In a speech to the annual general meeting of the American Society of Actuaries in Florida late last month, Canada's Chief Actuary Jean-Claude Ménard warned that as lifespans increase, so will pension costs.
“Canadian life expectancy at age 65 is projected to increase by three years to reach 25 years within the next 50 years. It means that half of Canadian retirees are expected to live past age 90,” he said. “This will result in increased costs for pension plans as beneficiaries are expected to receive their benefit for a longer period.”
Mortality rates have dropped significantly since the 1950s, and most recently this has been thanks to advances in the way heart diseases are treated. If mortality rates continue to decrease at the same pace as observed over the past 15 years, research conducted by the Office of the Chief Actuary suggests that a life expectancy of 100 could be attained by 2094 for males and by 2121 for females.
“To conclude, retirement is expensive and will become even more expensive in the future with improved longevity,” comments Mr. Ménard.