IRS Issues Mortality Table Regulations Used for Pension Plans

The Internal Revenue Service (IRS) has released final regulations titled “Mortality Tables for Determining Present Value under Defined Benefit Pension Plans”. According to a summary, the regulations prescribe mortality tables to be used for most defined benefit pension plans. The tables are used to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for the plan. These regulations are effective upon publication in the Federal Register, and apply to valuation dates occurring on or after January 1, 2024.

Additionally, the IRS issued proposed regulations titled “Plan-Specific Substitute Mortality Tables for Determining Present Value”. This guidance proposes updated requirements that a plan sponsor of a single-employer defined benefit plan must meet to obtain IRS approval to use mortality tables specific to the plan in calculating present value for minimum funding purposes (as a substitute for the generally applicable mortality tables). Comments on the proposed rule can be made within 60 days of publication in the Federal Register.