5.3 What happened since the release of Projections Life Table AG2016? The model has not changed: no alterations have been made in the model specification. The changes in the forecast AG2018 versus AG2016 are caused solely by adding mortality data of the two most recent years to the data set underlying Projections Life Table AG2016 and moving up the start year from 2016 to 2018. Research was done into some of the assumptions. This research is further discussed in chapter 6. 5.4 Definitions of life expectancy A classic definition of life expectancy is the so-called period life expectancy. This period life expectancy is based on mortality probabilities in a certain period, such as one calendar year, and assumes that mortality probabilities will be constant in the future. In period life expectancy current mortality rates are used for mortality rates needed one or two years from now. So period life expectancy does not allow for expected future developments in the mortality probabilities. This definition is commonly used to compare developments over time, but must never be used to estimate how long people are expected to live. The second definition however, the cohort life expectancy, does take on board expected future mortality developments. When calculating cohort life expectancy at birth, mortality probabilities are required for a new-born, a one-year-old a year from now, a two-yearold two years from now and so on. In cohort life expectancy, for probabilities you need in one and two years’ time, you use mortality probabilities projected one and two years into the future. So cohort life expectancy is based on expected developments in mortality probabilities in future calendar years. To evaluate cohort life expectancy you need a forward projection of mortality probabilities. In case of an expected decrease in mortality probabilities, cohort life expectancy is therefore higher than period life expectancy. In this publication, wherever the term ‘life expectancy’ is used, cohort life expectancy is intended. Where needed, the intended definition of life expectancy is explicitly specified. At the moment, period life expectancy is 80.6 years for men and 83.9 years for women. Cohort life expectancy is 90 years for men and 92.5 years for women, if the forward projection of mortality probabilities is based on Projections Life Table AG2018. Cohort life expectancy is higher because we expect mortality probabilities to drop in the future. The State Pension retirement age is determined on the basis of a forecast by Statistics Netherlands (Centraal Bureau voor de Statistiek or ‘CBS’). According to the most recent insights within AG, using its own model and the most recent available data, the expectation is that the State Pension retirement age will be 68 years in 2029. That is one year sooner than can be derived from the most recent CBS forecast (2030). 5.5 Publication of Projections Life Tables on the AG website AG published Projections Life Table AG2018, including the technical specifications of the projection model, on its website. Refer to www.ag-ai.nl/ActuarieelGenootschap/Publicaties. Also listed there are Excel files with the data sets that can be used to reproduce the estimations of the model’s parameters. Projection Table AG2018 Introduction Projections Life Table AG2018 11

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