When the Society of Actuaries (SOA) released the RP-2014 mortality table in 2014, they included mortality improvement scale MP-2014. The purpose of this scale is to reflect mortality improvement into the future, since one would expect future mortality rates to be lower with further advances in health and medicine. A practice was then started to update this improvement scale annually as additional years of Social Security Administration mortality experience became available.
On October 23, 2018, the SOA released the latest mortality improvement scale: MP-2018. The release can be found here. This scale reflects historical U.S. population mortality experience through 2016.
As with past updates to the improvement scale, MP-2018 shows slightly lower rates than the prior scale (MP-2017). The RP-2014 / MP-2014 combination made a significant increase to plan liabilities and the four subsequent updates to the improvement scale have seen steady decreases to plan liabilities, generally in the 0.5% to 1.0% per year range. MP-2018 is no different, with an expected liability decrease from MP-2017 measurements of 0.3% to 0.6%, the higher rates coming from groups that are younger and more heavily male.
The MP-2018 improvement scale is final and can be used for valuations from this point forward.
Feel free to reach out to your Foster & Foster consultant with any questions you may have.