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Old 01-25-2005, 04:54 PM
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CaptainDingo CaptainDingo is offline
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Default Mortality Tables

I am in the middle of a valuation (pension) and I wanted to use somewhere between QG 94, unisex with 2 year setback and 5 year setback.

What cases would I use which and why would I want to use setbacks in the first place (my boss thinks I might want to)? What examples are there?
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Old 01-25-2005, 08:49 PM
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Malik Shabazz Malik Shabazz is offline
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I'm not familiar with QG 94 (is it a Canadian table?), but here's what I've learned about set-forwards and set-backs in pension valuations:

1) Set-forwards are frequently window-dressing. If a company is using RP-2000 with a 5 year set-forward, they really wanted to use GAM-83 or GAM-71 but their actuary advised them to use a newer table with a set-forward to produce the same results.

2) When using a unisex table, it is common practice to use a set-back for females and a set-forward for males. With UP-84, I think the sex-distinct tables were male +1 and female -4.

3) In some cases, a set-back or set-forward may be appropriate. For example, in a pension valuation for a manufacturing company, the actuary may use RP-2000 for management and RP-2000 with a set-forward for blue-collar workers. Or RP-2000 for blue-collar workers and RP-2000 with a set-back for management.

I'm not sure that there are any specific rules that indicate when to use set-forwards or set-backs. If you were using RP-2000 and experiencing mortality gains (or losses) year after year, you might want to use a set-back (or a set-forward). Or you might choose to use a different table altogether.

Good luck.
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Old 01-27-2005, 09:34 AM
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Thanks, Malik!
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