More retirement-related regulatory news for plan sponsors, including links to detailed information.
Final regulations prescribing mortality tables for pension plans
The Internal Revenue Service (IRS) released final regulations prescribing mortality tables to be used by most defined benefit (DB) pension plans. The tables specify the probability of survival year-by-year for an individual based on age, gender, and other factors. This information is used (together with other actuarial assumptions) to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for a defined benefit plan.
To learn more, click here.
Guidance released on mortality table to determine minimum lump sums
The IRS released Notice 2017-60 and Revenue Procedure 2017-55. Notice 2017-60 sets forth: (1) the mortality table to be used to determine minimum lump sums for distributions during stability periods beginning in the 2018 calendar year, and (2) updated mortality tables for 2018 determined under prior regulations. The updated mortality tables determined under prior regulations apply to certain plans with end-of-year valuation dates, and certain plans for which a transition option under new regulations is used for the 2018 plan year.
Revenue Procedure 2017-55 provides procedures for obtaining approval to use plan-specific mortality tables for pension funding purposes in lieu of the standard mortality tables that are generally required to be used.
To download Notice 2017-60, click here.
To download Revenue Procedure 2017-55, click here.