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ALTERNATIVE MORTALITY TABLES PRESCRIBED FOR PLANS CALCULATING FUNDING LIABILITY FOR DISABILITY BENEFITS.

JAN. 4, 1996

Rev. Rul. 96-7; 1996-1 C.B. 59

DATED JAN. 4, 1996
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal 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 Terms
    pension plans, funding standards, minimum
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-939 (12 original pages)
  • Tax Analysts Electronic Citation
    96 TNT 4-11
Citations: Rev. Rul. 96-7; 1996-1 C.B. 59

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).

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal 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 Terms
    pension plans, funding standards, minimum
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 96-939 (12 original pages)
  • Tax Analysts Electronic Citation
    96 TNT 4-11
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