Mortality Table Construction

[Gary]

Does anyone know of suggested publications that pertain to the development of the various most common mortality tables, what the purpose and relevance of each of the tables are. Just background information to have on the subject. How the tables relate to one another.

Pax if you respond, if it is not too much trouble I would like to be able to respond to you by email. Thank you, Gary.

[david rigby]

Gary,

I keep handy all the original issues of various mortality table, so that when the client asks, I am able to give a valid answer as to the source or time of the data, etc. But I am not aware of an online source of these.

For example, the UP84 table was originally published by the Conference of Actuaries (in 1975 I think), the GAM-83 table was published by the Society of Actuaries in 1983, etc. I am unable to remember details of source data, so I don't try, just look it up if I need it. The articles that accompany a table are sometimes lengthy, which is good because there is excellent detail about the history of the data, usually some discussion about the most recent table, other information which indicates the need for the new table, etc.

In my opinion, mortality tables are one of the most important research tasks that is undertaken by the actuarial profession on a regular basis. If you read one of these articles, you will understand the care and importance that is necessary, and the substantial analysis that is done before a table is published. The articles accompanying the 1994 UP tables are an excellent example of this point.

BTW, if you click on the "profile" icon on a message, you may find out more information about someone, including an email address. My profile, includes my email address.

[Guest Len Diorio]

Originally posted by pax

Gary,  

I keep handy all the original issues of various mortality table, so that when the client asks, I am able to give a valid answer as to the source or time of the data, etc.  But I am not aware of an online source of these.

For example, the UP84 table was originally published by the Conference of Actuaries (in 1975 I think), the GAM-83 table was published by the Society of Actuaries in 1983, etc.  I am unable to remember details of source data, so I don't try, just look it up if I need it.  The articles that accompany a table are sometimes lengthy, which is good because there is excellent detail about the history of the data, usually some discussion about the most recent table, other information which indicates the need for the new table, etc.

In my opinion, mortality tables are one of the most important research tasks that is undertaken by the actuarial profession on a regular basis.  If you read one of these articles, you will understand the care and importance that is necessary, and the substantial analysis that is done before a table is published.  The articles accompanying the 1994 UP tables are an excellent example of this point.

BTW, if you click on the "profile" icon on a message, you may find out more information about someone, including an email address.  My profile, includes my email address.

I am new to this website and have never posted before, so I hope this question gets out!

I need a lump sum conversion factor (multiplier) using the GATT mortality and interest rate of 5.54% for a male age 55 years and 11 months. Can anyone help?

[david rigby]

Assuming the payment form is a life annuity and that benefits are payable monthly:

if the benefit is assumed to commence at 55-11/12, then the 5.54% factor is 76.1831 (mutlitply by monthly amount),

if the benefit is assumed to commence at 65, then the 5.54% factor is 160.4951 (multiply ditto).

(Others might get slightly different factors if they are more precise with rounding.)

[MGB]

I have not done the exact calc (other than a quick look at a spreadsheet with whole years).

I would say PAX's numbers are correct, but reversed. The higher number should be the annuity starting immediately, the lower number is the deferred annuity.

[MGB]

Getting back to the original question: Where is good background?

The Society of Actuaries Study Note P-461U from 1996, "Mortality Tables for Pension Plans" is exactly what you asked for, discussing why you would use different tables and the characteristics of commonly used ones.

To find it...??? If you know anyone that has taken these exams between 96 and 99, try to get a copy from them. Or, you may be able to order one directly from the SOA http://www.soa.org At the very least, you can contact their librarian and get a copy (copy fees).

The problem is, I do not know if they even issue this note for current exams anymore. This was used under the last structure before reform in 2000.

For the SOA's most current mortality table and a lengthy document on its creation (including comparisons to old tables) see the RP-2000 (RP is retirement plans, although it never mentions that fact in the report) report at:http://www.soa.org/research/rp2000.html

Note that the Academy of Actuaries recommended last week to the IRS that this table (with different tables for blue/white collar) be used for current liability in the future.