Morneau Shepell mortality study useful in the valuation of Quebec municipal pension plans
Current Canadian mortality table for public sector employees overestimates the life expectancy of Quebec's municipal employees
MONTREAL, Sep. 1, 2015 /CNW/ - The study on the mortality of municipal public sector employees in Quebec conducted by Morneau Shepell, in collaboration with researchers at the Université de Montréal, is the first of its kind to take into account the different types of municipal employee groups in Quebec. The study forms the basis for establishing the actuarial parameters for Quebec's municipal pension plans. Thanks to the new tool developed for this purpose, it will also be possible to conduct similar studies in other sectors, including the private sector, and to do so for all provinces across Canada.
Study highlights and impact on funding for Quebec's municipal pension plans
- The Canadian public sector table overestimates the life expectancy of all groups of employees except managers and professionals.1
- In Quebec, municipal managers and professionals live longer than blue collar workers - close to 18 months longer for men and 12 months for women.2
"Existing studies of the mortality rates of the different occupations mainly cover the private and public sectors, without taking into account the specific employee groups in the municipal sector. This sector, however, has many different groups within it. The fact that the public sector is primarily represented by education and health professionals bias the results for other employees in the public sector," explains Jérôme Dionne, Partner at Morneau Shepell."
Note also that in the study used to establish the new Canadian public sector table released in February 2014, the percentage of Quebec participants was extremely low. This means that the data in the Canadian public sector table must be adjusted to reflect the situation in the Quebec municipal sector, but there was no Quebec study on which to base that adjustment until now.
To provide the necessary data, Morneau Shepell, in collaboration with the Université de Montréal, conducted the very first study to take into account the specific life expectancies of Quebec's municipal employees based on their occupational groups. All the data was gathered from Quebec's largest municipal pension plans and researchers focused on six groups: white collar workers, blue collar workers, managers, police, firefighters and professionals. Based on the University's work, Morneau Shepell has also produced results for a seventh group of employees, such as bus drivers. The respondents represent more than 55 per cent of retirees and more than 60 per cent of the value of the plan commitments for Quebec's municipal pension plans.
"This study will give our actuaries a firm and unique basis to determine the pension plan funding requirements of our clients. This improvement will allow municipalities and employees to discuss pension plan issues on the basis of objective data, since the parties will be able to refer to figures that truly reflect the experience of Quebec municipal employees," says Mr. Dionne.
"The new tool developed in partnership with Morneau Shepell will allow its actuaries to produce mortality studies in a more informed manner, taking into account the experience of each employee group. The value of benefits, therefore, will be more representative of the reality of each group in terms of mortality," said Claudia Gagné, Assistant Professor in the Mathematics and Statistics Department of the Université de Montréal and partner in the study.
About Université de Montréal
Université de Montréal and its two affiliated schools, École Polytechnique (engineering) and HEC Montréal (business) are amongst the world's top 100 universities, according to international rankings. Founded in 1878, the campus today has over 66,000 students and 2,600 professors, making Université de Montréal the second largest university in Canada. Its students are drawn to the university by its deep roots in cosmopolitan Montreal and in consideration of its tenacious dedication to its international mission.
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human resources consulting and outsourcing services. The Company is the leading provider of Employee and Family Assistance Programs, as well as the largest administrator of pension and benefits plans. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive position. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With almost 4,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI).
For actuarial valuations as at December 31, 2013, actuaries had already begun to adjust their figures, but they did not have all the information specific to the Quebec municipal sector.
Based on life expectancy at age 65.
SOURCE Morneau Shepell Inc.