The Internal Revenue Service is trying to give pension plan administrators and others the figures they need to calculate defined benefit plan present values and contribution levels in the coming year.
The IRS published final regulations in February that permit plans to use “blended mortality tables” for workers and benefit recipients this year, because of the need to overhaul actuarial systems to cope with the effects of the Pension Protection Act of 2006.
In 2008, the IRS wants plans to use separate tables for “annuitants” and “nonannuitants,” IRS officials write in a preamble to the proposed mortality table regulations, which appeared in the Federal Register.
The IRS uses the term “annuitants” to refer to retirees, and the term “nonannuitant” to refer both to terminated vested participants and to active workers.
Although using separate tables is more complicated, the IRS and the Treasury Department “believe that failing to project mortality improvement in determining the funding target would tend to result in underfunding,” officials write.
The proposed “generally applicable mortality tables” would be based on the RP-2000 Mortality Tables Report, which was developed by the Society of Actuaries, Schaumburg, Ill.
Plan administrators could choose between using a static version of the table and generational mortality tables, which would provide different projected mortality rates for workers of different ages.