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January 12, 2004 at 07:00 PM
NU Online News Service, Jan. 12, 2004, 7:04 p.m. EST – The pension committee of the American Academy of Actuaries, Washington, is recommending that the Internal Revenue Service let pension plans use the new RP-2000 Mortality Table when reliable mortality tables for the plans’ own participants are not available.[@@]
Actuaries with the Society of Actuaries, Schaumburg, Ill., based the 2000 table on 11 million “life years” of private pension plan mortality data.
“The study includes by far the largest volume of private pension mortality data ever analyzed,” Carolyn Zimmerman, the academy pension committee chair, writes in a letter on behalf of the committee to the IRS.
The new pension mortality table provides separate mortality figures for white-collar and blue-collar workers, to reflect the fact that white-collar workers tend to live longer than blue-collar workers.
IRS regulations should require that plans that adopt the RP-2000 table use the table in a consistent manner, to keep sponsors from using the table only when it will lower their costs, Zimmerman writes.
Zimmerman recommends that the U.S. Treasury Department consider requiring a “collar adjustment” when at least 70% of the members of a plan will be either blue-collar or white-collar. Otherwise, Zimmerman writes, unadjusted rates would apply.
