committtee of the Caanadian Instittute of Actuaries. Compparisons weree done on thhe basis of thhe following g mortality rates: r 

Mortality M ratees developed d in this stud dy (Current S Study)



20 012 RCMP Plan P Actuariial Report (R RCMP 2012 )



26 6th CPP Actu uarial Reporrt (CPP26)



20 011 PS Plan n Actuarial Report R (PS 20 011)



20 014 Private Sector Morttality Table (CPM2014 ( P Private)



20 014 Public Sector S Mortaality Table (C CPM2014 P Public)



2014 Mortalitty Table (CP PM2014 Com mbined) – coombined expperience for private and pu ublic sectorss

All life expectancies shown in th he following tables were calculated1 for plan yeaar 2013.

1

Mortalitty assumptions for f the CPP and the CPM are pro ovided on a calenndar year basis; life expectanciees for plan year 22013 were esttimated by blend ding the calendarr year results forr years 2012 (75 % weight) and 22013 (25% weigght). The followiing actuariaal formula q[x+1] = (q(x) + q(x+1)*p(x))/(2-q(x))) was used to coonvert mortality rates from an agge last birthday bbasis (in roun nd bracket) to an exact age basis (in square brack ket) for the RCM MP Plan and the P PS Plan.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

Table 5 Period Life Expectancy Comparisons - Males For Plan Year 2013 Age 55 65 75 85

Current Study 29.7 20.6 12.6 6.4

RCMP 2012 29.4 20.4 12.5 6.7

CPP26 27.6 19.3 12.0 6.5

PS 2011 28.3 19.5 11.9 6.3

CPM2014 CPM2014 CPM2014 Combined Public Private 29.0 29.7 28.1 20.6 21.0 19.8 12.7 13.1 12.2 6.5 6.7 6.3

Except at older ages, this study has produced somewhat lower mortality rates than those used in the RCMP 2012. The life expectancy at age 65 based on the current study is 0.2 year higher (20.6 vs. 20.4) than the life expectancy based on the mortality assumptions of the RCMP 2012. The life expectancy at age 55 based on the current study is 0.3 year higher. At older ages, the mortality rates produced by this study are equal or even higher than the mortality rates used in the RCMP 2012. This difference in mortality rates (Current Study vs. RCMP 2012) is explained by the methodologies used to produce the mortality rates. For the triennial valuation, based on the judgement of the actuary, mortality rates are developed giving 50% credibility to the experience of the past three years and 50% credibility to the mortality rates as projected in the previous actuarial valuation as long as the trend can be observed over two valuation periods. The life expectancy at age 55 based on the mortality rates of the current study is equal to the life expectancy calculated under the CPM2014 Public table but is greater than the life expectancies calculated for the CPP26 and the PS Plan. It is also greater than the life expectancy calculated under the CPM2014 Private and the CPM2014 Combined tables. At age 65, the only table that produces life expectancy at age 65 higher than the one based on the mortality rates of the current study is the CPM2014 Public. At age 75, the gaps are closing and starting to reverse with life expectancies calculated under the CPM2014 Public and the CPM2014 Combined tables being greater than the life expectancy based on the current study. At age 85, the life expectancy calculated based on mortality rates of the current study is shorter than the life expectancy calculated under the CPP26 table, as well as the life expectancies calculated under the CPM2014 Public and the CPM2014 Combined tables. As mentioned in the first section of this document, an analysis of the mortality experience for female Regular Members was not included in this study as the number of female RCMP Plan participants is too small1 to produce meaningful results. The mortality rates used for female Regular Members for valuation purposes are based on the PS Plan mortality rates for females and reflecting the lower mortality experienced by male Regular Members. Life expectancies comparisons with various other segments of the Canadian population are shown in the following table.

1

As at 31 March 2012, there were only 378 female Regular Member retirement pensioners, compared to 11,313 male Regular Member retirement pensioners. The proportion of female contributors was 20% as at 31 March 2012 (3,900 female contributors), it was only 5% 40 years ago.

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

Table 6 Period Liffe Expectan ncy Comparrisons - Fem males For Plan Year Y 2013 Age 55 65 75 85

RCMP 2012 33.3 24.1 15.9 9.0

CPP26 30.8 22.2 14.2 7.7

PS 2011 31.2 22.1 14.1 7.6

CPM2014 C C CPM2014 Public Combined C 32.3 32.3 23.2 23.3 14.9 14.9 7.9 8.0

CP PM2014 P Private 31.6 22.6 14.4 7.7

It can be seen from Table T 6 that mortality m rattes used in thhe 2012 RCM MP Actuariaal report prodduce the higheest life expecctancies. In the t absence of o significannt mortality eexperience, it appears reasonable to increasse female Reegular Memb ber mortalityy rates in thee future in orrder to reducce life expectan ncies so that they t are in liine with the life expectaancies based on comparaable mortalityy tables (e..g. the CPM2 2014 Combiined table). F. Disccussion Except att older ages, the analysiss of male mo ortality over a 15 year obbservation period has produced d somewhat lower mortaality rates (hiigher life exppectancies) tthan those uused in the 20012 RCMP Plan P Actuariaal Report. Un nder the currrent study, thhe period liffe expectancyy of a male aaged 65 is 20.6 6, which is 0.2 0 year high her than the life l expectanncy based onn the 2012 R RCMP Plan Actuariall Report. The morttality rates fo or female Reegular Memb bers would nneed to be reevised upwaard in the nexxt actuarial valuation in n order to briing these rates in line wiith comparabble mortalityy tables. For valuaation purposes, if the maale mortality y assumptionns developedd under the current studyy and the femalle CPM2014 4 for the Pub blic Sector were w used to determine thhe financial status of thee RCMP Plan, P the finaancial impactt on the RCM MP Plan wouuld be minorr. The morttality rates used u for cond ducting statu utory actuariaal valuationss are appropriate for the purposes of the valuaation. As exp pected, malee mortality raates for malee Regular meembers are llower than thosse used for th he CPP and the t PS Plan but only up to a certain age. At oldeer ages (80+)), the gap narro ows and even n reverses with w male mo ortality rates for male Reegular membbers being cllose to the mo ortality rates used for thee PS Plan an nd even slighhtly higher thhan those useed for the CP PP. More dettailed analyssis similar to the current study shouldd be conductted on a reguular basis. W With more data becoming available in the future fo or female Reegular Membbers, subseqquent studiess should in nclude analysis of the fem male mortaliity.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

III- Prrojected Mortality M This secttion discussees the assump ption on futu ure mortalityy rates for R RCMP Plan R Regular Mem mbers developeed for the 2012 RCMP Plan Actuariaal Report (RC CMP 2012).. All informaation presentted in this section is baseed on the meethodology of o the RCMP P 2012. A. Futu ure Mortalitty Improvem ment Rates The calcu ulations of th he RCMP Pllan actuariall liability andd the currentt service cosst are based oon mortality y assumption ns that includ de future imp provements in mortalityy. That is, thee methodology used to project p futuree mortality raates involves making asssumptions aabout future aannual rates of mortality y improvemeents by age, sex, and caleendar year. T These futuree annual rates of mortalitty improvem ments are theen applied to o the plan yeear 2013 ratees developedd for the purppose of the RCMP 2012. y rates across all ages felll dramaticallly during thhe 20th centurry, leading tto an Mortality unpreced dented increaase in life ex xpectancy at all ages for both men annd women inn Canada. Thhere have been a number of reasons fo or the drop in mortality rrates, includding access too medical caare, immunizzations, antib biotics, mediical innovatio ons, improv ement in sannitary condittions, clean w water supply, and a improvem ments in the standard off living and eeducation. Thhis trend is aalso observeed in the RCM MP Plan popu ulation, as su upported by analysis of ppast mortalitty experiencee. Heat map ps of the histtorical Canaadian mortaliity improvem ment rates (thhe “MIRs”) are shown in Chart 1. A heat map is a useful to ool to analysse the trendss in mortalityy improvemeent rates. Thhis analysis is i usually peerformed on smoothed mortality m impprovement raates, 15-yearr smoothing in the case of o Chart 1. Different D collours corresp pond to the ddifferent leveels of improvvement ratess. Looking at these heaat maps, it caan be seen, th hat althoughh there has beeen a substanntial reduction in mortality y rates over time, t there have h been perriods with loow or even nnegative morrtality improvem ments (i.e. liittle change or o increase in n mortality) . Furthermorre, these perriods have beeen more pro onounced forr males than females. Th he most recennt deteriorattion in mortaality rates waas observed d in the 1990 0s for males aged a late 20s to early 400s, which waas due to incrreasing morttality from AID DS. Nevertheeless, over th he last decad des, males haave experiennced on averrage higher mortality y improvemeents than fem males. In future, several facttors may afffect mortality y improvemeents includinng new medical techniquues overies, the level l of pollu utants, air qu uality, improovements in nutrition, am mounts of and disco physical activity, preevalence of obesity o and diabetes, d emeergence of nnew forms off diseases, prevalencce of smokin ng, health ed ducation, etc. As such, thhe projectionns of future m mortality rattes are develloped by firsst examining g past mortallity trends annd then applyying judgmeent as to the magnitud de of the imp pact these treends will hav ve on future mortality im mprovement rates. Moree analyses on the past Canadian C mo ortality trend ds could be ffound in Acttuarial Studyy No. 12 “Mortalitty Projection ns for Sociall Security Prrograms in C Canada” publlished by thee OCA in April 201 14.

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

Chart 1 Historicall Annual Mo ortality Imp provement R Rates (Canaada) (15-year Moving M Averrage based on CHMD M Mortality Ratees) Males

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

As stated d in the Reviised CIA Edu ucational No ote: Selection of Mortaliity Assumptiions for Pennsion Plan Actu uarial Valuaations publish hed in March 2014 (the “CIA Educaational Note on Mortalityy”): “The anaalysis of morrtality improvement rates requires laarge quantitiees of consisttent data oveer long periiods. As a result, most mortality m imp provement stu tudies are baased on data gathered thrrough social seccurity prograams and assu umptions forr future morttality improvvements are normally baased on these published mortality m stud dies.” Accord dingly, the aassumption oon the futuree annual ratees of y improvemeents of the RCMP R 2012 is i based on tthe corresponnding assum mption developed mortality th for the pu urpose of thee 25 CPP Actuarial A Rep port. The CP PP MIRs aree developed oon calendar year basis, so these rates have h been in nterpolated to o obtain plann year mortaality improveement rates. MIRs forr plan year 2012 2 are assu umed to be th hose experieenced in Cannada on averrage over thee 15-year period p from 1991 to 2006. After plan n year 2012,, the improveement rates are assumedd to reduce grradually to th heir ultimatee level by plan year 20311. A sample of assumed mortality improvem ment rates iss shown in Table T 7.

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

Table 7 Mortality Improvemeent Factors (applicablee at the end of o the plan Age La ast Birthd day 30 40 50 60 70 80 90 100 + 110+

In nitial and Ultim mate Plan Yea ar Mortality R Reductions1 (% %) Male F Female 20 013

2031+

2013

20311+

2.66 2 2.04 2 1.78 2.22 2 2.40 2 1.94 1.11 0.34 0 0.03 0

0.80 0.80 0.80 0.80 0.80 0.70 0.44 0.30 0.30

1.51 1.29 1.23 1.34 1.42 1.41 0.67 0.12 0.03

0.800 0.800 0.800 0.800 0.800 0.700 0.444 0.300 0.300

The resullting mortaliity rates for RCMP R Plan Regular Meembers deveeloped for the purpose off the RCMP 2012 are show wn in Table 8. Table 8 Mortality Rates by Plan Year ors and Retirrement Beneficiaries (peer 1,000 indivviduals) Contributo

20 0 30 0 40 0 50 0

Male Regu ular Members 2013 2 2025 2 2050 2 0.5 0.4 0.3 0.5 0.4 0.3 0.9 0.7 0.6 1.9 1.6 1.3

Female Regu ular Members 2 013 2025 2050 0.2 0.2 0.1 0.3 0.3 0.2 0.6 0.5 0.4 1.0 0.9 0.7

60 0 65 5 70 0 75 5

4.6 7.9 14.0 1 25.7 2

3.7 6.2 11.1 20.9 2

3.0 5.0 8.9 17.0

3.1 5.9 9.5 1 5.8

2.7 5.1 8.2 13.7

22.2 44.1 6.7 11.3

80 0 85 5 90 0 95 5

49.8 4 90.4 9 14 43.5 20 06.3

41.2 4 77.6 7 12 28.7 19 92.8

34.1 66.3 6 114.4 17 76.5

228.2 5 1.0 992.6 15 2.4

24.4 45.4 86.2 146.2

20.3 39.0 77.0 1344.2

Age Last L Birthday

B. Life Expectanciies Life expeectancies aree the result of o the assump ption on futuure mortalityy rates. Table 9 shows projected d life expectaancies (witho out future im mprovementss, also calledd period life expectanciees) for RCM MP 2012 Regular Membeers at variouss ages for thee specified pplan years, bbased on eachh given plaan year’s mo ortality rates.. On a nation nal level, lifee expectanciies calculatedd in similar w ways are usuallly presented d by statisticaal agencies. Table 10 is similar to Taable 9, the oonly difference being thaat it takes intto account th he assumed mortality m im mprovements after the speecified plan years (wiith future im mprovements, also called cohort life eexpectanciess). Given thee continuing trend in increased i lon ngevity, it may m be argued that Table 10 is more rrealistic thann Table 9, especially y for the old der ages. At the t same tim me, the extennded length oof the projecction period increasess the uncertaainty of the reesults presen nted in Tablee 10 for youunger ages. 1

The mo ortality rate red duction applicaable during any y plan year withhin the 19-yearr select period is found by linnear interpolation between n the figures for plan years 20 013 and 2031.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

From plan years 2013 to 2050, life expectancy of RCMP 2012 Regular Members at age 65 (with assumed future mortality improvements) is projected to grow from 21.8 to 23.8 years for males and from 25.1 to 26.9 years for females, as shown in Table 10. Table 9 Life Expectancies without Improvements after the Given Year Female Regular Member

Male Regular Member Age 20 30 40 50

2013 63.0 53.3 43.6 34.1

2025 64.7 55.0 45.2 35.6

2050 66.3 56.5 46.7 37.0

2013 67.4 57.6 47.8 38.1

2025 68.5 58.6 48.8 39.1

2050 69.9 60.0 50.1 40.4

60 65 70 75

24.8 20.4 16.3 12.5

26.2 21.8 17.5 13.5

27.6 23.0 18.6 14.6

28.6 24.1 19.9 15.9

29.5 25.0 20.6 16.5

30.7 26.1 21.7 17.5

80 85 90 95

9.3 6.7 4.9 3.6

10.1 7.3 5.3 3.8

10.9 7.9 5.7 4.1

12.2 9.0 6.4 4.5

12.7 9.4 6.6 4.6

13.5 10.0 7.1 4.9

Table 10 Life Expectancies with Improvements after the Given Year Female Regular Member

Male Regular Member Age 20 30 40 50

2013 67.2 56.9 46.6 36.4

2025 67.9 57.6 47.3 37.1

2050 69.3 59.0 48.6 38.5

2013 70.8 60.4 50.1 39.9

2025 71.4 61.1 50.7 40.5

2050 72.6 62.3 52.0 41.8

60 65 70 75

26.5 21.8 17.3 13.2

27.3 22.6 18.1 13.9

28.5 23.8 19.2 14.9

29.9 25.1 20.6 16.4

30.5 25.7 21.2 16.9

31.7 26.9 22.2 17.8

80 85 90 95

9.6 6.9 5.0 3.7

10.3 7.4 5.3 3.8

11.1 8.0 5.8 4.1

12.5 9.1 6.5 4.5

13.0 9.5 6.7 4.6

13.8 10.1 7.1 4.9

Chart 2 compares, for plan year 2013, the impact of including future mortality improvement rates in the calculation of life expectancies for the RCMP 2012, the 25th Actuarial Report on the Canada Pension Plan as at 31 December 2009 (CPP25), the 26th Actuarial Report on the Canada Pension Plan as at 31 December 2012 (CPP26), and CPM tables with the scale CPM-B. The 25th and 26th CPP Actuarial Report as well as CPM life expectancies based on plan year are obtained by using 75% of calendar year 2012 and 25% of calendar year 2013 values. The solid part of the bars in Chart 2 represents the period life expectancy, and the shaded part corresponds to the projected increase in life expectancy due to future mortality improvements. As was discussed in Section II of this study, period life expectancies for the general population as determined for the purpose of the Canada Pension Plan actuarial reports are lower than those under the RCMP Plan. At the same time, for males, the CPM Public and Combined tables produce higher life expectancies than those of the RCMP Plan Regular Members at age 65. For females, the period life expectancy of the RCMP Plan Regular Members at age 65 are higher than the life expectancies based on the CPM tables. 16 |

ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

For the RCMP 2012, the assumed future improvements in mortality increase the life expectancy in 2013 by 1.4 years for males and 1.0 year for females. These increases are similar to those expected under the 25th CPP Actuarial Report. The changes made between the 25th and 26th CPP Actuarial Reports provide indications on how the RCMP 2012 mortality assumptions could evolve in the future. Firstly, the period life expectancies (without future mortality improvements) for the plan year 2013 have increased for both males and females between the CPP25 and CPP26. This increase in mainly related to stronger actual mortality improvements between the two reports compared to the CPP25 assumption. Secondly, the strengthening of the assumption on the future mortality improvement rates for the purpose of the 26th CPP Actuarial Report results in a higher expected differential between period and cohort life expectancies for the CPP26 compared to CPP25 (1.5 years versus 1.2 years for males, and 1.2 years versus 1.0 year for females). It could be expected that similar trends will be considered for the next RCMP Plan triennial actuarial report. The scale CPM-B was published by the CIA at the same time as the CPM tables. This scale adopts the assumption used for the purpose of the 26th CPP Actuarial Report with respect to the ultimate improvement rates and the period of transition from higher short-term improvement rates to the ultimate rates of improvement. The CIA Educational Note on Mortality states that: “The use of the CPM-B for future mortality improvement rates would typically be an appropriate assumption in the absence of credible information to the contrary…” As it could be seen from Chart 2, improvement scale CPM-B produces increases in life expectancy (1.4 years for males and about 1.1 years for females ) that are comparable to those obtained under the assumptions of the RCMP 2012 and the 26th CPP Actuarial Report. It further confirms that mortality improvement rates assumptions developed for the purpose of the RCMP 2012 are reasonable.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

Chart 2 Impact off Future Mo ortality Improvements o n Life Exp pectancy At Age 65 for Plan Yeear 2013

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

C. Impact of Morttality Assum mptions on Liabilities L aand Currentt Service Coost Mortality y assumption ns for the RC CMP Plan Actuarial A Repports are monnitored and uupdated everry time a staatutory actuaarial report is prepared. Both B the starrting mortaliity rates andd future morttality improvem ment rates arre examined d. Charts 3 an nd 4 present the evolutioon of projectted cohort liffe expectan ncies (with fu uture improv vements) of RCMP R Plan male and feemale Regulaar Members at age 65 ov ver four actu uarial reportss (2002 to 20 012). For malees, the projeccted cohort liife expectan ncy in 2013 aat age 65 inccreased from m 20.8 as based on the mortality assu umptions of the t 2002 RC CMP Plan Acctuarial Repoort (RCMP 22002) to 21.8 as based on the mortalitty assumptio ons of the RC CMP 2012. A little less tthan a third of this increase of 1.0 year could be explained e by y the lower 2012 2 mortaliity rates usedd in the RCM MP 2012 thaan those pro ojected underr the RCMP 2002 (the 2012 2 period llife expectanncies shown in Chart 5 aare 20.1 and 20.4 years as a per RCMP P 2002 and RCMP R 20122). The majorrity of the inncrease is thee result of higher assum med future MIRs M under the t RCMP 22012. Chart 5 shows thatt the impact of MIRs on the life expectancy at ag ge 65 is 0.7 year under tthe 2002 Repport and 1.4 years underr the RCMP 2012. It should be noted that t the diffeerence in proojected cohoort life expecctancies undeer these two o reports wid dens over tim me and reach hes 1.3 yearss by 2030. Chart 3 Life Expectancy of Male M with Fu uture Mortaality Improvvements At age 65 by b Plan Yeaar

Over the same period d (2002 Repo ort to 2012 Report), R the projected feemale cohortt life expectaancy a age 65 inccreased by 0..3 year from 24.8 to 25.11. The higheer increase foor males is in 2013 at related in n large exten nt to remarkaable gains made m by Canaadian males over the lastt decades.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

Chart 4 Life Expectancy of Feemale with Future Morrtality Imprrovements At Age 65 by Plan Yeaar

Chart 5 Life expecctancy – 200 02 vs. 2012 RCMP R Plan n Actuarial Reports At Age 65 without and d with Futuree Mortality IImprovemennts for Plan Y Year 2013

The revission of mortaality assump ptions could have a sizabble impact onn RCMP Plaan’s actuariaal liability and a current service s cost. The followiing Table shhows the imppact of changges in mortaality

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

assumptions between 2002 and 2012 RCMP Plan Actuarial Reports on the liabilities as at 31 March 2012. Table 11 2012 RCMP Plan Actuarial Liabilities - 2002 vs. 2012 Mortality Assumptions As at 31 March 2012 Description Mortality assumptions of the 2012 Report Mortality assumptions of the 2002 Report Difference Difference %

RCMP Plan Actuarial Liabilities ($ millions) Superannuation Pension Account Fund Total 13,141 5,307 18,448 12,875 5,257 18,132 (266) (50) (316) (2.0%) (0.9%) (1.7%)

The total actuarial liability of $18.4 billion would decrease by $0.3 billion or 1.7% as at 31 March 2012 if the mortality assumptions of the 2002 RCMP Plan Report were used. The 2013 current service cost determined using 2002 mortality assumption would be $436 million or 22.44% of pensionable payroll compared to $440 million or 22.65% of pensionable payroll as determined under the 2012 RCMP Plan Actuarial Report. As discussed, the results of the RCMP Plan actuarial reports take into account future potential improvements in mortality. The financial impact of excluding future mortality improvements as at 31 March 2012 is shown in the following Table. Table 12 2012 RCMP Plan Actuarial Liabilities with and without Mortality Improvements As at 31 March 2012 Description Mortality improvements of the 2012 Report Without mortality improvements Difference Difference %

RCMP Plan Actuarial Liabilities ($ millions) Superannuation Pension Account Fund Total 13,141 5,307 18,448 12,665 5,127 17,792 (476) (180) (656) (3.6%) (3.4%) (3.6%)

The total actuarial liability of $18.4 billion would decrease by $0.7 billion or 3.6% as at 31 March 2012 if future mortality improvements were not taken into account. The cost of future mortality improvements is divided between the Pension Fund and the Superannuation Account with 73% of this cost allocated to the Account. The current service cost for plan year 2013 of $440 million, or 22.65% of pensionable payroll, as determined in the RCMP 2012 Actuarial report would decrease by $17 million to $423 million, or 21.77% of pensionable payroll, if future mortality improvements were not taken into account. Chapter 1 of the Spring 2014 Report of the Auditor General of Canada states that the actuarial liabilities of the three major public sector pension plans (the Public Service, Canadian Forces and Royal Canadian Mounted Police) include the cost of future mortality improvements. The Auditor General report further specifies that if future mortality improvements were excluded from the calculations, the total liability for the three plans as at 31 March 2013 would be $7.7 billion lower than the total liability presented in the statutory actuarial reports. The figure as at 31 March 2013 for the RCMP is $0.7 billion.

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

IV- Conclusion The results of the current mortality study demonstrate that mortality assumptions developed for the 2012 RCMP plan Actuarial Report are appropriate for the purposes of the valuation. The liabilities presented in the most recent Actuarial Report on the Pension Plan for the Royal Canadian Mounted Police as at 31 March 2012 tabled in Parliament on 16 October 2013 include expected future mortality improvements. The cost of these future mortality improvements is $0.7 billion or 3.6% of the total RCMP plan actuarial liabilities. Based on the Regular Members mortality rates used in the 2012 RCMP Plan Actuarial Report, men aged 65 in plan year 2013 are expected to live to 85.4, more than one year older than Canadian males. By 2050, it is expected that male RCMP Regular Members will live for approximately 3 more years, up to age 88. Based on the Regular Members mortality rates used in the 2012 RCMP Plan Actuarial Report, women aged 65 in plan year 2013 are expected to live to 89.1, almost two years more than Canadian females. In the absence of significant mortality experience, it appears reasonable to revise the mortality rates for female Regular Members in future actuarial valuations to reduce life expectancies so that they are in line with the life expectancies based on comparable mortality tables (e.g. the CPM2014 Combined table). RCMP Regular Members are living longer than the general Canadian population mainly because of lower mortality rates before age 80.

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ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

V- Ap ppendices A. Com mplete Perio od Life Tablles - Curren nt Study and d RCMP Pllan Report Table 13 3 Period Liffe Table – Current C Study RCMP Plaan Regular Members M – Plan P Year 20 13 Males M Ag ge Last Birthda ay x 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 105 110 115

lx

100,000 99,840 99,670 99,481 99,272 99,044 98,796 98,519 98,214 97,880 97,508 97,098 96,642 96,139 95,581 94,960 94,267 93,494 92,634 91,680 90,607 89,411 88,079 86,599 84,954 83,127 81,107 78,877 76,424 73,719 70,755 67,521 64,017 60,240 56,198 51,910 47,415 42,759 38,008 33,265 28,611 24,139 19,934 16,077 12,633 9,650 7,150 5,127 3,551 2,375 1,532 97 3 0

Exact Agee

qx

dx

0.0016 0.0017 0.0019 0.0021 0.0023 0.0025 0.0028 0.0031 0.0034 0.0038 0.0042 0.0047 0.0052 0.0058 0.0065 0.0073 0.0082 0.0092 0.0103 0.0117 0.0132 0.0149 0.0168 0.0190 0.0215 0.0243 0.0275 0.0311 0.0354 0.0402 0.0457 0.0519 0.0590 0.0671 0.0763 0.0866 0.0982 0.1111 0.1248 0.1399 0.1563 0.1742 0.1935 0.2142 0.2361 0.2591 0.2829 0.3074 0.3313 0.3551 0.3787 0.5000 0.5000 1.0000

160 170 189 209 228 248 277 305 334 372 410 456 503 558 621 693 773 860 954 1,073 1,196 1,332 1,480 1,645 1,827 2,020 2,230 2,453 2,705 2,964 3,234 3,504 3,777 4,042 4,288 4,495 4,656 4,751 4,743 4,654 4,472 4,205 3,857 3,444 2,983 2,500 2,023 1,576 1,176 843 580 49 2 0

e̊ x

34.36 33.41 32.47 31.53 30.59 29.65 28.73 27.80 26.88 25.97 25.06 24.16 23.26 22.38 21.50 20.63 19.77 18.92 18.08 17.25 16.44 15.64 14.86 14.09 13.33 12.60 11.88 11.18 10.51 9.85 9.22 8.61 8.02 7.46 6.93 6.43 5.95 5.50 5.09 4.70 4.34 4.00 3.69 3.40 3.14 2.90 2.69 2.49 2.32 2.17 2.03 1.54 1.47 0.50

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

Table 14 Period Life Table – 2012 Actuarial Report RCMP plan Regular Members – Plan Year 2013 Males

Females Exact Age

Age Last Birthday x

lx

qx

50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 105 110 115

100,000 99,810 99,610 99,391 99,152 98,904 98,637 98,351 98,036 97,683 97,282 96,835 96,331 95,772 95,159 94,483 93,737 92,903 91,993 90,972 89,835 88,577 87,177 85,617 83,896 81,983 79,876 77,552 74,993 72,158 69,026 65,589 61,837 57,780 53,562 49,207 44,759 40,256 35,747 31,400 27,252 23,341 19,702 16,364 13,404 10,814 8,583 6,692 5,117 3,832 2,813 291 9 0

0.0019 0.0020 0.0022 0.0024 0.0025 0.0027 0.0029 0.0032 0.0036 0.0041 0.0046 0.0052 0.0058 0.0064 0.0071 0.0079 0.0089 0.0098 0.0111 0.0125 0.0140 0.0158 0.0179 0.0201 0.0228 0.0257 0.0291 0.0330 0.0378 0.0434 0.0498 0.0572 0.0656 0.0730 0.0813 0.0904 0.1006 0.1120 0.1216 0.1321 0.1435 0.1559 0.1694 0.1809 0.1932 0.2063 0.2203 0.2353 0.2512 0.2660 0.2800 0.5000 0.5000 1.0000

24 |

dx

190 200 219 239 248 267 286 315 353 401 447 504 559 613 676 746 834 910 1,021 1,137 1,258 1,400 1,560 1,721 1,913 2,107 2,324 2,559 2,835 3,132 3,437 3,752 4,057 4,218 4,355 4,448 4,503 4,509 4,347 4,148 3,911 3,639 3,338 2,960 2,590 2,231 1,891 1,575 1,285 1,019 788 146 5 0

Exact Age

Age Last Birthday

e̊ x

lx

qx

dx

e̊ x

34.06 33.12 32.19 31.25 30.33 29.40 28.47 27.55 26.64 25.72 24.82 23.93 23.04 22.17 21.30 20.44 19.59 18.76 17.93 17.11 16.31 15.52 14.75 13.99 13.25 12.53 11.83 11.15 10.49 9.86 9.25 8.68 8.14 7.64 7.17 6.73 6.31 5.92 5.57 5.24 4.92 4.63 4.35 4.10 3.86 3.62 3.40 3.18 2.97 2.76 2.55 1.56 1.47 0.50

100,000 99,900 99,790 99,680 99,560 99,431 99,282 99,103 98,895 98,658 98,382 98,077 97,734 97,363 96,925 96,431 95,862 95,239 94,553 93,815 92,989 92,106 91,139 90,073 88,902 87,622 86,238 84,720 83,043 81,183 79,145 76,913 74,483 71,839 68,951 65,828 62,471 58,866 55,028 50,972 46,757 42,427 38,099 33,813 29,573 25,489 21,604 18,033 14,792 11,891 9,364 1,263 39 1

0.0010 0.0011 0.0011 0.0012 0.0013 0.0015 0.0018 0.0021 0.0024 0.0028 0.0031 0.0035 0.0038 0.0045 0.0051 0.0059 0.0065 0.0072 0.0078 0.0088 0.0095 0.0105 0.0117 0.0130 0.0144 0.0158 0.0176 0.0198 0.0224 0.0251 0.0282 0.0316 0.0355 0.0402 0.0453 0.0510 0.0577 0.0652 0.0737 0.0827 0.0926 0.1020 0.1125 0.1254 0.1381 0.1524 0.1653 0.1797 0.1961 0.2125 0.2300 0.5000 0.5000 1.0000

100 110 110 120 129 149 179 208 237 276 305 343 371 438 494 569 623 686 738 826 883 967 1,066 1,171 1,280 1,384 1,518 1,677 1,860 2,038 2,232 2,430 2,644 2,888 3,123 3,357 3,605 3,838 4,056 4,215 4,330 4,328 4,286 4,240 4,084 3,885 3,571 3,241 2,901 2,527 2,154 632 20 1

38.12 37.16 36.20 35.23 34.27 33.32 32.36 31.42 30.48 29.54 28.62 27.70 26.79 25.89 24.99 24.11 23.24 22.39 21.54 20.70 19.86 19.04 18.23 17.43 16.64 15.87 15.10 14.35 13.61 12.89 12.20 11.52 10.86 10.21 9.60 9.00 8.43 7.89 7.37 6.88 6.42 5.99 5.58 5.19 4.82 4.47 4.14 3.83 3.52 3.21 2.90 1.58 1.47 0.50

ACTUARIAL STUDY Y NO. 15 MORTALITY O STUDY FFOR THE ROYAL CA ANADIAN MOUNTE ED POLICE PENSIO ON PLAN OFFICEE OF THE CHIEF AC CTUARY

B. Canadian Pensiioner Morta ality Rates (CPM) ( Table 15 5 Mortality Rates of Ca anadian Pen nsioner Morrtality (CPM M) – Males dar Years 20 012 and 2013 3 For Calend Age  50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 100 105 110 115

Public 0.00253 0.00272 0.00293 0.00319 0.00346 0.00377 0.00409 0.00443 0.00479 0.00517 0.00557 0.00599 0.00645 0.00695 0.00748 0.00808 0.00874 0.00947 0.01032 0.01128 0.01239 0.01367 0.01516 0.01687 0.01886 0.02116 0.02382 0.02691 0.03049 0.03465 0.03946 0.04486 0.05102 0.05803 0.06595 0.07488 0.08490 0.09611 0.10861 0.12252 0.13796 0.15510 0.17408 0.19513 0.21845 0.24295 0.36668 0.47942 0.58035 1.00000

CPM Malees 2012 Private Combineed 0.00310 0.00274 4 0.00333 0.00294 4 0.00360 0.00317 7 0.00391 0.00345 5 0.00427 0.00379 9 0.00471 0.00419 9 0.00466 6 0.00521 0.00516 6 0.00576 0.00567 7 0.00636 0.00615 5 0.00699 0.00659 9 0.00763 0.00700 0 0.00828 0.00740 0 0.00893 0.00785 5 0.00956 0.00836 6 0.01020 0.00895 5 0.01086 0.00962 2 0.01155 0.01040 0 0.01233 0.01130 0 0.01329 0.01236 6 0.01443 0.01359 9 0.01578 0.01502 2 0.01734 0.01665 5 0.01916 0.01852 2 0.02126 0.02067 7 0.02367 0.02310 0 0.02646 0.02591 1 0.02963 0.02913 3 0.03327 0.03283 3 0.03744 0.03711 1 0.04220 0.04206 6 0.04762 0.04760 0 0.05360 0.05396 6 0.06035 0.06118 8 0.06789 0.06935 5 0.07630 0.07855 5 0.08562 0.08886 6 0.09590 0.10037 7 0.10725 0.11316 6 0.11974 0.12735 5 0.13349 0.14306 6 0.14863 0.16042 2 0.16530 0.17955 5 0.18369 0.20068 8 0.20400 0.22398 8 0.22643 0.24830 0 0.24992 0.36872 2 0.36840 0.47942 2 0.47942 0.58035 5 0.58035 1.00000 0 1.00000

Public 0.00249 0.00268 0.00289 0.00313 0.00340 0.00370 0.00401 0.00434 0.00468 0.00505 0.00544 0.00584 0.00628 0.00676 0.00727 0.00784 0.00848 0.00919 0.01001 0.01095 0.01203 0.01327 0.01472 0.01638 0.01831 0.02055 0.02314 0.02615 0.02964 0.03369 0.03837 0.04370 0.04979 0.05673 0.06460 0.07349 0.08348 0.09468 0.10719 0.12113 0.13665 0.15391 0.17307 0.19435 0.21798 0.24286 0.36656 0.47927 0.58021 1.00000

CP PM Males 2013  Private C Combined 0.00305 0.00270 0.00328 0.00289 0.00355 0.00312 0.00384 0.00339 0.00419 0.00372 0.00462 0.00411 0.00510 0.00457 0.00564 0.00505 0.00621 0.00554 0.00682 0.00600 0.00744 0.00643 0.00807 0.00683 0.00869 0.00720 0.00929 0.00763 0.00991 0.00812 0.01054 0.00869 0.01121 0.00933 0.01197 0.01009 0.01289 0.01097 0.01401 0.01200 0.01531 0.01319 0.01683 0.01458 0.01860 0.01616 0.02064 0.01799 0.02299 0.02007 0.02570 0.02244 0.02879 0.02517 0.03233 0.02831 0.03639 0.03191 0.04102 0.03607 0.04630 0.04089 0.05222 0.04637 0.05889 0.05266 0.06638 0.05982 0.07474 0.06794 0.08403 0.07709 0.09429 0.08737 0.10564 0.09887 0.11817 0.11167 0.13198 0.12592 0.14722 0.14171 0.16404 0.15919 0.18263 0.17851 0.20319 0.19988 0.22594 0.22349 0.24983 0.24821 0.36828 0.36860 0.47927 0.47927 0.58021 0.58021 1.00000 1.00000

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

Table 16 Mortality Rates of Canadian Pensioner Mortality (CPM) – Females For Calendar Years 2012 and 2013 Age  50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 100 105 110 115

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Public 0.00131 0.00143 0.00156 0.00171 0.00190 0.00212 0.00236 0.00264 0.00293 0.00326 0.00359 0.00393 0.00432 0.00476 0.00525 0.00578 0.00634 0.00695 0.00760 0.00832 0.00911 0.01000 0.01102 0.01219 0.01353 0.01511 0.01696 0.01913 0.02165 0.02461 0.02807 0.03207 0.03670 0.04201 0.04809 0.05503 0.06273 0.07142 0.08117 0.09208 0.10426 0.11779 0.13283 0.14955 0.16812 0.18876 0.31804 0.41949 0.53032 1.00000

CPM Females 2012 Private Combined 0.00145 0.00132 0.00159 0.00144 0.00173 0.00157 0.00190 0.00172 0.00209 0.00191 0.00234 0.00213 0.00261 0.00237 0.00292 0.00265 0.00325 0.00295 0.00360 0.00328 0.00397 0.00361 0.00436 0.00396 0.00478 0.00435 0.00527 0.00480 0.00580 0.00529 0.00640 0.00582 0.00702 0.00639 0.00768 0.00699 0.00841 0.00765 0.00921 0.00838 0.01009 0.00917 0.01107 0.01008 0.01220 0.01110 0.01349 0.01227 0.01498 0.01363 0.01672 0.01521 0.01876 0.01708 0.02117 0.01925 0.02397 0.02181 0.02724 0.02479 0.03106 0.02826 0.03550 0.03229 0.04061 0.03695 0.04649 0.04230 0.05322 0.04842 0.06090 0.05540 0.06898 0.06313 0.07802 0.07184 0.08809 0.08161 0.09928 0.09254 0.11167 0.10474 0.12531 0.11827 0.14037 0.13330 0.15697 0.15002 0.17527 0.16857 0.19545 0.18919 0.31804 0.31804 0.41949 0.41949 0.53032 0.53032 1.00000 1.00000

Public 0.00129 0.00142 0.00154 0.00169 0.00187 0.00209 0.00233 0.00261 0.00289 0.00321 0.00353 0.00387 0.00425 0.00468 0.00516 0.00568 0.00623 0.00683 0.00747 0.00817 0.00895 0.00983 0.01082 0.01197 0.01330 0.01484 0.01666 0.01879 0.02127 0.02418 0.02758 0.03151 0.03605 0.04127 0.04725 0.05407 0.06173 0.07040 0.08014 0.09107 0.10328 0.11689 0.13206 0.14895 0.16776 0.18869 0.31794 0.41936 0.53019 1.00000

CPM Females 2013  Private Combined 0.00144 0.00130 0.00157 0.00143 0.00171 0.00155 0.00187 0.00170 0.00207 0.00188 0.00231 0.00210 0.00257 0.00234 0.00288 0.00262 0.00321 0.00291 0.00354 0.00323 0.00391 0.00355 0.00429 0.00390 0.00470 0.00428 0.00518 0.00472 0.00570 0.00520 0.00629 0.00572 0.00690 0.00628 0.00755 0.00687 0.00826 0.00752 0.00904 0.00823 0.00991 0.00901 0.01087 0.00990 0.01198 0.01091 0.01326 0.01206 0.01472 0.01339 0.01643 0.01494 0.01843 0.01678 0.02079 0.01891 0.02355 0.02142 0.02677 0.02435 0.03052 0.02776 0.03487 0.03172 0.03990 0.03630 0.04567 0.04155 0.05229 0.04757 0.05984 0.05444 0.06789 0.06213 0.07691 0.07081 0.08697 0.08058 0.09818 0.09152 0.11062 0.10375 0.12435 0.11737 0.13955 0.13253 0.15634 0.14942 0.17489 0.16821 0.19538 0.18912 0.31794 0.31794 0.41936 0.41936 0.53019 0.53019 1.00000 1.00000

ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL CANADIAN MOUNTED POLICE PENSION PLAN OFFICE OF THE CHIEF ACTUARY

Table 17 Current Study – Plan Years 2005 and 2013 Male Mortality Rates Age Last Birthday 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 105 110 115

Current Study Plan Year 2005 (Graduated observed mortality rates) 0.0018 0.0020 0.0022 0.0025 0.0027 0.0030 0.0034 0.0037 0.0041 0.0046 0.0051 0.0057 0.0064 0.0071 0.0079 0.0089 0.0099 0.0111 0.0125 0.0140 0.0157 0.0176 0.0198 0.0223 0.0251 0.0283 0.0319 0.0359 0.0405 0.0457 0.0515 0.0580 0.0653 0.0736 0.0827 0.0930 0.1043 0.1169 0.1307 0.1459 0.1624 0.1802 0.1992 0.2196 0.2410 0.2633 0.2865 0.3101 0.3340 0.3578 0.3814 0.5000 0.5000 1.0000

Current Study Plan Year 2013 (Plan year 2005 rates projected to 2013) 0.0016 0.0017 0.0019 0.0021 0.0023 0.0025 0.0028 0.0031 0.0034 0.0038 0.0042 0.0047 0.0052 0.0058 0.0065 0.0073 0.0082 0.0092 0.0103 0.0117 0.0132 0.0149 0.0168 0.0190 0.0215 0.0243 0.0275 0.0311 0.0354 0.0402 0.0457 0.0519 0.0590 0.0671 0.0763 0.0866 0.0982 0.1111 0.1248 0.1399 0.1563 0.1742 0.1935 0.2142 0.2361 0.2591 0.2829 0.3074 0.3313 0.3551 0.3787 0.5000 0.5000 1.0000

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ACTUARIAL STUDY NO. 15 MORTALITY STUDY FOR THE ROYAL O CANADIAN MOUNTED POLICE E PENSION PLAN OFFICE OF TH HE CHIEF ACTUARY Y

C. Biblliography Broffitt, J. D. Maxim mum Likeliho ood Alternatiives to Actuaarial Estimattors of Morttality Rates. Transactiions of Socieety of Actuaaries. 36: 77--142, 1984. Canada. Office of thee Superinten ndent of Finaancial Instituutions. Actuaarial Report on the Penssion S of Ca anada as at 31 3 March 20008. Ottawa:: Office of thhe Chief Plan for the Public Service Actuary, 2009. Canada. Office of thee Superinten ndent of Finaancial Instituutions. Actuaarial Report on the Penssion S of Ca anada as at 31 3 March 20011. Ottawa:: Office of thhe Chief Plan for the Public Service Actuary, 2012. ndent of Finaancial Instituutions. Canaada Pension P Plan Mortallity Canada. Office of thee Superinten Study, Acctuarial Stud dy No.7. Ottaawa: Office of the Chieff Actuary, 20009. Availabble at: http://ww ww.osfi-bsif..gc.ca/Eng/D Docs/cppmrt.pdf Canada. Office of thee Superinten ndent of Finaancial Instituutions. Mortaality Projecttions for Soccial Security Programs P in n Canada, Actuarial Stud dy No. 12. O Ottawa: Officce of the Chief Actuary, 2014. Av vailable at: http://www.o h osfi-bsif.gc.cca/Eng/oca-bbac/as-ea/Pagges/mpsspc.aspx Canada. Office of thee Superinten ndent of Finaancial Instituutions. Old A Age Security Program Mortalityy Experiencee, Actuarial Study S No. 11 1. Ottawa: O Office of the Chief Actuaary, 2012. Availablee at: http://w www.osfi-bsiif.gc.ca/Eng//Docs/oasstdd11.pdf Canada. Office of thee Superinten ndent of Finaancial Instituutions. Twennty-Fifth Actuuarial Reporrt on ada Pension Plan as at 31 3 Decemberr 2009. Ottaw wa: Office oof the Chief A Actuary, 2010. the Cana Canadian n Institute off Actuaries. Final F Reporrt: Canadiann Pensioners’ Mortality. 2014. Availlable at: http:///www.cia-ica.ca/docs/deefault-sourcee/2014/2140 13e.pdf?sfvrrsn=4 Canadian n Institute off Actuaries. Revised R Edu ucational Noote: Selectionn of Mortalitty Assumptioons for Pensiion Plan Acttuarial Valua ations. 2014 4. Available aat: http://ww ww.cia-ica.caa/docs/defauultsource/20 014/214029ee.pdf?sfvrsn n=0 Office off the Auditorr General of Canada. 201 14 Spring Reeport of the A Auditor Genneral of Canada. 2014. Av vailable at: http://www.o h oag-bvg.gc.ca/internet/Ennglish/parl_ooag_2014055_e_39319.hhtml D. Acknowledgem ments The follo owing peoplee assisted in the preparattion of this sstudy: Alain Gu uimond, A.S.A. Liya Din ng, A.S.A. Laurencee Frappier, F.S.A., F F.C.I..A. Jean-Clau ude Ménard d, F.S.A., F.C C.I.A. Mario Mercier, M F.S.A A., F.C.I.A. Michel Rapin, R F.S.A., F.C.I.A.

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