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December 02, 2005 at 07:00 PM
The Internal Revenue Service and the Pension Benefit Guaranty Corp. say they will be taking different approaches to replacing the 1983 Group Annuity Mortality Tables.[@@]
The IRS is writing a rule that will require defined benefit pension plan sponsors to use tables based largely on the RP-2000 Mortality Tables Report when computing minimum plan funding requirements, according to a notice .
The IRS will hear public comments on its proposed mortality table change April 19, 2006, in Washington.
In a separate action, the PBGC has issued a final rule requiring employers to use tables based largely on the 1994 Group Annuity Mortality Tables to value defined benefit plan benefits.
The PBGC shift, previously announced in a draft rule released in March, is scheduled to take effect Jan. 1, 2006.
The PBGC and IRS notices both appear today in the Federal Register.
Sticking with the 1983 tables could encourage employers to set too little cash aside for male pension plan members, because male mortality has improved considerably since then, according to Bruce Perlin and Linda Marshall, the main authors of the IRS rule-making notice.
