Approval for a single pension plan (after a merger) to use plan-specific substitute mortality tables for funding computations

Plain-English summary

Single-employer defined benefit pension plans must calculate their minimum
funding using mortality tables. A sponsor with enough participants may ask to
use "substitute" mortality tables built from its own plan's experience under
§ 430(h)(3)(C), rather than the standard IRS tables. Here, the IRS granted a
sponsor's request to use plan-specific base substitute mortality tables for
one plan ("Plan 1"), covering male and female participants, for up to five
plan years starting January 1, 2026. The sponsor had a prior approval running
through 2027 but sought a new ruling because of a significant change in its
male-participant population, and because two other plans had merged into Plan
1 (their data was folded into the experience study). This is the companion to
a separate ruling covering the sponsor's aggregated group. The IRS reviewed
only whether the tables were developed under the regulations and Revenue
Procedure 2024-32, not the accuracy of the calculations, and it flagged that
the plan mergers may separately require a funding-method change ruling unless
automatic approval under Revenue Procedure 2017-56 applied.

Note: this is a scanned document. The full text below has been proofread for
obvious OCR errors; the numeric base substitute mortality tables and the
mortality-ratio table did not survive scanning and are marked [illegible].

Ruling snapshot

• Question: May the plan sponsor use plan-specific base substitute
  mortality tables for Plan 1's § 430 funding computations?
• Outcome: Approved (for up to 5 plan years beginning January 1, 2026,
  subject to conditions)
• Key authorities: IRC § 430(h)(3)(C); ERISA § 303(h)(3)(C); Treas. Reg.
  §§ 1.430(h)(3)-1 and 1.430(h)(3)-2; Rev. Proc. 2024-32; Rev. Proc. 2017-56

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                         DEC 29 2025
GOVERNMENT ENTITIES
DIVISION

Release Number: 202613005
Release Date: 3/27/26

Re: Request for use of plan-specific base substitute mortality tables

Taxpayer =
EIN: -

Plan 1 =
EIN: - (Plan No.: )

Aggregated Group 2:

Plan 2 =
EIN: - (Plan No.: )

Plan 3 =
EIN: - (Plan No.: )

Other plans involved in plan merger

Plan 4 =
EIN: - (Plan No.: )
Plan 5 =
EIN: - (Plan No.: )
Merger Date =
Dear

This letter is to inform Taxpayer that their request to use base substitute mortality tables for
making computations under section 430 of the Internal Revenue Code ("Code") for Plan 1 has
been granted with respect to the populations specified in this ruling. This ruling is effective for a
period of up to 5 plan years beginning with the plan year commencing January 1, 2026 for Plan
1. Approval has been granted in accordance with section 430(h)(3)(C)(i) of the Code and
section 303(h)(3)(C)(i) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").

This approval applies to the following specific populations of Plan 1:

• Male combined annuitants and nonannuitants, including disabled male annuitants and
nonannuitants ("Male Participants")

• Female combined annuitants and nonannuitants, including disabled female annuitants
and nonannuitants ("Female Participants")

This letter ruling was requested by Taxpayer in their submission dated May 29, 2025.
Taxpayer submitted a separate request for approval to use base substitute mortality tables for
the Aggregated Group 2 at the same time as this request for Plan 1. The ruling for the
Aggregated Group 2 will be addressed in a separate letter ruling.

The following facts and representations have been submitted under penalties of perjury in
support of the ruling requested.

Taxpayer previously received a letter ruling dated September 20, 2022 granting the use of
base substitute mortality tables for Plan 1, effective for a period up to 5 plan years beginning
with the plan year commencing January 1, 2023. The approved use of base substitute
mortality tables currently being used will expire on December 31, 2027.

Due to a significant change in population of Male Participants since the letter ruling was issued
on September 20, 2022, Taxpayer submitted this new request for a letter ruling to use base
substitute mortality tables for Male Participants and Female Participants for a period of up to 5
plan years beginning with the plan year commencing January 1, 2026.

Taxpayer represents that effective Merger Date, Plan 4 and Plan 5 merged into Plan 1.
Taxpayer further represents that this experience study includes data for Plan 4 and Plan 5.¹

Taxpayer represents that Plan 1, Plan 2, and Plan 3 are the only pension plans within
Taxpayer's controlled group. Taxpayer further represents that they do not participate in any
multiple-employer plans.

Taxpayer represents that they have no plans for which base substitute mortality tables are not
intended to be used.

Taxpayer represents that no plan was spun off from Plan 1.

Taxpayer represents that there were no special events that occurred during the experience
study that required adjustments to the experience study data.

¹ The plan mergers of Plan 4 and Plan 5 into Plan 1 on Merger Date may require a ruling for a change in funding
method, unless the requirements for automatic approval under Revenue Procedure 2017-56 were met.

Taxpayer represents that the simplified rule under section 1.430(h)(3)-2(d)(4)(i) of the Treasury
Regulations ("Regulations") is not being used for this experience study.

Taxpayer represents that the combined genders rule under section 1.430(h)(3)-2(d)(6) of the
Regulations is not being used.

Taxpayer's request is made in accordance with section 430(h)(3)(C)(i) of the Code,
section 303(h)(3)(C)(i) of ERISA, section 1.430(h)(3)-2(b)(1) of the Regulations, and Revenue
Procedure 2024-32.

Section 430(h)(3) of the Code states, in relevant part, that:

(A) In general. Except as provided in subparagraph (C) or (D), the Secretary shall by
regulation prescribe mortality tables to be used in determining any present value of
making any computation under this section. Such tables shall be based on the actual
experience of pension plans and projected trends in such experience. In prescribing
such tables, the Secretary shall take into account results of available independent
studies of mortality of individuals covered by pension plans.

(C) Substitute mortality table —

(i) In general. Upon request by the plan sponsor and approval by the Secretary, a
mortality table which meets the requirements of clause (iii) shall be used in
determining any present value or making any computation under this section
during the period of consecutive plan years (not to exceed 10) specified in the
request.

(ii) Early termination of period. Notwithstanding clause (i), a mortality table described
in clause (i) shall cease to be in effect as of the earliest of —

(I) the date on which there is a significant change in the participants in the
plan by reason of a plan spinoff or merger or otherwise, or

(II) the date on which the plan actuary determines that such substitute
mortality table does not meet the requirements of clause (iii).

(iii) Requirements. A mortality table meets the requirements of this section if -

(I) there is a sufficient number of plan participants, and the pension plans
have been maintained for a sufficient period of time, to have credible
information necessary, and

(II) such table reflects the actual experience of the pension plans maintained
by the sponsor and projected trends in general mortality experience.

Section 1.430(h)(3)-1 of the Regulations states, in relevant part, that:
(d) Base mortality tables. The following are the base mortality tables. The base year for
these tables is 2012.²

Section 1.430(h)(3)-2 of the Regulations states, in relevant part, that:
(b) Procedures for obtaining approval to use substitute mortality tables —
(1) Written request for approval to use substitute mortality tables —
(i) General requirements. To use substitute mortality tables, a plan sponsor
must first submit a written request to the Commissioner demonstrating that

² Due to the length, these base mortality tables have not been included in this letter ruling.

those substitute mortality tables meet the requirements of section
430(h)(3)(C) and this section. This request must specify the first plan year,
and the term of years (not more than 10), for which the tables are to apply.

(ii) Time for written request. Substitute mortality tables may not be used for a
plan year unless the plan sponsor submits the written request described in
paragraph (b)(1)(i) of this section at least 7 months before the first day of
the first plan year for which the substitute mortality tables are to apply.

(c) Development of substitute mortality tables —
(2) Mortality experience requirements —

(ii) Credible mortality information —

(B) Simplified rule. Whether there is credible mortality information for a
gender may be determined by only taking into account people who
are at least age 50 and less than age 100. If there is credible
mortality information for a gender using this simplified rule, the
entire gender (not just those who are at least age 50 and less than
age 100) has credible mortality information.

(3) Determination of substitute mortality tables -

(i) Requirement to use generational mortality table. A plan's substitute
mortality tables must be generational mortality tables. A plan's substitute
mortality tables are determined using the plan's base substitute mortality
tables developed pursuant to paragraph (d) or (e) of this section and the
mortality improvement factors described in paragraph (c)(3)(ii) of this
section.

(ii) Determination of mortality improvement factors. The mortality
improvement factor determined under § 1.430(h)(3)-1(b)(2)(ii) for that age
and gender for the applicable period. The applicable period is the period
beginning with the base year for the base substitute mortality table
determined under paragraph (d) or (e) of this section and ending in the
calendar year in which the individual attains the age for which the
probability of death is being determined. The base year for the base
substitute mortality table is the calendar year that contains the day before
the midpoint of the experience study period.

(6) Duration of use of tables —

(ii) Early termination of use of tables. A plan's substitute mortality tables must
not be used beginning with the earliest of —

(A) For a plan using a substitute mortality table for only one gender
because of a lack of credible mortality information with respect to
the other gender, the first plan year for which there is credible
mortality information with respect to the gender that had lacked
credible mortality information (unless an approved substitute
mortality table is used for that gender);

(B) The first plan year in which the plan fails to satisfy the requirements
of paragraph (c)(1) of this section (regarding use of substitute
mortality tables for all plans in the controlled group), taking into
account the rules of paragraph (f)(3) of this section (regarding the
transition period for newly-affiliated plans);

(C) The second plan year following the plan year for which there is a
significant change in individuals covered by the plan as described
in paragraph (c)(6)(iii) of this section;

(D) The first plan year following the plan year for 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

(E) The date specified in guidance published in the Internal Revenue
Bulletin in conjunction with a replacement of mortality tables
specified under section 430(h)(3)(A) and § 1.430(h)(3)-1 (other than
changes to the mortality improvement rates under § 1.430(h)(3)-
1(b)(1)(iii) or annual updates to the static mortality tables issued as
noted in § 1.430(h)(3)-1(c)(1)(iv)).

(iii) Significant change in coverage —

(A) Change in coverage from time of experience study. For purposes of
applying the rules of paragraph (c)(6)(ii)(C) of this section, a
significant change in the individuals covered by a substitute
mortality table for a plan year occurs if the number of individuals
covered by the substitute mortality table for the plan year is less
than 80 percent or more than 120 percent of the average number of
individuals in that population over the years covered by the
experience study on which the substitute mortality tables are
based. However, a change in coverage is not treated as significant
if the plan's actuary certifies in writing to the satisfaction of the
Commissioner that the substitute mortality tables used for the
population continue to be accurately predictive of future mortality of
that population (taking into account the effect of the change in the
population).

(B) Change in coverage from time of certification. For purposes of
applying the rules of paragraph (c)(6)(ii)(C) of this section, a
significant change in the individuals covered by a substitute
mortality table for a plan year occurs if the number of individuals
covered by the substitute mortality table for the plan year is less
than 80 percent or more than 120 percent of the number of
individuals covered by the substitute mortality table in a plan year
for which a certification described in paragraph (c)(6)(iii)(A) of this
section was made on account of a prior change in coverage.
However, a change in coverage is not treated as significant if the
plan's actuary certifies in writing to the satisfaction of the
Commissioner that the substitute mortality tables used by the plan
with respect to the covered population continue to be accurately
predictive of future mortality of that population (taking into account
the effect of the change in the population).

(d) Full credibility —

(2) Experience study requirements —

(i) General rule. The base substitute mortality table for a gender or other
population must be developed from an experience study of the mortality
experience of that population that is collected over an experience study
period. The experience study period must consist of 2, 3, 4, or 5
consecutive 12-month periods, and must be the same period for all
populations except as provided in paragraph (c)(5)(iii) of this section.

(ii) Requirements to use recent experience data —

(A) General rule. Except as provided in paragraph (d)(2)(ii)(B) of this
section, the last day of the experience study period must be less
than 3 years before the first day of the first plan year for which the
substitute mortality tables are to apply. For example, if January 1,
2019, is the first day of the first plan year for which the substitute
mortality tables will be used, then an experience study using
calendar year data generally must include data collected for a
period that ends no earlier than December 31, 2016.

(3) Full credibility threshold —

(i) Threshold number of deaths. The full credibility threshold for a gender or
other population is the product of 1,082 and the population's benefit
dispersion factor. In calculating the population's benefit dispersion factor,
for purposes of (d)(3)(iii), (iv), and (v) of this section, the population is
adjusted, as appropriate, for individuals who leave the population on
account of a reason other than death.

(ii) Population's dispersion factor. The population's benefit dispersion factor is
equal to —

(A) The number of expected deaths for the population during the
experience study period (as defined in paragraph (d)(3)(iii) of this
section); multiplied by

(B) The sum of the mortality-weighted squares of the benefits (as
defined in paragraph (d)(3)(iv) of this section); divided by

(C) The square of the sum of the mortality-weighted benefits (as
defined in paragraph (d)(3)(v) of this section).

(4) Development of mortality rates -

(i) In general. The mortality rates under the base substitute mortality tables
must be amounts-weighted mortality rates that are derived from the
experience study. Except as provided in paragraph (d)(4)(iv) of this
section, the mortality rate for an age and gender is determined by
multiplying the mortality rate for that age and gender from the standard
mortality table determined under paragraph (d)(4)(iii) of this section by the
mortality ratio determined under paragraph (d)(4)(ii) of this section. If the
simplified rule under paragraph (c)(2)(ii)(B) of this section is used for the
population, then the mortality ratio is determined only taking into account
people who are at least 50 years old and less than 100 years old, but the
mortality ratio is applied to all ages.

(ii) Mortality ratio -

(A) In general. Except as provided in paragraph (d)(6) of this section, a
mortality ratio is determined for a gender or other population within
a gender, and is equal to the quotient determined by dividing —

(1) The sum, for all years in the experience study period, of the
benefit amount for all individuals in the population at the
beginning of the year who died during the year, by

(2) The sum, for all years in the experience study period, for all
individuals in the population at the beginning of the year
(adjusted, as appropriate, for individuals who leave on
account of reason other than death), of the product of —

(i) The probability of death of the individual using the
mortality rate for the individual's age and gender from
the standard mortality table determined under
paragraph (d)(4)(iii) of this section; and

(ii) The benefit amount for the individual.

(iii) Standard mortality table —

(A) Projection of base table. Except as otherwise provided in this
paragraph (d)(4)(iii), the standard mortality table for a year is the
mortality table determined by applying cumulative mortality
improvement factors determined under § 1.430(h)(3)-1(b)(2)(ii) to
the base mortality table under § 1.430(h)(3)-1(d) for the period
beginning with the base year for that mortality table and ending in
the base year for the base substitute mortality table determined
under paragraph (c)(3)(ii) of this section. For purposes of the
preceding sentence, the cumulative mortality improvement factors
are determined using the mortality improvement rates described in
§ 1.430(h)(3)-1(b)(1)(iii) that apply for the calendar year during
which the plan sponsor submits the request for approval to use
substitute mortality tables.

(iv) Modification for ages 96 and older. Mortality rates for ages 96 and older
under the base substitute mortality table are determined using the rules of
paragraph (d)(4)(i) of this section but substituting a modified mortality ratio
for the mortality ratio determined under paragraph (d)(4)(ii) of this section.
The modified mortality ratio is determined as follows —

(A) For ages 96 through 109, if the mortality ratio is greater than 1.0,
the modified mortality ratio is equal to the mortality ratio for the
population reduced by 1/15th of the excess of the mortality ratio
over 1.0 for each year that the age exceeds 95.

(B) For ages 96 through 109, if the mortality ratio is less than 1.0, the
modified mortality ratio is equal to the mortality ratio for the
population increased by 1/15th of the excess of 1.0 over the
mortality ratio for each year that the age exceeds 95.

(C) For ages 110 and older, the modified mortality ratio is equal to 1.0.

Section 303(h)(3) of ERISA states, in relevant part, that:
(C) Substitute mortality table.-
(i) In general.-Upon request by the plan sponsor and approval by the Secretary of
the Treasury, a mortality table which meets the requirements of clause (iii) shall
be used in determining any present value or making any computation under this
section during the period of consecutive plan years (not to exceed 10) specified
in the request.
(iii) Requirements.-A mortality table meets the requirements of this clause if-

(I) there is a sufficient number of participants, and the pension plans have
been maintained for a sufficient period of time, to have credible
information necessary for purposes of subclause (II), and

(II) such table reflects the actual experience of the pension plans maintained
by the sponsor and projected trends in general mortality experience.

Revenue Procedure 2024-32 sets forth the procedure by which the sponsor of a defined
benefit plan that is subject to the funding requirements of § 430 of the Code may request
approval from the Internal Revenue Service ("IRS") for the use of plan-specific substitute
mortality tables in accordance with § 430(h)(3)(C) and § 1.430(h)(3)-2 of the Regulations.

Section 8.1. of Revenue Procedure 2024-32 states, in relevant part, that the following
information must be provided in tabular form for each population within the plan (or aggregated
group) for which approval to use substitute mortality tables is requested, aggregating all plans
that have the same plan year.
(1) The average number of individuals within the population during the experience study
period; and
(2) The number of individuals within the population as of the last day of the plan year
immediately preceding the plan year during which approval to use substitute mortality
tables is requested.

Section 12.2. of Revenue Procedure 2024-32 states, in relevant part, that if a substitute
mortality table was first approved for use for a plan year that began before January 1, 2025,
and the number of individuals covered by the substitute mortality table is less than 80 percent
or more than 120 percent of the average number of individuals in that population over the 12-
month period covered by the experience study, then the substitute mortality table may not be
used for a plan year beginning on or after January 1, 2026. This termination, which is pursuant
to § 1.430(h)(3)-2(c)(6)(ii)(E), applies without regard to whether the actuary makes the
certification described in § 1.430(h)(3)-2(c)(6)(iii)(A).

Taxpayer's proposed base substitute mortality tables are developed based on an experience
study period from January 1, 2023 through December 31, 2024, with a base year of 2023. This
satisfies the requirements under section 1.430(h)(3)-2(d)(2) of the Regulations.

Taxpayer's proposed base substitute mortality tables are developed by adjusting the
applicable standard mortality tables in section 1.430(h)(3)-1(d) of the Regulations by the
mortality ratios, in accordance with section 1.430(h)(3)-2(d)(4)(i) of the Regulations shown
below.

Mortality Ratio and Credibility Weighting Factor Table

| Population           | Mortality Ratio | Credibility Weighting Factor |
| Male Participants    | [illegible]     | [illegible]                  |
| Female Participants  | [illegible]     | [illegible]                  |

The mortality ratios above are determined in accordance with section 1.430(h)(3)-2(d)(4)(i) of
the Regulations.

Permission is hereby granted to use the base substitute mortality tables, shown below, for
Male Participants and Female Participants.

Base Substitute Mortality Tables
Approved for Use Beginning with the Plan
Year Commencing January 1, 2026 for Plan 1

Base year 2023

[The base substitute mortality tables, listing Male Participants and Female
Participants mortality rates for ages 1 through 120 (pages 9 through 12 of the
release), did not survive scanning; the per-age rate values are [illegible].]

In granting this approval, we have only considered whether the base substitute mortality tables
are developed in accordance with section 1.430(h)(3)-2 of the Regulations and Revenue
Procedure 2024-32. Accordingly, we are not expressing any opinion as to the accuracy or
acceptability of any calculations or other material submitted with Taxpayer's request.

These approved base substitute mortality tables must be applied on a generational basis, as
provided in section 1.430(h)(3)-2(c)(3)(i) of the Regulations.

Taxpayer's attention is called to section 430(h)(3)(C)(ii) of the Code and section
1.430(h)(3)-2(c)(6)(ii) of the Regulations, which describe the circumstances in which the use of
these approved base substitute mortality tables will terminate before the end of the 5-year
period described above.

Taxpayer's attention is also called to the fact that a certification must be provided each plan
year that it is required under section 1.430(h)(3)-2(c)(6)(iii) of the Regulations, signed by the
enrolled actuary for Plan 1, stating that the approved base substitute mortality tables continue
to be accurately predictive of the expected future mortality for Male Participants and Female
Participants. The certification must also contain a statement that:

(1) The enrolled actuary is current with educational requirements set forth by the Joint
Board for the Enrollment of Actuaries as well as any other actuarial designations
asserted;

(2) The enrolled actuary was personally involved in the determination that the substitute
mortality table is still accurately predictive and provides the actuary's best estimate for
the Plan;

(3) In determining that the substitute mortality table is still accurately predictive, the enrolled
actuary took into consideration the effect of business combinations, plan mergers or
spinoffs and settlements/other risk transfers, and other events that would have similar
effects on the relevant populations; and,

(4) The enrolled actuary has the specific knowledge and experience to make the
judgements set forth above and attests to these representations.

All required certifications must be provided on or before the date the Form 5500 is filed for
each plan year for which the certification is required and must be accompanied by the
supporting information relied upon by the enrolled actuary to make that certification. To the
extent possible, please also provide the following supporting information:

(1) The number of actual deaths during the experience study period used to develop the
substitute mortality tables and the beginning and ending dates of the experience study
period;

(2) A table showing the number of expected deaths and actual deaths, reported separately
as of December 31, 2024 and for each plan year beginning with deaths during the plan
year ending December 31, 2024 through the plan year immediately preceding the most
recent actuarial valuation, and in total;

(3) A table similar to the stability demonstration required under section 8.1 of Revenue
Procedure 2024-32, showing the average number of participants in the population
covered by the substitute mortality table during the experience study period and the
number of participants in that population as of the end of each plan year, beginning with
December 31, 2024 through the plan year immediately preceding the most recent
actuarial valuation, expressed both as a headcount and as a percentage of the average
number of participants in the experience study;

(4) A table showing a comparison of (i) the average ages and (ii) percentage of the
population, by the following monthly single life annuity brackets: under $100, between
$100 and $250, between $250 to $500, between $500 to $1,000, between $1,000 and
$1,500, and $1,500 and over, along with the average age and average benefit amount
for the population in total. This information should also be provided for the population in
the experience study and at the end of each plan year, beginning with the valuation date
for the first plan year that the certification is required, through the date immediately
preceding the most recent actuarial valuation at the time the information is reported; and
(5) An explanation of any material changes in the population.

This information must be provided to David M. Ziegler (or to another individual designated by
the IRS) to the following address:

Internal Revenue Service
Attn: Mr. David M. Ziegler
TE/GE: SE:T:EP:RA:T:A2
IR-6213
1111 Constitution Ave. NW
Washington, DC 20224-0002

Failure to provide this information by the due date may result in a requirement that the
standard mortality tables must be used for purposes of section 430 of the Code, beginning with
the earlier of:
(1) the plan year for which the deadline for providing this information is missed, or
(2) the date required for early termination of the use of the substitute mortality tables
pursuant to section 1.430(h)(3)-2(c)(6)(ii)(C) of the Regulations.

This letter ruling may be revoked or modified retroactively if there was a misstatement or
omission of controlling facts, the facts at the time of the transaction are materially different from
the controlling facts on which the letter ruling was based, or the transaction involves a
continuing action or series of actions and the controlling facts change during the course of the
transaction.

No opinion is expressed as to the tax treatment of the transaction described herein under the
provisions of any other section of either the Code or Regulations which may be applicable
thereto, as appropriate.

When filing Form 5500 for Plan 1 for the plan years for which these base 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.

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.

The plan mergers of Plan 4 and Plan 5 into Plan 1 on Merger Date may require a ruling for a
change in funding method, unless the requirements for automatic approval under Revenue
Procedure 2017-56 were met.

We have sent a copy of this letter ruling to Taxpayer's authorized representatives pursuant to
the Power of Attorney and Declaration of Representative (Form 2848) on file with the IRS. In
addition, a copy of this letter ruling is being sent to the Manager, EP Classification Group 4 in
Houston, Texas.

If Taxpayer wishes to inquire about this letter ruling, please contact Mr. (ID Badge
Number ) at ( ) -

Sincerely yours,

David M. Ziegler, Manager
Employee Plans Actuarial Group 2

Enclosures
Notice 437, Notice of Intention to Disclose (Rulings)
A deleted copy of the letter ruling

cc: