Pension plan may change four non-prescribed actuarial assumptions

Plain-English summary

A defined benefit pension plan requested approval to change non-prescribed actuarial assumptions for a plan year beginning October 1, 2013. The changes covered retirement rates, disability rates, select and ultimate withdrawal rates, and the percentage electing a joint and survivor option. The IRS approved the changes under IRC § 430(h)(5) and the corresponding ERISA provision. It did not express an opinion on the accuracy of the plan's calculations or whether the plan satisfied other Code requirements. The plan was instructed to report the change on Schedule SB of Form 5500 and attach the ruling.

Ruling snapshot

• Question: May the pension plan use the proposed changes to four actuarial assumptions for the specified plan year?
• Outcome: Approved.
• Key authorities: IRC § 430(h)(5); ERISA § 303(h)(5)

Full text (IRS public release)

Significant Index No. 0430.00-00

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

FEB 04 2015

SE:T:EP:RA

Re:

Dear

This letter constitutes notice that approval has been granted for the change in assumptions as described below. The ruling applies for the plan year beginning October 1, 2013. This ruling is made in accordance with section 430(h)(5) of the Internal Revenue Code (Code) and section 303(h)(5) of the Employee Retirement Income Security Act of 1974. Your authorized representatives reviewed and confirmed each of the rates contained in this ruling on November 10, 2014.

In issuing this ruling, we have considered only the acceptability of the new assumptions and, as necessary, the method by which the transition is to be made between the prior and the new assumptions. Accordingly, we are not expressing any opinion as to the accuracy or acceptability of any calculation or other material submitted with your request. Please note that this letter addresses only specific issues arising under section 430 of the Code and the approval granted herein should not be read to imply that the Plan as it stands satisfies the requirements of other sections of the Code.

This approval applies to the following changes in assumptions:

• Retirement rates

• Disability rates

• Select and ultimate withdrawal rates

• Percent electing a joint and survivor option

+2

201518022

The retirement rates that have been approved are as follows:

10/1/20

Age Less than 30 years 30 - 32 years Over 32 years 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

10/1/20

Age Less than 30 years 30 - 32 years Over 32 years 47 48 49 50 51 52 53 54 55 56 57 58

+3

201518022

10/1/20

Age Less than 30 years 30 - 32 years Over 32 years 59 60 61 62 63 64 65 66 67 68 69 70

10/1/20

Age Less than 30 years 30 - 32 years Over 32 years 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

+4

201518022

10/1/20

Age Less than 30 years 30 - 32 years Over 32 years 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

The disability rates that have been approved are as follows:

Age Rates
27 %
28 %
29 %
30 %
31 %
32 %
33 %
34 %
35 %
36 %
37 %
38 %
39 %
40 %

+5

201518022

Disability rates (Continued)

Age Rates
41 %
42 %
43 %
44 %
45 %
46 %
47 %
48 %
49 %
50 %
51 %
52 %
53 %
54 %
55 %
56 %
57 %
58 %
59 %
60 %
61 %
62 %
63 %
64 %

The withdraw rates that have been approved are as follows:

Age/Service 0 1 2 3 4 5
25
% % % % % %
26
% % % % % %
27
% % % % % %
28
% % % % % %
29
% % % % % %
30
% % % % % %

+6

201518022

Withdraw rates (continued)

Age 0 1 2 3 4 5
31 % % % % % %
32 % % % % % %
33 % % % % % %
34 % % % % % %
35 % % % % % %
36 % % % % % %
37 % % % % % %
38 % % % % % %
39 % % % % % %
40 % % % % % %
41 % % % % % %
42 % % % % % %
43 % % % % % %
44 % % % % % %
45 % % % % % %
46 % % % % % %
47 % % % % % %
48 % % % % % %
49 % % % % % %
50 % % % % % %
51 % % % % % %
52 % % % % % %
53 % % % % % %
54 % % % % % %
55 % % % % % %
56 % % % % % %
57 % % % % % %
58 % % % % % %
59+ % % % % % %

The percent electing a joint and survivor option assumption is approved as follows:

Percentage
Male %
Female %

When filing Form 5500 for the plan year beginning October 1, , please indicate on line 24 of the Schedule SB by checking the “Yes” box that a change in non-prescribed assumptions has been made for the current year. You should also include a copy of this letter as an attachment to the Schedule SB labeled: “Schedule SB, line 24 — Change in Non-Prescribed Actuarial Assumptions.”

+7

201518022

If you have any questions regarding this matter, please contact
(ID# ) at .

Sincerely yours,

David M. Ziegler, Manager
Employee Plans Actuarial Group 2

Cc: