Private Letter Ruling
201849015
Released December 7, 2018
Approved
Transcribed from scan
Seven pension plans may use combined substitute mortality tables for 10 years
Apply this to your situation
This page covers one taxpayer's ruling from 2018, which can't be cited as precedent. Ezel answers your situation under the current Code and IRS guidance, with citations.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
Transcribed from a scanned original: the IRS released this determination as an image-only PDF. The full text below is a machine transcription, proofread against the scan. Check the original PDF before quoting exact language.
View official IRS release (PDF)
Plain-English summary
A taxpayer requested permission for seven defined benefit pension plans to use plan-specific substitute mortality tables. The proposed tables combine the plans' male participants into one population and their female participants into another, including annuitants, nonannuitants, and disabled participants. The IRS found that the rates were developed correctly under the regulations and Revenue Ruling 2017-55. It approved their use for 10 plan years beginning with the redacted effective year. The approval does not confirm every submitted calculation, requires generational application of the rates, and can terminate early if one of the listed regulatory events occurs.
Ruling snapshot
- Question: May seven related pension plans use combined male and female substitute mortality tables for 10 plan years?
- Outcome: Approved
- Key authorities: IRC § 430(h)(3); Treas. Reg. §§ 1.430(h)(3)-1, 1.430(h)(3)-2; Rev. Rul. 2017-55
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
SEP 11 2018
SE:T:EP:RA:A2
Number: 201849015
Release Date: 12/7/2018
Re: Request for the use of plan-specific substitute mortality tables for:
Taxpayer = [redacted]
Plan 1 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 2 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 3 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 4 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 5 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 6 = [redacted]
EIN/PN: [redacted] / [redacted]
Plan 7 = [redacted]
EIN/PN: [redacted] / [redacted]
Dear [redacted]:
This letter is to inform you that your request to use substitute mortality tables for making
computations under section 430 of the Internal Revenue Code (the “Code”) for Plans 1
through 7 has been granted with respect to the populations specified in this letter,
effective for a period of 10 plan years beginning with the plan year commencing January
1, [redacted]. Your request has been granted in accordance with section 430(h)(3) of the
Code and section 303(h)(3) of the Employee Retirement Income Security Act of 1974.
Specifically, this approval applies to the following populations:
• Plans 1 through 7 combined – Male participants (annuitants and nonannuitants),
including disabled participants
• Plans 1 through 7 combined – Female participants (annuitants and
nonannuitants), including disabled participants
In granting this approval, we have only considered whether the substitute mortality rates
were developed correctly in accordance with section 1.430(h)(3)-2 of the Treasury
Regulations (“Regulations”) and Revenue Ruling 2017-55. Accordingly, we are not
expressing any opinion as to the accuracy or acceptability of any calculations or other
material submitted with your request.
Permission is hereby granted to use the substitute mortality rates shown in the tables
below for Plans 1 through 7:
Substitute Mortality Tables
Approved for use beginning with the plan year commencing January 1, [redacted]
Base year [redacted]
Age | Male Annuitants and Nonannuitants | Female Annuitants and Nonannuitants
1 | [redacted] | [redacted]
2 | [redacted] | [redacted]
3 | [redacted] | [redacted]
4 | [redacted] | [redacted]
5 | [redacted] | [redacted]
6 | [redacted] | [redacted]
7 | [redacted] | [redacted]
8 | [redacted] | [redacted]
9 | [redacted] | [redacted]
10 | [redacted] | [redacted]
11 | [redacted] | [redacted]
12 | [redacted] | [redacted]
13 | [redacted] | [redacted]
14 | [redacted] | [redacted]
15 | [redacted] | [redacted]
16 | [redacted] | [redacted]
17 | [redacted] | [redacted]
18 | [redacted] | [redacted]
19 | [redacted] | [redacted]
20 | [redacted] | [redacted]
21 | [redacted] | [redacted]
22 | [redacted] | [redacted]
23 | [redacted] | [redacted]
24 | [redacted] | [redacted]
25 | [redacted] | [redacted]
26 | [redacted] | [redacted]
27 | [redacted] | [redacted]
28 | [redacted] | [redacted]
29 | [redacted] | [redacted]
30 | [redacted] | [redacted]
31 | [redacted] | [redacted]
32 | [redacted] | [redacted]
33 | [redacted] | [redacted]
34 | [redacted] | [redacted]
35 | [redacted] | [redacted]
36 | [redacted] | [redacted]
37 | [redacted] | [redacted]
38 | [redacted] | [redacted]
39 | [redacted] | [redacted]
40 | [redacted] | [redacted]
41 | [redacted] | [redacted]
42 | [redacted] | [redacted]
43 | [redacted] | [redacted]
44 | [redacted] | [redacted]
45 | [redacted] | [redacted]
46 | [redacted] | [redacted]
47 | [redacted] | [redacted]
48 | [redacted] | [redacted]
49 | [redacted] | [redacted]
50 | [redacted] | [redacted]
51 | [redacted] | [redacted]
52 | [redacted] | [redacted]
53 | [redacted] | [redacted]
54 | [redacted] | [redacted]
55 | [redacted] | [redacted]
56 | [redacted] | [redacted]
57 | [redacted] | [redacted]
58 | [redacted] | [redacted]
59 | [redacted] | [redacted]
60 | [redacted] | [redacted]
61 | [redacted] | [redacted]
62 | [redacted] | [redacted]
63 | [redacted] | [redacted]
64 | [redacted] | [redacted]
65 | [redacted] | [redacted]
66 | [redacted] | [redacted]
67 | [redacted] | [redacted]
68 | [redacted] | [redacted]
69 | [redacted] | [redacted]
70 | [redacted] | [redacted]
71 | [redacted] | [redacted]
72 | [redacted] | [redacted]
73 | [redacted] | [redacted]
74 | [redacted] | [redacted]
75 | [redacted] | [redacted]
76 | [redacted] | [redacted]
77 | [redacted] | [redacted]
78 | [redacted] | [redacted]
79 | [redacted] | [redacted]
80 | [redacted] | [redacted]
81 | [redacted] | [redacted]
82 | [redacted] | [redacted]
83 | [redacted] | [redacted]
84 | [redacted] | [redacted]
85 | [redacted] | [redacted]
86 | [redacted] | [redacted]
87 | [redacted] | [redacted]
88 | [redacted] | [redacted]
89 | [redacted] | [redacted]
90 | [redacted] | [redacted]
91 | [redacted] | [redacted]
92 | [redacted] | [redacted]
93 | [redacted] | [redacted]
94 | [redacted] | [redacted]
95 | [redacted] | [redacted]
96 | [redacted] | [redacted]
97 | [redacted] | [redacted]
98 | [redacted] | [redacted]
99 | [redacted] | [redacted]
100 | [redacted] | [redacted]
101 | [redacted] | [redacted]
102 | [redacted] | [redacted]
103 | [redacted] | [redacted]
104 | [redacted] | [redacted]
105 | [redacted] | [redacted]
106 | [redacted] | [redacted]
107 | [redacted] | [redacted]
108 | [redacted] | [redacted]
109 | [redacted] | [redacted]
110 | [redacted] | [redacted]
111 | [redacted] | [redacted]
112 | [redacted] | [redacted]
113 | [redacted] | [redacted]
114 | [redacted] | [redacted]
115 | [redacted] | [redacted]
116 | [redacted] | [redacted]
117 | [redacted] | [redacted]
118 | [redacted] | [redacted]
119 | [redacted] | [redacted]
120 | [redacted] | [redacted]
The above rates were developed based on an experience study period from January 1,
[redacted], through December 31, [redacted], for all plans except newly-acquired Plans 6 and 7.
The experience study period for Plans 6 and 7 is from January 1, [redacted] to December 31,
[redacted]. The base year for the table is [redacted]. The rates were calculated by adjusting the
applicable standard mortality tables in section 1.430(h)(3)-1(d) of the Regulations
indicated in the table below, using the mortality ratio and partial credibility weighting
factor determined by aggregating male and female experience, as shown in the table
below.
Population | Standard base mortality table | Mortality ratio | Credibility factor
Plans 1 through 7 male participants | Male combined annuitant/nonannuitant mortality | 1.0639255 | 1.000000
Plans 1 through 7 female participants | Female combined annuitant/nonannuitant mortality | |
The Internal Revenue Service has reviewed the substitute mortality rates and
supporting information, and has determined that based on the information submitted,
the rates were correctly developed in accordance with section 1.430(h)(3)-2 of the
Regulations and Revenue Ruling 2017-55.
The above rates must be applied on a generational basis, as provided in section
1.430(h)(3)-2(c)(3) of the Regulations.
Your attention is called to section 430(h)(3)(C)(ii) of the Code and section 1.430(h)(3)-
2(d)(6) of the Regulations, which describe the circumstances in which the use of the
substitute mortality table will terminate before the end of the 10-year period described
above. In general, the substitute mortality tables can no longer be used as of the
earliest of:
(1) For a plan using a substitute mortality table for only one gender, the first plan
year for which there is full or partial credible mortality information with respect to
the other gender that had lacked credible mortality information (unless an
approved substitute mortality table is used for that gender),
(2) The first plan year in which the plan fails to satisfy the requirements of
paragraph 1.430(h)(3)-2(c)(1) of the Regulations, regarding the requirement that
other plans and populations in the controlled group must also use substitute
mortality tables unless it can be demonstrated that they do not have credible
mortality information (taking into account the transition period for newly affiliated
companies in section 1.430(h)(3)-2(f)(3) of the Regulations),
(3) The second plan year following the plan year for which there is a significant
change in individuals covered by the plan as described in section
1.430(h)(3)-2(c)(6)(iii) of the Regulations,
(4) The plan year following the plan year in which a substitute mortality table used
for a plan population is no longer accurately predictive of future mortality of that
population, as determined by the Commissioner or as certified by the Plan’s
actuary to the satisfaction of the Commissioner, or
(5) The date specified in guidance published in the Internal Revenue Bulletin
pursuant to a replacement of mortality tables specified under section
430(h)(3)(A) of the Code and 1.430(h)(3)-1 of the Regulations, other than
annual updates to the static mortality tables issued pursuant to 1.430(h)(3)-
1(a)(3) of the regulations or changes to the mortality improvement rates
pursuant to section 1.430(h)(3)-1(a)(2)(i)(C) of the Regulations.
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.
When filing Form 5500 for the plan years for which the substitute mortality tables are
used, please note the information that is required to be attached to Schedule SB
(Actuarial Information) in accordance with the instructions to that form.
We have sent a copy of this letter to your authorized representatives pursuant to a
power of attorney on file in this office and to the Manager, EP Classification in
Baltimore, Maryland and to the Manager, EP Compliance Unit in Chicago, Illinois.
If you require further assistance in this matter, please contact
(ID# [redacted]) at ([redacted]) [redacted].
Sincerely,
David M. Ziegler, Manager
Employee Plans Actuarial Group 2
cc:
Get today's answer for your situation
You just read what the IRS ruled for one taxpayer in 2018, and it can't be cited as precedent. Ezel checks the current Internal Revenue Code and IRS guidance and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the authority it relies on.