IRS Issues Mortality Tables to Be Used for DB Plans in 2019

The Internal Revenue Service (IRS) has issued Notice 2018-02, which specifies updated 2019 mortality improvement rates and static mortality tables to be used for defined benefit (DB) plans under Section 430(h)(3)(A) of the Internal Revenue Code (Code) and Section 303(h)(3)(A) of the Employee Retirement Income Security Act (ERISA).

The updated mortality improvement rates and static tables apply for purposes of calculating the funding target and other items for valuation dates occurring during calendar year 2019. The notice also includes a modified unisex version of the mortality tables for use in determining minimum present value under Section 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.

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.

The static mortality tables that apply under Section 430(h)(3)(A) for valuation dates occurring during 2019 are set forth in the appendix to the notice. The IRS says mortality rates in these tables have been developed from the base mortality rates and methodology set forth in Section 1.430(h)(3)-1(c) and (d) of the code using the mortality improvement rates specified in the notice. The static mortality table that applies under Section 417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2019 is set forth in the appendix to the notice in the column labeled “Unisex.” The IRS says the mortality rates in this table are derived from the mortality tables specified under Section 430(h)(3)(A) for 2019 in accordance with the procedures set forth in Revenue Ruling 2007-67.