The largest public pension obligations are likely to be for teachers, according to a comprehensive look at mortality tables for public sector pension plans released Tuesday by the Society of Actuaries.
It is the first time SOA has looked at public sector mortality separate from the private sector.
SOA found the largest pension obligations likely to be for teachers than other job categories, when comparing the same benefit amount. Teachers have the longest age-65 life expectancy, and more deferred-to-62 annuity values, compared to public safety and general employee categories.
The SOA tables also suggest a correlation between higher income and lower mortality.
Women reaching age 65 had life expectancies of 90.03 for teachers, 88.8 for general employees and 87.68 for public safety personnel. Men reaching age 65 had life expectancies of 87.7 for teachers, 85.49 for general employees, and 85.27 for public safety personnel.
Dale Hall, SOA's managing director of research, cautioned plan actuaries and other officials to interpret the mortality tables based on each individual job category. "There is no single mortality table covering aggregate public retirement plan mortality across all professions studied, due to the varying mortality patterns from each job category," he said in a statement.
Implementing the new public pension mortality tables will vary by job category and other demographics in each pension plan, and mortality tables are just one of many assumptions used to calculate pension funding, the SOA said. Further, plan sponsors will have to figure out how to best incorporate mortality improvement into their plan valuations.
The study was based on about 46 million life-years of exposure and 580 thousand deaths from 35 public pension systems representing 78 plans. Contributors were asked to identify plan members as teachers, public safety personnel or general employees.
The mortality experience data covers calendar years 2008-2013, and the SOA said the mortality rates should be considered one-year mortality probabilities as of July 1, 2010.