Public Sector Pension Funds in Australia: Longevity Selection and Liabilities

Joelle H. Fong, John Piggott, and Michael Sherris

This paper assesses the cost and risk faced by public sector, defined benefit plan providers arising from uncertain mortality, including longevity selection, mortality improvements, and unexpected systematic shocks.

Using longitudinal micro data on Australian pensioners, we quantify the extent of longevity selection at both aggregate and scheme level.