CO129-387 - Individuals - 1911 — Page 313

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II.

Principles of the Valuation.

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1. With respect to the assumption of the

rate of compound interest at which the values of

the liabilities and contributions should be dis-

counted, I need add nothing to the statement that

6 per cent. has been adopted.

2.

But the important question of the rate of

mortality demands a brief discussion.

Since a primary object of a Valuation is

to secure, as far as practicable, a reasonable uni-

formity and stability of future results consistent

with past experience, so that continuity may not

be interrupted by grave changes.

this element of

mortality forms the most serious consideration.

The

differences between the experience of Pension Funds

as indicative of the probable future are very

marked: differences occasioned by the constitution

of the Funds themselves; by the Fules of Membership:

by the composition of membership; by the social

condition of the members; by the climate and modes

of life in the various localities; and by the vary-

ing proportions between the Nationalities to which the

members belong; so that, practically, every Fund

presents a distinct problem to which no general

measure (without modification) can apply. Where a

Fund possesses a long duration and wide area and

its membership has become practically consolidated,

so that a uniform experience may be regarded as

fairly assured, the appropriate measure of its

expected mortality is, obviously, the tabulated (and

graduated) experience of the past. But few Funds

present