The Internal Revenue Service has come out with an explanation of how large employers can develop their own plan-specific mortality tables.
The Pension Benefit Guaranty Corp. recently published a proposed rule advising employers about how to adopt new pension plan mortality tables in 2008.
Employers with “credible experience” can use their own substitute tables, but an employer that wants to use a substitute table must have a stable number of employees, and it must have data on 1,000 male deaths and 1,000 female deaths over a 4-year period.
The American Benefits Council, Washington, has noted that the 1,000-death requirement will limit use of the substitute mortality table provision.
The IRS itself estimates that only about 50 respondents or recordkeepers will be able to use the provision, and that meeting the requirements of the provision will take each of those organizations an average of about 508 hours.
A copy of the mortality table revenue procedure is on the Web HYPERLINK “http://www.irs.gov/pub/irs-drop/rp-07-37.pdf”here.