Updated Mortality Improvement Rates and Static Mortality Tables for Defined Benefit Pension Plans for 2019

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Internal Revenue Bulletin › IRB 2018 › Notice › Notice 2018-2

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Updated Mortality Improvement Rates and Static Mortality Tables for Defined

Benefit Pension Plans for 2019

Notice 2018-02

PURPOSE

This notice specifies updated mortality improvement rates and static

mortality tables to be used for defined benefit pension plans under § 430(h)(3)(A)

of the Internal Revenue Code (Code) and section 303(h)(3)(A) of the Employee

Retirement Income Security Act of 1974, Pub. L. No. 93-406, as amended

(ERISA). These updated mortality improvement rates and static tables, which are

being issued pursuant to the regulations under § 430(h)(3)(A), apply for purposes

of calculating the funding target and other items for valuation dates occurring

during calendar year 2019.

This notice also includes a modified unisex version of the mortality tables

for use in determining minimum present value under § 417(e)(3) of the Code and

section 205(g)(3) of ERISA for distributions with annuity starting dates that occur

during stability periods beginning in the 2019 calendar year.

BACKGROUND

Section 412 of the Code provides minimum funding requirements that

generally apply for defined benefit plans. Section 412(a)(2) provides that § 430

specifies the minimum funding requirements that generally apply to defined

benefit plans that are not multiemployer plans. Section 430(a) defines the

minimum required contribution for such a plan by reference to the plan’s funding

target for the plan year. Under § 430(d)(1), a plan’s funding target for a plan year

generally is the present value of all benefits accrued or earned under the plan as

of the first day of that plan year.

Section 430(h)(3) provides rules regarding the mortality tables that are

generally used under § 430. Under § 430(h)(3)(A), except as provided in

§ 430(h)(3)(C) or (D), the Secretary is to prescribe by regulation mortality tables

to be used in determining any present value or making any computation under

§ 430

benefits accrued or earned under the plan as

of the first day of that plan year.

Section 430(h)(3) provides rules regarding the mortality tables that are

generally used under § 430. Under § 430(h)(3)(A), except as provided in

§ 430(h)(3)(C) or (D), the Secretary is to prescribe by regulation mortality tables

to be used in determining any present value or making any computation under

§ 430. Those tables are to be based on the actual experience of pension plans

and projected trends in that experience. Section 430(h)(3)(B) requires the

Secretary to revise any table in effect under § 430(h)(3)(A) at least every 10

years to reflect the actual experience of pension plans and projected trends in

that experience.

Section 430(h)(3)(C) provides that, upon request by a plan sponsor and

approval by the Secretary, substitute mortality tables that meet the applicable

requirements may be used in lieu of the standard mortality tables provided under

§ 430(h)(3)(A). Section 430(h)(3)(D) provides for the use of separate mortality

tables with respect to certain individuals who are entitled to benefits on account

of disability.

Mortality Tables for Purposes of § 430

On October 5, 2017, the Treasury Department and the Internal Revenue

Service amended § 1.430(h)(3)-1 to revise the mortality tables used under

§ 430(h)(3)(A) for plan years beginning on or after January 1, 2018. T.D. 9826,

82 F.R. 46388. The mortality tables used under § 430(h)(3)(A) are based on the

tables in the RP-2014 Mortality Tables Report,1 adjusted for mortality

improvement. Section 1.430(h)(3)-1 sets forth base mortality tables with a base

year of 2006.

Section 1.430(h)(3)-1(a) permits plan sponsors to apply the projection of

mortality improvement in either of two ways: through use of static tables that are

updated annually to reflect expected improvements in mortality, or through use of

generational tables

Tables Report,1 adjusted for mortality

improvement. Section 1.430(h)(3)-1 sets forth base mortality tables with a base

year of 2006.

Section 1.430(h)(3)-1(a) permits plan sponsors to apply the projection of

mortality improvement in either of two ways: through use of static tables that are

updated annually to reflect expected improvements in mortality, or through use of

generational tables. Section 1.430(h)(3)-1(a)(2)(i)(C) provides that, for valuation

dates occurring in years after 2018, updated mortality improvement rates that

take into account new data for mortality improvement trends of the general

population, along with static mortality tables that reflect those updated mortality

improvement rates, will be provided through guidance published in the Internal

Revenue Bulletin.

Application of These Tables for Other Funding Rules

Section 1.431(c)(6)-1 provides that the same mortality assumptions that

apply for purposes of § 430(h)(3)(A) and § 1.430(h)(3)-1(a)(2) are used to

determine a multiemployer plan’s current liability for purposes of applying the full-

funding rules of § 431(c)(6). For this purpose, a multiemployer plan may apply

either the static mortality tables or the generational mortality tables (as updated

pursuant to §1.430(h)(3)-1(a)(2)(i)(C) and (a)(3)).

Section 433 provides the minimum funding standards for CSEC plans,

which are described in section 414(y). Section 433(h)(3)(B)(i) provides that the

Secretary may by regulation prescribe mortality tables to be used in determining

current liability for purposes of § 433(c)(7)(C). Section 1.433(h)(3)-1(a) provides

that the mortality tables described in § 430(h)(3)(A) are to be used to determine

current liability under § 433(c)(7)(C)

ng standards for CSEC plans,

which are described in section 414(y). Section 433(h)(3)(B)(i) provides that the

Secretary may by regulation prescribe mortality tables to be used in determining

current liability for purposes of § 433(c)(7)(C). Section 1.433(h)(3)-1(a) provides

that the mortality tables described in § 430(h)(3)(A) are to be used to determine

current liability under § 433(c)(7)(C).

Application of Mortality Tables for Minimum Present Value Requirements

under § 417(e)(3)

Section 417(e)(3) generally provides that the present value of certain

accelerated forms of benefit under a qualified pension plan (including single-sum

1 The RP-2014 Mortality Tables Report, as revised November 2014, is available at

www.soa.org/Research/Experience-Study/pension/research-2014-rp.aspx.

distributions) must not be less than the present value of the accrued benefit using

applicable interest rates and the applicable mortality table. Section 417(e)(3)(B)

defines the term “applicable mortality table” as the mortality table specified for the

plan year under § 430(h)(3)(A) (without regard to § 430(h)(3)(C) or (D)), modified

as appropriate by the Secretary.

Rev. Rul. 2007-67, 2007-2 CB 1047, provides that, except as otherwise

stated in future guidance, the applicable mortality table under § 417(e)(3) is a

static mortality table set forth in published guidance that is developed based on a

fixed blend of 50 percent of the static male combined mortality rates and

50 percent of the static female combined mortality rates used under

§ 1.430(h)(3)-1. Rev. Rul. 2007-67 also provides that the applicable mortality

table for a calendar year applies to distributions with annuity starting dates that

occur during stability periods that begin during that calendar year

developed based on a

fixed blend of 50 percent of the static male combined mortality rates and

50 percent of the static female combined mortality rates used under

§ 1.430(h)(3)-1. Rev. Rul. 2007-67 also provides that the applicable mortality

table for a calendar year applies to distributions with annuity starting dates that

occur during stability periods that begin during that calendar year.

MORTALITY IMPROVEMENT RATES FOR 2019

The mortality improvement rates for valuation dates occurring during 2019

are the mortality improvement rates in the Mortality Improvement Scale MP-2017

Report (issued by the Retirement Plans Experience Committee (RPEC) of the

Society of Actuaries and available at http://www.soa.org/Files/Research/Exp-

Study/mortality-improvement-scale-mp-2017.pdf).

STATIC MORTALITY TABLES FOR 2019

The static mortality tables that apply under § 430(h)(3)(A) for valuation

dates occurring during 2019 are set forth in the appendix to this notice. The

mortality rates in these tables have been developed from the base mortality rates

and methodology set forth in § 1.430(h)(3)-1(c) and (d) using the mortality

improvement rates specified in this notice.

The static mortality table that applies under § 417(e)(3) for distributions

with annuity starting dates occurring during stability periods beginning in 2019 is

set forth in the appendix to this notice in the column labeled “Unisex.” The

mortality rates in this table are derived from the mortality tables specified under

§ 430(h)(3)(A) for 2019 in accordance with the procedures set forth in

Rev. Rul. 2007-67.

Drafting Information

The principal authors of this notice are Arslan Malik and Linda S. F.

Marshall of the Office of the Associate Chief Counsel (Tax Exempt and

Government Entities). For further information regarding this notice, contact

Arslan Malik or Linda Marshall at (202) 317-6700 (not a toll-free number)

A) for 2019 in accordance with the procedures set forth in

Rev. Rul. 2007-67.

Drafting Information

The principal authors of this notice are Arslan Malik and Linda S. F.

Marshall of the Office of the Associate Chief Counsel (Tax Exempt and

Government Entities). For further information regarding this notice, contact

Arslan Malik or Linda Marshall at (202) 317-6700 (not a toll-free number).

APPENDIX

Mortality Tables for 2019

Valuation Dates Occurring During 2019 and

Distributions Subject to § 417(e)(3) with Annuity Starting Dates During

Stability Periods Beginning in 2019

Age

MALE

FEMALE

UNISEX

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Table for

Distributions

Subject to

§ 417(e)(3)

0.002709

0.002489

0.002599

0.000159

0.000156

0.000158

0.000108

0.000103

0.000106

0.000091

0.000078

0.000085

0.000071

0.000059

0.000065

0.000063

0.000054

0.000059

0.000057

0.000050

0.000054

0.000051

0.000047

0.000049

0.000044

0.000043

0.000044

0.000036

0.000041

0.000039

0.000030

0.000039

0.000035

0.000032

0.000040

0.000036

0.000049

0.000047

0.000048

0.000065

0.000053

0.000059

0.000081

0.000059

0.000070

0.000097

0.000030

0.000039

0.000035

0.000032

0.000040

0.000036

0.000049

0.000047

0.000048

0.000065

0.000053

0.000059

0.000081

0.000059

0.000070

0.000097

0.000066

0.000082

0.000114

0.000071

0.000093

0.000132

0.000076

0.000104

0.000151

0.000080

0.000116

0.000171

0.000084

0.000128

0.000190

0.000084

0.000137

0.000215

0.000087

0.000151

0.000240

0.000089

0.000165

0.000257

0.000093

0.000175

0.000269

0.000096

0.000183

0.000260

0.000100

0.000180

0.000256

0.000104

0.000180

0.000256

0.000109

0.000183

0.000261

0.000115

0.000188

0.000271

0.000122

0.000197

0.000284

0.000132

0.000208

0.000300

0.000144

0.000222

0.000317

0.000156

0.000237

0.000336

0.000170

0.000253

0.000352

0.000185

0.000269

0.000368

0.000200

0.000284

0.000382

0.000214

0.000298

Age

MALE

FEMALE

FEMA

000317

0.000317

0.000156

0.000237

0.000336

0.000170

0.000253

0.000352

0.000185

0.000269

0.000368

0.000200

0.000284

0.000382

0.000214

0.000298

Age

MALE

FEMALE

UNISEX

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Table for

Distributions

Subject to

§ 417(e)(3)

0.000396

0.000232

0.000314

0.000413

0.000250

0.000332

0.000433

0.000271

0.000352

0.000457

0.000294

0.000376

0.000485

0.000491

0.000485

0.000318

0.000316

0.000318

0.000402

0.000520

0.000566

0.000520

0.000346

0.000366

0.000346

0.000433

0.000565

0.000683

0.000567

0.000378

0.000443

0.000378

0.000473

0.000618

0.000841

0.000622

0.000415

0.000547

0.000415

0.000519

0.000682

0.001043

0.000690

0.000456

0.000680

0.000458

0.000574

0.000757

0.001289

0.000771

0.000504

0.000846

0.000510

0.000641

0.000843

0.001585

0.000867

0.000558

0.001047

0.000570

0.000719

0.000940

0.001936

0.000976

0.000617

0.001287

0.000639

0.000808

0.001050

0.002348

0.001103

0.000682

0.001569

0.000719

0.000911

0.001173

0.002827

0.001248

0.000756

0.001898

0.000813

0.001031

0.001310

0.003069

0.001398

0.000837

0.002016

0.000906

0.001152

0.001465

0.003330

0.001593

0.000929

0.002160

0.001021

0.001307

0.001629

0.003587

0.001816

0.001032

0.002330

0.001155

0.001486

0.001812

0.003859

0.002076

0.001148

0.002529

0.001312

0.001694

0.002018

0.004151

0.002459

0.001

173

0.002827

0.001248

0.000756

0.001898

0.000813

0.001031

0.001310

0.003069

0.001398

0.000837

0.002016

0.000906

0.001152

0.001465

0.003330

0.001593

0.000929

0.002160

0.001021

0.001307

0.001629

0.003587

0.001816

0.001032

0.002330

0.001155

0.001486

0.001812

0.003859

0.002076

0.001148

0.002529

0.001312

0.001694

0.002018

0.004151

0.002459

0.001274

0.002758

0.001556

0.002008

0.002258

0.004472

0.002961

0.001412

0.003018

0.001871

0.002416

0.002539

0.004828

0.003404

0.001560

0.003310

0.002156

0.002780

0.002871

0.005224

0.003907

0.001718

0.003633

0.002461

0.003184

0.003260

0.005665

0.004459

0.001885

0.003992

0.002804

0.003632

0.003715

0.006157

0.005091

0.002061

0.004382

0.003211

0.004151

0.004238

0.006700

0.005798

0.002250

0.004807

0.003734

0.004766

0.004836

0.007298

0.006585

0.002452

0.005270

0.004311

0.005448

0.005513

0.007956

0.007443

0.002671

0.005769

0.005001

0.006222

0.006267

0.008673

0.008277

0.002909

0.006310

0.005644

0.006961

0.007108

0.009458

0.009184

0.003171

0.006904

0.006363

0.007774

0.007948

0.010323

0.010162

0.003526

0.007562

0.007206

0.008684

0.008870

0.011277

0.011159

0.003924

0.008298

0.008021

0.009590

0.009892

0.012341

0.012253

0.004370

0.009123

0.008896

0.010575

0.011025

0.013534

0.013462

0.004874

0.010052

0.009859

0.011661

0.012289

0.014875

0.014808

0.005441

0.011098

0.010906

0.012857

0.013703

0.016385

0.016322

0.006083

0.012277

0.012088

0.014205

0.015289

0.018089

0.018031

0.006810

0.013609

0.013425

0.015728

0.017063

0.020008

0.019954

0.007637

0.015116

0.014939

0.017447

0.019059

0.022182

0.022133

0.008570

0.016809

0.016642

0.019388

0.021299

0.024640

0.024597

0.009636

0.018736

0.018581

0.021589

0.023809

0.027425

0.027387

0.010850

0.020932

0.020795

0.024091

0.026632

0.030598

0.030567

0.012238

0.023449

0.023

031

0.006810

0.013609

0.013425

0.015728

0.017063

0.020008

0.019954

0.007637

0.015116

0.014939

0.017447

0.019059

0.022182

0.022133

0.008570

0.016809

0.016642

0.019388

0.021299

0.024640

0.024597

0.009636

0.018736

0.018581

0.021589

0.023809

0.027425

0.027387

0.010850

0.020932

0.020795

0.024091

0.026632

0.030598

0.030567

0.012238

0.023449

0.023335

0.026951

0.029797

0.034205

0.034182

0.013816

0.026334

0.026249

0.030216

0.033337

0.038308

0.038295

0.015613

0.029650

0.029602

0.033949

Age

MALE

FEMALE

UNISEX

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Non-

Annuitant

Table

2019

Annuitant

Table

2019

Optional

Combined

Table

for Small

Plans

2019

Table for

Distributions

Subject to

§ 417(e)(3)

0.037328

0.043013

0.017661

0.033482

0.038248

0.039221

0.048107

0.019407

0.037671

0.042889

0.042793

0.053899

0.022779

0.042472

0.048186

0.048109

0.060505

0.027801

0.047965

0.054235

0.055203

0.068037

0.034499

0.054212

0.061125

0.064088

0.076506

0.042936

0.061316

0.068911

0.074920

0.086158

0.053154

0.069382

0.077770

0.087644

0.097001

0.065156

0.078446

0.087724

0.102308

0.109110

0.078988

0.088548

0.098829

0.118962

0.122618

0.094649

0.099731

0.111175

0.137544

0.112167

0.124856

0.153292

0.125600

0.139446

0.169507

0.139864

0.154686

0.185842

0.154780

0.170311

0.202075

0.170211

0.186143

0.218007

0.186103

0.137544

0.112167

0.124856

0.153292

0.125600

0.139446

0.169507

0.139864

0.154686

0.185842

0.154780

0.170311

0.202075

0.170211

0.186143

0.218007

0.186103

0.202055

0.236576

0.203654

0.220115

0.255535

0.221920

0.238728

0.275230

0.241013

0.258122

0.295476

0.260772

0.278124

100

0.316169

0.281029

0.298599

101

0.337103

0.301563

0.319333

102

0.357825

0.322285

0.340055

103

0.378197

0.342997

0.360597

104

0.398127

0.363294

0.380711

105

0.416745

0.383279

0.400012

106

0.434629

0.402808

0.418719

107

0.451641

0.421196

0.436419

108

0.467699

0.438540

0.453120

109

0.482755

0.454881

0.468818

110

0.496722

0.470279

0.483501

111

0.501914

0.484597

0.493256

112

0.501408

0.497856

0.499632

113

0.501004

0.503015

0.502010

114

0.500451

0.501403

0.500927

115

0.500000

116

0.500000

117

0.500000

408

0.497856

0.499632

113

0.501004

0.503015

0.502010

114

0.500451

0.501403

0.500927

115

0.500000

116

0.500000

117

0.500000

118

0.500000

119

0.500000

120

1.000000

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