Pension plan's revised actuarial assumptions are approved

Plain-English summary

A pension plan requested approval to revise its retirement, withdrawal, and disability assumptions for minimum-funding purposes. The taxpayer represented that the plan had not conducted lump-sum windows or annuity purchases during the experience-study period used to develop the assumptions. The IRS approved the changes under section 430(h)(5) for the specified plan year but did not validate the calculations or determine whether the plan complied with other Code provisions. The plan had to report the change on Schedule SB and attach the ruling to that schedule. The public copy lists the affected ages but leaves all current and proposed rates blank.

Ruling snapshot

• Question: Could the pension plan change its retirement, withdrawal, and disability assumptions for minimum-funding calculations?
• Outcome: approved for the specified plan year
• Key authorities: IRC § 430(h)(5); ERISA § 303(h)(5)

Full text (IRS public release)

Significant Index No. 430.00-00

201710041

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

NOV 30 2016

[illegible]

RE: Change in Funding Method Request
Taxpayer =

Plan =
(EIN: - : PN: )

Dear

This letter constitutes notice that approval has been granted for the change in
assumptions as described below. The approval applies for the plan year beginning
January 1, 20__. This approval has been granted 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 (ERISA).

In granting this approval, we have considered only the acceptability of the new current
liability assumptions and, as necessary, the method by which the transition is to be
made between the prior and the new method. The Taxpayer has represented under
penalty of perjury that the Plan did not engage in any lump sum windows or annuity
purchase activities during the period reviewed for the experience study used to develop
these new assumptions.

We are not expressing any opinion as to the accuracy or acceptability of any
calculations or other material submitted with your request. Please note that this letter
addresses only 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 revisions of the following assumptions: the revision of the
rates of retirement, the revision of the rates of withdrawal, and the revision of the rates
of disability.

Rates of Retirement
Less Than 30 Years of Service

Age Current Proposed
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75

Rates of Retirement
30 Years of Service

Age Current Proposed
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75

Rates of Retirement
More Than 30 Years of Service

Age Current Proposed
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75

Rates of Withdrawal

Age Current Proposed
20
21
22
23
24
25
26
27
28
29
30
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
60
61
62
63
64
65
66

Rates of Disability

Age Current Proposed
21
22
23
24
25
26
27
28
29
30
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
60
61
62
63
64
65

When filing Form 5500 for the plan year beginning January 1, 20__; 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.”

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited by others as precedent.

This ruling is intended to solely address the issues specifically described above. For
any issue not specifically addressed in this ruling, the Plan must satisfy any and all

applicable sections of the Code and/or regulations as in effect for the relevant plan
year(s).

A copy of this letter is being sent to your authorized representative pursuant to a power
of attorney (Form 2848) on file in this office. If you have any questions regarding this
matter, please contact (ID# ) at ( ) - .

Sincerely yours,

David M. Ziegler, Manager
Employee Plans Actuarial Group 2

Cc: