Regular Force Death Benefit Account as at 31 March 2022

Report type
Canadian Forces
Published date
Tabled date
As at date
PDF 808.13 KB
The Honourable Anita Anand, P.C., M.P.
President of the Treasury Board
Ottawa, Canada
K1A 0R6

Dear Minister:

Pursuant to Section 72 of the Canadian Forces Superannuation Act, I am pleased to submit the report on the actuarial review as at 31 March 2022 of the Regular Force Death Benefit Account established under Part II of this Act.

Yours sincerely,

Assia Billig, FCIA, FSA, PhD
Chief Actuary

Table of contents

    Tables

    Figures

    1. Highlights of the report

    Main findings for actuarial report on the Regular Force Death Benefit Account as at 31 March 2022
    blank Regular Force Death Benefit Account
    Financial position

    • As at 31 March 2022, the account balance is $169.6 million, the actuarial liability is $148.5 million, resulting in an actuarial excess of $21.1 million.

    • The account balance is projected to reduce each year as the projected contributions and annual interest credits are consistently lower than the projected death benefits for all future plan years.
    Ratio of actuarial excess to annual benefit payments

    • The actuarial excess totalling $21.1 million is 0.6 times the total amount of death benefits projected for plan year 2023.

    • The actuarial excess is projected to reduce and become a shortfall during plan year 2024.
    Term insurance monthly cost and contribution per $1000 of coverage for plan year 2023

    • The monthly cost rate projected for plan year 2023 is 14.2 cents per month per $1,000 of term insurance.

    • Participant contributions are 9.96 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 1.2 cents per $1,000 of term insurance for plan year 2023.
    Paid-up death benefit

    • The legislated contribution rates per $5,000 of paid-up death benefit for age 65 are $310 for males and $291 for females.

    • The estimated single premiums per $5,000 of paid-up death benefit for age 65 in plan year 2023, are $2,577 for male officers, $2,829 for male other rank and $2,514 for females.

    2. Introduction

    This actuarial report on the Regular Force Death Benefit (RFDB) Account was made pursuant to Section 72 of the Canadian Forces Superannuation Act (CFSA) which states that "A valuation report on the state of the Regular Force Death Benefit Account shall be prepared … in accordance with the Public Pensions Reporting Act and as if the supplementary death benefit plan established by this Part were a pension plan established under an Act referred to in subsection 3(1) of that Act".

    This actuarial valuation is as at 31 March 2022 and is in respect of the death benefits and contributions defined by Part II of the CFSA.

    The previous actuarial report was made as at 31 March 2019. The date of the next periodic review is scheduled to occur no later than 31 March 2025.

    2.1 Purpose of this actuarial report

    The purpose of this actuarial valuation is to determine the state of the RFDB 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 is achieved by providing a best-estimate long-term projection of the RFDB Account based on the projected contributions and interest credited to the account and projected death benefits debited from the account.

    2.2 Scope 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 as well as the cost of the term and paid up-insurances as well as sensitivity of those results to a 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.

    3. Valuation basis

    This valuation report is based on the supplementary death benefit (SDB) plan provisions enacted by legislation, summarized in Appendix A. There have been no changes to the plan provisions since the last actuarial valuation report.

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

    The participant data provided by Public Services and Procurement Canada (PSPC) are summarized in Appendix C.

    This valuation was prepared using accepted actuarial practices 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.

    Actuarial assumptions used in the previous report were revised based on economic trends and demographic experience.

    Death benefits are paid out of the Consolidated Revenue Fund of Canada and charged against the RFDB Account. Contributions made by participants and the government are credited to the RFDB Account. Based on the balance of the RFDB Account, interest credits are calculated in such manner and at such rates and credited at such times as the Canadian Forces Superannuation Regulations provide.

    The following table presents a summary of the ultimate economic assumptions used in this report and a comparison with those used in the previous report.

    Table 1 Ultimate best-estimate economic assumptions
    blank 31 March 2022 31 March 2019
    Real increase in average earnings 0.6% 0.7%
    Real projected yield on the Regular Force Death Benefit Account 2.0% 2.5%

    Table 2 presents a summary of the main demographic assumptions used in this report and those used in the previous report.

    Table 2 Demographic assumptions as at 31 March 2022 and as at 31 March 2019
    Demographic assumptions 31 March 2022 31 March 2019
    Promotional and seniority rate of increase
    Officer 0.5% to 10.6% 0.5% to 9.5%
    Other rank 0.5% to 5.4% 0.5% to 7.3%
    Cohort life expectancy at age 65
    Male officer 23.5 23.6
    Male other rank 20.8 21.2
    Female 24.4 24.6
    Average age at retirement
    Regular Force members 52.7 53.7

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

    4. Valuation results

    4.1 State of Account

    The following State of the Account as at 31 March 2022 was prepared using the RFDB Account balance available for benefits 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 results of the previous valuation are shown for comparison purposes.

    Table 3 State of the Account
    ($ millions)
    blank 31 March 2022 31 March 2019
    Account balance 169.6 179.5
    Liabilities - paid-up death benefitTable 3 footnote a 123.7 119.3
    Liabilities - IBNRTable 3 footnote b 5.5 5.4
    Liabilities - outstanding paymentsTable 3 footnote c 19.3 0.0
    Total liabilities 148.5 124.7
    Actuarial excess 21.1 54.8

    Table 3 footnotes

    Table 3 footnote a

    The $5,000 portion of the basic benefit for which monthly contributions are no longer required from either the participant or the government. See Appendix D.6.1.

    Return to table 3 footnote a

    Table 3 footnote b

    Incurred but not reported claims. See Appendix D.6.2.

    Return to table 3 footnote b

    Table 3 footnote c

    Death benefit payments that are still outstanding. See Appendix D.6.3.

    Return to table 3 footnote c

    4.2 Financial position

    At 31 March 2022 the actuarial excess totalling $21.1 million is 0.6 times the total amount of death benefits projected for plan yearFootnote 1 2023. By comparison, the actuarial excess as at 31 March 2019 under the previous report was $54.8 million, which was 1.5 times the amount of death benefits that were projected for plan year 2020.

    Table 4 Financial position
    ($ millions)
    blank 31 March 2022 31 March 2019
    Actuarial excess (A) 21.1 54.8
    Estimated benefits for next plan year (B) 37.3 35.8
    Ratio of the actuarial excess over estimated benefits for next plan year (A/B) 0.6 1.5

    As shown in Appendix B.5 and explained in section 4.4 below, the projected contributions to the plan are less than the projected death benefits for all future plan years. This projected annual shortfall is greater than the projected annual interest credits to the RFDB Account and accordingly entails a continuously decreasing account balance and actuarial excess. The actuarial excess is therefore projected to become an actuarial shortfall during plan year 2024. The RFDB Account is therefore projected to be reducing significantly each year.

    4.3 The monthly benefit cost rate

    The monthly benefit cost rate is defined as the ratio of the total expected monthly term insurance payments over the total amount of expected monthly term insurance benefit coverage, where coverage is expressed per thousand dollars. In this report, term insurance benefit means the basic benefit less the 10% per year reduction applicable from age 61 and less the $5,000 paid-up death benefit applicable from age 65. The projected monthly cost for plan year 2023 is 14.2 cents. The projected monthly cost at the last valuation for the same plan year was 14.7 cents.

    4.4 Legislated contribution rates

    The aggregate amount of death benefit payments projected for plan year 2023 is $37.3 million, which is made up of $29.6 million in respect of the term insurance and $7.7 million in respect of the paid‑up insurance. In this report, term insurance means the basic coverage (two times salary rounded to next $250) less the 10% per year reduction applicable from age 61 and less the $5,000 paid-up insurance applicable from age 65.

    4.4.1 Paid-up insurance

    For plan year 2023, the estimated single premium at age 65 for each $5,000 of paid-up insured benefit and the corresponding legislated contribution rates are shown in Table 5 below.

    Table 5 Paid-up insurance per $5,000 of coverage for plan year 2023
    blank Single premium at age 65 ($) Legislated contribution ($)
    Male officer 2,577 310
    Male other rank 2,829 310
    Female 2,514 291

    The legislated contributions are determined on the basis of the original $500 of paid-up insured benefit and were not readjusted on 5 October 1992 when Part II of the CFSA was amended to increase the paid‑up insured benefit from $500 to $5,000.

    The assumed improvements in longevity cause the projected single premium for the paid‑up death benefit to decrease over time. In addition, the projected ultimate yield of 4.0% is higher than the yield of 3.2% projected for plan year 2023. This has the effect of gradually decreasing the projected single premium over the years.

    The net effect of longevity improvements and increasing projected yields result in a decrease in the projected single premium at age 65 for each $5,000 of paid-up insured benefit over time.

    The projected single premium for plan years 2023 and 2047 are shown in Table 6 below.

    Table 6 Single premium for paid-up insurance per $5,000 coverage at age 65
    blank Plan year 2023 ($) Plan year 2047 ($)
    Male officer 2,577 2,259
    Male other rank 2,829 2,400
    Female 2,514 2,057

    4.4.2 Term insurance

    The total amount of term insurance proceeds projected to be payable during plan year 2023 is $29.6 million. Given that the total amount of term insurance projected to be in force for plan year 2023 is $17,352 million, the benefit cost rate projected for plan year 2023 is 14.2 cents per month per $1,000 of term insurance.

    Non‑elective participants and elective participants in receipt of an immediate annuity are required to contribute monthly 20 cents per $1,000 of salary or 9.96Footnote 2 cents per $1,000 of term insurance  As a minimum, the government contribution credited monthly to the RFDB Account is equal to one‑twelfth of the total amount of term insurance proceeds payable during the month. Table 7 presents the monthly contribution and the cost rates for plan year 2023. It shows that contributions are 3.04 cents less than the monthly cost.

    Table 7 Monthly cost and contribution per $1,000 of coverage for plan year 2023 (cents)
    Contribution Total cost
    Participant Government Total
    9.96 1.20 11.16 14.20

    As shown in Figure 1, the monthly cost per $1,000 of term insurance is projected at 14.2 cents in plan year 2023.Thereafter the monthly cost is projected to decrease gradually to reach 9.3 cents by plan year 2047. In comparison, the combined contribution rate in 2047 is projected to be 10.74 cents (i.e. 9.96 cents for participants plus 0.78 cents for the government).

    Figure 1 Projected monthly cost
    (Cents per $1,000 of term insurance)
    Projected monthly cost from previous and current report. Line graph. Both reports show a decrease in projected cost.
    Text description - Projected monthly cost

    Line graphs comparing the projected monthly costs over time between the current and previous valuation report. Y-axis represents the monthly cost in cents per thousand dollar of term insurance. X-axis represents the plan year, starting in plan year 2023 and ending in 2047.

    The projected monthly cost for plan year 2023 is 14.2 cents per thousand dollar of term insurance compared to 14.7 cents in the previous report. The projected monthly cost decreases over time. As a result, by plan year 2047 the projected monthly cost is 9.3 cents per thousand dollars of term insurance representing an increase of of 0.7 cents from the 8.6 cents projected in the previous report.

    Figure 1 - Chart 1
    Plan year Projected cost from the 31 March 2019 report Projected cost from the 31 March 2022 report
    2023 14.7 14.2
    2024 14.5 14.0
    2025 14.3 13.8
    2026 14.1 13.6
    2027 13.8 13.3
    2028 13.4 12.9
    2029 13.1 12.5
    2030 12.7 12.1
    2031 12.2 11.7
    2032 11.8 11.3
    2033 11.3 10.9
    2034 11.0 10.6
    2035 10.6 10.4
    2036 10.3 10.1
    2037 10.1 10.0
    2038 9.9 9.8
    2039 9.7 9.7
    2040 9.5 9.6
    2041 9.3 9.6
    2042 9.2 9.5
    2043 9.1 9.5
    2044 8.9 9.4
    2045 8.8 9.4
    2046 8.7 9.4
    2047 8.6 9.3

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

    Table 8 Projected monthly cost
    (Cents per $1,000 of term insurance)
    Participants 2023 2026 2032 2037 2042 2047
    Non-elective 6.5 6.2 5.8 5.5 5.3 5.1
    Elective 28.9 28.8 25.4 22.2 21.0 20.7
    All 14.2 13.6 11.3 10.0 9.5 9.3

    For non‑elective and elective participants, the monthly cost projected for plan year 2047 is respectively 78% and 72% of the monthly cost estimated for plan year 2023. For all plan participants in aggregate, the monthly cost projected for plan year 2047 is 65% of the monthly cost projected for plan year 2023.

    This results mainly from the following two factors:

    • There is a reduction in cost due to the assumed lower mortality for plan year 2047 in accordance with the longevity improvement factors shown in Table 36 applied to the current mortality rates shown in Table 33.
    • There is a reduction in cost due to higher proportion of female participants for plan year 2047 compared to plan year 2023.
      1. For non-elective, this is due to female participants having lower mortality rates than male.
      2. The proportion of female non-elective participants is higher than the proportion of female elective participants for plan year 2023. As time goes by, the proportion of female elective participants increases as the female non-elective participants become elective participants.

    4.5 Reconciliation of results with the previous report

    Table 9 illustrates the impact of the updated assumptions, intervaluation economic experience and population changes since the last valuation report as at 31 March 2019. The projected monthly cost for plan year 2023 fell 0.5 cents from 14.7 cents as at 31 March 2019 to 14.2 cents as at 31 March 2022.

    Table 9 Reconciliation of results
    Element of reconciliation Monthly cost by $1,000 of term insurance
    Previous valuation as at 31 March 2019 for plan year 2023 14.7
    Change in the valuation system (0.5)
    Retroactive data correction (0.1)
    Demographic changes 0.1
    Revision of economic assumptions 0.0
    Revision of demographic assumptions 0.0
    Valuation as at 31 March 2022 14.2

    The revisions of economic and demographic assumptions have minimal impact to the monthly cost for plan year 2023.

    4.6 Sensitivity of valuation results to variations in key assumptions

    The following supplementary estimates indicate the degree to which the valuation results depend on some of the key assumptions. These resulting differences 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.

    Table 10 Sensitivity of valuation results to variations in key assumptions
    blank Actuarial liability
    ($ million)    		 Effect Actuarial excess to benefit payments in plan year
    (ratio)    		 Effect
    Valuation basis 148.5 n/a 0.6 n/a
    Projected interest yields
    +1% 136.3 (12.2) 0.9 0.3
    -1% 162.7 14.2  0.2 (0.4)
    Longevity improvement
    0% 150.6 2.1  0.5 (0.1)

    4.6.1 Projected interest yields

    As a measure of sensitivity, an increment of one percentage point in the projected yields would change from 2024 to 2026 the plan year during which the actuarial excess is projected to become an actuarial shortfall. With such additional interest credit, the RFDB Account is projected to reduce significantly but is not expected to become exhausted over the projection period.

    Similarly, a decrease of one percentage point in the projected yields would change from 2024 to 2023 the plan year during which the actuarial excess is projected to become an actuarial shortfall, and the RFDB Account is projected to become exhausted by plan year 2048.

    4.6.2 Mortality

    If the assumed improvements in longevity after the 2023 plan year were disregarded, then the monthly benefit cost rate of 9.3 cents projected for 2047 would climb to 11.9 cents, an increase of 27%. The RFDB Account would become exhausted by plan year 2039.

    Figure 2 Sensitivity of projected monthly cost to variation in selected mortality assumptions
    Projected monthly cost if longevity improvements are disregarded. Line graph showing the increase in cost.
    Text description - Sensitivity of projected monthly cost to variation in selected mortality assumptions

    Line graphs comparing two curves of monthly cost over time. The difference in the curves show the impact of disregarding longevity improvement assumptions on the monthly cost. Y-axis represents the monthly cost in cents per thousand dollars of term insurance. X-axis represents the plan year, starting in 2023 and ending in 2047.

    The dotted line shows the increase in the monthly cost when longevity improvement is disregarded. If there was no improvement in the longevity, by plan year 2047, the projected monthly cost would be 11.9 cents per thousand dollars of term insurance compared to 9.3 in the current valuation.

    Figure 2 - Chart 2
    Plan year Valuation basis No longevity improvement
    2023 14.2 14.2
    2024 14.0 14.2
    2025 13.8 14.2
    2026 13.6 14.1
    2027 13.3 14.0
    2028 12.9 13.8
    2029 12.5 13.5
    2030 12.1 13.3
    2031 11.7 13.0
    2032 11.3 12.7
    2033 10.9 12.4
    2034 10.6 12.1
    2035 10.4 12.0
    2036 10.1 11.8
    2037 10.0 11.7
    2038 9.8 11.7
    2039 9.7 11.6
    2040 9.6 11.6
    2041 9.6 11.6
    2042 9.5 11.6
    2043 9.5 11.7
    2044 9.4 11.7
    2045 9.4 11.8
    2046 9.4 11.8
    2047 9.3 11.9

    5. Actuarial opinion

    In our opinion, considering that this report was prepared pursuant to the Public Pensions Reporting Act per Section 72 of the Canadian Forces Superannuation Act,

    • the valuation 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 opinion given, in accordance with accepted actuarial practice in Canada. In particular, this report was prepared in accordance with the Standards of Practice (Standard of Practice – General Standards) published by the Canadian Institute of Actuaries.

    To the best of our knowledge, after discussion with the Department of National Defence, there were no events between the valuation date and the date of this report that would have a material impact on the results of this valuation.

    Yann Bernard, FCIA, FSA
    Senior Actuary

    Assia Billig, FCIA, FSA
    Chief Actuary

    John Kmetic, FCIA, FSA
    Senior Actuary

    Ottawa, Canada
    29 September 2023

    Appendix A ― Summary of plan provisions

    Following is a summary description of the main provisions of the Supplementary Death Benefit (SDB) plan established for the members of the Regular Force under Part II - Supplementary Death Benefits of the Canadian Forces Superannuation Act (CFSA). This plan supplements benefits payable under the pension plan by providing a lump-sum benefit upon the death of a plan participant.

    The legislation shall prevail if there is a discrepancy between it and this summary.

    A.1 Plan participants

    A.1.1 Non-elective participants

    The term non-elective participant means a member of the Regular Force, or a member of the Reserve Force who is, with the approval of the Chief of the Defence Staff, on full-time service in a position in a Regular Force establishment or as a supernumerary to a Regular Force establishment.

    A.1.2 Elective participants

    The term elective participant means all previously non-elective participants who have ceased to be employed in the Canadian Forces by reason of retirement or disability. A retired member entitled to an immediate annuity, 3A disability annuity (i.e. on medical grounds, being disabled and unfit to perform any duties), or 3B disability annuity (i.e. on medical grounds, being disabled and unfit to perform his own duties in his present trade or employment, and not otherwise advantageously employable under existing service policy) may opt to continue their coverage under the SDB plan. Such right is limited to members who, at the time they cease to be employed in the Canadian Forces, have completed at least five years of continuous service in the Canadian Forces or five years of membership in the SDB plan.

    Elective participants entitled to a deferred annuity under the CFSA upon cessation of employment may elect to continue their coverage in the SDB plan; otherwise their membership and coverage are discontinued. This election must be made within the 13-month period running from one year before to the 30th day following cessation of employment. The basic benefit is extended for 30 days after the date of cessation whether or not a participant exercises the right of election for continuous coverage.

    An elective participant who becomes a participant in the SDB plan established under Part II of the Public Service Superannuation Act (PSSA) automatically ceases to be a participant in the SDB plan established under the CFSA. Any such person, who subsequently ceases to be a participant in the SDB plan under the PSSA, without entitlement to an immediate annuity under the PSSA, is deemed thereupon to regain the status of elective participant in the SDB plan established under the CFSA.

    A.2 RFDB Account balance

    The plan is financed through the RFDB Account, which forms part of the Accounts of Canada. The RFDB Account is credited with all contributions made by the participants and the government, and debited with all benefit payments as they become due. The RFDB Account is also credited with interest earnings based on interest rates applying to the Superannuation Accounts.

    A.3 Contributions

    A.3.1 Non-elective participants, and elective participants in receipt of an immediate annuity

    For non-elective participants as well as elective participants in receipt of an immediate annuity (disability or retirement) under Part I of the CFSA or the Defence Services Pension Continuation Act, the legislated contribution rate is 5 cents per month for each $250 of salary (for this purpose the salary is in practice rounded to the next lower multiple of $250 if not already equal to such a multiple). When these participants attain age 65, their contribution is reduced by 50 cents per month in recognition of the fact that $5,000 of basic benefit becomes paid-up (by the government) for the remaining lifetime of the participant.

    A.3.2 Elective participants entitled to a deferred annuity

    For elective participants entitled to a deferred annuity, the contribution rate is set by regulation and 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 $2,000 of death benefit
    Age Annual ($) Monthly ($)
    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

    A.3.3 Government

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

    When a participant, other than one entitled to a deferred annuity, reaches age 65, the government credits to the RFDB Account a single premium for the $5,000 paid‑up insured benefit in respect of which contributions are no longer required from the participant.

    The legislated amount of single premium for each such $5,000 paid‑up insured benefit is shown in the following table and corresponds to one-tenth of $5,000 times the single premium rate for each dollar 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 $5,000 of paid-up benefit
    Age Male ($) Female ($)
    65 310 291
    66 316 298
    67 323 306
    68 329 313
    69 336 320

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

    A.4 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 $250 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 Canadian Forces.

    The amount of basic benefit described above is reduced by 10% per year starting at age 61 until it would normally vanish at age 70. However, the amount of basic benefit cannot at any time be reduced below the paid-up benefit value of $5,000 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 prior to 5 October 1993, to keep their basic benefit at $500, the paid-up benefit is $500 instead of $5,000. Such election is irrevocable. The plan administrator has advised OSFI that all members who have opted to reduce their paid‑up coverage to $500 will nonetheless be receiving a minimum death benefit of $5,000 upon death.
    • For elective participants entitled to a deferred annuity, there is no coverage past age 70.

    Upon ceasing to be employed in the Canadian Forces, elective participants in receipt of an immediate annuity under Part I of the CFSA or the Defence Services Pension Continuation Act may opt to reduce their amount of basic benefit to $5,000.

    Appendix B ― RFDB Account balance available for benefits

    B.1 Regular Force Death Benefit Account

    The plan is entirely financed through the RFDB Account, which forms part of the Accounts of Canada. The Account records the transactions for the plan, meaning that no formal debt instrument has been issued to the RFDB Account by the government in recognition of the amounts therein. The RFDB Account is:

    • credited with all contributions made by participants 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 annual benefit payments when they become due.

    Table 13 shows the reconciliation of the balance of the RFDB Account from the last valuation date to the current valuation date. Since the last valuation, the RFDB Account balance has decreased by $9.9 million. As at 31 March 2022, the Account balance is reported at $169.6 million. The net reduction in the Account balance is due to actual death benefit payments exceeding the total of contributions and interest earnings over the intervaluation period.

    Table 13 Regular Force Death Benefit Account
    blank 2020 2021 2022 2020-2022
    Opening balance 179.5 172.2 170.9 179.5
    Income
    Employee contributions 19.1 20.0 20.0 59.1
    Employer contributions
    Term insurance 2.3 2.0 2.0 6.3
    Paid-up insurance 0.0 1.5 0.7 2.2
    Interest earnings 6.7 5.9 5.6 18.2
    Subtotal 28.1 29.4 28.3 85.8
    Expenditure
    Benefits claims 35.4 30.7 29.6 95.7
    Closing balance 172.2 170.9 169.6 169.6

    B.2 Rates of interest

    As per the Canadian Forces Superannuation Regulations, the following effective rates of interest on the RFDB Account by plan year were calculated using the foregoing entries.

    Table 14 Rates of interest
    Plan year Interest
    2020 3.88%
    2021 3.50%
    2022 3.34%

    B.3 Sources of financial data

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

    B.4 Account and liabilities projection

    The following table shows a projection of the RFDB Account and liabilities over 25 years commencing 1 April 2022.

    Table 15 State of the account at the end of plan year
    ($ million)
    Plan year Account LiabilitiesTable 15 footnote b Actuarial excess Ratio of projected actuarial excess at the end of the plan year to annual benefit payments projected for the following plan year
    2022 169.6Table 15 footnote a 148.5 21.1 0.6
    2023 161.5 152.1 9.4 0.2
    2024 153.0 155.5 (2.5) 0-
    2025 144.5 159.1 (14.6) 0-
    2026 135.9 162.9 (27.0) 0-
    2027 127.6 167.8 (40.2) 0-
    2028 119.5 172.4 (52.9) 0-
    2029 111.7 176.3 (64.6) 0-
    2030 104.3 179.2 (74.9) 0-
    2031 97.2 180.5 (83.3) 0-
    2032 90.6 180.9 (90.3) 0-
    2033 84.6 181.4 (96.8) 0-
    2034 79.2 181.4 (102.2) 0-
    2035 74.1 180.9 (106.8) 0-
    2036 69.4 180.4 (111.0) 0-
    2037 64.9 179.7 (114.8) 0-
    2038 60.7 178.4 (117.7) 0-
    2039 56.8 176.7 (119.9) 0-
    2040 53.0 175.1 (122.1) 0-
    2041 49.5 173.7 (124.2) 0-
    2042 46.1 172.7 (126.6) 0-
    2043 42.8 171.8 (129.0) 0-
    2044 39.5 171.0 (131.5) 0-
    2045 36.3 170.2 (133.9) 0-
    2046 33.1 169.3 (136.2) 0-
    2047 30.0 168.4 (138.4) 0-

    Table 15 footnotes

    Table 15 footnote a

    Bold figures denote actual experience.

    Return to table 15 footnote a

    Table 15 footnote b

    Death benefit payments that are still outstanding are added to the liabilities in each plan year.

    Return to table 15 footnote b

    B.5 Income and expenditure projection

    The following table shows a projection of the income and expenditure which served as the basis of the projection of the RFDB Account over 25 years commencing with plan year 2023.

    Table 16 Income and expenditure projection
    Plan year Contributions Benefit payments Interest credits Net credits
    Participants Government Total
    Term Paid-up Term Paid-up Total
    2023 20.7 2.5 0.8 24.0 29.6 7.7 37.3 5.2 (8.1)
    2024 21.2 2.5 0.8 24.5 29.8 7.8 37.6 4.8 (8.3)
    2025 21.5 2.5 0.9 24.9 29.9 7.9 37.8 4.4 (8.5)
    2026 21.9 2.5 0.9 25.3 29.9 8.0 37.9 4.0 (8.6)
    2027 22.3 2.5 1.0 25.8 29.7 8.1 37.8 3.8 (8.2)
    2028 22.7 2.5 1.0 26.2 29.5 8.2 37.7 3.4 (8.1)
    2029 23.2 2.4 1.0 26.6 29.1 8.3 37.4 3.1 (7.7)
    2030 23.6 2.4 0.9 26.9 28.8 8.4 37.2 2.9 (7.4)
    2031 24.1 2.4 0.8 27.3 28.3 8.5 36.8 2.6 (6.9)
    2032 24.6 2.3 0.7 27.6 27.9 8.6 36.5 2.3 (6.6)
    2033 25.1 2.3 0.6 28.0 27.6 8.7 36.3 2.2 (6.1)
    2034 25.7 2.3 0.6 28.6 27.4 8.8 36.2 2.1 (5.5)
    2035 26.3 2.3 0.6 29.2 27.4 8.8 36.2 2.0 (5.0)
    2036 27.0 2.3 0.5 29.8 27.5 8.9 36.4 1.8 (4.8)
    2037 27.7 2.3 0.5 30.5 27.8 9.0 36.8 1.8 (4.5)
    2038 28.5 2.3 0.5 31.3 28.1 9.1 37.2 1.7 (4.2)
    2039 29.3 2.4 0.4 32.1 28.6 9.2 37.8 1.7 (4.0)
    2040 30.1 2.4 0.4 32.9 29.1 9.3 38.4 1.7 (3.8)
    2041 30.9 2.5 0.5 33.9 29.7 9.4 39.1 1.7 (3.5)
    2042 31.7 2.5 0.5 34.7 30.3 9.5 39.8 1.6 (3.5)
    2043 32.6 2.6 0.5 35.7 31.0 9.6 40.6 1.6 (3.3)
    2044 33.5 2.6 0.5 36.6 31.7 9.7 41.4 1.5 (3.3)
    2045 34.4 2.7 0.5 37.6 32.4 9.8 42.2 1.4 (3.2)
    2046 35.3 2.8 0.5 38.6 33.1 9.9 43.0 1.3 (3.1)
    2047 36.2 2.8 0.5 39.5 33.8 10.1 43.9 1.2 (3.2)

    Appendix C ― Participant data

    C.1 Source of participant data

    The Department of National Defence (DND) no longer provide data in respect to non-elective and elective participants of the SDB plan. Instead, data were extracted from the master computer files maintained by the Public Services and Procurement Canada (PSPC) which covers the period from 1 April 2009 to 31 March 2022.

    Consistency tests were therefore performed to ensure that a status could be established for each member as of 31 March of each year and to ensure consistency between PSPC data and DND data that was used in the previous report. Consistency tests were also performed on all other information required to value member benefits. In some cases, adjustments were made to the raw data, after consulting with the PSPC, based on the omissions and discrepancies identified by the various consistency tests. More details can be found in Appendix the Actuarial Report on the Pension Plans for the Canadian Forces – Regular Force and Reserve Force as at 31 March 2022 published by the Office of the Chief Actuary.

    C.2 Participant data summary

    Table 17 to Table 27 show the detailed participant data upon which this valuation is based.

    Table 17 Reconciliation of contributors
    blank Male Female Grand total
    Officer Other rank Total Officer Other rank Total
    As at 31 March 2019 14,076 43,645 57,721 3,344 7,205 10,549 68,270
    Data corrections (218) 216 (2) (47) 62 15 13
    New contributors
    New entrants 2,150 8,628 10,778 701 1,702 2,403 13,181
    Rehired/Cash-out 26 172 198 6 17 23 221
    Rehired/Pensioners 40 77 117 2 7 9 126
    Subtotal 2,216 8,877 11,093 709 1,726 2,435 13,528
    Changes of
    Officers/other ranks 667 (667) Not applicable- 139 (139) Not applicable- Not applicable-
    Subtotal 667 (667) Not applicable- 139 (139) Not applicable- Not applicable-
    Terminations
    Return of contribution (112) (767) (879) (54) (144) (198) (1,077)
    Transfer value (236) (1,609) (1,845) (46) (213) (259) (2,104)
    Pending (199) (1,203) (1,402) (48) (163) (211) (1,613)
    Transfer from reserve force 52 407 459 26 105 131 590
    To non-participants (536) (2,069) (2,605) (113) (399) (512) (3,117)
    Subtotal (1,031) (5,241) (6,272) (235) (814) (1,049) (7,321)
    Pensionable terminations
    Disability (3A) (1) (4) (5) (1) (2) (3) (8)
    Disability (3B) (526) (3,265) (3,791) (194) (804) (998) (4,789)
    Other retirement (1,222) (2,215) (3,437) (168) (217) (385) (3,822)
    Deceased (18) (97) (115) (6) (12) (18) (133)
    Subtotal (1,767) (5,581) (7,348) (369) (1,035) (1,404) (8,752)
    As at 31 March 2022 13,943 41,249 55,192 3,541 7,005 10,546 65,738
    Table 18 Reconciliation of pensioners
    blank Male Female Grand total
    Officer Other rank Total Officer Other rank Total
    Retirement pensioners
    As at 31 March 2019 13,942 39,456 53,398 968 2,782 3,750 57,148
    Data corrections 31 (230) (199) (10) (25) (35) (234)
    New pensioners 992 1,529 2,521 126 127 253 2,774
    Rehired/Pensioners (37) (33) (70) (4) (2) (6) (76)
    Deceased (962) (3,303) (4,265) (27) (45) (72) (4,337)
    To non-participants (344) (766) (1,110) (41) (69) (110) (1,220)
    As at 31 March 2022 13,622 36,653 50,275 1,012 2,768 3,780 54,055
    Disability pensioners (3A)
    As at 31 March 2019 39 343 382 13 55 68 450
    Data corrections 4 (9) (5) Not applicable- 4 4 (1)
    New pensioners 2 5 7 1 1 2 9
    Rehired/Pensioners Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable-
    Deceased (7) (60) (67) (1) (1) (2) (69)
    To non-participants Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable-
    As at 31 March 2022 38 279 317 13 59 72 389
    Disability pensioners (3B)
    As at 31 March 2019 1,770 15,270 17,040 453 2,750 3,203 20,243
    Data corrections 17 119 136 1 31 32 168
    New pensioners 488 3,207 3,695 180 739 919 4,614
    Rehired/Pensioners Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable- Not applicable-
    Deceased (41) (449) (490) (4) (32) (36) (526)
    To non-participants (84) (405) (489) (22) (89) (111) (600)
    As at 31 March 2022 2,150 17,742 19,892 608 3,399 4,007 23,899
    Table 19 Non-elective officers As at 31 March 2022
    AgeTable 19 footnote a Number Basic benefit ($ thousands)
    Male Female Total Male Female Grand total
    15 to 19 362 152 514 22,227 9,145 31,373
    20 to 24 1,409 375 1,784 139,560 36,965 176,525
    25 to 29 2,015 541 2,556 344,275 95,085 439,360
    30 to 34 2,375 670 3,045 503,374 143,706 647,080
    35 to 39 2,308 662 2,970 546,471 158,319 704,791
    40 to 44 1,975 520 2,495 517,156 133,552 650,708
    45 to 49 1,570 321 1,891 440,480 86,636 527,116
    50 to 54 1,218 211 1,429 353,965 60,397 414,362
    55 to 59 642 87 729 186,416 26,995 213,411
    60 to 64 69 2 71 19,534 594 20,128
    Total 13,943 3,541 17,484 3,073,460 751,393 3,824,852

    Table 19 footnotes

    Table 19 footnote a

    Expressed in completed years calculated at the beginning of the plan year.

    Return to table 19 footnote a
    Table 20 Non-elective officers - Summary
    blank Average Male Female Total
    As at 31 March 2019 Age 37.3 35.6 37.0
    Service 14.2 12.2 13.8
    Basic benefit ($) 189,864 184,642 188,862
    As at 31 March 2022 Age 37.4 35.7 37.0
    Service 14.1 12.0 13.7
    Basic benefit ($) 220,430 212,198 218,763
    Table 21 Non-elective other ranks As at 31 March 2022
    AgeTable 21 footnote a Number Basic benefit ($ thousands)
    Male Female Total Male Female Grand total
    15 to 19 754 87 841 63,368 7,558 70,926
    20 to 24 5,694 694 6,388 649,582 79,448 729,031
    25 to 29 8,248 1,312 9,560 1,126,028 173,165 1,299,193
    30 to 34 8,512 1,423 9,935 1,283,643 201,867 1,485,509
    35 to 39 6,974 1,202 8,176 1,123,921 179,737 1,303,658
    40 to 44 4,924 1,005 5,929 832,295 159,040 991,335
    45 to 49 3,090 631 3,721 544,848 102,997 647,845
    50 to 54 2,015 451 2,466 366,623 75,471 442,094
    55 to 59 973 185 1,158 173,489 30,676 204,165
    60 to 64 64 15 79 10,880 2,447 13,327
    65 to 69 1 0 1 6 0 6
    Total 41,249 7,005 48,254 6,174,684 1,012,405 7,187,089

    Table 21 footnotes

    Table 21 footnote a

    Expressed in completed years calculated at the beginning of the plan year.

    Return to table 21 footnote a
    Table 22 Non-elective other ranks - Summary
    blank Average Male Female Total
    As at 31 March 2019 Age 34.3 36.0 34.6
    Service 11.2 10.3 11.1
    Basic benefit ($) 130,406 126,190 129,809
    As at 31 March 2022 Age 34.6 36.0 34.8
    Service 11.3 10.2 11.2
    Basic benefit ($) 149,693 144,526 148,943
    Table 23 Elective disabled (3A) participants as at 31 March 2022
    AgeTable 23 footnote a Number Term and paid-up insurance ($ thousands)
    Male Female Total Male Female Grand total
    35 to 39 2 0 2 280 0 280
    40 to 44 0 0 0 0 0 0
    45 to 49 2 2 4 302 287 589
    50 to 54 6 6 12 649 694 1,342
    55 to 59 45 15 60 4,659 1,379 6,038
    60 to 64 50 21 71 3,376 1,383 4,759
    65 to 69 40 14 54 1,200 305 1,505
    70 to 74 32 8 40 160 40 200
    75 to 79 26 5 31 130 25 155
    80 to 84 41 0 41 205 0 205
    85 to 89 47 0 47 235 0 235
    90 to 94 21 1 22 105 5 110
    95 to 99 5 0 5 25 0 25
    Total 317 72 389 11,326 4,117 15,443

    Table 23 footnotes

    Table 23 footnote a

    Expressed in completed years calculated at the beginning of the plan year.

    Return to table 23 footnote a
    Table 24 Elective disabled (3A) participants - Summary
    blank Average Male Female Total
    As at 31 March 2019 Age 72.6 61.0 70.8
    Term and paid-up insurance ($) 35,534 65,885 40,120
    As at 31 March 2022 Age 73.1 63.7 71.4
    Term and paid-up insurance ($) 35,730 57,179 39,700
    Table 25 Elective retired and disabled (3B) participants
    AgeTable 25 footnote a Number Term and paid-up insurance ($ thousands)
    Male Female Total Male Female Grand total
    25 to 29 11 2 13 1,498 361 1,858
    30 to 34 410 61 471 57,861 9,002 66,863
    35 to 39 1,263 199 1,462 180,405 29,346 209,751
    40 to 44 2,061 474 2,535 319,552 77,652 397,204
    45 to 49 3,027 628 3,655 491,114 108,873 599,986
    50 to 54 6,288 1,102 7,390 983,072 168,749 1,151,821
    55 to 59 11,286 1,817 13,103 1,682,985 258,163 1,941,148
    60 to 64 12,735 1,862 14,597 1,339,349 177,645 1,516,993
    65 to 69 8,201 956 9,157 289,069 31,978 321,047
    70 to 74 7,052 426 7,478 35,260 2,130 37,390
    75 to 79 6,678 123 6,801 33,390 615 34,005
    80 to 84 5,841 86 5,927 29,205 430 29,635
    85 to 89 3,688 30 3,718 18,440 150 18,590
    90 to 94 1,320 13 1,333 6,600 65 6,665
    95 to 99 274 6 280 1,370 30 1,400
    100+ 32 2 34 160 10 170
    Total 70,167 7,787 77,954 5,469,329 865,197 6,334,526

    Table 25 footnotes

    Table 25 footnote a

    Expressed in completed years calculated at the beginning of the plan year.

    Return to table 25 footnote a
    Table 26 Elective retired and disabled (3B) participants - Summary
    blank Average Male Female Total
    As at 31 March 2019 Age 65.2 57.1 64.4
    Term and paid-up insurance ($) 76,753 112,151 79,933
    As at 31 March 2022 Age 65.7 58.4 64.9
    Term and paid-up insurance ($) 77,947 111,108 81,260
    Table 27 Elective participants entitled to a deferred annuityTable 27 footnote a
    Number Term insurance benefit ($ thousands)
    3 221

    Table 27 footnotes

    Table 27 footnote a

    Due to their negligible effect on costs and liabilities, these participants were not taken into consideration for the purpose of this valuation.

    Return to table 27 footnote a

    Appendix D ― Methodology

    D.1 RFDB Account balance

    The RFDB account balance available for benefits of the plan forms part of the Accounts of Canada. The account records the transactions for the plan, meaning that no debt instrument has been issued to the RFDB 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 A.

    The RFDB Account balance corresponds to the cumulative historical excess of contributions and interest credits over past benefit payments. The RFDB Account balance is projected to the end of a given plan year by adding to the RFDB Account balance 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. Administration expenses are ignored because they are not debited from the RFDB Account.

    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 60 cents per $250 of salary (equivalent to the monthly rate of 5 cents per $250 of salary)

    by

    • the projected participants' rounded salaries for that plan year on an open-group basis, reduced by 10% per year from age 61, if applicable, (the legislation expresses the annual reduction of 10% per year on the total amount of coverage)

    less

    • $6.00 annually corresponding to the $5,000 paid-up coverage after age 65, if applicable (i.e. death benefit coverage of $5,000 corresponds to an annual salary of $2,500, hence an annual contribution of 60 cents per $250 of salary would produce a contribution of $6.00 annually).

    Non-elective participants' salaries are projected for a given plan year using the assumed rates of increase described in Appendix F and by the assumed seniority and promotional salary increases given in Table 29. Elective participants' salaries are frozen at 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.

    D.3 Discount rates

    The rates used to calculate the present value of benefits in respect of paid-up death benefit are the same as the yields described and shown in Appendix E.

    D.4 Interest credits

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

    D.5 Benefit payments

    The total amount of annual benefits (term and paid-up insurance) for a given plan year is projected as the sum of the participant annual benefits in force during that plan year multiplied by the mortality rates applicable to each participant during that plan year. The amount of annual benefit in force depends on the salary projected to time of death. Elective participants' salaries are frozen at time of retirement or disability and are not subject to further increases. Salaries are projected for this purpose using the assumed rates of increase in salaries and the number of participants projected on an open-group basis as described in Appendix F.

    D.6 Liabilities

    D.6.1 Paid-up reserve

    At the end of a given plan year, the liabilities associated with the individual $5,000 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 $5,000 paid-up death benefit projected payable on the basis of the assumed mortality rates. With the exception of elective participants entitled to a deferred annuity, this valuation assumes that the paid-up benefit of $5,000 will be paid to all elective participants when it becomes available to them.

    D.6.2 IBNR

    On the basis of the plan's experience, the reserve at the end of a given plan year for claims incurred but not reported (IBNR) is set equal to one-sixth of the projected annual death benefits paid on average during the six previous plan years.

    D.6.3 Outstanding payments

    Outstanding payments are liabilities related to death reported, but still unpaid at the end of a given plan year. They are determined by taking the difference between 95% of the expected payments and the payments already disbursed for the deaths that occurred over the period of five years preceding the valuation date. The 95% assumption was developed based on the actual percentage of payments made from prior years according to the data provided.

    D.6.4 Extension of coverage

    Due to the negligible financial impact of the 30-day extension of the basic benefit upon termination of coverage and to the nature of basic benefit paid on a monthly basis, no explicit liability was calculated in respect of that basic benefit provision.

    Appendix E ― Economic assumptions

    The following economic assumptions are required for valuation purposes:

    E.1 Increases in average earnings

    Average earnings are exclusive of seniority and promotional increases, which are considered under a separate demographic assumption. Except for the first three years which were provided by the Department of National Defence, the annual increase in pensionable earnings is assumed to be 0.6% higher than the corresponding increase in CPI. This corresponds to an ultimate increase in average pensionable earnings of 2.6% for plan year 2028 and thereafter (2.7% in the previous valuation for plan year 2026 and thereafter).

    The resulting assumed increases in average earnings are shown in Table 28.

    E.2 Projected yields on RFDB Account

    These yields are required for the long‑term projection of the RFDB Account balance, liabilities and excess or shortfall. The methodology used to determine the projected yields on the Superannuation Account is described in Appendix F of the Report on the Pension Plans for the Canadian Forces- Regular Force and Reserve Force as at 31 March 2022 prepared by Office of the Chief Actuary. The projected yield on the Account is 3.2% in plan year 2023. It is projected to reach a low of 2.5% in 2032 and to reach its ultimate value of 4.0% in 2049.

    Table 28 Summary of economic assumption
    (percentage)
    Plan year Economic increase in earningsTable 28 footnote a of non-elective participants Projected yield
    2023 4.8 3.2
    2024 3.0 3.1
    2025 2.3 3.0
    2026 2.7 2.9
    2027 2.7 2.9
    2028 2.6 2.8
    2029 2.6 2.7
    2030 2.6 2.7
    2031 2.6 2.6
    2032 2.6 2.5
    2033 2.6 2.6
    2034 2.6 2.6
    2035 2.6 2.6
    2036 2.6 2.6
    2037 2.6 2.7
    2038 2.6 2.8
    2039 2.6 2.9
    2040 2.6 3.1
    2041 2.6 3.3
    2042 2.6 3.5
    2043 2.6 3.7
    2044 2.6 3.8
    2045 2.6 3.8
    2046 2.6 3.9
    2047 2.6 3.9
    2048 2.6 3.9
    2049+ 2.6 4.0

    Table 28 footnotes

    Table 28 footnote a

    Exclusive of seniority and promotional increases.

    Return to table 28 footnote a

    Appendix F ― Demographic and other assumptions

    F.1 Demographic assumptions

    Except where otherwise noted, all demographic assumptions were determined from the Canadian Forces - Regular Force plan's experience as it was done in the past. Where applicable, assumptions of the previous valuation were updated to reflect the intervaluation experience. All references to age and years of qualifying service in this section are based on rounding the exact age and years of qualifying service to the nearest integer. For detailed descriptions on each assumption, please refer to the Actuarial Report on the Pension Plans for Canadian Forces - Regular Force and Reserve Force as at 31 March 2022.

    Table 29 Sample of assumed seniority and promotional salary increases
    (Percentage of annual earnings)
    Years of qualifying service Officer Other rank
    0 7.9 20.0
    1 7.4 19.1
    2 12.8 10.4
    3 14.1 8.8
    4 22.1 5.4
    5 10.6 2.2
    6 7.1 1.9
    7 7.4 1.7
    8 5.1 1.2
    9 4.3 0.8
    10 4.0 0.8
    15 2.7 1.2
    20 2.4 1.4
    25 2.2 1.3
    30 1.7 1.0
    35 and above 1.1 0.5
    Table 30 Sample of assumed withdrawal rates of the Regular Force Plan
    (Per 1,000 individuals)
    Years of qualifying service Officer Male other rank Female other rank
    0 60 100 90
    1 40 50 40
    5 17.5 38 22
    10 17.5 27.5 22
    12 17.5 22.5 14
    13 to 19 17.5 20 14
    20 to 24Table 30 footnote a 18 20 14
    25 and above 0 0 0

    Table 30 footnotes

    Table 30 footnote a

    Withdrawal rates above 19 years of service do not apply for members under the old terms of service

    Return to table 30 footnote a
    Table 31 Sample of assumed rates of retirement for members of the Regular Force Plan
    (Per 1,000 individuals)
    Years of qualifying service Male officer Female officer Male other rank Female other rank
    20 50 50 80 40
    21 50 75 50 40
    22 50 75 45 40
    23 50 75 43 45
    24 50 75 50 50
    25 100 100 75 55
    26 90 100 75 60
    27 85 100 75 65
    28 85 100 75 70
    29 85 100 75 75
    30 100 150 90 80
    34 250 150 150 150
    35 500 300 400 200
    36 250 200 200 150
    38 and above 150 150 150 150
    Table 32 Sample of assumed 3B disability incidence rates (own occupation) for the Regular Force Plan
    (Per 1,000 individuals)
    Age Male officer Female officer Male other rank Female other rank
    15 0.0 0.0 0.0 0.0
    20 3.5 8.0 3.0 7.0
    25 3.5 8.0 6.0 10.0
    30 3.5 8.0 17.0 22.5
    35 6.0 8.0 29.5 35.0
    40 11.0 31.0 42.0 52.0
    45 16.5 33.5 54.5 72.0
    50 24.0 36.0 61.0 92.0
    55 59.0 95.0 115.0 142.0
    60 300.0 450.0 500.0 500.0
    Table 33 Sample of assumed rates of mortality for plan year 2023 for contributors and retirement pensioners
    (Per 1,000 individuals)
    Age Male officer Male other rank Female
    40 0.5 0.8 0.4
    50 0.7 2.1 1.1
    60 2.0 5.3 3.2
    70 7.6 17.6 9.4
    80 35.0 46.8 30.4
    90 132.1 150.9 97.3
    100 320.8 340.7 263.4
    115 1000.0 1000.0 1000.0
    Table 34 Sample of assumed rates of mortality for plan year 2023 for disability (3A) pensioners
    (Per 1,000 individuals)
    Age Male officer Male other rank Female
    40 0.9 8.6 3.6
    50 2.4 11.5 5.8
    60 5.9 17.3 11.0
    70 14.6 35.9 22.7
    80 43.7 76.2 50.3
    90 124.5 160.5 115.4
    100 308.0 312.4 268.9
    115 1000.0 1000.0 1000.0
    Table 35 Sample of assumed rates of mortality plan year 2023 for surviving spouses
    (Per 1,000 individuals)
    Age Male Female
    Before 60 0.0 0.0
    60 8.2 6.1
    70 16.9 14.7
    80 54.1 39.2
    90 146.0 111.4
    100 360.6 295.7
    115 1000.0 1000.0
    Table 36 Sample of assumed longevity improvement factors at initial and ultimate plan year mortality reductions
    (Applicable at the end of the plan year)
    Age Male at plan year 2024 Male at plan year 2040 Female at plan year 2024 Female at plan year 2040
    40 0.59 0.80 0.79 0.80
    50 1.38 0.80 1.30 0.80
    60 1.79 0.80 1.58 0.80
    70 1.71 0.80 1.30 0.80
    80 1.59 0.80 1.06 0.80
    90 1.53 0.62 1.38 0.62
    100 0.69 0.28 0.77 0.28
    110 0.00 0.00 0.00 0.00

    F.2 Other assumptions

    F.2.1 New participants

    If it were not for the rounding to the next lower multiple of $250 of salary involved in the computation of contributions and the rounding to the next higher multiple of $250 involved in the computation of the amount of death benefit, the legislated contribution rate would be 10 cents (i.e., 20 cents divided by two) instead of 9.96 cents.

    F.2.2 Non-elective participants choosing to become elective participants at retirement

    The proportion of new retirees choosing to continue their coverage under the SDB plan is assumed to be 80% and is derived from the plan's own recent experience.

    F.2.3 Option to reduce coverage to $500

    The valuation data indicates that the proportion of elective participants opting to reduce their basic benefit to $500 is negligible. Accordingly, no elective participants were assumed to make such an option.

    F.2.4 Administrative expenses

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

    Appendix G ― Acknowledgements

    The Public Services and Procurement Canada provided all relevant valuation data on plan participants.

    The co-operation and able assistance received from the above-mentioned data provider deserve to be acknowledged.

    The following individuals were instrumental in the preparation of this report:

    Linda Benjauthrit, ACIA, ASA
    Simon Brien, ACIA, ASA
    Julie Fortier
    Guillaume Lépine-Mathieu, ACIA, ASA
    Shufen Lee, ACIA, ASA
    Véronique Menard, FCIA, FSA
    Kelly Moore

    Footnotes

    Footnote 1

    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 footnote 1

    Footnote 2

    If it were not for the rounding to the next lower multiple of $250 of salary involved in the computation of contributions and the rounding to the next higher multiple of $250 involved in the computation of the amount of death benefit, the legislated contribution rate would be 10 cents (i.e., 20 cents divided by two) instead of 9.96 cents.

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