Industry News

In October 2021, the Retirement Plans Experience Committee (RPEC) of the Society of Actuaries (SOA) issued its Mortality Improvement Scale MP-2021 Report. The report provides the new MP-2021 Mortality Improvement Scale, which is an annually updated mortality improvement scale for pension plans. The new scale includes one additional year of historical U.S. population mortality experience through 2019.

The new scale suggests that life expectancies increased slightly, which may result in slightly higher pension plan obligations. According to the SOA’s report, their preliminary estimates indicate that, generally, updating from the MP-2020 to the MP-2021 scale may increase a pension plan’s obligations by about 0.2% to 0.4%, when calculated using a 4.0% discount rate. 

Since March 2020, COVID-19 has significantly affected mortality rates in the United States. The RPEC noted that due to the uncertainty about the near-term and long-term effects of COVID-19, no adjustments to Scale  MP-2021 have been made for the pandemic. However, the report includes instructions for individual practitioners to incorporate their COVID-19 adjustments into the base improvement scale.

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.

The MP-2021 report is available here.