Industry News

On October 21, 2020, the Retirement Plans Experience Committee (RPEC) of the Society of Actuaries (SOA) issued its Mortality Improvement Scale MP-2020 Report.  The report provides the new MP-2020 Mortality Improvement Scale, which is an annually updated mortality improvement scale for pension plans.  The new scale suggests that life expectancies decreased slightly, which may result in slightly lower pension plan obligations.  According to the SOA’s report, their preliminary estimates indicate that, generally, updating from the MP-2019 to the MP-2020 scale may reduce a pension plan’s obligations by about 0.3% to 0.8%, when calculated using a 4.0% discount rate.

The report also contains considerations related to COVID-19, including: 1) the MP-2020 scale is based on data through 2018 so it does not reflect any actual COVID-19 deaths; and 2) adjusting the scale for future impacts of COVID-19 should be done with caution since any change made in one year affects all future mortality rates. 

The MP-2020 scale incorporates the most recent publicly available mortality data from the Social Security Administration (SSA) for 2016 and 2017.  In addition, it includes preliminary 2018 data developed by the SOA and acquired from the SSA, Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services (CMS) and the U.S. Census Bureau. 

Currently, Piotr Krekora, Consultant for GRS, serves as a member of the RPEC and David Kausch, Chief Actuary for GRS, previously served as a member and chairperson of the RPEC. 

MP-2020 is available here.