ALTERNATIVE MORTALITY TABLES PRESCRIBED FOR PLANS CALCULATING FUNDING LIABILITY FOR DISABILITY BENEFITS.
Rev. Rul. 96-7; 1996-1 C.B. 59
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Rul. 96-7
(For a summary, see Tax Notes, Jan. 1, 1996, p. 45; for the full
text, see 95 TNT 253-12, or H&D, Dec. 29, 1995, p. 5191.)
Communications Division
Part I
Section 412. -- Minimum Funding Standards
- Code Sections
- Subject Areas/Tax Topics
- Index Termspension plans, funding standards, minimum
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-939 (12 original pages)
- Tax Analysts Electronic Citation96 TNT 4-11
Rev. Rul. 96-7
ISSUE
[1] What alternative mortality tables may be used to calculate a plan's current liability under section 412(l) of the Internal Revenue Code for individuals who are entitled to benefits under the plan on account of disability?
LAW AND ANALYSIS
[2] Section 412(l) provides additional funding requirements for certain underfunded defined benefit pension plans that have more than 100 participants and that are not multiemployer plans. In general, the additional funding requirements are determined based on a plan's unfunded current liability.
[3] Section 751(a) of the Retirement Protection Act of 1994 added section 412(l)(7)(C)(ii) to the Code, effective for plan years beginning after December 31, 1994. Section 412(l)(7)(C)(ii) provides that, for purposes of determining current liability, the mortality table used shall be the table prescribed by the Secretary, and sets forth the basis for establishing a table. For plan years beginning before the effective date of the first tables prescribed under section 412(l)(7)(C)(ii)(II), the table must be based on the prevailing commissioners' standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on January 1, 1993. Rev. Rul. 95-28, 1995-1 C.B. 74, sets forth this mortality table.
[4] Section 412(l)(7)(C)(iii)(I) provides that, for plan years beginning after December 31, 1995, the Secretary shall establish mortality tables that may be used, in lieu of the tables under section 412(l)(7)(C)(ii), to determine current liability under section 412(l) for individuals who are entitled to benefits under the plan on account of disability. The Secretary must establish separate tables for individuals whose disabilities occurred in plan years beginning before January 1, 1995, and for individuals whose disabilities occur in plan years beginning after December 31, 1994. Under section 412(l)(7)(C)(iii)(II), the mortality table for individuals whose disabilities occur in plan years beginning after December 31, 1994, applies only with respect to individuals who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.
[5] The alternative mortality tables provided for under section 412(l)(7)(C)(iii) are permitted to be used in the specified circumstances, but are not required to be used. For any individual for whom these alternative mortality tables are not used, the mortality table prescribed under section 412(l)(7)(C)(ii) must be used.
[6] The alternative mortality tables provided under section 412(l)(7)(C)(iii) may be used only for individuals who are entitled to benefits under the plan on account of disability. For this purpose, an individual is entitled to benefits under a plan on account of disability if, because of the occurrence of a disability, the individual is entitled to receive a benefit to which the individual would not be entitled in the absence of the disability. For example, an individual is entitled to benefits under a plan on account of disability if, upon the occurrence of a disability at a time before the individual would have been entitled to receive an unreduced normal retirement benefit upon retirement, the individual is entitled to receive the same annuity that would have been payable to the individual upon retirement at normal retirement age. As a further example, an individual is entitled to benefits under a plan on account of disability if the individual, who would not otherwise be earning service credits, is credited with years of service for the period of disability. On the other hand, an individual is not entitled to benefits on account of disability if the individual separates from the service of the employer because of a disability, but merely receives the same benefit that would have been payable if the individual had separated from service without the occurrence of the disability.
[7] For purposes of section 412(l)(7)(C)(iii), any individual who has become entitled to benefits under a plan on account of disability continues to be considered entitled to benefits under the plan on account of disability until the individual recovers from disability and becomes entitled to different benefits under the plan than the individual would have been entitled to if the individual had not recovered.
[8] Under section 412(l), nothing prohibits the use of an additional actuarial assumption that meets the requirements of section 412(c) regarding the probability of recovery from disability.
HOLDING
[9] The mortality tables provided below, as applicable, may be used for plan years beginning after December 31, 1995, in lieu of the mortality table required to be used under section 412(l)(7)(C)(ii), for purposes of determining current liability. The first mortality table provided below may be used for plan years beginning after December 31, 1995, in lieu of the mortality table required to be used under section 412(l)(7)(C)(ii), for purposes of determining current liability for individuals entitled to benefits under the plan on account of disability, whose disabilities occurred in plan years beginning before January 1, 1995. The second mortality table provided below may be used for plan years beginning after December 31, 1995, in lieu of the mortality table required to be used under section 412(l)(7)(C)(ii), for purposes of determining current liability for individuals entitled to benefits under the plan on account of disability, whose disabilities occur in plan years beginning after December 31, 1994. This second mortality table may be used only for individuals who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder. The mortality table required to be used under section 412(l)(7)(C)(ii) must be used for individuals whose disabilities occur in plan years beginning after December 31, 1994, but who are not disabled within the meaning of title II of the Social Security Act and the regulations thereunder.
MORTALITY TABLE FOR DISABILITIES OCCURRING IN PLAN YEARS BEGINNING
BEFORE JANUARY 1, 1995
[10] The following mortality table is the mortality table that is permitted to be used for individuals entitled to benefits under the plan on account of disability, whose disabilities occurred in plan years beginning before January 1, 1995. The table sets forth the number living based upon a starting population of one million lives at age 15 (lx), and the annual rate of mortality (qx), to be used for each age and each gender.
Age lx male qx male
15 1,000,000.00 0.006245
16 993,755.00 0.006493
17 987,302.55 0.006749
18 980,639.24 0.007018
19 973,757.12 0.007297
20 966,651.61 0.007586
21 959,318.59 0.007887
22 951,752.45 0.008201
23 943,947.13 0.008526
24 935,899.03 0.008864
25 927,603.22 0.009216
26 919,054.43 0.009581
27 910,248.97 0.009964
28 901,179.25 0.010358
29 891,844.84 0.010768
30 882,241.45 0.011190
31 872,369.17 0.011624
32 862,228.75 0.012071
33 851,820.79 0.012531
34 841,146.62 0.013022
35 830,193.21 0.013421
36 819,051.19 0.013892
37 807,672.93 0.014380
38 796,058.59 0.014889
39 784,206.07 0.015420
40 772,113.62 0.015976
41 759,778.33 0.016562
42 747,194.88 0.017179
43 734,358.82 0.017831
44 721,264.47 0.018521
45 707,905.93 0.019251
46 694,278.03 0.020025
47 680,375.11 0.020846
48 666,192.01 0.021716
49 651,724.99 0.022639
50 636,970.59 0.023624
51 621,922.79 0.024617
52 606,612.92 0.025865
53 590,922.88 0.027076
54 574,923.05 0.028263
55 558,674.00 0.029451
56 542,220.49 0.030667
57 525,592.21 0.031937
58 508,806.38 0.033281
59 491,872.79 0.034700
60 474,804.81 0.036185
61 457,623.99 0.037729
62 440,358.30 0.039325
63 423,041.21 0.040976
64 405,706.67 0.042720
65 388,374.88 0.044607
66 371,050.64 0.046684
67 353,728.52 0.049000
68 336,395.82 0.051594
69 319,039.81 0.054468
70 301,662.35 0.057612
71 284,282.98 0.061019
72 266,936.32 0.064679
73 249,671.14 0.068604
74 232,542.70 0.072881
75 215,594.76 0.076965
76 199,001.51 0.081027
77 182,877.01 0.085222
78 167,291.87 0.089592
79 152,303.86 0.094182
80 137,959.57 0.099034
81 124,296.89 0.104194
82 111,345.90 0.109705
83 99,130.69 0.115609
84 87,670.29 0.121952
85 76,978.73 0.128777
86 67,065.64 0.136128
87 57,936.13 0.144048
88 49,590.54 0.152581
89 42,023.97 0.161771
90 35,225.71 0.171662
91 29,178.79 0.182297
92 23,859.59 0.193720
93 19,237.51 0.205975
94 15,275.06 0.219106
95 11,928.20 0.234086
96 9,135.98 0.248436
97 6,866.27 0.263954
98 5,053.89 0.280803
99 3,634.74 0.299154
100 2,547.40 0.319185
101 1,734.31 0.341086
102 1,142.76 0.365052
103 725.59 0.393102
104 440.36 0.427255
105 252.21 0.469531
106 133.79 0.521945
107 63.96 0.586518
108 26.45 0.665268
109 8.85 0.760215
110 2.12 1.000000
Age lx female qx female
15 1,000,000.00 0.004667
16 995,333.00 0.004873
17 990,482.74 0.005086
18 985,445.15 0.005312
19 980,210.46 0.005546
20 974,774.22 0.005790
21 969,130.27 0.006046
22 963,270.91 0.006313
23 957,189.78 0.006591
24 950,880.94 0.006881
25 944,337.93 0.007185
26 937,552.86 0.007502
27 930,519.34 0.007834
28 923,229.65 0.008179
29 915,678.56 0.008537
30 907,861.41 0.008905
31 899,776.90 0.009282
32 891,425.18 0.009666
33 882,808.66 0.010061
34 873,926.72 0.010489
35 864,760.10 0.010885
36 855,347.19 0.011246
37 845,727.96 0.011599
38 835,918.36 0.011947
39 825,931.64 0.012292
40 815,779.29 0.012636
41 805,471.10 0.012981
42 795,015.28 0.013330
43 784,417.73 0.013684
44 773,683.76 0.014045
45 762,817.37 0.014417
46 751,819.83 0.014800
47 740,692.90 0.015197
48 729,436.59 0.015611
49 718,049.35 0.016043
50 706,529.69 0.016495
51 694,875.48 0.016970
52 683,083.44 0.017470
53 671,149.97 0.017997
54 659,071.29 0.018553
55 646,843.54 0.019140
56 634,462.95 0.019761
57 621,925.33 0.020417
58 609,227.48 0.021111
59 596,366.08 0.021845
60 583,338.46 0.022621
61 570,142.76 0.023441
62 556,778.05 0.024307
63 543,244.44 0.025222
64 529,542.73 0.026187
65 515,675.60 0.027205
66 501,646.64 0.028278
67 487,461.08 0.029408
68 473,125.82 0.030598
69 458,649.12 0.031848
70 444,042.06 0.033123
71 429,334.06 0.034916
72 414,343.43 0.036986
73 399,018.52 0.039352
74 383,316.35 0.042033
75 367,204.41 0.044540
76 350,849.13 0.047104
77 334,322.73 0.049840
78 317,660.08 0.052794
79 300,889.54 0.056017
80 284,034.61 0.059556
81 267,118.64 0.063460
82 250,167.29 0.067777
83 233,211.70 0.072556
84 216,290.80 0.077845
85 199,453.64 0.083693
86 182,760.77 0.090148
87 166,285.25 0.097260
88 150,112.35 0.105075
89 134,339.29 0.113643
90 119,072.57 0.123012
91 104,425.22 0.133216
92 90,514.11 0.143634
93 77,513.20 0.155581
94 65,453.62 0.169181
95 54,380.11 0.184537
96 44,344.97 0.201757
97 35,398.06 0.222043
98 27,538.17 0.243899
99 20,821.64 0.268185
100 15,237.59 0.295187
101 10,739.65 0.325225
102 7,246.85 0.358897
103 4,645.98 0.395842
104 2,806.90 0.438360
105 1,576.47 0.487816
106 807.44 0.545886
107 366.67 0.614309
108 141.42 0.694884
109 43.15 0.789474
110 9.08 1.000000
MORTALITY TABLE FOR DISABILITIES OCCURRING IN PLAN YEARS BEGINNING
AFTER DECEMBER 31, 1994
[11] The following mortality table is the mortality table that is permitted to be used for individuals entitled to benefits under the plan on account of disability, whose disabilities occur in plan years beginning after December 31, 1994. This mortality table may be used only for individuals who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder. The table sets forth the number living based upon a starting population of one million lives at age 15 (lx), and the annual rate of mortality (qx), to be used for each age and each gender.
Age lx male qx male
15 1,000,000.00 0.022010
16 977,990.00 0.022502
17 955,983.27 0.023001
18 933,994.70 0.023519
19 912,028.08 0.024045
20 890,098.36 0.024583
21 868,217.07 0.025133
22 846,396.17 0.025697
23 824,646.33 0.026269
24 802,983.70 0.026857
25 781,417.96 0.027457
26 759,962.57 0.028071
27 738,629.66 0.028704
28 717,428.04 0.029345
29 696,375.11 0.029999
30 675,484.55 0.030661
31 654,773.52 0.031331
32 634,258.81 0.032006
33 613,958.72 0.032689
34 593,889.03 0.033405
35 574,050.16 0.034184
36 554,426.83 0.034981
37 535,032.43 0.035796
38 515,880.41 0.036634
39 496,981.64 0.037493
40 478,348.31 0.038373
41 459,992.65 0.039272
42 441,927.82 0.040189
43 424,167.18 0.041122
44 406,724.58 0.042071
45 389,613.27 0.043033
46 372,847.04 0.044007
47 356,439.16 0.044993
48 340,401.90 0.045989
49 324,747.15 0.046993
50 309,486.31 0.048004
51 294,629.73 0.049021
52 280,186.69 0.050042
53 266,165.58 0.051067
54 252,573.31 0.052093
55 239,416.00 0.053120
56 226,698.23 0.054144
57 214,423.88 0.055089
58 202,611.48 0.056068
59 191,251.46 0.057080
60 180,334.83 0.058118
61 169,854.13 0.059172
62 159,803.52 0.060232
63 150,178.23 0.061303
64 140,971.86 0.062429
65 132,171.12 0.063669
66 123,755.92 0.065082
67 115,701.64 0.066724
68 107,981.56 0.068642
69 100,569.49 0.070834
70 93,445.75 0.073284
71 86,597.67 0.075979
72 80,018.07 0.078903
73 73,704.40 0.082070
74 67,655.48 0.085606
75 61,863.77 0.088918
76 56,362.97 0.092208
77 51,165.85 0.095625
78 46,273.11 0.099216
79 41,682.08 0.103030
80 37,387.58 0.107113
81 33,382.88 0.111515
82 29,660.19 0.116283
83 26,211.21 0.121464
84 23,027.49 0.127108
85 20,100.52 0.133262
86 17,421.88 0.139974
87 14,983.27 0.147292
88 12,776.35 0.155265
89 10,792.63 0.163939
90 9,023.30 0.173363
91 7,458.99 0.183585
92 6,089.63 0.194653
93 4,904.27 0.206615
94 3,890.97 0.219519
95 3,036.83 0.234086
96 2,325.95 0.248436
97 1,748.10 0.263954
98 1,286.68 0.280803
99 925.38 0.299154
100 648.55 0.319185
101 441.54 0.341086
102 290.94 0.365052
103 184.73 0.393102
104 112.11 0.427255
105 64.21 0.469531
106 34.06 0.521945
107 16.28 0.586518
108 6.73 0.665268
109 2.25 0.760215
110 0.54 1.000000
Age lx female qx female
15 1,000,000.00 0.007777
16 992,223.00 0.008120
17 984,166.15 0.008476
18 975,824.36 0.008852
19 967,186.36 0.009243
20 958,246.66 0.009650
21 948,999.58 0.010076
22 939,437.46 0.010521
23 929,553.63 0.010984
24 919,343.42 0.011468
25 908,800.39 0.011974
26 897,918.41 0.012502
27 886,692.64 0.013057
28 875,115.09 0.013632
29 863,185.52 0.014229
30 850,903.25 0.014843
31 838,273.30 0.015473
32 825,302.69 0.016103
33 812,012.85 0.016604
34 798,530.18 0.017121
35 784,858.55 0.017654
36 771,002.66 0.018204
37 756,967.32 0.018770
38 742,759.05 0.019355
39 728,382.95 0.019957
40 713,846.61 0.020579
41 699,156.36 0.021219
42 684,320.96 0.021880
43 669,348.02 0.022561
44 654,246.86 0.023263
45 639,027.11 0.023988
46 623,698.13 0.024734
47 608,271.58 0.025504
48 592,758.22 0.026298
49 577,169.87 0.027117
50 561,518.75 0.027961
51 545,818.12 0.028832
52 530,081.10 0.029730
53 514,321.79 0.030655
54 498,555.25 0.031609
55 482,796.42 0.032594
56 467,060.15 0.033608
57 451,363.19 0.034655
58 435,721.20 0.035733
59 420,151.58 0.036846
60 404,670.67 0.037993
61 389,296.02 0.039176
62 374,044.96 0.040395
63 358,935.41 0.041653
64 343,984.68 0.042950
65 329,210.53 0.044287
66 314,630.79 0.045666
67 300,262.86 0.046828
68 286,202.15 0.048070
69 272,444.41 0.049584
70 258,935.53 0.051331
71 245,644.11 0.053268
72 232,559.14 0.055356
73 219,685.59 0.057573
74 207,037.63 0.059979
75 194,619.72 0.062574
76 182,441.59 0.065480
77 170,495.31 0.068690
78 158,783.99 0.072237
79 147,313.91 0.076156
80 136,095.07 0.080480
81 125,142.14 0.085243
82 114,474.65 0.090480
83 104,116.98 0.096224
84 94,098.43 0.102508
85 84,452.59 0.109368
86 75,216.18 0.116837
87 66,428.15 0.124948
88 58,128.08 0.133736
89 50,354.26 0.143234
90 43,141.82 0.153477
91 36,520.54 0.164498
92 30,512.99 0.176332
93 25,132.57 0.189011
94 20,382.24 0.202571
95 16,253.39 0.217045
96 12,725.67 0.232467
97 9,767.37 0.248870
98 7,336.57 0.266289
99 5,382.92 0.284758
100 3,850.09 0.303433
101 2,681.85 0.327385
102 1,803.85 0.359020
103 1,156.23 0.395842
104 698.55 0.438360
105 392.33 0.487816
106 200.95 0.545886
107 91.25 0.614309
108 35.20 0.694884
109 10.74 0.789474
110 2.26 1.000000
EFFECTIVE DATE
[12] This revenue ruling is effective for plan years beginning after December 31, 1995.
DRAFTING INFORMATION
[13] The principal author of this revenue ruling is Edward Sypher of the Employee Plans Division. For further information regarding this revenue ruling, please contact the Employee Plans Division's taxpayer assistance telephone service at (202) 622-6076 between 2:30 and 4:00 Eastern time (not a toll free number) Monday through Thursday. Mr. Sypher's number is (202) 622-6245 (also not a toll free number).
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Rul. 96-7
(For a summary, see Tax Notes, Jan. 1, 1996, p. 45; for the full
text, see 95 TNT 253-12, or H&D, Dec. 29, 1995, p. 5191.)
Communications Division
Part I
Section 412. -- Minimum Funding Standards
- Code Sections
- Subject Areas/Tax Topics
- Index Termspension plans, funding standards, minimum
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 96-939 (12 original pages)
- Tax Analysts Electronic Citation96 TNT 4-11