Actuarial Report (15th) on the Public Service Death Benefit Account as at 31 March 2023

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ISSN: 2369-4998

The Honourable Anita Anand, P.C., M.P.
President of the Treasury Board
Ottawa, Canada
K1A 0R5

Dear Minister:

Pursuant to Section 59 of the Public Service Superannuation Act, I am pleased to submit the report on the actuarial review as at 31 March 2023 of the Public Service Death Benefit Account established under Part II of this Act.

Yours sincerely,

Assia Billig, FCIA, FSA, PhD
Chief Actuary
Office of the Chief Actuary

Table of contents

    List of Tables

    List of Charts

    1. Highlights of the report

    Main findings for actuarial report on the Public Service Death Benefit Account as at 31 March 2023
      Public Service Death Benefit Account
    Financial position As at 31 March 2023, the Account balance is $4,131 million, the actuarial liability is $1,203 million, resulting in an actuarial excess of $2,928 million.
    Ratio of actuarial excess to annual benefit payments The actuarial excess totalling $2,928 million is 13.2 times the total amount of death benefits projected for plan yearTable Main findings Footnote a 2024.
    Term insurance monthly cost and contribution per $1000 of coverage for plan year 2024

    The monthly cost rate projected for plan year 2024 is 17.2 cents per month per $1,000 of term insurance.

    Participants contributions are 15 cents per $1,000 of term insurance.

    Government contributions are equal to one-twelfth of the total amount of term insurance proceeds payable during the year. It is estimated to be 1.6 cents per $1,000 of term insurance for plan year 2024.
    Paid-up death benefit

    The legislated contribution rates per $10,000 of paid-up death benefit for age 65 are $310 for males and $291 for females.

    The estimated single premiums per $10,000 of paid-up death benefit for age 65 in plan year 2024, are $5,344 for males and $5,086 for females.

    Table Main findings Footnotes

    Table Main findings Footnote a

    Any reference to a given plan year in this report should be taken as the 12-month period ending 31 March of the given year.

    Return to table Main findings footnote a referrer

    2. Introduction

    This actuarial report on the Public Service Death Benefit Account was made pursuant to Section 59 of the Public Service Superannuation Act (PSSA).

    This actuarial valuation is as at 31 March 2023 and is in respect of death benefits and contributions defined by Part II of the PSSA.

    In this report, paid-up insurance refers to the $10,000 portion of the benefit for which monthly contributions are no longer required from either the participant or the government. The contribution for the paid-up benefit is generally made at age 65.

    In this report, term insurance refers to the basic coverage (two times salary) less 10% reduction per year from age 66 and less $10,000 paid-up insurance.

    The previous actuarial report was prepared as at 31 March 2020. The date of the next periodic review is scheduled to occur no later than 31 March 2026.

    2.1 Purpose of this actuarial report

    The purpose of this actuarial valuation is to determine the state of the Account as well as to assist the President of the Treasury Board in making informed decisions regarding the financing of the government's death benefit obligation. This report may not be suitable for another purpose.

    2.2 Structure of the report

    Section 3 presents a general overview of the valuation basis used in preparing this actuarial report and section 4 presents the financial position of the plan, the cost of the term and paid-up insurance, a reconciliation of the main results as well as a sensitivity analysis of those results to variations in key assumptions.

    Finally, section 5 provides the actuarial opinion for the current valuation.

    The various appendices provide a summary of the plan provisions, a description of data, methodology and assumptions employed.

    Numbers shown in the tables throughout this report may not add up due to rounding.

    3. Valuation basis

    3.1 Valuation inputs

    This valuation report is based on the supplementary death benefits (SDB) plan provisions enacted by the Legislation, summarized in Appendix A.

    No amendments were made to the PSSA since the previous valuation. Minor amendments were applied to the Public Service Superannuation Regulations since the previous valuation. Those amendments did not have any impact on the actuarial valuation of the SDB.

    The financial data on which this valuation is based relate to the Account established to track contributions and benefits under the SDB plan provisions. The Account data is summarized in Appendix B.

    The membership data is summarized in Appendix C.

    The valuation was prepared using accepted actuarial practice in Canada, methods and assumptions which are summarized in Appendices D to F.

    All actuarial assumptions used in this report are best-estimate assumptions. They are independently reasonable and appropriate in aggregate for the purposes of the valuation at the date of this report. The actuarial assumptions used in the previous report were revised based on economic trends and demographic experience. A complete description of the assumptions is shown in Appendices E and F.

    The following tables present summaries of the ultimate economic and of the demographic assumptions used in this report and a comparison with those used in the previous report.

    Table 1 Ultimate best-estimate economic assumptions
      31 March 2023 31 March 2020
    Increase in average earnings 2.5% 2.7%
    Projected yield on the Public Service Death Benefit Account 4.0% 4.1%
    Table 2 Demographic assumptions
      31 March 2023 31 March 2020
    Promotional and seniority rate of increase
    Male 0.6 - 6.1% 0.6 - 5.9%
    Female 0.7 - 6.3% 0.7 - 6.1%
    Cohort life expectancy at age 65Table 2 Footnote a
    Male 22.5 years 22.4 years
    Female 24.1 years 24.1 years
    Average retirement age
    Group 1 60.3 years 60.1 years
    Group 2 62.2 years 62.1 years

    Table 2 Footnotes

    Table 2 Footnote a

    Life expectancy of non-disabled members with assumed future mortality improvements.

    Return to table 2 footnote a referrer

    3.2 Subsequent events

    The Pay Equity Act, which came into force on 31 August 2021, applies to all federally regulated employers with 10 employees or more. On 19 August 2024, the Pay Equity Commissioner has granted Treasury Board Secretariat the requested extension of 3 years to post a final pay equity plan for employees of Core Public Administrations by 31 August 2027. Since federal employers are at various steps of the pay equity process, the details of the expected changes to compensation are not known, and the impact of the implementation of the Pay Equity Act has not been considered in this report.

    As of the date of the signing of this report, we were not aware of any other subsequent events that may have a material impact on the results of this valuation.

    4. Valuation results

    4.1 State of the account

    The state of the account as at 31 March 2023 was prepared using the Account balance described in Appendix B, the data described in Appendix C, the methodology described in Appendix D, and the assumptions described in Appendices E and F.

    The following table presents the state of the Account as at 31 March 2023. The results of the previous valuation are also shown for comparison purposes.

    Table 3 State of the account ($ millions)
      31 March 2023 31 March 2020
    Account balance 4,131 3,880
    Liabilities
    Paid-up death benefit 1,099 965
    IBNR and outstanding paymentsTable 3 Footnote a 104 31
    Total liabilities 1,203 996
    Actuarial excess 2,928 2,884

    Table 3 Footnotes

    Table 3 Footnote a

    Incurred but not reported claims and death benefit payments that are still outstanding. See Appendix D.3.2.

    Return to table 3 footnote a referrer

    4.2 Actuarial excess over estimated benefits

    The estimated benefits consist of death benefit payments from term and paid-up insurance.

    At 31 March 2023, the ratio of actuarial excess over estimated benefits is 13.2. By comparison, this ratio was 14.4 under the previous report. Both ratios are presented in the following table.

    Table 4 Actuarial excess over estimated benefits ratio ($ millions)
      31 March 2023 31 March 2020
    Actuarial excess (A) 2,928 2,884
    Estimated benefits for next plan year
    Term Insurance 175 156
    Paid-up death benefit 47 44
    Total estimated benefits for next plan year (B) 222 200
    Ratio of the actuarial excess over estimated benefits for next plan year (A/B) 13.2 14.4

    The actuarial excess is projected to reach $5,070 million at the end of plan year 2048 mainly due to the growth in the interest credits made.

    Chart 1 shows the ratio of projected actuarial excess at the end of the plan year to annual benefit payments projected for the following plan year. This ratio is expected to decrease from the current level of 13.2 to 9.5 by the end of plan year 2048 as the cost continues to exceed the contributions throughout the period. This ratio is expected to be 12.5 by the end of plan year 2026.

    Chart 1 Projected ratio of actuarial excess to annual benefit payments

    (Actuarial excess is measured at the end of plan year and annual payments are those of the following plan year)

    Chart 1 - Text version

    Line graphs comparing the projected ratio of actuarial excess to annual benefit payments from previous and current report. The vertical axis represents the ratio of actuarial excess to annual benefit payments. The horizontal axis represents the plan year, starting in plan year 2020 and ending in 2048.

    The projected ratio of actuarial excess to annual benefit payments for plan year 2023 is 13.2 compared to 14.0 in the previous report. This projected ratio decreases over time. As a result, by plan year 2045 the projected ratio is 9.6, a decrease of 1.0 from the projected ratio of 10.6 in the previous report.

    Chart 1 Projected ratio of actuarial excess to annual benefit payments
    Plan year Projected ratio from the 31 March 2020 report Projected ratio from the 31 March 2023 report
    2020 14.4 no data
    2021 14.3 no data
    2022 14.2 no data
    2023 14.0 13.2
    2024 13.9 12.9
    2025 13.7 12.7
    2026 13.5 12.5
    2027 13.4 12.3
    2028 13.2 12.1
    2029 12.9 11.9
    2030 12.7 11.7
    2031 12.5 11.6
    2032 12.3 11.4
    2033 12.1 11.2
    2034 11.8 11.0
    2035 11.6 10.9
    2036 11.4 10.7
    2037 11.2 10.5
    2038 11.1 10.4
    2039 10.9 10.2
    2040 10.8 10.1
    2041 10.6 9.9
    2042 10.6 9.8
    2043 10.6 9.8
    2044 10.6 9.6
    2045 10.6 9.6
    2046 no data 9.5
    2047 no data 9.5
    2048 no data 9.5

    4.3 Term insurance

    The monthly cost is defined as the ratio of the expected monthly term benefit payments over the amount of expected monthly term insurance benefit coverage, where coverage is expressed per thousand dollars.

    The projected monthly cost for plan year 2024 is 17.2 cents per $1000 of term insurance. The amounts of insurance coverage and benefits payable for plan year 2024 are projected to be $84,683 million and $175 million, respectively.

    Non‑elective participants and elective participants in receipt of an immediate annuity or an annual allowance are required to contribute 15 cents per $1,000 of term insurance monthly. As a minimum, the government contribution credited monthly to the Account is equal to one‑twelfth of the total amount of term insurance proceeds payable during the month.

    The following table presents the monthly contribution and the cost rates for plan year 2024. It shows that contributions are 0.6 cents less than the monthly cost.

    Table 5 Monthly cost and contributions per $1,000 of coverage for plan year 2024 (cents)
    Contribution Total Cost
    Participant Government Total
    15 1.6 16.6 17.2

    As shown in Chart 2, the projected monthly cost in the 31 March 2023 report is generally lower than in the previous valuation. This is mainly due to:

    • a change in the mortality improvement rates,
    • changes in demography, for example, the number of non-elective participants increased by about 68,000 participants.

    Chart 2 Projected monthly cost

    (cents per $1,000 of term insurance)

    Chart 2 - Text version

    Line graphs comparing the projected monthly costs over time between the current and previous valuation report. The vertical axis represents the monthly cost in cents per thousand dollar of term insurance. The horizontal axis represents the plan year, starting in plan year 2021 and ending in 2048.

    The projected monthly cost for plan year 2024 is 17.2 cents per thousand dollar of term insurance compared to 17.7 cents in the previous report. By plan year 2045 the projected monthly cost is 15.7 cents per thousand dollars of term insurance representing an decrease of 0.2 cents from the projected 15.9 cents in the previous report.

    Chart 2 Projected monthly cost
    Plan Year Projected cost from the 31 March 2020 report Projected cost from the 31 March 2023 report
    2021 19.0 no data
    2022 18.4 no data
    2023 18.0 no data
    2024 17.7 17.2
    2025 17.5 16.5
    2026 17.2 16.3
    2027 17.0 16.2
    2028 16.8 16.0
    2029 16.6 15.8
    2030 16.4 15.6
    2031 16.3 15.4
    2032 16.1 15.3
    2033 16.0 15.1
    2034 15.9 15.0
    2035 15.9 15.0
    2036 15.8 14.9
    2037 15.8 14.9
    2038 15.8 14.9
    2039 15.8 15.0
    2040 15.8 15.1
    2041 15.8 15.2
    2042 15.8 15.3
    2043 15.9 15.4
    2044 15.9 15.6
    2045 15.9 15.7
    2046 no data 15.9
    2047 no data 16.0
    2048 no data 16.2

    The following table shows the projected monthly costs per $1,000 of term insurance by participant type for selected plan years.

    Table 6 Projected monthly cost (cents per $1,000 of term insurance)
    Participants 2024 2028 2033 2038 2043 2048
    Non-elective 9.2 8.6 8.3 8.1 8.5 8.8
    Elective 56.4 53.8 50.5 47.3 46.4 48.3
    All 17.2 16.0 15.1 14.9 15.4 16.2

    The monthly cost per $1,000 of term insurance is projected to gradually decrease to 14.9 cents in 2038 and then to increase to 16.2 cents by plan year 2048. In plan year 2048, the total contribution rate is projected to be 16.5 cents (15 cents from the participants and 1.5 cents from the government). The decrease in the monthly cost is mainly due to lower mortality rates in accordance with the mortality improvement rates shown in Table 36 applied to the current mortality rates shown in Table 35. The increase in the cost is due to changes of demographic assumptions other than mortality. For example, the average age of the non-elective participants increases.

    4.4 Paid‑up insurance

    The estimated single premiumsFootnote 1 and the legislated contribution ratesFootnote 2 at age 65 for each $10,000 of paid-up insured benefit are shown in the table below.

    Table 7 Paid-up insurance per $10,000 of coverage for plan year 2024
      Single premiums at age 65 ($) Legislated contribution ($)
    Male 5,344 310
    Female 5,086 291

    The assumed mortality improvements and the projected increase in yield from 3.1% in plan year 2024 to 4.0% ultimately are expected to cause the projected single premium for the paid‑up death benefit to decrease over time. The projected single premium for male and female in plan year 2048 are $4,244 and $4,012, respectively.

    4.5 Reconciliation as at 31 March 2023

    The following table illustrates the impact of the updated assumptions, intervaluation economic and demographic assumptions changes since the last valuation report as at 31 March 2020.

    In the intervaluation period, the non-elective population grew significantly more than expected. The higher proportion of non-elective members compared to the elective group resulted in a lower monthly cost than anticipated. The monthly cost is expected to lower over time because of the mortality improvement factors.

    The main revision to economic assumptions is the change of interest rates. The main revision to the demographic assumption is a change to IBNR and outstanding payments' assumption.

    Table 8 Previous valuation results for plan year 2021 and 2024
      Monthy cost by $1,000 of term insurance Actuarial excess (beginning of plan year) to benefit payments ratio
    Previous valuation as at 31 March 2020 for plan year 2021 19.0 14.4
    Previous valuation as at 31 March 2020 for plan year 2024 17.7 14.0
    Table 9 Reconciliation of results for plan year 2024
      Monthy cost by $1,000 of term insurance Actuarial excess (beginning of plan year) to benefit payments ratio
    Previous valuation as at 31 March 2020 17.7 14.0
    Demographic changes (0.8) (0.2)
    Changes in assumptions
    Revision of economic assumptions 0.1 0.0
    Revision of demographic assumptions 0.2 (0.6)
    Valuation as at 31 March 2023 17.2 13.2

    4.6 Sensitivity of valuation results

    The following supplementary estimates indicate the degree to which the valuation results depend on some of the key assumptions. The table below presents the effects on valuation results when key assumptions are varied.

    Table 10 Sensitivity of valuation results to variations in key assumptions
    Assumption(s) varied Actuarial liability  Effect  Actuarial excess to benefit payments ratio Effect
      1,203  no data 13.18 no data
    Projected interest yields
    +1% 1,074 (129) 13.76 0.58
    -1% 1,360 157  12.48 (0.70)
    Mortality improvement
    No mortality improvement 1,225 22 13.08 (0.10)
    Constant at plan year 2024 1,194 (9) 13.22 0.04

    Differences between these results and those shown in the valuation can also serve as a basis for approximating the effect of other numerical variations in a key assumption to the extent that such effects are indeed linear.

    4.7 Sensitivity of projected monthly cost

    Chart 3 below shows that lower (no mortality improvement – top dotted line) or higher (2024 constant mortality improvement – bottom dotted line) mortality improvement factors would have a significant impact on the monthly cost per $1,000 of term insurance.

    Chart 3 Sensitivity of projected monthly cost to different mortality improvement assumptions

    Chart 3 - Text version

    Line graphs comparing three curves of monthly cost over time. The difference in the curves show the impact of disregarding mortality improvement and applying constant mortality improvement at 2024 level on the monthly cost. The vertical axis represents the monthly cost in cents per thousand dollars of term insurance. The horizontal axis represents the plan year, starting in 2024 and ending in 2048.

    If mortality improvement is disregarded, the projected monthly cost in plan year 2024 would be 20.4 cents per thousand dollars of term insurance compared to 16.2 in the current valuation.

    If mortality improvements are kept at their level for plan year 2024 level, the projected monthly cost in plan year 2048 would be 14.6 cents per thousand dollars of term insurance compared to 16.2 in the current valuation.

    Chart 3 Sensitivity of projected monthly cost to different mortality improvement assumptions
    Plan Year Best-estimate No mortality improvement 2024 constant mortality improvement
    2024 17.2 17.2 17.2
    2025 16.5 16.7 16.5
    2026 16.3 16.8 16.3
    2027 16.2 16.9 16.2
    2028 16.0 16.9 15.9
    2029 15.8 16.8 15.7
    2030 15.6 16.8 15.5
    2031 15.4 16.8 15.3
    2032 15.3 16.9 15.1
    2033 15.1 16.9 14.9
    2034 15.0 16.9 14.7
    2035 15.0 17.0 14.6
    2036 14.9 17.1 14.5
    2037 14.9 17.2 14.4
    2038 14.9 17.4 14.3
    2039 15.0 17.6 14.3
    2040 15.1 17.8 14.2
    2041 15.2 18.1 14.3
    2042 15.3 18.4 14.3
    2043 15.4 18.7 14.3
    2044 15.6 19.0 14.4
    2045 15.7 19.4 14.4
    2046 15.9 19.7 14.5
    2047 16.0 20.0 14.5
    2048 16.2 20.4 14.6

    Chart 4 below shows that lower (no population growth – top dotted line) or higher (additional 1% population growth – bottom dotted line) population growth assumptions would also have an impact on the monthly cost per $1,000 of term insurance.

    Chart 4 Sensitivity of projected monthly cost to different population growth assumptions

    Chart 4 - Text version

    Line graphs comparing three curves of monthly cost over time. The difference in the curves show the impact of having no population growth and having additional one percent population growth than best-estimate's on the monthly cost. The vertical axis represents the monthly cost in cents per thousand dollars of term insurance. The horizontal axis represents the plan year, starting in 2024 and ending in 2048.

    If there is no population growth, the projected monthly cost in plan year 2048 would be 17.1 cents per thousand dollars of term insurance compared to 16.2 in the current valuation.

    If the population growth is one percent higher than best-estimate assumptions, the projected monthly cost in plan year 2048 would be 14.7 cents per thousand dollars of term insurance compared to 16.2 in the current valuation.

    Chart 4 Sensitivity of projected monthly cost to different population growth assumptions
    Plan Year Best-estimate No population growth Additional 1% population growth
    2024 17.2 17.2 17.2
    2025 16.5 16.8 16.4
    2026 16.3 16.6 16.2
    2027 16.2 16.4 16.0
    2028 16.0 16.2 15.6
    2029 15.8 16.0 15.3
    2030 15.6 15.9 15.1
    2031 15.4 15.8 14.9
    2032 15.3 15.7 14.6
    2033 15.1 15.6 14.4
    2034 15.0 15.5 14.3
    2035 15.0 15.5 14.2
    2036 14.9 15.5 14.0
    2037 14.9 15.5 14.0
    2038 14.9 15.6 13.9
    2039 15.0 15.7 13.9
    2040 15.1 15.8 14.0
    2041 15.2 15.9 14.0
    2042 15.3 16.1 14.1
    2043 15.4 16.2 14.2
    2044 15.6 16.4 14.3
    2045 15.7 16.6 14.4
    2046 15.9 16.8 14.5
    2047 16.0 16.9 14.6
    2048 16.2 17.1 14.7

    5. Actuarial opinion

    In our opinion, considering that this report was prepared pursuant to the Public Pensions Reporting Act,

    • the valuation input data on which the valuation is based are sufficient and reliable for the purposes of the valuation;
    • the assumptions used are individually reasonable and appropriate in aggregate for the purposes of the valuation; and
    • the methods employed are appropriate for the purposes of the valuation.

    This report has been prepared, and our opinions given, in accordance with accepted actuarial practice in Canada. In particular, this report was prepared in accordance with the Standards of Practice (General Standards) published by the Canadian Institute of Actuaries.

    The subsequent event described in section 3.2 was not considered in this valuation since the details were not available at the time the report was prepared. To the best of our knowledge, after discussion with Public Services and Procurement Canada and the Treasury Board of Canada Secretariat, there were no other subsequent events between the valuation date and the date of this report that would have a material impact on the results of this valuation.

    Assia Billig, FCIA, FSA
    Chief Actuary

    Alexandre Larose, FCIA, FSA
    Annie St-Jacques, FCIA, FSA

    Ottawa, Canada

    27 September 2024

    Appendix A – Summary of plan provisions

    The following is a summary description of the main provisions of the SDB plan established for public servants under Part II of the PSSA. This plan supplements benefits payable under the pension plan for the Public Service of Canada (PSPP) by providing a lump sum benefit upon the death of a plan participant.

    A.1 Plan participants

    A.1.1 Non-elective participants

    The term non-elective participant means all contributors to the PSPP who are employed in the Public Service except employees of Crown corporations covered under other group life insurance plans.

    A.1.2 Elective participants

    The term elective participant means all participants who have ceased to be employed in the Public Service following disability or retirement and have opted to continue their coverage under the SDB plan. Such right is limited to participants who, at the time they cease to be employed in the Public Service, have completed at least two years of continuous service in the Public Service or two years of participation in the SDB plan.

    A non-elective participant who ceases employment and becomes entitled to an immediate annuity or an annual allowance in the PSPP automatically becomes an elective participant. During the first 30 days as an elective participant, an individual has the right to opt out of the plan, effective on the 31st day.

    A.2 Contributions

    A.2.1 Non-elective participants and elective participants in receipt of an immediate annuity or an annual allowance

    For non-elective participants as well as elective participants in receipt of an immediate annuity (disability or retirement) or an annual allowance under the PSPP, the rate of contribution is 15 cents per month for each $1,000 of death benefit. When these participants attain age 65 (or complete two years of service, if later), their contribution is reduced by $1.5 per month in recognition of the fact that $10,000 of basic benefit becomes paid-up (by the government) for the remaining lifetime of the participant.

    A.2.2 Elective participants entitled to a deferred annuity

    For elective participants entitled to a deferred annuity under the PSPP, the contribution rate set in the legislationFootnote 3 varies in accordance with the attained age of the participant, and the corresponding contributions become chargeable on the 30th day immediately following cessation of employment.

    The contribution rates for selected ages are shown in the following table:

    Table 11 Contribution per $2,000 of death benefit (cents)
    Age AnnuallyTable 11 Footnote a MonthlyTable 11 Footnote b
    25 9.70 0.82
    30 11.42 0.97
    35 13.58 1.15
    40 16.29 1.39
    45 19.72 1.67
    50 24.11 2.05
    55 29.80 2.53
    60 37.65 3.20

    Table 11 Footnotes

    Table 11 Footnote a

    For elective participants entitled to a deferred annuity during deferral period.

    Return to table 11 footnote a referrer

    Table 11 Footnote b

    For elective participants who were entitled to a deferred annuity once and are currently in payment.

    Return to table 11 footnote b referrer

    A.2.3 Government

    The government credits monthly to the Account an amount equal to one‑twelfth of the total amount of death benefits paid in the month.

    Crown corporations and public boards whose employees are participants in the plan contribute at the rate of four cents per month for each $1,000 of death benefit.

    When a participant, other than one entitled to a deferred annuity, reaches age 65 (or completes two years of service, if later), the government credits to the Account a single premium for the individual $10,000 paid‑up portion of basic benefit in respect of which contributions are no longer required from the participant.

    The legislated amount of single premiumFootnote 4 for each such $10,000 paid‑up portion of basic benefit is shown in the following table and corresponds to one-twentieth of the single premium rate for $10,000 dollars of death benefit, computed on the basis of the Life Tables, Canada, 1950-1952 and interest at 4% per annum.

    Table 12 Legislated single premium per $10,000 of basic benefit ($)
    Age Male Female
    65 310 291
    66 316 298
    67 323 306
    68 329 313
    69 336 320
    70 343 328
    71 349 335
    72 356 342
    73 362 349
    74 369 356
    75 375 363

    Under the statutes, if for whatever reason the Account were to become exhausted, the government would then credit special contributions to the Account in an amount at least equal to the basic benefits then due but not paid by reason of such cash shortfall.

    A.3 Amount of basic benefit

    Subject to the applicable reductions described below, the lump sum benefit payable upon the death of a participant is equal to twice the participant's current salary, the result being rounded to the next higher multiple of $1,000 if not already equal to such a multiple. For this purpose, the current salary of an elective participant is defined as the annual rate of pay at the time of cessation of employment in the Public Service.

    The amount of basic benefit described above is reduced by 10% per year starting at age 66 until it would normally vanish at age 75. However, the amount of basic benefit cannot at any time be reduced below a basic floor value of $10,000 subject to the following exceptions:

    • For those elective participants who had, upon cessation of employment prior to 5 October 1992, made an election to reduce their basic benefit to $500 and further had made a second election, within one year thereafter, to keep their basic benefit at $500, the floor value is $500 instead of $10,000. Such election is irrevocable.
    • For non-elective participants, the amount of basic benefit cannot be reduced below the multiple of $1,000 equal to or next above one-third of the participant's annual salary, even if the resulting amount is higher than $10,000.
    • For elective participants entitled to a deferred annuity, there is no coverage past age 75.

    Upon ceasing to be employed in the Public Service, elective participants in receipt of an immediate annuity or in receipt of an annual allowance under the PSPP may opt to reduce their amount of basic benefit to $10,000.

    Appendix B – Account balance

    B.1 Reconciliation of the Public Service Death Benefit Account

    The Account, which forms part of the Public Accounts of Canada, records the transactions for the plan. No formal debt instrument has been issued to the Account by the government in recognition of the amounts therein. The Account is:

    • credited with all contributions made by participants, Crown corporations and the government;
    • credited with interest earnings every three months on the basis of the actual average yield for the same period on the combined Superannuation Accounts of the Public Service, Canadian Forces and Royal Canadian Mounted Police pension plans. These accounts generate interest earnings as though net cash flows were invested quarterly in 20‑year Government of Canada bonds issued at prescribed interest rates and held to maturity; and
    • debited with basic benefit payments when they become due.

    Table 13 shows the reconciliation of the balance of the Account from the last valuation date to the current valuation date. Since the last valuation, the Account balance has grown by $251 million (a 6% increase) to $4,131 million as at 31 March 2023. The net growth in the Account balance is to a large extent the result of interest credits made.

    Table 13 Public Service Death Benefit Account ($ millions)
    Plan year 2021 2022 2023 2021-2023
    Opening balance as at 1 April of the previous year 3,880.2 3,976.9 4,063.5 3,880.2
    Income
    Employee contributions
    Active members
    Public Service employees 88.6 97.3 104.2 290.1
    Public Service corporations 6.5 6.8 6.7 20.0
    Retired employees 27.6 28.0 28.7 84.3
    Total employee contributions 122.7 132.1 139.6 394.4
    Employer contributions
    Public Service corporations 1.7 1.8 1.8 5.3
    Death benefit - general 11.5 12.8 13.8 38.1
    Death benefit - single premium $10,000 3.2 3.3 3.4 9.8
    Interest 133.5 131.9 128.1 393.5
    Total income 272.6 281.9 286.7 841.1
    Expenditures - Benefits payments
    General 138.2 153.6 165.5 457.3
    Life coverage for $10,000 37.7 41.7 53.4 132.8
    Other death benefit payments 0.0 0.0 0.1 0.1
    Total expenditures 175.9 195.3 219.0 590.2
    Closing balance as at 31 March of the plan year 3,976.9 4,063.5 4,131.1 4,131.1

    B.2 Rates of interest

    The following rates of interest on the Account by plan year were calculated using the foregoing entries.

    Table 14 Rates of interest
    Plan year Interest 
    2021 3.5%
    2022 3.3%
    2023 3.2%

    B.3 Sources of the financial data

    The Account entries shown previously were taken from the Public Accounts of Canada.

    Appendix C – Participant data

    C.1 Source of participant data

    The valuation input data required in respect of contributors (both active and non-active) and pensioners are extracted from master computer files maintained by the Department of Public Services and Procurement Canada (PSPC).

    The main valuation data file supplied by PSPC contained the historical status information on all participants up to 31 March 2023.

    C.2 Validation of participant data

    The participant data were validated with respect to the Actuarial Report on the Pension Plan for the Public Service of Canada as at 31 March 2023. Details of the data validation can be found in Appendix D of that report.

    C.3 Participant data summary

    Tables 15 to 21 on the following pages show the detailed participant data upon which this valuation is based.

    Table 15 Reconciliation of non-elective participants
      Male Female Total
    As at 31 March 2020 143,955 185,593 329,548
    Data corrections 1,159 1,651 2,810
    Eligibility change 40 35 75
    New non-elective from
    New participants 47,242 68,828  116,070
    Rehired from cash-outs 1,472 2,240 3,712
    Rehired from pensioners 862 1,395 2,257
    Subtotal 49,576 72,463 122,039
    Non-elective terminations
    Disabled pensioners (601) (1,245) (1,846)
    Deferred retired pensioners (3,666) (4,444) (8,110)
    Retired pensioners in pay (11,781) (13,911) (25,692)
    Death (no survivors) (247) (257) (504)
    Death (with survivors) (428) (311) (739)
    ROC or TVTable 15 Footnote a (8,909) (11,059) (19,968)
    Subtotal (25,632) (31,227) (56,859)
    As at 31 March 2023 169,098 228,515 397,613

    Table 15 Footnotes

    Table 15 Footnote a

    Termination of membership in the public service pension plan resulting in a refund of pension contributions or a payment of transfer value of accumulated pension benefit.

    Return to table 15 footnote a referrer
    Table 16 Reconciliation of elective participants
      Male Female Total
    As at 31 March 2020 98,714 93,842 192,556
    Data corrections 150 208 358
    New from non-elective 12,239 14,968 27,207
    Elective terminations
    Non-elective (30) (52) (82)
    Death (9,827) (5,488) (15,315)
    Subtotal (9,857) (5,540) (15,397)
    As at 31 March 2023 101,246 103,478 204,724
    Table 17 Non-elective participants – As at 31 March 2023
    Age NumberTable 17 Footnote a Basic benefits ($ thousands)
    Male Female Total Male Female Total
    15-19 100 96 196 10,214 9,597 19,811
    20-24 4,757 6,649 11,406 571,773 778,653 1,350,426
    25-29 16,049 24,079 40,128 2,365,717 3,486,657 5,852,374
    30-34 19,945 29,309 49,254 3,275,184 4,633,315 7,908,498
    35-39 21,846 31,162 53,008 3,922,276 5,311,739 9,234,015
    40-44 24,188 34,877 59,065 4,644,204 6,281,697 10,925,901
    45-49 23,801 33,474 57,275 4,788,788 6,305,947 11,094,735
    50-54 22,247 29,020 51,267 4,577,128 5,523,368 10,100,496
    55-59 18,781 22,591 41,372 3,841,368 4,149,213 7,990,581
    60-64 11,818 12,369 24,187 2,342,088 2,127,542 4,469,630
    65-69 4,221 3,830 8,051 702,572 553,218 1,255,790
    Above 69 1,345 1,059 2,404 77,073 53,891 130,964
    Total 169,098 228,515 397,613 31,118,384 39,214,836 70,333,221

    Table 17 Footnotes

    Table 17 Footnote a

    Includes Correctional Services Canada employees and members from participating Crown corporations and public boards.

    Return to table 17 footnote a referrer
    Table 18 Non-elective participants – Summary
      Average Male Female Total
    As at 31 March 2020 AgeTable 18 Footnote a 46.5 44.8 45.6
    ServiceTable 18 Footnote a 14.0 12.9 13.4
    Basic benefit ($) 173,733 160,719 166,386
    As at 31 March 2023 AgeTable 18 Footnote a 45.0 43.7 44.3
    ServiceTable 18 Footnote a 12.7 11.7 12.1
    Basic benefit ($) 184,026 171,607 176,889

    Table 18 Footnotes

    Table 18 Footnote a

    Expressed in rounded years calculated at the beginning of the plan year. Averages are calculated on a dollar-weighted basis.

    Return to table 18 footnote a referrer
    Table 19 Elective participants in receipt of a disability pension As at 31 March 2023
    Age Number Basic benefits ($ thousands)
    Male Female Total Male Female Total
    To 34 8 10 18 1,150 1,298 2,448
    35-39 35 87 122 4,705 12,016 16,721
    40-44 79 286 365 11,270 38,833 50,103
    45-49 193 607 800 28,906 83,445 112,351
    50-54 372 929 1,301 56,156 127,698 183,854
    55-59 691 1,513 2,204 101,185 202,727 303,912
    60-64 905 2,149 3,054 121,197 263,912 385,109
    65-69 844 1,797 2,641 78,287 152,547 230,833
    70-74 791 1,199 1,990 23,994 34,305 58,298
    75-79 567 709 1,276 5,670 7,090 12,760
    80-84 375 441 816 3,750 4,410 8,160
    85-89 240 268 508 2,400 2,680 5,080
    90-94 81 89 170 810 890 1,700
    95-99 16 15 31 160 150 310
    Above 99 4 8 12 40 80 120
    Total 5,201 10,107 15,308 439,680 932,080 1,371,760
    Table 20 Elective participants in receipt of a disability pension – Summary
      Average Male Female Total
    As at 31 March 2020 AgeTable 20 Footnote a 59.9 58.1 58.7
    Basic benefit ($) 80,020 91,711 87,539
    As at 31 March 2023 AgeTable 20 Footnote a 59.7 58.5 58.9
    Basic benefit ($) 84,538 92,221 89,611

    Table 20 Footnotes

    Table 20 Footnote a

    Expressed in rounded years calculated at the beginning of the plan year. Averages are calculated on a dollar-weighted basis.

    Return to table 20 footnote a referrer
    Table 21 Elective retired participants (In Receipt of an Immediate Annuity or an Annual Allowance) As at 31 March 2023
    Age NumberTable 21 Footnote a Basic benefits ($ thousands)
    Male Female Total Male Female Total
    To 49 5 7 12 992 1,327 2,319
    50-54 162 208 370 34,966 37,881 72,847
    55-59 3,635 5,442 9,077 756,297 999,933 1,756,230
    60-64 12,438 17,542 29,980 2,353,799 2,830,699 5,184,498
    65-69 19,338 24,041 43,379 2,678,423 2,832,580 5,511,003
    70-74 21,428 20,986 42,414 1,067,978 893,212 1,961,190
    75-79 18,355 13,176 31,531 183,550 131,760 315,310
    80-84 10,985 6,520 17,505 109,850 65,200 175,050
    85-89 5,759 3,119 8,878 57,590 31,190 88,780
    90-94 2,975 1,564 4,539 29,750 15,640 45,390
    95-99 840 632 1,472 8,400 6,320 14,720
    Above 99 125 134 259 1,250 1,340 2,590
    Total 96,045 93,371 189,416 7,282,846 7,847,082 15,129,927

    Table 21 Footnotes

    Table 21 Footnote a

    Participants entitled to a deferred annuity were not taken into account for valuation purposes. Their impact is considered negligible

    Return to table 21 footnote a referrer
    Table 22 Elective retired participants – Summary
      Average Male Female Total
    As at 31 March 2020 AgeTable 22 Footnote a 65.5 64.2 64.9
    Basic benefit ($) 79,471 89,973 84,453
    As at 31 March 2023 AgeTable 22 Footnote a 65.8 64.8 65.3
    Basic benefit ($) 75,827 84,042 79,877

    Table 22 Footnotes

    Table 22 Footnote a

    Expressed in rounded years calculated at the beginning of the plan year. Averages are calculated on a dollar-weighted basis.

    Return to table 22 footnote a referrer

    Appendix D – Methodology

    D.1 Account balance

    The balance of the Account forms part of the Public Accounts of Canada. The Account records the transactions for the plan, meaning that no debt instrument has been issued to the Account by the government in recognition of the amounts therein. The recorded balance is shown at the book value of the underlying notional bond portfolio described in Appendix B.

    The Account balance corresponds to the cumulative historical excess of contributions and interest credits over basic benefit payments. The Account balance is accordingly projected to the end of a given plan year by adding to the Account at the beginning of that plan year the net income (i.e. the excess of contributions and interest credits over benefits) projected as described below for that plan year.

    In the projection of the Account, no assumption was made regarding the expenses incurred for the administration of the plan. These expenses, which are not debited to the Account, are commingled with all other government charges.

    D.2 Contributions

    D.2.1 Participants

    Participants' annual contributions are projected for a given plan year by multiplying:

    • the legislated annual contribution rate of $1.8 per $1,000 of coverage (equivalent to the monthly rate of 15 cents per $1,000 of coverage),

      by

    • the aggregate of two times the salaries of participants projected for that plan year on an open-group basis,

      less

    • 10% per year reduction from age 65, and
    • 10,000 paid-up coverage after age 65.

    Non-elective participants' salaries are projected for a given plan year using the assumed rates of increase described in Appendix E and the assumed seniority and promotional salary increases described in Table 24. Elective participants' salaries are frozen at the time of retirement or disability and are not subject to further increases.

    D.2.2 Government

    The government's annual contribution is projected for a given plan year as the sum of:

    • one-twelfth of the amount of term insurance death benefits projected to be paid during that plan year,

      and

    • the legislated single premiums in respect of relevant participants 65 years of age (or participants completing two years of service, if older).

    D.2.3 Crown corporations and public boards

    Crown corporations' and public boards' annual contributions are projected for a given plan year by multiplying:

    • the legislated annual contribution rate of $0.48 per $1,000 of coverage (equivalent to the monthly rate of 4 cents per $1,000 of coverage),

      by

    • the aggregate of two times the salaries of each participant who is employed by the Crown corporation or public board projected for that plan year on an open-group basis,

      less

    • 10% per year reduction from age 65, and
    • 10,000 paid-up coverage after age 65.

    D.2.4 Interest credits

    Annual interest credits are projected for a given plan year as the product of the yield projected for that plan year (shown in Appendix E) and the projected average Account balance in that plan year.

    D.2.5 Basic benefit payments

    The total amount of basic benefits (term and paid-up insurance) for a given plan year is projected as the total amount of insurance in force during that plan year multiplied by the mortality rates assumed to apply during that plan year. The amount of basic benefit in force depends on the salary projected to time of death. Salaries are projected for this purpose using the assumed rates of increase in salaries and the number of participants is projected on an open-group basis as described in Appendix F.

    D.3 Liabilities

    D.3.1 Paid-up reserve

    At the end of a given plan year, the liabilities associated with the individual $10,000 paid-up death benefit in force correspond to the amount which, together with interest at the projected yields, is sufficient to pay for each individual $10,000 paid-up death benefit projected payable on the basis of the assumed mortality rates.

    D.3.2 IBNR and outstanding payments

    On the basis of the plan's experience, at the end of a given plan year, the liabilities for deaths incurred but not reported (IBNR) are set equal to 1% of the expected payments of the plan year. The IBNR deaths are assumed to be reported the following plan year.

    Outstanding payments are liabilities related to deaths reported, but still unpaid at the end of a given plan year. They are determined by taking the difference between 97% of the expected payments and the payments already disbursed for the deaths that have already occurred. The 97% assumption was developed based on the actual percentage of payments made from prior years according to the data provided.

    In the previous valuation, the reserve at the end of a given plan year for claims incurred but not reported (IBNR) and for pending claims was set equal to one-sixth of the projected annual death benefits paid on average during the six previous plan year.

    Appendix E – Economic Assumptions

    The following economic assumptions are required for valuation purposes:

    E.1 Employment earnings increases

    Average earnings increases are exclusive of seniority and promotional increases, which are considered under a separate demographic assumption. Except for the first two years which reflect the current collective agreements, the annual increase in pensionable earnings is assumed to be 0.5% higher than the corresponding increase in CPI. This corresponds to an increase in average pensionable earnings of 2.6 % for plan year 2026 and 2027, and 2.5% for plan year 2028 and thereafter (2.7% in the previous valuation for plan year 2029 and thereafter).

    E.2 Projected yields on SDB Account

    These yields are required for the long-term projection of the SDB Account balance, liabilities, and excess. The methodology used to determine the projected yields on the Superannuation Account is described in Appendix F of the Report on the Pension Plan for the Public Service of Canada as at 31 March 2023 prepared by Office of the Chief Actuary. The projected yield on the Account is 3.1% in plan year 2024. It is projected to reach a low of 2.6% in 2036 and to reach its ultimate value of 4.0% in 2050.

    E.3 Summary of economic assumptions

    The economic assumptions used in this report are summarized in the following table.

    Table 23 Summary of economic assumptions (percentage)
    Plan year Average earnings increase of non-elective participants Projected yield on Account
    2024 3.5 3.1
    2025 2.3 3.0
    2026 2.6 2.9
    2027 2.6 2.9
    2028 2.5 2.8
    2029 2.5 2.7
    2030 2.5 2.7
    2031 2.5 2.6
    2032 2.5 2.6
    2033 2.5 2.6
    2035 2.5 2.6
    2040 2.5 3.1
    2045 2.5 3.8
    2050+ 2.5 4.0

    Appendix F – Demographic and other assumptions

    All contributors to the pension plan for the Public Service of Canada are covered by a supplementary death benefit as defined under Part II of the PSSA. Hence, given the size of the population subject to the PSSA, except where otherwise noted, the demographic assumptions are the same as those used in the Actuarial Report on the Pension Plan for the Public Service of Canada as at 31 March 2023.

    Details on these assumptions can be found in Appendix G of that report.

    F.1 Demographic assumptions

    F.1.1 Seniority and promotional salary increases

    Seniority means length of service within a classification and promotion means moving to a higher paid classification.

    The following table shows a sample of the assumed seniority and promotional salary increases.

    Table 24 Sample of assumed seniority and promotional salary increases (Percentage of annual earnings)
    Years of pensionable service Male Female
    0 6.1 6.3
    1 5.6 5.8
    2 5.0 5.3
    3 4.4 4.7
    4 3.8 4.1
    5 3.4 3.6
    6 3.0 3.3
    7 2.8 3.0
    8 2.5 2.8
    9 2.4 2.7
    10 2.2 2.5
    15 1.6 1.9
    20 1.2 1.5
    25 1.0 1.2
    30 0.8 1.1

    F.1.2 New participants

    As the active population of the plan is expected to grow, new participants are projected to replace members that cease to be active as well as increase the number of participants over time.

    The assumed percentage increases in the number of participants for each plan year are shown in the following table:

    Table 25 Assumed annual increases in number of contributors
    Plan Year Percentage
    2024 3.8
    2025 to 2026 -1.0
    2027 to 2031 0.7
    2032 and after 0.6

    It is assumed that the distribution of new members by age, gender, service, and salary level (which is adjusted by the economic increases) will be on average the same as those of members with less than one year of service at each of the three years preceding the valuation date.

    F.1.3 Pensionable retirement

    The following tables show a sample of the assumed rates of pensionable retirement.

    Table 26 Sample of assumed rates of retirement – Main group 1 – Male (Per 1,000 individuals)
    Age Years of pensionable service
    2 5 10 20 29 30 35
    50 55 35 25 15 20 20 0
    55 50 45 30 20 130 280 275
    60 90 75 100 165 275 320 335
    65 160 135 245 250 235 325 335
    70 220 310 250 325 315 330 530
    Table 27 Sample of assumed rates of retirement – Main group 1 – Female (Per 1,000 individuals)
    Age Years of pensionable service
    2 5 10 20 29 30 35
    50 90 45 15 10 15 15 0
    55 65 45 30 30 200 325 550
    60 115 70 130 200 360 375 400
    65 205 230 240 290 240 300 395
    70 300 415 270 275 300 280 495
    Table 28 Sample of assumed rates of retirement – Main group 2 – Male (Per 1,000 individuals)
    Age Years of pensionable service
    2 5 10 20 29 30 35
    55 40 40 30 19 25 28 0
    60 85 65 75 57 162 301 332
    65 160 135 245 250 235 325 335
    70 220 310 250 325 315 330 530
    Table 29 Sample of assumed rates of retirement – Main group 2 – Female (Per 1,000 individuals)
    Age Years of pensionable service
    2 5 10 20 29 30 35
    55 55 35 25 16 21 23 0
    60 95 70 95 76 233 355 585
    65 205 230 240 290 240 300 395
    70 300 415 270 275 300 280 495
    Table 30 Sample of assumed rates of retirement – Operational service (Per 1,000 individuals)
    Age Years of pensionable service
    2 5 10 20 25 30 35
    40 0 0 0 0 0 0 0
    45 0 0 0 5 20 0 0
    50 15 15 15 10 125 100 0
    55 20 20 20 15 100 225 350
    60 100 100 100 125 250 250 500
    65 300 300 300 300 450 300 500

    F.1.4 Disability retirement

    The following table shows a sample of the assumed rates of disability retirement.

    Table 31 Sample of assumed rates of pensionable disability (Per 1,000 individuals)
    Age Male Female
    25 0.00 0.00
    30 0.15 0.10
    35 0.40 0.85
    40 0.70 1.65
    45 1.40 2.65
    50 2.45 4.45
    55 4.00 6.25
    59 4.50 6.55
    60 to 64Table 31 Footnote a 2.00 6.00
    65 and above 0.00 0.00

    Table 31 Footnotes

    Table 31 Footnote a

    Rates for ages 60 and above are nil for Group 1.

    Return to table 31 footnote a referrer

    F.1.5 Withdrawal

    Withdrawal with less than two years of service includes termination of employment for any reason. Withdrawal with two or more years of service means termination of employment for reasons other than death, disability or retirement with an immediate annuity or an annual allowance. Tables 32 to 34 provide samples of the assumed rates of withdrawal.

    Table 32 Sample of assumed rates of withdrawal – Main group – Male (Per 1,000 individuals)
    Age Years of pensionable service
    0 1 2 5 10 15 21 and after+
    20 420 250 80 0 0 0 0
    25 150 120 70 40 0 0 0
    30 99 85 50 28 14 0 0
    35 88 75 50 28 14 10 0
    40 90 76 50 28 14 10 0
    45 96 78 50 28 14 10 0
    50 115 91 50 28 14 10 0
    54 133 105 50 28 14 10 0
    60 190 158 0 0 0 0 0
    65 259 196 0 0 0 0 0
    Table 33 Sample of assumed rates of withdrawal – Main group – Female (Per 1,000 individuals)
    Age Years of pensionable service
    0 1 2 5 10 15 21 and after+
    20 350 200 100 0 0 0 0
    25 130 110 60 23 0 0 0
    30 94 82 50 23 13 0 0
    35 88 71 50 23 13 10 0
    40 92 72 50 23 13 10 0
    45 102 77 50 23 13 10 0
    50 129 97 50 28 15 10 0
    54 156 112 50 30 20 15 0
    60 223 164 0 0 0 0 0
    65 312 220 0 0 0 0 0

    The assumed rates of withdrawal are the same for actual operational contributors as well as for deemed operational contributors.

    Table 34 Sample of assumed rates of withdrawal – Operational group (Per 1,000 individuals)
    Years of pensionable service Unisex
    0 50
    1 40
    2 30
    3 22
    4 17
    5 14
    10 9
    15 9
    19 7
    20 and after+ 0

    F.1.6 Elective participants entitled to a deferred annuity

    Due to their negligible impact on costs and liabilities, actual and future deferred annuitants are not taken into consideration for the purpose of this valuation.

    F.1.7 Mortality

    The following table provides samples of the assumed mortality rates.

    Table 35 Sample of assumed rates of mortality For Plan Year 2024 (Per 1,000 individuals)
    Age Non-elective participants and elective retired participants Elective disabled participants
    Male Female Male Female
    30 0.3 0.2 5.5 3.2
    40 0.5 0.3 8.6 4.9
    50 1.2 1.0 10.7 7.6
    60 3.6 2.6 19.5 11.7
    70 11.2 9.3 34.6 23.4
    80 37.7 27.9 77.3 54.8
    90 139.9 112.6 186.4 154.7
    100 360.0 330.0 421.0 435.1
    110 500.0 500.0 500.0 500.0

    Mortality rates are expected to reduce over time. A sample of assumed mortality improvement rates is shown in the following table.

    Table 36 Sample of assumed mortality improvement rates (applicable at the beginning of the plan year)
    Age Initial and ultimate plan year mortality improvement rates (%)
    Male at plan year 2025 Male at plan year 2040 and after+ Female at plan year 2025 Female at plan year 2040 and after+
    40 0.60 0.80 0.79 0.80
    50 1.34 0.80 1.27 0.80
    60 1.73 0.80 1.53 0.80
    70 1.65 0.80 1.27 0.80
    80 1.54 0.80 1.04 0.80
    90 1.48 0.62 1.34 0.62
    100 0.67 0.28 0.75 0.28
    110 and above 0.00 0.00 0.00 0.00

    F.2 Election proportions

    A rate of 100% is assumed for the non-elective participants who opt to continue their coverage under the SDB plan at retirement. This is derived from the plan's own recent experience.

    A non-elective participant who becomes disabled is also assumed to always opt to continue the coverage.

    F.3 Other assumptions

    F.3.1 Option to reduce coverage to $10,000

    The valuation data indicates that the proportion of elective participants opting to reduce their basic benefit to $10,000 is negligible. Accordingly, no elective participants were assumed to make such an option.

    F.3.2 Option to reduce 10% coverage annually from age 61

    Bill C-78 introduced this option to participants effective 1 October 1999. Election of this option by participants would have a positive effect on the plan's actuarial excess. The valuation data indicates that participants that have opted for this option have already passed age 75. Accordingly, no non-elective participants were assumed to make such an election anymore in the future.

    Appendix G – Acknowledgements

    The Superannuation Directorate of Public Services and Procurement Canada provided the data on plan participants.

    The following individuals assisted in the preparation of this report:

    Linda Benjauthrit, ACIA, ASA
    Simon Brien, ACIA, ASA
    Julie Fortier
    Shufen Lee, ACIA, ASA
    Kelly Moore

    Date modified: