7 RESULTS This chapter presents the results of Projections Life Table AG2020. The results are compared to those of Projections Life Table AG2018. For a number of example funds the effect on the level of the provisions is evaluated. With the aid of these example funds it is possible to assess the impact for other pension funds. In addition, the AG2020 forecast is confronted with historical developments and compared to the latest forecast by Statistics Netherlands (CBS 2019-2060). 7.1 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 into account 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-year-old 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. 7.2 Observations with respect to Projections Life Table AG2018 Tables 7.1 and 7.2 present the AG2018 forecast of period life expectancies in the years 2017, 2018 and 2019 and how these relate to the realised life expectancies in these years. Also the table shows the forecast of life expectancies for 2019, 2020 and 2021. In this case, period life expectancies are used, as these can be compared across observation years. Projections Life Table AG2020 Results 26
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