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IRS Releases Mortality Table to Determine Minimum Present Value

OCT. 19, 2023

Notice 2023-73; 2023-45 IRB 1232

DATED OCT. 19, 2023
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Citations: Notice 2023-73; 2023-45 IRB 1232

Mortality Table for Use in Determining Minimum Present Value for 2024

PURPOSE

This notice specifies a mortality table 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 2024 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 sets forth the minimum funding requirements that apply to defined benefit plans that are not multiemployer plans or CSEC plans.

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

In TD 9983 (88 FR XX), the Department of the Treasury and Internal Revenue Service issued §1.430(h)(3)-1, which provides updated mortality tables, mortality improvement rates, and static mortality tables for defined benefit pension plans, applicable for valuation dates occurring on or after January 1, 2024. Section 1.430(h)(3)-1(a) provides that the mortality tables to be used in determining present value under section 430 are the generational mortality tables described in §1.430(h)(3)-1(b) and the static mortality tables for small plans described in §1.430(h)(3)-1(c). The static mortality tables for small plans for valuation dates occurring in 2024, which consist of separate mortality rates that apply for each gender, are set forth in §1.430(h)(3)-1(e).

Section 417(e)(3) generally provides that the present value of certain accelerated forms of benefit under a qualified pension plan (including single-sum 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.

STATIC MORTALITY TABLE APPLICABLE UNDER §417(e)(3) FOR 2024

The static mortality table that applies under §417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2024 is set forth in the appendix to this notice. The mortality rates in this table are derived from the mortality tables specified under §430(h)(3)(A) for 2024 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 (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this notice, contact Arslan Malik or Linda Marshall at (202) 317-6700 (not a toll-free number).


APPENDIX

Mortality Table for Distributions Subject to §417(e)(3) with Annuity Starting Dates during Stability Periods That Begin in 2024

Age

2024 Table for Distributions Subject to §417(e)(3)

0

0.00331

1

0.00024

2

0.00015

3

0.00011

4

0.00010

5

0.00008

6

0.00008

7

0.00007

8

0.00006

9

0.00005

10

0.00006

11

0.00006

12

0.00007

13

0.00009

14

0.00011

15

0.00013

16

0.00015

17

0.00018

18

0.00020

19

0.00022

20

0.00023

21

0.00024

22

0.00024

23

0.00026

24

0.00027

25

0.00027

26

0.00028

27

0.00030

28

0.00030

29

0.00032

30

0.00034

31

0.00035

32

0.00037

33

0.00040

34

0.00042

35

0.00044

36

0.00047

37

0.00049

38

0.00051

39

0.00054

40

0.00056

41

0.00057

42

0.00059

43

0.00061

44

0.00063

45

0.00066

46

0.00070

47

0.00074

48

0.00079

49

0.00084

50

0.00092

51

0.00102

52

0.00114

53

0.00127

54

0.00144

55

0.00172

56

0.00212

57

0.00246

58

0.00285

59

0.00328

60

0.00379

61

0.00433

62

0.00512

63

0.00591

64

0.00656

65

0.00740

66

0.00832

67

0.00920

68

0.01017

69

0.01126

70

0.01251

71

0.01396

72

0.01559

73

0.01745

74

0.01959

75

0.02204

76

0.02485

77

0.02805

78

0.03169

79

0.03583

80

0.04079

81

0.04583

82

0.05150

83

0.05787

84

0.06508

85

0.07327

86

0.08259

87

0.09310

88

0.10497

89

0.11814

90

0.13262

91

0.14773

92

0.16329

93

0.17927

94

0.19542

95

0.21170

96

0.22904

97

0.24682

98

0.26513

99

0.28401

100

0.30325

101

0.32271

102

0.34211

103

0.36140

104

0.38043

105

0.39884

106

0.41675

107

0.43400

108

0.45044

109

0.46615

110

0.47865

111

0.48673

112

0.49436

113

0.49788

114

0.49885

115

0.49978

116

0.49990

117

0.49998

118

0.50000

119

0.50000

120

1.00000

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