Authors: Dominic Bourbonnais Karen Debortoli Farzeen Mawji
This evolution includes greater acceptance and recognition of transgender and non-binary individuals. While individuals have been able to change their gender on birth and identity documents from male to female, or vice versa, since the 1970s, they're now able to select a third option for gender on federal and many provincial identity documents. With the 2021 census, Canada became the first country to collect data on both sex at birth and gender identification, with results indicating that one in 300 Canadians over age 15 identifies as transgender or non-binary, with higher percentages among lower age ranges. There's also an impact on pension plans, particularly those in Quebec, which has yet to allow the use of unisex mortality tables.
This article provides background on the recognition of non-binary gender identities in Canada, explores its effect on mortality and other assumptions, discusses its impact on pension and benefit plans, and gives employers and plan sponsors some steps to take to meet the needs of their transgender and non-binary plan members.
Gender diversity terminology
As terminology varies, it's important to define some key terms that will be used in this discussion. The following definitions aren't intended to be exhaustive, but rather to provide some context for the discussion below, particularly in relation to workplace benefits and their costing.
Assigned sex at birth: The sex assigned to an individual at their birth, which typically corresponds to their anatomical and other biological characteristics — male, female or intersex.
Gender identity: An individual's deeply held sense of their gender, which may differ from their assigned sex at birth.
- Cisgender: An individual whose gender identity is consistent with their assigned sex at birth.
- Transgender: An individual whose gender identity doesn't correspond to their assigned sex assigned at birth. There's no requirement for medical/surgical intervention. For the purpose of this discussion, this term is used exclusively for individuals who have a gender identity that's either male or female (i.e., separate from non-binary).
- Non-binary: An individual whose gender identity falls outside the traditional male/female binary.
Gender-affirming care: Medical (i.e., pharmaceutical or surgical) treatment provided to an individual to better align their physical characteristics with their gender identity.
Background on gender diversity data
All Canadian jurisdictions have allowed individuals to change their gender on their birth certificate, some as far back as the 1970s. However, such changes could only be from male to female (or vice versa) and required that the individual undergo gender affirmation surgery. Starting with Ontario in 2012, provinces and territories gradually removed the requirement for surgery.
Starting in 2018, some provinces and territories allow individuals to select a third gender identity (e.g., non-binary, other) on birth records and other civil documents. This option isn't available yet in all Canadian jurisdictions. Since June 2019, the federal government has allowed individuals who don't identify exclusively as male or female to use "X" for gender on their passports, travel documents, citizenship certificates and permanent resident cards.
To gather data on gender diversity in Canada, the 2021 Census asked respondents questions about both their assigned sex at birth and gender identity. The resulting data indicates non-binary rate of 0.01% to 0.43% of the population, depending on age group.1 Information from Statistics Canada shows that proportions of transgender and non-binary Canadians were between three and seven times higher for Generation Z and Millennials (0.79% and 0.51%, respectively) than for Generation X, Baby Boomers and those born in 1945 or earlier (0.19%, 0.15% and 0.12%, respectively).1
Mortality, risk and gender
For actuarial purposes, individuals are currently classified as either male or female, including those who are transgender or non-binary. Due to the impact of traditional split of mortality data between male and female, "transfeminine" refers to individuals whose assigned sex at birth was male, but identify as female, while "transmasculine" refers to individuals whose assigned sex at birth was female but identify as male. In mortality studies, transfeminine individuals have been traditionally grouped with cisgender females, with transmasculine individuals grouped with cisgender males.
Also, while transgender individuals aren't required to receive gender affirming surgery or medication (e.g., hormones), mortality tables may distinguish between those who have and those who haven't, due to the impact of certain care — particularly surgical gender assignment and hormone medication — on specific risk factors, including mortality.
In terms of group benefits, there was a disconnect in historic risk assessment practices between the information actuaries and insurers thought they were getting, and what they were actually receiving. Specifically, while the expectation was that group benefits were costed based on individuals' sex at birth, costs were instead based on individuals' identified gender. This disconnect is due to the above-noted ability of individuals to change the sex on their personal identification documents.
The increasing percentage of the population that identifies as transgender or non-binary brings a new paradigm for risk assessment, as most of the costing methods have used a binary model differentiated based on a male/female split. This area is where actual impacts, legal context and the position of the various parties involved are still evolving rapidly.
Based on 2021 Census data, approximately 0.1% to 0.3% of the Canadian population identified as transgender or non-binary, or one in 300 individuals age 15 or over.1 As noted above, the percentages are higher for lower age ranges. When looking at the impact of this group on the development of mortality tables, this group of individuals is small. It's therefore unlikely that any significant inference can be drawn on the risk factors for this population.
Impact of gender-affirming care
Additional complications are posed by data availability. Notwithstanding the 2021 Census, it's currently difficult to obtain both sex at birth and gender identity from industry data. Therefore, even if the size of the group were to warrant it, it would be difficult to obtain sufficient data to determine if an adjustment is needed for this population that differs from those made for traditional risk factors. There's some medical research — often from patient records in gender affirmation centers outside Canada (including the US, UK, Netherlands and Denmark — suggesting that there's a significant difference in mortality rates. Specifically:
- 48% of the transgender population age 26 and below has reported having attempted suicide (compared to 6% in the 16-24 age band overall population).2
- Deaths reported in various studies with sample sizes ranging from 1,500 to 6.6M and duration from a few years to 40 years have indicated:
| Cisgender female | Cisgender male | |
| Transgender female | Higher mortality (2-3 times more deaths) | Higher mortality (1.5-1.75 times more deaths) |
| Transgender male | Higher mortality (1.25-1.5 times more death) | Unclear trend (0.6-1.1 times number of deaths) |
However, from an actuarial and underwriting perspective, this data isn't considered sufficiently reliable to make significant adjustment to costing. Also, this data tends to over represents individuals that have received some form of surgical gender-affirming care.
Impact of gender identity on pension and benefits plans
Impact of gender identity on pensions
The Canadian Institute of Actuaries (CIA) published Final Report — Gender Identity Task Force in May 2023. The report reviewed the potential actuarial implications of use of a gender other than male or female.
In March 2024, the CIA also published a Notice of Intent: Review of Standards of Practice with Respect to Gender Identity. The notice outlines planned changes to the CIA's Consolidated Standards of Practice based on the report. The planned changes include clarifying that actuaries should understand whether data reflects sex assigned at birth or gender and provides guidance on certain situations regarding mortality assumptions where there's a lack of information, or where only gender information is available. Such adjustments are needed, as the current wording of the consolidated standards requires use of sex-distinct mortality table.
While pension standards legislation in almost all Canadian jurisdictions states that actuaries must use unisex mortality tables, Quebec's requires the use of sex-distinct mortality tables. As a result, legislative and regulatory changes will be required in that province following any changes to the consolidated standards. Such amendments are already under consideration by the provincial government following the 2021 case Attorney General of Quebec c. Center for Gender Advocacy. The optional or mandatory use of unisex mortality in other Canadian jurisdictions will be a safeguard if a very large percentage of the population eventually has a gender that's either male or female.
Impact of gender identity on benefits
We've seen a similar pattern where most of the transgender and non-binary individuals are costed on a unisex basis. Insurers are still grasping the concept and trying to improve their costing. A key consideration is the fact that traditional underwriting processes were based on male/female categorizations of sex. Individuals who identify as non-binary therefore fall outside of these traditional categorizations, placing them in uncharted territory from a traditional underwriting and costing perspective. The benefits space has fewer regulatory considerations, so that insurer alignment on this issue will be driven more by market pressures and the desire to get the best pricing possible.
Transgender-specific research
Given the relative lack of transgender-specific research on medical implications, it's currently difficult to accurately quantify the risk factors applicable to these individuals. For example, many studies currently group non-binary individuals with transgender individuals in their data. However, a 2019 study links the cause of death to either a biological component or a behavioral component; it indicates that 80% of mortality can be explained through the latter.
While the 2019 study doesn't resolve the fact that mortality study is broken down by male/female, it may resolve some underwriting limitations where available data (defined as sex at birth, but really gender, as discussed above) isn't providing underwriters with sufficient information. Additional questions regarding risk-taking behavior in an underwriting questionnaire (e.g., bungee jumping, sky diving, driving a motorcycle, smoking, etc.) may allow underwriters to cost individuals based on sex-distinct or unisex mortality tables, or a blend of the two based on behavior, like what's already done for smokers and non-smokers.
Four actions to take today
Although the issue is evolving, here are four actions you can take today:
Be informed. This discussion has hopefully provided you with an overview of the impacts of gender identity on pension and benefit plans. Continue to follow developments in this area, so you're aware of changes that may impact your plans and/or practices (particularly for pension plans in Quebec).
Gather information. Review your current forms (new hire, plan enrolment, benefits selection, beneficiary designation, etc.), tools and systems that request the sex of employees/members and their dependents to see how they talk about sex and gender designation. Make changes to facilitate collection of gender identity information and ensure transgender non-binary individuals can select an option that best fits their experience.
Modify language. In the course of your review, look at the language and terminology in the above materials, as well as in policies, employment booklets, etc. to ensure that it's inclusive and not gendered.
Talk to your insurers. Ask your carriers about how individuals who identify as other than male or female are costed, as there's currently no standard approach. Work with carriers to ensure that changes to terminology etc. are reflected on their end as well. Also, consider adding gender affirmation coverage (available from many carriers) and/or increase other coverage maximums (e.g., psychological/counselling) to meet the needs of transgender and non-binary employees/members and dependents.
