Updated Mortality Tables for Determining Current Liability, 72260-72268 [E5-6742]
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Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
and tribal governments, in the aggregate,
or by the private sector, of $100,000,000
or more (adjusted annually for inflation)
in any one year.’’ The current threshold
after adjustment for inflation is $115
million, using the most current (2003)
Implicit Price Deflator for the Gross
Domestic Product. FDA does not expect
this proposed rule to result in any 1year expenditure that would meet or
exceed this amount.
B. Environmental Impact
The agency has determined, under 21
CFR 25.31(h), that this action is of a
type that does not individually or
cumulatively have a significant effect on
the human environment. Therefore,
neither an environmental assessment
nor an environmental impact statement
is required.
C. Federalism
FDA has analyzed this proposed rule
in accordance with the principles set
forth in Executive Order 13132. FDA
has determined that the proposed rule
does not contain policies that have
substantial direct effects on the States,
on the relationship between the
National Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government. Accordingly, the
agency has concluded that the proposed
rule does not contain policies that have
federalism implications as defined in
the Executive order and, consequently,
a federalism summary impact statement
is not required.
IV. Paperwork Reduction Act of 1995
This proposed rule contains no
collections of information. Therefore,
clearance by the Office of Management
and Budget under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520) is not required.
V. Request for Comments
Interested persons may submit to the
Division of Dockets Management (see
ADDRESSES) written or electronic
comments regarding this document.
Submit a single copy of electronic
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individuals may submit one paper copy.
Comments are to be identified with the
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comments may be seen in the Division
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VI. References
The following references have been
placed on display in the Division of
Dockets Management (see ADDRESSES),
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and may be seen by interested persons
between 9 a.m. and 4 p.m., Monday
through Friday.
1. Massell, B.F., L.H. Honikman, and J.
Amezcua, ‘‘Rheumatic Fever Following
Streptococcal Vaccination. Report of Three
Cases,’’ Journal of the American Medical
Association, 207(6): 1115–1119, 1969.
2. Kaplan, M.H. and M. Meyeserian, ‘‘An
Immunological Cross-Reaction Between
Group A Streptococcal Cells and Human
Heart Tissue,’’ Lancet, 1:706–710, 1962.
3. Fox, E.N., L.M. Pachman, M.K. Wittner,
and A. Dorfman, ‘‘Primary Immunization of
Infants and Children with Group A
Streptococcal M Protein,’’ Journal of
Infectious Diseases, 120:598–604, 1969.
List of Subjects in 21 CFR Part 610
Biologics, Labeling, Reporting and
recordkeeping requirements.
Therefore, under the Federal Food,
Drug, and Cosmetic Act and the Public
Health Service Act, and under authority
delegated by the Commissioner of Food
and Drugs, it is proposed that 21 CFR
part 610 be amended as follows:
PART 610—GENERAL BIOLOGICAL
PRODUCTS STANDARDS
1. The authority citation for 21 CFR
part 610 continues to read as follows:
Authority: 21 U.S.C. 321, 331, 351, 352,
353, 355, 360, 360c, 360d, 360h, 360i, 371,
372, 374, 381; 42 U.S.C. 216, 262, 263, 263a,
264.
§ 610.19
[Removed]
2. Remove § 610.19.
Dated: November 21, 2005.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 05–23545 Filed 12–1–05; 8:45 am]
BILLING CODE 4160–01–S
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–124988–05]
RIN 1545–BE72
Updated Mortality Tables for
Determining Current Liability
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:
This document contains
proposed regulations under section
412(l)(7)(C)(ii) of the Internal Revenue
Code (Code) and section 302(d)(7)(C)(ii)
of the Employee Retirement Income
Security Act of 1974 (ERISA) (Pub. L.
93–406, 88 Stat. 829). These regulations
SUMMARY:
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provide the public with guidance
regarding mortality tables to be used in
determining current liability under
section 412(l)(7) of the Code and section
302(d)(7) of ERISA. These regulations
affect plan sponsors and administrators,
and participants in and beneficiaries of,
certain retirement plans.
DATES: Written or electronic comments
and requests to speak and outlines of
topics to be discussed at the public
hearing scheduled for April 19, 2006, at
10 a.m., must be received by March 29,
2006.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–124988–05), room
5226, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–124988–05),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC. Alternatively,
taxpayers may submit comments
electronically directly to the IRS
Internet site at https://www.irs.gov/regs.
The public hearing will be held in the
Auditorium, Internal Revenue Building,
1111 Constitution Avenue, NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Concerning the regulations, Bruce Perlin
or Linda Marshall at (202) 622–6090
(not a toll-free number); concerning
submissions and the hearing and/or to
be placed on the building access list to
attend the hearing, Treena Garrett at
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 412 of the Internal Revenue
Code provides minimum funding
requirements with respect to certain
defined benefit pension plans.1 Section
412(l) provides additional funding
requirements for certain of these plans,
based in part on a plan’s unfunded
current liability, as defined in section
412(l)(8).
Pursuant to section 412(c)(6), if the
otherwise applicable minimum funding
requirement exceeds the plan’s full
funding limitation (defined in section
412(c)(7) as the excess of a specified
measure of plan liability over the plan
assets), then the minimum funding for
1 Section 302 of ERISA sets forth funding rules
that are parallel to those in section 412 of the Code.
Under section 101 of Reorganization Plan No. 4 of
1978 (43 FR 47713) and section 302 of ERISA, the
Secretary of the Treasury has interpretive
jurisdiction over the subject matter addressed in
these proposed regulations for ERISA, as well as the
Code. Thus, these proposed Treasury regulations
issued under section 412 of the Code apply as well
for purposes of section 302 of ERISA.
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Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
the year is reduced by that excess.
Under section 412(c)(7)(E), the full
funding limitation cannot be less than
the excess of 90% of the plan’s current
liability (including the expected
increase in current liability due to
benefits accruing during the plan year)
over the value of the plan’s assets. For
this purpose, the term current liability
generally has the same meaning given
that term under section 412(l)(7).
Section 412(l)(7)(C)(ii) provides that,
for purposes of determining current
liability in plan years beginning on or
after January 1, 1995, the mortality table
used is the table prescribed by the
Secretary. Under section
412(l)(7)(C)(ii)(I), the initial mortality
table used in determining current
liability under section 412(l)(7) must be
based on the prevailing commissioners’
standard table (described in section
807(d)(5)(A)) used to determine reserves
for group annuity contracts issued on
January 1, 1993. For purposes of section
807(d)(5), Rev. Rul. 92–19 (1992–1 C.B.
227) specifies the prevailing
commissioners’ standard table used to
determine reserves for group annuity
contracts issued on January 1, 1993, as
the 1983 Group Annuity Mortality Table
(1983 GAM). Accordingly, Rev. Rul. 95–
28 (1995–1 C.B. 74) sets forth two
gender-specific mortality tables—based
on 1983 GAM—for purposes of
detemining current liability for
partcipants who are not entitled to
disability benefits.2
Section 412(l)(7)(C)(iii)(I) specifies
that the Secretary is to establish
different mortality tables to be used to
determine current liability for
individuals who are entitled to benefits
under the plan on account of disability.
One such set of tables is to apply to
individuals whose disabilities occur in
2 Section 417(e)(3)(A)(ii)(I) requires the present
value of certain distributions to be determined
using a table prescribed by the Secretary based on
the prevailing commissioners’ standard table
(described in section 807(d)(5)(A)) used to
determine reserves for group annuity contracts
issued on the date as of which present value is
being determined. Thus, in contrast to the mortality
table initially prescribed for determining current
liability under section 412(l)(7)(C)(ii)(I), the
mortality table used to determine present value
under section 417(e)(3)(A)(ii)(I) is not fixed as of a
specified date but, rather, must be updated when
the prevailing commissioner’s standard table
changes. Rev. Rul. 95–6 (1995–1 C.B. 80) set forth
tables under section 417(e)(3)(A)(ii)(I) based on
1983 GAM, which was the prevailing
commissioner’s standard table at that time. The
1994 Group Annuity Reserving Table became the
prevailing commissioners’ standard table under
section 807(d)(5)(A) for annuities issued on or after
January 1, 1999. See Rev. Rul. 2001–38 (2001–2 C.B.
124). Accordingly, Rev. Rul. 2001–62 (2001–2 C.B.
632) required plans to adopt a new mortality table
(based on the 1994 Group Annuity Reserving Table)
for calculating the minimum present value of
distributions pursuant to section 417(e).
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plan years beginning before January 1,
1995, and a second set of tables for
individuals whose disabilities occur in
plan years beginning on or after such
date. Under section 412(l)(7)(C)(iii)(II),
the separate tables for disabilities that
occur in plan years beginning after
December 31, 1994 apply only with
respect to individuals who are disabled
within the meaning of title II of the
Social Security Act and the regulations
thereunder. Rev. Rul. 96–7 (1996–1 C.B.
59) sets forth the mortality tables
established under section
412(l)(7)(C)(iii).
Under section 412(l)(7)(C)(ii)(III), the
Secretary of the Treasury is required to
periodically (at least every 5 years)
review any tables in effect under that
subsection and, to the extent necessary,
by regulation update the tables to reflect
the actual experience of pension plans
and projected trends in such experience.
Section 412(l)(7)(C)(ii)(II) provides that
the updated tables are to take into
account the results of available
independent studies of mortality of
individuals covered by pension plans.
Pursuant to section 412(l)(7)(C)(ii)(II),
any new mortality tables prescribed by
regulation can be effective no earlier
than the first plan year beginning after
December 31, 1999. Under section
412(l)(10), increases in current liability
arising from the adoption of such a new
mortality table generally are required to
be amortized over a 10-year period.
In order to facilitate the review of the
applicable mortality tables pursuant to
section 412(l)(7)(C)(ii)(III), Rev. Rul. 95–
28 requested comments concerning the
mortality table to be used for
determining current liability for plan
years beginning after December 31,
1999, and information on existing or
upcoming independent studies of
mortality of individuals covered by
pension plans. In Announcement 2000–
7 (2000–1 C.B. 586), the IRS and the
Treasury Department also requested
comments regarding mortality tables to
be used for determining current liability
for plan years beginning after December
31, 1999, but indicated that it was
anticipated that in no event would there
be any change in the mortality tables for
plan years beginning before January 1,
2001.
Notice 2003–62 (2003–2 C.B. 576) was
issued as part of the periodic review by
the IRS and the Treasury Department of
the mortality tables used in determining
current liability under section 412(l)(7).
At the time the Notice 2003–62 was
issued, the IRS and the Treasury
Department were aware of two reviews
of mortality experience for retirement
plan participants undertaken by the
Retirement Plans Experience Committee
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72261
of the Society of Actuaries (the UP–94
Study and the RP–2000 Mortality Tables
Report),3 and commentators were
invited to submit any other independent
studies of pension plan mortality
experience. Notice 2003–62 also
requested the submission of studies
regarding projected trends in mortality
experience. With respect to projecting
mortality improvements, the IRS and
the Treasury Department requested
comments regarding the advantages and
disadvantages of reflecting these trends
on an ongoing basis through the use of
generational, modified generational, or
sequentially static mortality tables.
In addition, Notice 2003–62 requested
comments on whether certain risk
factors should be taken into account in
predicting an individual’s mortality.
Comments were requested as to the
extent that separate mortality tables
should be prescribed that take into
account these factors, with particular
attention paid to the administrative
issues in applying such distinctions. In
this regard, comments were specifically
requested as to how it would be
determined which category an
individual fits into, the extent to which
an individual, once categorized, remains
in that same category, the classification
of individuals for whom adequate
information is unavailable, whether
distinctions are applicable to
beneficiaries, and the extent to which
distinctions may overlap or work at
cross purposes. Some examples of
factors that were listed in Notice 2003–
62 are the following: gender, tobacco
use, job classification, annuity size, and
income. Comments were also requested
as to whether classification systems, if
permitted, should be mandatory or
optional. A number of comments were
submitted regarding the issues
identified in Notice 2003–62.
The IRS and the Treasury Department
have reviewed the mortality tables that
are used for purposes of determining
current liability for participants and
beneficiaries (other than disabled
participants). The existing mortality
table for determining current liability
(1983 GAM) was compared to
independent studies of mortality of
individuals covered by pension plans,
after reflecting projected trends for
mortality improvement through 2007.
The comparison indicates that the 1983
3 The UP–94 Study, prepared by the UP–84 Task
Force of the Society of Actuaries, was published in
the Transactions of the Society of Actuaries, Vol.
XLVII (1995), p. 819. The RP–2000 Mortality Table
Report was released in July, 2000. Society of
Actuaries, RP–2000 Mortaality Tables Report, at
https://www.soa.org/ccm/content/researchpublications/experience-studies-tools/the-rp-2000mortality-tables/.
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GAM is no longer appropriate for
determining current liability. For
example, comparing the RP–2000
Combined Healthy Mortality Table for
males projected to 2007 (when this
proposed regulation would take effect)
with the 1983 GAM shows that a current
mortality table reflects a 52% decrease
in the number of expected deaths at age
50, a 26% decrease at 65, and an 19%
decrease at age 80. Comparing annuity
values derived under these updated
mortality rates with annuity values
determined under the 1983 GAM shows
an increase in present value of 12% for
a 35-year-old male with a deferred
annuity payable at age 65, a 5% increase
for a 55-year-old male with an
immediate annuity, and a 7% increase
for a 75-year-old male with an
immediate annuity (all calculated at a
6% interest rate). Female mortality rates
also changed, although with a different
pattern. For females, the number of
expected deaths decreased by 10% at
age 50, but increased by 33% at age 65
and increased by 2% at age 80.4
Comparing annuity values derived
under these updated mortality rates
with annuity values determined under
the 1983 GAM shows a decrease in
present value of 3% for a 35-year-old
female with a deferred annuity payable
at age 65, a 2% decrease for a 55-yearold female with an immediate annuity,
and a 2% decrease for a 75-year-old
female with an immediate annuity (all
calculated at a 6% interest rate).
Based on this review of the 1983 GAM
compared to more recent mortality
experience, the IRS and Treasury
Department have determined that
updated mortality tables should be used
to determine current liability for
participants and beneficiaries (other
than disabled participants).5
Explanation of Provisions
The proposed regulations would set
forth the methodology the IRS and
Treasury would use to establish
mortality tables to be used under section
412(l)(7)(C)(ii) to determine current
liability for participants and
beneficiaries (other than disabled
participants). The mortality tables that
would apply for the 2007 plan year are
4 The developers of the 1983 GAM table
acknowledged that the number of female lives used
to develop the table had been relatively small and
they recommended an age setback to the male table
be used rather than a separate female table. See
Development of the 1983 Group Annuity Mortality
Table, Transaction of the Society of Actuaries, Vol.
XXXV (1983), pp. 859, 883–84.
5 The IRS and Treasury are in the process of
reviewing recent mortality experience and expected
trends for disabled participants to determine
whether updated mortality tables under section
412(l)(7)(C)(iii) are needed.
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set forth in the proposed regulations.
The mortality tables that would be used
for subsequent plan years would be
published in the Internal Revenue
Bulletin. Comments are requested
regarding whether it would be desirable
to publish a series of tables for each of
a number of years (such as five years)
along with final regulations, with tables
for subsequent years to be published in
the Internal Revenue Bulletin.
These new mortality tables would be
based on the tables contained in the RP–
2000 Mortality Tables Report.
Commentators generally recommended
that the RP–2000 mortality tables be the
basis for the mortality tables used under
section 412(l)(7)(C)(ii) (although one
commentator urged that large employers
be permitted to use mortality tables
tailored to their actual mortality
experience). The IRS and the Treasury
Department have reviewed the RP–2000
mortality tables and the accompanying
report published by the Society of
Actuaries, and have determined that the
RP–2000 mortality tables form the best
available basis for predicting mortality
of pension plan participants and
beneficiaries (other than disabled
participants) based on pension plan
experience and expected trends.
Accordingly, the proposed regulations
would change the mortality tables used
to determine current liability from
tables based on 1983 GAM to updated
tables based on the RP–2000 mortality
tables. As under the currently
applicable mortality tables, the
mortality tables set forth in these
proposed regulations are gender-distinct
because of significant differences
between expected male mortality and
expected female mortality.
The proposed regulations would
provide for separate sets of tables for
annuitants and nonannuitants. This
distinction has been made because the
RP–2000 Mortality Tables Report
indicates that these two groups have
significantly different mortality
experience. This is particularly true at
typical ages for early retirees, where the
number of health-induced early
retirements results in a population that
has higher mortality rates than the
population of currently employed
individuals. Under the proposed
regulations, the annuitant mortality
table would be applied to determine the
present value of benefits for each
annuitant. The annuitant mortality table
is also used for each nonannuitant (i.e.,
an active employee or a terminated
vested participant) for the period after
which the nonannuitant is projected to
commence receiving benefits, while the
nonannuitant mortality table is applied
for the period before the nonannuitant
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is projected to commence receiving
benefits. Thus, for example, with
respect to a 45-year-old active
participant who is projected to
commence receiving an annuity at age
55, current liability would be
determined using the nonannuitant
mortality table for the period before the
participant attains age 55 (i.e., so that
the probability of an active male
participant living from age 45 to the age
of 55 using the mortality table that
would apply in 2007 is 98.59%) and the
annuitant mortality table after the
participant attains age 55. Similarly, if
a 45-year-old terminated vested
participant is projected to commence an
annuity at age 65, current liability
would be determined using the
nonannuitant mortality table for the
period before the participant attains age
65 and the annuitant mortality table for
ages 65 and above.
The mortality tables that would be
established pursuant to this regulation
would be based on mortality
improvements through the year of the
actuarial valuation and would reflect
the impact of further expected
improvements in mortality.
Commentators generally stated that the
projection of mortality improvement is
desirable because it reflects expected
mortality more accurately than using
mortality tables that do not reflect such
projection. The IRS and Treasury agree
with these comments, and believe that
failing to project mortality improvement
in determining current liability would
tend to leave plans underfunded. The
regulations would specify the projection
factors that are to be used to calculate
expected mortality improvement. These
projection factors are from Mortality
Projection Scale AA, which was also
recommended for use in the UP–94
Study and RP–2000 Mortality Tables
Report. The mortality tables for
annuitants are generally based on a
future projection period of 7 years, and
the mortality tables for nonannuitants
are generally based on a future
projection period of 15 years. These
projection periods were selected as the
expected average duration of liabilities
and are consistent with projection
periods suggested by commentators.
The RP–2000 Mortality Tables Report
did not develop mortality rates for
annuitants younger than 50 years of age
or for nonannuitants older than 70 years
of age. The mortality tables for
annuitants use the values that apply for
the nonannuitant mortality tables at
younger ages, with a smoothed
transition to the annuitant mortality
tables by age 50. Similarly, the mortality
tables for both male and female
nonannuitants use the values that apply
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for the annuitant mortality tables at
older ages (i.e., ages above 70), with a
smoothed transition to the nonannuitant
mortality tables by age 70.
The mortality tables for annuitants
applicable for the 2007 plan year would
use the values that apply for the
nonannuitant mortality tables at ages 40
and younger for males and at ages 44
and younger for females with a
smoothed transition to the annuitant
mortality tables between the ages of 41
and 49 for males and between 45 and 49
for females. Similarly, the mortality
tables for both male and female
nonannuitants applicable for the 2007
plan year use the values that apply for
the annuitant mortality tables at ages 80
and older, with a smoothed transition to
the nonannuitant mortality tables
between the ages of 71 and 79.
The proposed regulations would
provide an option for smaller plans (i.e.,
plans where the total of active and
inactive participants is less than 500) to
use a single blended table for all healthy
participants—in lieu of the separate
tables for annuitants and
nonannuitants—in order to simplify the
actuarial valuation for these plans. This
blended table would be constructed
from the separate nonannuitant and
annuitant tables using the
nonannuitant/annuitant weighting
factors published in the RP–2000
Mortality Tables Report. However,
because the RP–2000 Mortality Tables
Report does not provide weighting
factors before age 50 or after age 70, the
IRS and the Treasury Department would
extend the table of weighting factors for
ages 41 through 50 (ages 45–50 for
females) and for ages 70 through 79 in
order to develop the blended table.
The proposed regulations do not
provide for the use of generational
mortality tables to compute a plan’s
current liability. Although
commentators generally stated that the
use of generational mortality tables
provides a more accurate prediction of
participant mortality, they urged against
requiring the use of generational
mortality tables, arguing that many
actuarial valuation systems are not
currently capable of using a generational
approach to mortality improvement.
However, several commentators
requested that the use of generational
mortality tables be permitted on an
optional basis. The IRS and the Treasury
Department agree that the use of
generational mortality tables would be
preferable, but believe that the approach
taken in the proposed regulations (i.e.,
projecting liabilities for annuitants and
nonannuitants to average expected
duration) is appropriate because it
reasonably approximates the use of
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generational tables without being overly
complex to apply. In light of several
comments requesting that the use of
generational tables be optional, the IRS
and the Treasury Department are
considering adopting such a rule and
request comments regarding any issues
that might arise in implementing an
optional use of a generational table. In
addition, comments are requested
regarding how much lead time would be
appropriate if generational mortality
tables were to be required in the future.
The RP–2000 mortality tables and the
accompanying report analyze
differences in expected mortality based
on a number of factors, including job
classification, annuity size, employment
status (i.e., active or retired), and
industry. The IRS and the Treasury
Department have considered whether
separate mortality tables should be
provided based on any of these
distinctions, or on other distinctions
cited in Notice 2003–62, such as tobacco
use or income level. The IRS and the
Treasury Department have concluded
that it is inappropriate to apply
distinctions other than the annuitant
and nonannuitant distinction described
above. In general, these other
distinctions were not made because of
the complexity involved in the process.
For example, no distinction was made
for tobacco use because of the difficulty
in obtaining, maintaining, and
documenting accurate data on the extent
of tobacco use.
Although several commentators
recommended that separate mortality
tables apply to plans that are
determined to be ‘‘white collar’’ or
‘‘blue collar’’ in nature, the IRS and
Treasury have not adopted this
recommendation because of serious
administrability concerns.
Commentators recognized that it may be
difficult to identify whether a specific
individual falls into the category of blue
collar or white collar (especially if an
individual has shifted job classifications
during his or her career), and suggested
that the classification be based on
whether the plan is primarily composed
of blue collar employees or white collar
employees or whether a plan covers a
mixed population of blue collar and
white collar employees. While the planwide classification may avoid the
difficulties of categorizing those
individuals who are hard to classify as
either blue collar or white collar, it
would create additional problems if a
plan shifted between these categories.
More importantly, the RP–2000
Mortality Tables Report indicates that
plans that are primarily blue collar in
nature, but that provide large annuities,
tend to have significantly better
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72263
mortality experience than the average
mortality for individuals in the RP–2000
Mortality Tables Report. As a result,
classifying such a plan as blue collar
and allowing the plan to use a weaker
mortality table will lead to systematic
underfunding of the plan.6 Other
concerns weighing against the use of
separate tables for blue collar and white
collar plans include the risk of antiselection by plans in the absence of
mandatory adjustments and the lack of
research showing the extent to which
any mortality differences attributable to
blue collar or white collar status extend
to beneficiaries of the plan.
As noted above, the mortality
experience is significantly different for
annuitants and nonannuitants. While
the use of separate mortality rates for
these groups of individuals will likely
entail changes in programming of
actuarial software, the IRS and Treasury
believe that the improvement in
accuracy resulting from the the use of
separate mortality tables for annuitants
and nonannuitants more than offsets the
added complexity. Furthermore, the
annutant/nonannuitant distinction does
not have the same difficult
administrative issues as separate tables
based on collar type, annuity size, or
tobacco. This is because it is usually a
straightforward process to categorize an
individual as an annuitant or a
nonannuitant, and once an indvidual is
categorized as an annuitant, the
individual’s status usually does not
change again.
Proposed Effective Date
These regulations are proposed to
apply to plan years beginning on or after
January 1, 2007.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a
significant regulatory action as defined
in Executive Order 12866. Therefore, a
regulatory assessment is not required. It
is hereby certified that these regulations
will not have a significant economic
impact on a substantial number of small
entities. This certification is based upon
the fact that these regulations provide
for special rules to simplify the
application of these regulations by
actuaries who provide services for small
entities. Therefore, a Regulatory
Flexibility Analysis under the
6 Although some commentators suggested
addressing this problem by treating some highly
compensated union employees as if they were
white collar workers, the developers of the RP–2000
Mortality Tables Report (and the researchers they
hired to apply a multivariate analysis of the data)
were unable to find a practical model to apply the
combined effect of collar and annuity amount on
mortality.
E:\FR\FM\02DEP1.SGM
02DEP1
72264
Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
Regulatory Flexibility Act (5 U.S.C.
chapter 6) is not required. Pursuant to
section 7805(f) of the Code, this notice
of proposed rulemaking will be
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small business.
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written (a signed original and eight (8)
copies) or electronic comments that are
submitted timely to the IRS. The IRS
and Treasury Department specifically
request comments on the clarity of the
proposed regulations and how they may
be made easier to understand. All
comments will be available for public
inspection and copying.
A public hearing has been scheduled
for April 19, 2006, at 10 a.m. in the
auditorium, Internal Revenue Building,
1111 Constitution Avenue, NW.,
Washington, DC. Due to building
security procedures, visitors must use
the main building entrance on
Constitution Avenue. In addition, all
visitors must present photo
identification to enter the building.
Because of access restrictions, visitors
will not be admitted beyond the
immediate entrance area more than 30
minutes before the hearing starts. For
more information about having your
name placed on the list to attend the
hearing, see the FOR FURTHER
INFORMATION CONTACT section of this
preamble.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
must submit written (signed original
and eight (8) copies) or electronic
comments and an outline of the topics
to be discussed and the time to be
devoted to each topic by March 29,
2006. A period of 10 minutes will be
allotted to each person for making
comments. An agenda showing the
scheduling of the speakers will be
prepared after the deadline for receiving
outlines has passed. Copies of the
agenda will be available free of charge
at the hearing.
Drafting Information
The principal authors of these
regulations are Bruce Perlin and Linda
S.F. Marshall, Office of Division
Counsel/Associate Chief Counsel (Tax
Exempt and Government Entities).
However, other personnel from the IRS
and Treasury participated in the
development of these regulations.
14:49 Dec 01, 2005
Jkt 208001
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
proposed to be amended as follows:
PART 1—INCOME TAXES
Comments and Public Hearing
VerDate Aug<31>2005
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Paragraph 1. The authority citation
for part 1 continues to read, in part, as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.412(l)(7)–1 is added
to read as follows:
§ 1.412(l)(7)–1 Mortality tables used to
determine current liability.
(a) General rules. This section sets
forth the basis used to generate
mortality tables to be used in
connection with computations under
section 412(l)(7)(C)(ii) for determining
current liability for participants and
beneficiaries (other than disabled
participants). The mortality tables,
which reflect the probability of death at
each age, that are to be used for plan
years beginning during 2007, are
provided in paragraph (e) of this
section. The mortality tables to be used
for later plan years are to be provided
in guidance published in the Internal
Revenue Bulletin. See § 601.601(d) of
this chapter.
(b) Use of the tables—(1) Separate
tables for annuitants and
nonannuitants. Separate tables are
provided for use by annuitants and
nonannuitants. The annuitant mortality
table is applied to determine the present
value of benefits for each annuitant, and
to each nonannuitant for the period after
which the nonannuitant is projected to
commence receiving benefits. For
purposes of this section, an annuitant
means a plan participant who is
currently receiving benefits and a
nonannuitant means a plan participant
who is not currently receiving benefits
(e.g., an active employee or a terminated
vested participant). A participant whose
benefit has partially commenced is
treated as an annuitant with respect to
the portion of the benefit which has
commenced and a nonannuitant with
respect to the balance of the benefit. The
nonannuitant mortality table is applied
to each nonannuitant for the period
before the nonannuitant is projected to
commence receiving benefits. Thus, for
example, with respect to a 45-year-old
active participant who is projected to
commence receiving an annuity at age
55, current liability would be
determined using the nonannuitant
mortality table for the period before the
participant attains age 55 (i.e., so that
PO 00000
Frm 00008
Fmt 4702
Sfmt 4702
the probability of an active male
participant living from age 45 to the age
of 55 for the table that applies in plan
years beginning in 2007 is 98.59%) and
the annuitant mortality table for the
period ages 55 and above. Similarly, if
a 45-year-old terminated vested
participant is projected to commence an
annuity at age 65, current liability
would be determined using the
nonannuitant mortality table for the
period before the participant attains age
65 and the annuitant mortality table for
ages 65 and above.
(2) Small plan tables. As an
alternative to the separate tables
specified for annuitants and
nonannuitants, a small plan can use a
combined table that applies the same
mortality rates to both annuitants and
nonannuitants. For this purpose, a small
plan is defined as a plan with fewer
than 500 participants (including both
active and inactive participants).
(c) Construction of the tables—(1)
Source of basic data. The mortality
tables are based on the separate
mortality tables for employees and
healthy annuitants under the RP–2000
Mortality Tables Report (https://
www.soa.org/ccm/content/researchpublications/experience-studies-tools/
the-rp-2000-mortality-tables/), as set
forth in paragraph (d) of this section.
(2) Projected mortality improvements.
The mortality rates under the basic
mortality tables are projected to improve
using Projection Scale AA, as set forth
in paragraph (d) of this section. The
annuitant mortality rates for a plan year
are based on applying the improvement
factors from 2000 until 7 years after the
plan year. The nonannuitant mortality
rates for a plan year are based on
applying the improvement factors from
2000 until 15 years after the plan year.
The projection scale is applied using the
following equation: Projected mortality
rate = base mortality rate *
[(1¥projection factor)∧(number of years
projected)].
(3) Treatment of young annuitants
and older nonannuitants. The mortality
tables for annuitants use the values that
apply for the nonannuitant mortality
tables at younger ages, with a smoothed
transition to the annuitant mortality
tables by age 50. Similarly, the mortality
tables for both male and female
nonannuitants use the values that apply
for the annuitant mortality tables at
older ages (i.e., ages above 70), with a
smoothed transition to the nonannuitant
mortality tables by age 70.
(4) Construction of the combined table
for small plans. The combined table for
small plans is constructed from the
separate nonannuitant and annuitant
tables using the nonannuitant weighting
E:\FR\FM\02DEP1.SGM
02DEP1
72265
Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
factors as set forth in paragraph (d) of
this section. The weighting factors are
applied to develop this table using the
following equation: Combined mortality
rate = [non-annuitant rate * (1 ¥
weighting factor)] + [annuitant rate *
weighting factor].
(d) Tables. As set forth in paragraph
(c) of this section, the following values
are used to develop the mortality tables
that are used for determining current
liability under section 412(l)(7)(C)(ii)
and this section.
Male
Age
Non-annuitant table
(year 2000)
Annuitant
table
(year 2000)
0.000637
0.000430
0.000357
0.000278
0.000255
0.000244
0.000234
0.000216
0.000209
0.000212
0.000219
0.000228
0.000240
0.000254
0.000269
0.000284
0.000301
0.000316
0.000331
0.000345
0.000357
0.000366
0.000373
0.000376
0.000376
0.000378
0.000382
0.000393
0.000412
0.000444
0.000499
0.000562
0.000631
0.000702
0.000773
0.000841
0.000904
0.000964
0.001021
0.001079
0.001142
0.001215
0.001299
0.001397
0.001508
0.001616
0.001734
0.001860
0.001995
0.002138
0.002288
0.002448
0.002621
0.002812
0.003029
0.003306
0.003628
0.003997
0.004414
0.004878
0.005382
0.005918
0.006472
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.005347
0.005528
0.005644
0.005722
0.005797
0.005905
0.006124
0.006444
0.006895
0.007485
0.008196
0.009001
0.009915
0.010951
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.019
0.019
0.019
0.019
0.019
0.019
0.019
0.018
0.017
0.015
0.013
0.010
0.006
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.006
0.007
0.008
0.009
0.010
0.011
0.012
0.013
0.014
0.015
0.016
0.017
0.018
0.019
0.020
0.020
0.020
0.019
0.018
0.017
0.016
0.016
0.016
0.015
0.015
0.014
PO 00000
Fmt 4702
1 ......................................
2 ......................................
3 ......................................
4 ......................................
5 ......................................
6 ......................................
7 ......................................
8 ......................................
9 ......................................
10 ....................................
11 ....................................
12 ....................................
13 ....................................
14 ....................................
15 ....................................
16 ....................................
17 ....................................
18 ....................................
19 ....................................
20 ....................................
21 ....................................
22 ....................................
23 ....................................
24 ....................................
25 ....................................
26 ....................................
27 ....................................
28 ....................................
29 ....................................
30 ....................................
31 ....................................
32 ....................................
33 ....................................
34 ....................................
35 ....................................
36 ....................................
37 ....................................
38 ....................................
39 ....................................
40 ....................................
41 ....................................
42 ....................................
43 ....................................
44 ....................................
45 ....................................
46 ....................................
47 ....................................
48 ....................................
49 ....................................
50 ....................................
51 ....................................
52 ....................................
53 ....................................
54 ....................................
55 ....................................
56 ....................................
57 ....................................
58 ....................................
59 ....................................
60 ....................................
61 ....................................
62 ....................................
63 ....................................
VerDate Aug<31>2005
Female
14:49 Dec 01, 2005
Jkt 208001
Projection
scale AA 7
Frm 00009
Weighting
factors for
small
plans 8
Non-annuitant table
(year 2000)
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.0045
0.0091
0.0136
0.0181
0.0226
0.0272
0.0317
0.0362
0.0407
0.0453
0.0498
0.0686
0.0953
0.1288
0.2066
0.3173
0.3780
0.4401
0.4986
0.5633
0.6338
0.7103
0.7902
Sfmt 4702
Annuitant
table
(year 2000)
0.000571
0.000372
0.000278
0.000208
0.000188
0.000176
0.000165
0.000147
0.000140
0.000141
0.000143
0.000148
0.000155
0.000162
0.000170
0.000177
0.000184
0.000188
0.000190
0.000191
0.000192
0.000194
0.000197
0.000201
0.000207
0.000214
0.000223
0.000235
0.000248
0.000264
0.000307
0.000350
0.000394
0.000435
0.000475
0.000514
0.000554
0.000598
0.000648
0.000706
0.000774
0.000852
0.000937
0.001029
0.001124
0.001223
0.001326
0.001434
0.001550
0.001676
0.001814
0.001967
0.002135
0.002321
0.002526
0.002756
0.003010
0.003291
0.003599
0.003931
0.004285
0.004656
0.005039
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.002344
0.002459
0.002647
0.002895
0.003190
0.003531
0.003925
0.004385
0.004921
0.005531
0.006200
0.006919
0.007689
0.008509
E:\FR\FM\02DEP1.SGM
02DEP1
Projection
scale AA
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.020
0.018
0.016
0.015
0.014
0.014
0.015
0.016
0.017
0.017
0.016
0.015
0.014
0.012
0.012
0.012
0.012
0.010
0.008
0.008
0.009
0.010
0.011
0.012
0.013
0.014
0.015
0.015
0.015
0.015
0.015
0.015
0.016
0.017
0.018
0.018
0.018
0.017
0.016
0.014
0.012
0.010
0.008
0.006
0.005
0.005
0.005
0.005
0.005
0.005
0.005
Weighting
factors for
small plans
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.0084
0.0167
0.0251
0.0335
0.0419
0.0502
0.0586
0.0744
0.0947
0.1189
0.1897
0.2857
0.3403
0.3878
0.4360
0.4954
0.5805
0.6598
0.7520
72266
Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
Male
Age
Non-annuitant table
(year 2000)
Annuitant
table
(year 2000)
64 ....................................
65 ....................................
66 ....................................
67 ....................................
68 ....................................
69 ....................................
70 ....................................
71 ....................................
72 ....................................
73 ....................................
74 ....................................
75 ....................................
76 ....................................
77 ....................................
78 ....................................
79 ....................................
80 ....................................
81 ....................................
82 ....................................
83 ....................................
84 ....................................
85 ....................................
86 ....................................
87 ....................................
88 ....................................
89 ....................................
90 ....................................
91 ....................................
92 ....................................
93 ....................................
94 ....................................
95 ....................................
96 ....................................
97 ....................................
98 ....................................
99 ....................................
100 ..................................
101 ..................................
102 ..................................
103 ..................................
104 ..................................
105 ..................................
106 ..................................
107 ..................................
108 ..................................
109 ..................................
110 ..................................
111 ..................................
112 ..................................
113 ..................................
114 ..................................
115 ..................................
116 ..................................
117 ..................................
118 ..................................
119 ..................................
120 ..................................
0.007028
0.007573
0.008099
0.008598
0.009069
0.009510
0.009922
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.012117
0.013419
0.014868
0.016460
0.018200
0.020105
0.022206
0.024570
0.027281
0.030387
0.033900
0.037834
0.042169
0.046906
0.052123
0.057927
0.064368
0.072041
0.080486
0.089718
0.099779
0.110757
0.122797
0.136043
0.150590
0.166420
0.183408
0.199769
0.216605
0.233662
0.250693
0.267491
0.283905
0.299852
0.315296
0.330207
0.344556
0.358628
0.371685
0.383040
0.392003
0.397886
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
(e) Tables for plan years beginning
during 2007. The following tables are to
VerDate Aug<31>2005
14:49 Dec 01, 2005
Jkt 208001
Female
Projection
scale AA 7
0.014
0.014
0.013
0.013
0.014
0.014
0.015
0.015
0.015
0.015
0.015
0.014
0.014
0.013
0.012
0.011
0.010
0.009
0.008
0.008
0.007
0.007
0.007
0.006
0.005
0.005
0.004
0.004
0.003
0.003
0.003
0.002
0.002
0.002
0.001
0.001
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Weighting
factors for
small
plans 8
Non-annuitant table
(year 2000)
0.8355
0.8832
0.9321
0.9510
0.9639
0.9714
0.9740
0.9766
0.9792
0.9818
0.9844
0.9870
0.9896
0.9922
0.9948
0.9974
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
Annuitant
table
(year 2000)
0.005429
0.005821
0.006207
0.006583
0.006945
0.007289
0.007613
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
0.009395
0.010364
0.011413
0.012540
0.013771
0.015153
0.016742
0.018579
0.020665
0.022970
0.025458
0.028106
0.030966
0.034105
0.037595
0.041506
0.045879
0.050780
0.056294
0.062506
0.069517
0.077446
0.086376
0.096337
0.107303
0.119154
0.131682
0.144604
0.157618
0.170433
0.182799
0.194509
0.205379
0.215240
0.223947
0.231387
0.237467
0.244834
0.254498
0.266044
0.279055
0.293116
0.307811
0.322725
0.337441
0.351544
0.364617
0.376246
0.386015
0.393507
0.398308
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
be used for determining current liability
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
Projection
scale AA
0.005
0.005
0.005
0.005
0.005
0.005
0.005
0.006
0.006
0.007
0.007
0.008
0.008
0.007
0.007
0.007
0.007
0.007
0.007
0.007
0.007
0.006
0.005
0.004
0.004
0.003
0.003
0.003
0.003
0.002
0.002
0.002
0.002
0.001
0.001
0.001
0.001
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Weighting
factors for
small plans
0.8043
0.8552
0.9118
0.9367
0.9523
0.9627
0.9661
0.9695
0.9729
0.9763
0.9797
0.9830
0.9864
0.9898
0.9932
0.9966
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
under section 412(l)(7)(C)(ii) for plan
years beginning during 2007.
E:\FR\FM\02DEP1.SGM
02DEP1
Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
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1 ..............................................................
2 ..............................................................
3 ..............................................................
4 ..............................................................
5 ..............................................................
6 ..............................................................
7 ..............................................................
8 ..............................................................
9 ..............................................................
10 ............................................................
11 ............................................................
12 ............................................................
13 ............................................................
14 ............................................................
15 ............................................................
16 ............................................................
17 ............................................................
18 ............................................................
19 ............................................................
20 ............................................................
21 ............................................................
22 ............................................................
23 ............................................................
24 ............................................................
25 ............................................................
26 ............................................................
27 ............................................................
28 ............................................................
29 ............................................................
30 ............................................................
31 ............................................................
32 ............................................................
33 ............................................................
34 ............................................................
35 ............................................................
36 ............................................................
37 ............................................................
38 ............................................................
39 ............................................................
40 ............................................................
41 ............................................................
42 ............................................................
43 ............................................................
44 ............................................................
45 ............................................................
46 ............................................................
47 ............................................................
48 ............................................................
49 ............................................................
50 ............................................................
51 ............................................................
52 ............................................................
53 ............................................................
54 ............................................................
55 ............................................................
56 ............................................................
57 ............................................................
58 ............................................................
59 ............................................................
60 ............................................................
61 ............................................................
62 ............................................................
63 ............................................................
64 ............................................................
65 ............................................................
66 ............................................................
67 ............................................................
68 ............................................................
69 ............................................................
70 ............................................................
14:49 Dec 01, 2005
Female
Non-annuitant
table
Age
VerDate Aug<31>2005
72267
Jkt 208001
Annuitant table
Optional
combined
table
for small plans
Non-annuitant
table
Annuitant table
Optional
combined
table
for small plans
0.000408
0.000276
0.000229
0.000178
0.000163
0.000156
0.000150
0.000138
0.000134
0.000136
0.000140
0.000146
0.000154
0.000167
0.000176
0.000186
0.000197
0.000207
0.000217
0.000226
0.000239
0.000251
0.000267
0.000282
0.000301
0.000331
0.000342
0.000352
0.000369
0.000398
0.000447
0.000503
0.000565
0.000629
0.000692
0.000753
0.000810
0.000844
0.000875
0.000904
0.000936
0.000974
0.001018
0.001071
0.001131
0.001185
0.001244
0.001304
0.001368
0.001434
0.001500
0.001570
0.001681
0.001803
0.001986
0.002217
0.002488
0.002803
0.003095
0.003421
0.003860
0.004244
0.004746
0.005154
0.005553
0.006073
0.006447
0.006650
0.006974
0.007115
0.000408
0.000276
0.000229
0.000178
0.000163
0.000156
0.000150
0.000138
0.000134
0.000136
0.000140
0.000146
0.000154
0.000167
0.000176
0.000186
0.000197
0.000207
0.000217
0.000226
0.000239
0.000251
0.000267
0.000282
0.000301
0.000331
0.000342
0.000352
0.000369
0.000398
0.000447
0.000503
0.000565
0.000629
0.000692
0.000753
0.000810
0.000844
0.000875
0.000904
0.000963
0.001081
0.001258
0.001493
0.001788
0.002142
0.002554
0.003026
0.003557
0.004146
0.004226
0.004254
0.004312
0.004369
0.004514
0.004749
0.005069
0.005501
0.005972
0.006539
0.007284
0.008024
0.008989
0.009947
0.011015
0.012379
0.013705
0.014940
0.016504
0.017971
0.000408
0.000276
0.000229
0.000178
0.000163
0.000156
0.000150
0.000138
0.000134
0.000136
0.000140
0.000146
0.000154
0.000167
0.000176
0.000186
0.000197
0.000207
0.000217
0.000226
0.000239
0.000251
0.000267
0.000282
0.000301
0.000331
0.000342
0.000352
0.000369
0.000398
0.000447
0.000503
0.000565
0.000629
0.000692
0.000753
0.000810
0.000844
0.000875
0.000904
0.000936
0.000975
0.001021
0.001079
0.001146
0.001211
0.001286
0.001366
0.001457
0.001557
0.001636
0.001754
0.001932
0.002134
0.002508
0.003020
0.003464
0.003990
0.004529
0.005177
0.006030
0.006929
0.008099
0.009159
0.010377
0.011951
0.013349
0.014641
0.016231
0.017689
0.000366
0.000239
0.000178
0.000133
0.000121
0.000113
0.000106
0.000094
0.000090
0.000090
0.000092
0.000095
0.000099
0.000109
0.000119
0.000127
0.000135
0.000138
0.000136
0.000134
0.000132
0.000133
0.000138
0.000144
0.000152
0.000164
0.000171
0.000180
0.000190
0.000212
0.000257
0.000293
0.000323
0.000349
0.000372
0.000394
0.000415
0.000439
0.000465
0.000506
0.000555
0.000611
0.000672
0.000738
0.000788
0.000839
0.000889
0.000962
0.001039
0.001149
0.001272
0.001442
0.001637
0.001861
0.002117
0.002414
0.002696
0.002947
0.003223
0.003521
0.003838
0.004170
0.004513
0.004862
0.005213
0.005559
0.005896
0.006220
0.006528
0.006818
0.000366
0.000239
0.000178
0.000133
0.000121
0.000113
0.000106
0.000094
0.000090
0.000090
0.000092
0.000095
0.000099
0.000109
0.000119
0.000127
0.000135
0.000138
0.000136
0.000134
0.000132
0.000133
0.000138
0.000144
0.000152
0.000164
0.000171
0.000180
0.000190
0.000212
0.000257
0.000293
0.000323
0.000349
0.000372
0.000394
0.000415
0.000439
0.000465
0.000506
0.000555
0.000611
0.000672
0.000738
0.000791
0.000896
0.001054
0.001265
0.001528
0.001844
0.001962
0.002173
0.002445
0.002771
0.003155
0.003608
0.004088
0.004588
0.005156
0.005780
0.006450
0.007168
0.007932
0.008758
0.009662
0.010640
0.011690
0.012838
0.014126
0.015607
0.000366
0.000239
0.000178
0.000133
0.000121
0.000113
0.000106
0.000094
0.000090
0.000090
0.000092
0.000095
0.000099
0.000109
0.000119
0.000127
0.000135
0.000138
0.000136
0.000134
0.000132
0.000133
0.000138
0.000144
0.000152
0.000164
0.000171
0.000180
0.000190
0.000212
0.000257
0.000293
0.000323
0.000349
0.000372
0.000394
0.000415
0.000439
0.000465
0.000506
0.000555
0.000611
0.000672
0.000738
0.000788
0.000840
0.000893
0.000972
0.001059
0.001184
0.001312
0.001496
0.001714
0.001969
0.002314
0.002755
0.003170
0.003583
0.004066
0.004640
0.005354
0.006148
0.007084
0.007996
0.009018
0.010192
0.011323
0.012522
0.013843
0.015309
PO 00000
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E:\FR\FM\02DEP1.SGM
02DEP1
72268
Federal Register / Vol. 70, No. 231 / Friday, December 2, 2005 / Proposed Rules
Male
Female
Non-annuitant
table
Annuitant table
Optional
combined
table
for small plans
Non-annuitant
table
Annuitant table
Optional
combined
table
for small plans
71 ............................................................
72 ............................................................
73 ............................................................
74 ............................................................
75 ............................................................
76 ............................................................
77 ............................................................
78 ............................................................
79 ............................................................
80 ............................................................
81 ............................................................
82 ............................................................
83 ............................................................
84 ............................................................
85 ............................................................
86 ............................................................
87 ............................................................
88 ............................................................
89 ............................................................
90 ............................................................
91 ............................................................
92 ............................................................
93 ............................................................
94 ............................................................
95 ............................................................
96 ............................................................
97 ............................................................
98 ............................................................
99 ............................................................
100 ..........................................................
101 ..........................................................
102 ..........................................................
103 ..........................................................
104 ..........................................................
105 ..........................................................
106 ..........................................................
107 ..........................................................
108 ..........................................................
109 ..........................................................
110 ..........................................................
111 ..........................................................
112 ..........................................................
113 ..........................................................
114 ..........................................................
115 ..........................................................
116 ..........................................................
117 ..........................................................
118 ..........................................................
119 ..........................................................
120 ..........................................................
0.008002
0.009777
0.012439
0.015988
0.020425
0.025749
0.031961
0.039059
0.047046
0.055919
0.063476
0.071926
0.080176
0.090433
0.100383
0.111295
0.125051
0.140385
0.155142
0.173400
0.188868
0.207683
0.224037
0.240367
0.260098
0.276058
0.291564
0.310910
0.325614
0.339763
0.358628
0.371685
0.383040
0.392003
0.397886
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
0.019884
0.022078
0.024592
0.027435
0.031057
0.034615
0.039054
0.044018
0.049617
0.055919
0.063476
0.071926
0.080176
0.090433
0.100383
0.111295
0.125051
0.140385
0.155142
0.173400
0.188868
0.207683
0.224037
0.240367
0.260098
0.276058
0.291564
0.310910
0.325614
0.339763
0.358628
0.371685
0.383040
0.392003
0.397886
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
0.019606
0.021822
0.024371
0.027256
0.030919
0.034523
0.038999
0.043992
0.049610
0.055919
0.063476
0.071926
0.080176
0.090433
0.100383
0.111295
0.125051
0.140385
0.155142
0.173400
0.188868
0.207683
0.224037
0.240367
0.260098
0.276058
0.291564
0.310910
0.325614
0.339763
0.358628
0.371685
0.383040
0.392003
0.397886
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
0.007450
0.008714
0.010610
0.013139
0.016299
0.020092
0.024516
0.029573
0.035261
0.041582
0.046024
0.051021
0.056651
0.063006
0.071188
0.080522
0.091080
0.101448
0.114246
0.126258
0.138648
0.151126
0.165722
0.177747
0.189133
0.199703
0.212246
0.220832
0.228169
0.234164
0.244834
0.254498
0.266044
0.279055
0.293116
0.307811
0.322725
0.337441
0.351544
0.364617
0.376246
0.386015
0.393507
0.398308
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
0.017078
0.018995
0.020819
0.023074
0.025117
0.027673
0.030911
0.034074
0.037618
0.041582
0.046024
0.051021
0.056651
0.063006
0.071188
0.080522
0.091080
0.101448
0.114246
0.126258
0.138648
0.151126
0.165722
0.177747
0.189133
0.199703
0.212246
0.220832
0.228169
0.234164
0.244834
0.254498
0.266044
0.279055
0.293116
0.307811
0.322725
0.337441
0.351544
0.364617
0.376246
0.386015
0.393507
0.398308
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
0.016784
0.018716
0.020577
0.022872
0.024967
0.027570
0.030846
0.034043
0.037610
0.041582
0.046024
0.051021
0.056651
0.063006
0.071188
0.080522
0.091080
0.101448
0.114246
0.126258
0.138648
0.151126
0.165722
0.177747
0.189133
0.199703
0.212246
0.220832
0.228169
0.234164
0.244834
0.254498
0.266044
0.279055
0.293116
0.307811
0.322725
0.337441
0.351544
0.364617
0.376246
0.386015
0.393507
0.398308
0.400000
0.400000
0.400000
0.400000
0.400000
1.000000
(f) Effective date. The mortality tables
described in this section apply for plan
years beginning on or after January 1,
2007.
ENVIRONMENTAL PROTECTION
AGENCY
Age
Mark E. Matthews,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. E5–6742 Filed 12–1–05; 8:45 am]
BILLING CODE 4830–01–P
40 CFR Parts 51 and 96
[OAR 2003–0053; FRL–8003–7]
Rule To Reduce Interstate Transport of
Fine Particulate Matter and Ozone
(Clean Air Interstate Rule):
Reconsideration
Environmental Protection
Agency (EPA).
AGENCY:
VerDate Aug<31>2005
14:49 Dec 01, 2005
Jkt 208001
Notice of reconsideration;
request for comment; notice of public
hearing.
ACTION:
PO 00000
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Sfmt 4702
SUMMARY: On May 12, 2005, EPA
published in the Federal Register the
final ‘‘Rule to Reduce Interstate
Transport of Fine Particulate Matter and
Ozone’’ (Clean Air Interstate Rule or
CAIR). The CAIR requires certain
upwind States to reduce emissions of
nitrogen oxides (NOX) and/or sulfur
dioxide (SO2) that significantly
contribute to nonattainment of, or
interfere with maintenance by,
E:\FR\FM\02DEP1.SGM
02DEP1
]]>Agencies
[Federal Register Volume 70, Number 231 (Friday, December 2, 2005)]
[Proposed Rules]
[Pages 72260-72268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6742]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-124988-05]
RIN 1545-BE72
Updated Mortality Tables for Determining Current Liability
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations under section
412(l)(7)(C)(ii) of the Internal Revenue Code (Code) and section
302(d)(7)(C)(ii) of the Employee Retirement Income Security Act of 1974
(ERISA) (Pub. L. 93-406, 88 Stat. 829). These regulations provide the
public with guidance regarding mortality tables to be used in
determining current liability under section 412(l)(7) of the Code and
section 302(d)(7) of ERISA. These regulations affect plan sponsors and
administrators, and participants in and beneficiaries of, certain
retirement plans.
DATES: Written or electronic comments and requests to speak and
outlines of topics to be discussed at the public hearing scheduled for
April 19, 2006, at 10 a.m., must be received by March 29, 2006.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-124988-05), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand-delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
124988-05), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue, NW., Washington, DC. Alternatively, taxpayers may submit
comments electronically directly to the IRS Internet site at https://
www.irs.gov/regs. The public hearing will be held in the Auditorium,
Internal Revenue Building, 1111 Constitution Avenue, NW., Washington,
DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Bruce
Perlin or Linda Marshall at (202) 622-6090 (not a toll-free number);
concerning submissions and the hearing and/or to be placed on the
building access list to attend the hearing, Treena Garrett at (202)
622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 412 of the Internal Revenue Code provides minimum funding
requirements with respect to certain defined benefit pension plans.\1\
Section 412(l) provides additional funding requirements for certain of
these plans, based in part on a plan's unfunded current liability, as
defined in section 412(l)(8).
---------------------------------------------------------------------------
\1\ Section 302 of ERISA sets forth funding rules that are
parallel to those in section 412 of the Code. Under section 101 of
Reorganization Plan No. 4 of 1978 (43 FR 47713) and section 302 of
ERISA, the Secretary of the Treasury has interpretive jurisdiction
over the subject matter addressed in these proposed regulations for
ERISA, as well as the Code. Thus, these proposed Treasury
regulations issued under section 412 of the Code apply as well for
purposes of section 302 of ERISA.
---------------------------------------------------------------------------
Pursuant to section 412(c)(6), if the otherwise applicable minimum
funding requirement exceeds the plan's full funding limitation (defined
in section 412(c)(7) as the excess of a specified measure of plan
liability over the plan assets), then the minimum funding for
[[Page 72261]]
the year is reduced by that excess. Under section 412(c)(7)(E), the
full funding limitation cannot be less than the excess of 90% of the
plan's current liability (including the expected increase in current
liability due to benefits accruing during the plan year) over the value
of the plan's assets. For this purpose, the term current liability
generally has the same meaning given that term under section 412(l)(7).
Section 412(l)(7)(C)(ii) provides that, for purposes of determining
current liability in plan years beginning on or after January 1, 1995,
the mortality table used is the table prescribed by the Secretary.
Under section 412(l)(7)(C)(ii)(I), the initial mortality table used in
determining current liability under section 412(l)(7) must be based on
the prevailing commissioners' standard table (described in section
807(d)(5)(A)) used to determine reserves for group annuity contracts
issued on January 1, 1993. For purposes of section 807(d)(5), Rev. Rul.
92-19 (1992-1 C.B. 227) specifies the prevailing commissioners'
standard table used to determine reserves for group annuity contracts
issued on January 1, 1993, as the 1983 Group Annuity Mortality Table
(1983 GAM). Accordingly, Rev. Rul. 95-28 (1995-1 C.B. 74) sets forth
two gender-specific mortality tables--based on 1983 GAM--for purposes
of detemining current liability for partcipants who are not entitled to
disability benefits.\2\
---------------------------------------------------------------------------
\2\ Section 417(e)(3)(A)(ii)(I) requires the present value of
certain distributions to be determined using a table prescribed by
the Secretary based on the prevailing commissioners' standard table
(described in section 807(d)(5)(A)) used to determine reserves for
group annuity contracts issued on the date as of which present value
is being determined. Thus, in contrast to the mortality table
initially prescribed for determining current liability under section
412(l)(7)(C)(ii)(I), the mortality table used to determine present
value under section 417(e)(3)(A)(ii)(I) is not fixed as of a
specified date but, rather, must be updated when the prevailing
commissioner's standard table changes. Rev. Rul. 95-6 (1995-1 C.B.
80) set forth tables under section 417(e)(3)(A)(ii)(I) based on 1983
GAM, which was the prevailing commissioner's standard table at that
time. The 1994 Group Annuity Reserving Table became the prevailing
commissioners' standard table under section 807(d)(5)(A) for
annuities issued on or after January 1, 1999. See Rev. Rul. 2001-38
(2001-2 C.B. 124). Accordingly, Rev. Rul. 2001-62 (2001-2 C.B. 632)
required plans to adopt a new mortality table (based on the 1994
Group Annuity Reserving Table) for calculating the minimum present
value of distributions pursuant to section 417(e).
---------------------------------------------------------------------------
Section 412(l)(7)(C)(iii)(I) specifies that the Secretary is to
establish different mortality tables to be used to determine current
liability for individuals who are entitled to benefits under the plan
on account of disability. One such set of tables is to apply to
individuals whose disabilities occur in plan years beginning before
January 1, 1995, and a second set of tables for individuals whose
disabilities occur in plan years beginning on or after such date. Under
section 412(l)(7)(C)(iii)(II), the separate tables for disabilities
that occur in plan years beginning after December 31, 1994 apply only
with respect to individuals who are disabled within the meaning of
title II of the Social Security Act and the regulations thereunder.
Rev. Rul. 96-7 (1996-1 C.B. 59) sets forth the mortality tables
established under section 412(l)(7)(C)(iii).
Under section 412(l)(7)(C)(ii)(III), the Secretary of the Treasury
is required to periodically (at least every 5 years) review any tables
in effect under that subsection and, to the extent necessary, by
regulation update the tables to reflect the actual experience of
pension plans and projected trends in such experience. Section
412(l)(7)(C)(ii)(II) provides that the updated tables are to take into
account the results of available independent studies of mortality of
individuals covered by pension plans. Pursuant to section
412(l)(7)(C)(ii)(II), any new mortality tables prescribed by regulation
can be effective no earlier than the first plan year beginning after
December 31, 1999. Under section 412(l)(10), increases in current
liability arising from the adoption of such a new mortality table
generally are required to be amortized over a 10-year period.
In order to facilitate the review of the applicable mortality
tables pursuant to section 412(l)(7)(C)(ii)(III), Rev. Rul. 95-28
requested comments concerning the mortality table to be used for
determining current liability for plan years beginning after December
31, 1999, and information on existing or upcoming independent studies
of mortality of individuals covered by pension plans. In Announcement
2000-7 (2000-1 C.B. 586), the IRS and the Treasury Department also
requested comments regarding mortality tables to be used for
determining current liability for plan years beginning after December
31, 1999, but indicated that it was anticipated that in no event would
there be any change in the mortality tables for plan years beginning
before January 1, 2001.
Notice 2003-62 (2003-2 C.B. 576) was issued as part of the periodic
review by the IRS and the Treasury Department of the mortality tables
used in determining current liability under section 412(l)(7). At the
time the Notice 2003-62 was issued, the IRS and the Treasury Department
were aware of two reviews of mortality experience for retirement plan
participants undertaken by the Retirement Plans Experience Committee of
the Society of Actuaries (the UP-94 Study and the RP-2000 Mortality
Tables Report),\3\ and commentators were invited to submit any other
independent studies of pension plan mortality experience. Notice 2003-
62 also requested the submission of studies regarding projected trends
in mortality experience. With respect to projecting mortality
improvements, the IRS and the Treasury Department requested comments
regarding the advantages and disadvantages of reflecting these trends
on an ongoing basis through the use of generational, modified
generational, or sequentially static mortality tables.
---------------------------------------------------------------------------
\3\ The UP-94 Study, prepared by the UP-84 Task Force of the
Society of Actuaries, was published in the Transactions of the
Society of Actuaries, Vol. XLVII (1995), p. 819. The RP-2000
Mortality Table Report was released in July, 2000. Society of
Actuaries, RP-2000 Mortaality Tables Report, at https://www.soa.org/
ccm/content/research-publications/experience-studies-tools/the-rp-
2000-mortality-tables/.
---------------------------------------------------------------------------
In addition, Notice 2003-62 requested comments on whether certain
risk factors should be taken into account in predicting an individual's
mortality. Comments were requested as to the extent that separate
mortality tables should be prescribed that take into account these
factors, with particular attention paid to the administrative issues in
applying such distinctions. In this regard, comments were specifically
requested as to how it would be determined which category an individual
fits into, the extent to which an individual, once categorized, remains
in that same category, the classification of individuals for whom
adequate information is unavailable, whether distinctions are
applicable to beneficiaries, and the extent to which distinctions may
overlap or work at cross purposes. Some examples of factors that were
listed in Notice 2003-62 are the following: gender, tobacco use, job
classification, annuity size, and income. Comments were also requested
as to whether classification systems, if permitted, should be mandatory
or optional. A number of comments were submitted regarding the issues
identified in Notice 2003-62.
The IRS and the Treasury Department have reviewed the mortality
tables that are used for purposes of determining current liability for
participants and beneficiaries (other than disabled participants). The
existing mortality table for determining current liability (1983 GAM)
was compared to independent studies of mortality of individuals covered
by pension plans, after reflecting projected trends for mortality
improvement through 2007. The comparison indicates that the 1983
[[Page 72262]]
GAM is no longer appropriate for determining current liability. For
example, comparing the RP-2000 Combined Healthy Mortality Table for
males projected to 2007 (when this proposed regulation would take
effect) with the 1983 GAM shows that a current mortality table reflects
a 52% decrease in the number of expected deaths at age 50, a 26%
decrease at 65, and an 19% decrease at age 80. Comparing annuity values
derived under these updated mortality rates with annuity values
determined under the 1983 GAM shows an increase in present value of 12%
for a 35-year-old male with a deferred annuity payable at age 65, a 5%
increase for a 55-year-old male with an immediate annuity, and a 7%
increase for a 75-year-old male with an immediate annuity (all
calculated at a 6% interest rate). Female mortality rates also changed,
although with a different pattern. For females, the number of expected
deaths decreased by 10% at age 50, but increased by 33% at age 65 and
increased by 2% at age 80.\4\ Comparing annuity values derived under
these updated mortality rates with annuity values determined under the
1983 GAM shows a decrease in present value of 3% for a 35-year-old
female with a deferred annuity payable at age 65, a 2% decrease for a
55-year-old female with an immediate annuity, and a 2% decrease for a
75-year-old female with an immediate annuity (all calculated at a 6%
interest rate).
---------------------------------------------------------------------------
\4\ The developers of the 1983 GAM table acknowledged that the
number of female lives used to develop the table had been relatively
small and they recommended an age setback to the male table be used
rather than a separate female table. See Development of the 1983
Group Annuity Mortality Table, Transaction of the Society of
Actuaries, Vol. XXXV (1983), pp. 859, 883-84.
---------------------------------------------------------------------------
Based on this review of the 1983 GAM compared to more recent
mortality experience, the IRS and Treasury Department have determined
that updated mortality tables should be used to determine current
liability for participants and beneficiaries (other than disabled
participants).\5\
---------------------------------------------------------------------------
\5\ The IRS and Treasury are in the process of reviewing recent
mortality experience and expected trends for disabled participants
to determine whether updated mortality tables under section
412(l)(7)(C)(iii) are needed.
---------------------------------------------------------------------------
Explanation of Provisions
The proposed regulations would set forth the methodology the IRS
and Treasury would use to establish mortality tables to be used under
section 412(l)(7)(C)(ii) to determine current liability for
participants and beneficiaries (other than disabled participants). The
mortality tables that would apply for the 2007 plan year are set forth
in the proposed regulations. The mortality tables that would be used
for subsequent plan years would be published in the Internal Revenue
Bulletin. Comments are requested regarding whether it would be
desirable to publish a series of tables for each of a number of years
(such as five years) along with final regulations, with tables for
subsequent years to be published in the Internal Revenue Bulletin.
These new mortality tables would be based on the tables contained
in the RP-2000 Mortality Tables Report. Commentators generally
recommended that the RP-2000 mortality tables be the basis for the
mortality tables used under section 412(l)(7)(C)(ii) (although one
commentator urged that large employers be permitted to use mortality
tables tailored to their actual mortality experience). The IRS and the
Treasury Department have reviewed the RP-2000 mortality tables and the
accompanying report published by the Society of Actuaries, and have
determined that the RP-2000 mortality tables form the best available
basis for predicting mortality of pension plan participants and
beneficiaries (other than disabled participants) based on pension plan
experience and expected trends. Accordingly, the proposed regulations
would change the mortality tables used to determine current liability
from tables based on 1983 GAM to updated tables based on the RP-2000
mortality tables. As under the currently applicable mortality tables,
the mortality tables set forth in these proposed regulations are
gender-distinct because of significant differences between expected
male mortality and expected female mortality.
The proposed regulations would provide for separate sets of tables
for annuitants and nonannuitants. This distinction has been made
because the RP-2000 Mortality Tables Report indicates that these two
groups have significantly different mortality experience. This is
particularly true at typical ages for early retirees, where the number
of health-induced early retirements results in a population that has
higher mortality rates than the population of currently employed
individuals. Under the proposed regulations, the annuitant mortality
table would be applied to determine the present value of benefits for
each annuitant. The annuitant mortality table is also used for each
nonannuitant (i.e., an active employee or a terminated vested
participant) for the period after which the nonannuitant is projected
to commence receiving benefits, while the nonannuitant mortality table
is applied for the period before the nonannuitant is projected to
commence receiving benefits. Thus, for example, with respect to a 45-
year-old active participant who is projected to commence receiving an
annuity at age 55, current liability would be determined using the
nonannuitant mortality table for the period before the participant
attains age 55 (i.e., so that the probability of an active male
participant living from age 45 to the age of 55 using the mortality
table that would apply in 2007 is 98.59%) and the annuitant mortality
table after the participant attains age 55. Similarly, if a 45-year-old
terminated vested participant is projected to commence an annuity at
age 65, current liability would be determined using the nonannuitant
mortality table for the period before the participant attains age 65
and the annuitant mortality table for ages 65 and above.
The mortality tables that would be established pursuant to this
regulation would be based on mortality improvements through the year of
the actuarial valuation and would reflect the impact of further
expected improvements in mortality. Commentators generally stated that
the projection of mortality improvement is desirable because it
reflects expected mortality more accurately than using mortality tables
that do not reflect such projection. The IRS and Treasury agree with
these comments, and believe that failing to project mortality
improvement in determining current liability would tend to leave plans
underfunded. The regulations would specify the projection factors that
are to be used to calculate expected mortality improvement. These
projection factors are from Mortality Projection Scale AA, which was
also recommended for use in the UP-94 Study and RP-2000 Mortality
Tables Report. The mortality tables for annuitants are generally based
on a future projection period of 7 years, and the mortality tables for
nonannuitants are generally based on a future projection period of 15
years. These projection periods were selected as the expected average
duration of liabilities and are consistent with projection periods
suggested by commentators.
The RP-2000 Mortality Tables Report did not develop mortality rates
for annuitants younger than 50 years of age or for nonannuitants older
than 70 years of age. The mortality tables for annuitants use the
values that apply for the nonannuitant mortality tables at younger
ages, with a smoothed transition to the annuitant mortality tables by
age 50. Similarly, the mortality tables for both male and female
nonannuitants use the values that apply
[[Page 72263]]
for the annuitant mortality tables at older ages (i.e., ages above 70),
with a smoothed transition to the nonannuitant mortality tables by age
70.
The mortality tables for annuitants applicable for the 2007 plan
year would use the values that apply for the nonannuitant mortality
tables at ages 40 and younger for males and at ages 44 and younger for
females with a smoothed transition to the annuitant mortality tables
between the ages of 41 and 49 for males and between 45 and 49 for
females. Similarly, the mortality tables for both male and female
nonannuitants applicable for the 2007 plan year use the values that
apply for the annuitant mortality tables at ages 80 and older, with a
smoothed transition to the nonannuitant mortality tables between the
ages of 71 and 79.
The proposed regulations would provide an option for smaller plans
(i.e., plans where the total of active and inactive participants is
less than 500) to use a single blended table for all healthy
participants--in lieu of the separate tables for annuitants and
nonannuitants--in order to simplify the actuarial valuation for these
plans. This blended table would be constructed from the separate
nonannuitant and annuitant tables using the nonannuitant/annuitant
weighting factors published in the RP-2000 Mortality Tables Report.
However, because the RP-2000 Mortality Tables Report does not provide
weighting factors before age 50 or after age 70, the IRS and the
Treasury Department would extend the table of weighting factors for
ages 41 through 50 (ages 45-50 for females) and for ages 70 through 79
in order to develop the blended table.
The proposed regulations do not provide for the use of generational
mortality tables to compute a plan's current liability. Although
commentators generally stated that the use of generational mortality
tables provides a more accurate prediction of participant mortality,
they urged against requiring the use of generational mortality tables,
arguing that many actuarial valuation systems are not currently capable
of using a generational approach to mortality improvement. However,
several commentators requested that the use of generational mortality
tables be permitted on an optional basis. The IRS and the Treasury
Department agree that the use of generational mortality tables would be
preferable, but believe that the approach taken in the proposed
regulations (i.e., projecting liabilities for annuitants and
nonannuitants to average expected duration) is appropriate because it
reasonably approximates the use of generational tables without being
overly complex to apply. In light of several comments requesting that
the use of generational tables be optional, the IRS and the Treasury
Department are considering adopting such a rule and request comments
regarding any issues that might arise in implementing an optional use
of a generational table. In addition, comments are requested regarding
how much lead time would be appropriate if generational mortality
tables were to be required in the future.
The RP-2000 mortality tables and the accompanying report analyze
differences in expected mortality based on a number of factors,
including job classification, annuity size, employment status (i.e.,
active or retired), and industry. The IRS and the Treasury Department
have considered whether separate mortality tables should be provided
based on any of these distinctions, or on other distinctions cited in
Notice 2003-62, such as tobacco use or income level. The IRS and the
Treasury Department have concluded that it is inappropriate to apply
distinctions other than the annuitant and nonannuitant distinction
described above. In general, these other distinctions were not made
because of the complexity involved in the process. For example, no
distinction was made for tobacco use because of the difficulty in
obtaining, maintaining, and documenting accurate data on the extent of
tobacco use.
Although several commentators recommended that separate mortality
tables apply to plans that are determined to be ``white collar'' or
``blue collar'' in nature, the IRS and Treasury have not adopted this
recommendation because of serious administrability concerns.
Commentators recognized that it may be difficult to identify whether a
specific individual falls into the category of blue collar or white
collar (especially if an individual has shifted job classifications
during his or her career), and suggested that the classification be
based on whether the plan is primarily composed of blue collar
employees or white collar employees or whether a plan covers a mixed
population of blue collar and white collar employees. While the plan-
wide classification may avoid the difficulties of categorizing those
individuals who are hard to classify as either blue collar or white
collar, it would create additional problems if a plan shifted between
these categories.
More importantly, the RP-2000 Mortality Tables Report indicates
that plans that are primarily blue collar in nature, but that provide
large annuities, tend to have significantly better mortality experience
than the average mortality for individuals in the RP-2000 Mortality
Tables Report. As a result, classifying such a plan as blue collar and
allowing the plan to use a weaker mortality table will lead to
systematic underfunding of the plan.\6\ Other concerns weighing against
the use of separate tables for blue collar and white collar plans
include the risk of anti-selection by plans in the absence of mandatory
adjustments and the lack of research showing the extent to which any
mortality differences attributable to blue collar or white collar
status extend to beneficiaries of the plan.
---------------------------------------------------------------------------
\6\ Although some commentators suggested addressing this problem
by treating some highly compensated union employees as if they were
white collar workers, the developers of the RP-2000 Mortality Tables
Report (and the researchers they hired to apply a multivariate
analysis of the data) were unable to find a practical model to apply
the combined effect of collar and annuity amount on mortality.
---------------------------------------------------------------------------
As noted above, the mortality experience is significantly different
for annuitants and nonannuitants. While the use of separate mortality
rates for these groups of individuals will likely entail changes in
programming of actuarial software, the IRS and Treasury believe that
the improvement in accuracy resulting from the the use of separate
mortality tables for annuitants and nonannuitants more than offsets the
added complexity. Furthermore, the annutant/nonannuitant distinction
does not have the same difficult administrative issues as separate
tables based on collar type, annuity size, or tobacco. This is because
it is usually a straightforward process to categorize an individual as
an annuitant or a nonannuitant, and once an indvidual is categorized as
an annuitant, the individual's status usually does not change again.
Proposed Effective Date
These regulations are proposed to apply to plan years beginning on
or after January 1, 2007.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It is hereby
certified that these regulations will not have a significant economic
impact on a substantial number of small entities. This certification is
based upon the fact that these regulations provide for special rules to
simplify the application of these regulations by actuaries who provide
services for small entities. Therefore, a Regulatory Flexibility
Analysis under the
[[Page 72264]]
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
Pursuant to section 7805(f) of the Code, this notice of proposed
rulemaking will be submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. The IRS and Treasury Department specifically request comments on
the clarity of the proposed regulations and how they may be made easier
to understand. All comments will be available for public inspection and
copying.
A public hearing has been scheduled for April 19, 2006, at 10 a.m.
in the auditorium, Internal Revenue Building, 1111 Constitution Avenue,
NW., Washington, DC. Due to building security procedures, visitors must
use the main building entrance on Constitution Avenue. In addition, all
visitors must present photo identification to enter the building.
Because of access restrictions, visitors will not be admitted beyond
the immediate entrance area more than 30 minutes before the hearing
starts. For more information about having your name placed on the list
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section
of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit written
(signed original and eight (8) copies) or electronic comments and an
outline of the topics to be discussed and the time to be devoted to
each topic by March 29, 2006. A period of 10 minutes will be allotted
to each person for making comments. An agenda showing the scheduling of
the speakers will be prepared after the deadline for receiving outlines
has passed. Copies of the agenda will be available free of charge at
the hearing.
Drafting Information
The principal authors of these regulations are Bruce Perlin and
Linda S.F. Marshall, Office of Division Counsel/Associate Chief Counsel
(Tax Exempt and Government Entities). However, other personnel from the
IRS and Treasury participated in the development of these regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read,
in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.412(l)(7)-1 is added to read as follows:
Sec. 1.412(l)(7)-1 Mortality tables used to determine current
liability.
(a) General rules. This section sets forth the basis used to
generate mortality tables to be used in connection with computations
under section 412(l)(7)(C)(ii) for determining current liability for
participants and beneficiaries (other than disabled participants). The
mortality tables, which reflect the probability of death at each age,
that are to be used for plan years beginning during 2007, are provided
in paragraph (e) of this section. The mortality tables to be used for
later plan years are to be provided in guidance published in the
Internal Revenue Bulletin. See Sec. 601.601(d) of this chapter.
(b) Use of the tables--(1) Separate tables for annuitants and
nonannuitants. Separate tables are provided for use by annuitants and
nonannuitants. The annuitant mortality table is applied to determine
the present value of benefits for each annuitant, and to each
nonannuitant for the period after which the nonannuitant is projected
to commence receiving benefits. For purposes of this section, an
annuitant means a plan participant who is currently receiving benefits
and a nonannuitant means a plan participant who is not currently
receiving benefits (e.g., an active employee or a terminated vested
participant). A participant whose benefit has partially commenced is
treated as an annuitant with respect to the portion of the benefit
which has commenced and a nonannuitant with respect to the balance of
the benefit. The nonannuitant mortality table is applied to each
nonannuitant for the period before the nonannuitant is projected to
commence receiving benefits. Thus, for example, with respect to a 45-
year-old active participant who is projected to commence receiving an
annuity at age 55, current liability would be determined using the
nonannuitant mortality table for the period before the participant
attains age 55 (i.e., so that the probability of an active male
participant living from age 45 to the age of 55 for the table that
applies in plan years beginning in 2007 is 98.59%) and the annuitant
mortality table for the period ages 55 and above. Similarly, if a 45-
year-old terminated vested participant is projected to commence an
annuity at age 65, current liability would be determined using the
nonannuitant mortality table for the period before the participant
attains age 65 and the annuitant mortality table for ages 65 and above.
(2) Small plan tables. As an alternative to the separate tables
specified for annuitants and nonannuitants, a small plan can use a
combined table that applies the same mortality rates to both annuitants
and nonannuitants. For this purpose, a small plan is defined as a plan
with fewer than 500 participants (including both active and inactive
participants).
(c) Construction of the tables--(1) Source of basic data. The
mortality tables are based on the separate mortality tables for
employees and healthy annuitants under the RP-2000 Mortality Tables
Report (https://www.soa.org/ccm/content/research-publications/
experience-studies-tools/the-rp-2000-mortality-tables/), as set forth
in paragraph (d) of this section.
(2) Projected mortality improvements. The mortality rates under the
basic mortality tables are projected to improve using Projection Scale
AA, as set forth in paragraph (d) of this section. The annuitant
mortality rates for a plan year are based on applying the improvement
factors from 2000 until 7 years after the plan year. The nonannuitant
mortality rates for a plan year are based on applying the improvement
factors from 2000 until 15 years after the plan year. The projection
scale is applied using the following equation: Projected mortality rate
= base mortality rate * [(1-projection factor)[caret](number of years
projected)].
(3) Treatment of young annuitants and older nonannuitants. The
mortality tables for annuitants use the values that apply for the
nonannuitant mortality tables at younger ages, with a smoothed
transition to the annuitant mortality tables by age 50. Similarly, the
mortality tables for both male and female nonannuitants use the values
that apply for the annuitant mortality tables at older ages (i.e., ages
above 70), with a smoothed transition to the nonannuitant mortality
tables by age 70.
(4) Construction of the combined table for small plans. The
combined table for small plans is constructed from the separate
nonannuitant and annuitant tables using the nonannuitant weighting
[[Page 72265]]
factors as set forth in paragraph (d) of this section. The weighting
factors are applied to develop this table using the following equation:
Combined mortality rate = [non-annuitant rate * (1 - weighting factor)]
+ [annuitant rate * weighting factor].
(d) Tables. As set forth in paragraph (c) of this section, the
following values are used to develop the mortality tables that are used
for determining current liability under section 412(l)(7)(C)(ii) and
this section.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Male Female
--------------------------------------------------------------------------------------------------------
Non- Weighting Non-
Age annuitant Annuitant Projection factors for annuitant Annuitant Projection Weighting
table table scale AA small plans table table scale AA factors for
(year 2000) (year 2000) \7\ \8\ (year 2000) (year 2000) small plans
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.............................................. 0.000637 ........... 0.020 ............ 0.000571 ........... 0.020 ...........
2.............................................. 0.000430 ........... 0.020 ............ 0.000372 ........... 0.020 ...........
3.............................................. 0.000357 ........... 0.020 ............ 0.000278 ........... 0.020 ...........
4.............................................. 0.000278 ........... 0.020 ............ 0.000208 ........... 0.020 ...........
5.............................................. 0.000255 ........... 0.020 ............ 0.000188 ........... 0.020 ...........
6.............................................. 0.000244 ........... 0.020 ............ 0.000176 ........... 0.020 ...........
7.............................................. 0.000234 ........... 0.020 ............ 0.000165 ........... 0.020 ...........
8.............................................. 0.000216 ........... 0.020 ............ 0.000147 ........... 0.020 ...........
9.............................................. 0.000209 ........... 0.020 ............ 0.000140 ........... 0.020 ...........
10............................................. 0.000212 ........... 0.020 ............ 0.000141 ........... 0.020 ...........
11............................................. 0.000219 ........... 0.020 ............ 0.000143 ........... 0.020 ...........
12............................................. 0.000228 ........... 0.020 ............ 0.000148 ........... 0.020 ...........
13............................................. 0.000240 ........... 0.020 ............ 0.000155 ........... 0.020 ...........
14............................................. 0.000254 ........... 0.019 ............ 0.000162 ........... 0.018 ...........
15............................................. 0.000269 ........... 0.019 ............ 0.000170 ........... 0.016 ...........
16............................................. 0.000284 ........... 0.019 ............ 0.000177 ........... 0.015 ...........
17............................................. 0.000301 ........... 0.019 ............ 0.000184 ........... 0.014 ...........
18............................................. 0.000316 ........... 0.019 ............ 0.000188 ........... 0.014 ...........
19............................................. 0.000331 ........... 0.019 ............ 0.000190 ........... 0.015 ...........
20............................................. 0.000345 ........... 0.019 ............ 0.000191 ........... 0.016 ...........
21............................................. 0.000357 ........... 0.018 ............ 0.000192 ........... 0.017 ...........
22............................................. 0.000366 ........... 0.017 ............ 0.000194 ........... 0.017 ...........
23............................................. 0.000373 ........... 0.015 ............ 0.000197 ........... 0.016 ...........
24............................................. 0.000376 ........... 0.013 ............ 0.000201 ........... 0.015 ...........
25............................................. 0.000376 ........... 0.010 ............ 0.000207 ........... 0.014 ...........
26............................................. 0.000378 ........... 0.006 ............ 0.000214 ........... 0.012 ...........
27............................................. 0.000382 ........... 0.005 ............ 0.000223 ........... 0.012 ...........
28............................................. 0.000393 ........... 0.005 ............ 0.000235 ........... 0.012 ...........
29............................................. 0.000412 ........... 0.005 ............ 0.000248 ........... 0.012 ...........
30............................................. 0.000444 ........... 0.005 ............ 0.000264 ........... 0.010 ...........
31............................................. 0.000499 ........... 0.005 ............ 0.000307 ........... 0.008 ...........
32............................................. 0.000562 ........... 0.005 ............ 0.000350 ........... 0.008 ...........
33............................................. 0.000631 ........... 0.005 ............ 0.000394 ........... 0.009 ...........
34............................................. 0.000702 ........... 0.005 ............ 0.000435 ........... 0.010 ...........
35............................................. 0.000773 ........... 0.005 ............ 0.000475 ........... 0.011 ...........
36............................................. 0.000841 ........... 0.005 ............ 0.000514 ........... 0.012 ...........
37............................................. 0.000904 ........... 0.005 ............ 0.000554 ........... 0.013 ...........
38............................................. 0.000964 ........... 0.006 ............ 0.000598 ........... 0.014 ...........
39............................................. 0.001021 ........... 0.007 ............ 0.000648 ........... 0.015 ...........
40............................................. 0.001079 ........... 0.008 ............ 0.000706 ........... 0.015 ...........
41............................................. 0.001142 ........... 0.009 0.0045 0.000774 ........... 0.015 ...........
42............................................. 0.001215 ........... 0.010 0.0091 0.000852 ........... 0.015 ...........
43............................................. 0.001299 ........... 0.011 0.0136 0.000937 ........... 0.015 ...........
44............................................. 0.001397 ........... 0.012 0.0181 0.001029 ........... 0.015 ...........
45............................................. 0.001508 ........... 0.013 0.0226 0.001124 ........... 0.016 0.0084
46............................................. 0.001616 ........... 0.014 0.0272 0.001223 ........... 0.017 0.0167
47............................................. 0.001734 ........... 0.015 0.0317 0.001326 ........... 0.018 0.0251
48............................................. 0.001860 ........... 0.016 0.0362 0.001434 ........... 0.018 0.0335
49............................................. 0.001995 ........... 0.017 0.0407 0.001550 ........... 0.018 0.0419
50............................................. 0.002138 0.005347 0.018 0.0453 0.001676 0.002344 0.017 0.0502
51............................................. 0.002288 0.005528 0.019 0.0498 0.001814 0.002459 0.016 0.0586
52............................................. 0.002448 0.005644 0.020 0.0686 0.001967 0.002647 0.014 0.0744
53............................................. 0.002621 0.005722 0.020 0.0953 0.002135 0.002895 0.012 0.0947
54............................................. 0.002812 0.005797 0.020 0.1288 0.002321 0.003190 0.010 0.1189
55............................................. 0.003029 0.005905 0.019 0.2066 0.002526 0.003531 0.008 0.1897
56............................................. 0.003306 0.006124 0.018 0.3173 0.002756 0.003925 0.006 0.2857
57............................................. 0.003628 0.006444 0.017 0.3780 0.003010 0.004385 0.005 0.3403
58............................................. 0.003997 0.006895 0.016 0.4401 0.003291 0.004921 0.005 0.3878
59............................................. 0.004414 0.007485 0.016 0.4986 0.003599 0.005531 0.005 0.4360
60............................................. 0.004878 0.008196 0.016 0.5633 0.003931 0.006200 0.005 0.4954
61............................................. 0.005382 0.009001 0.015 0.6338 0.004285 0.006919 0.005 0.5805
62............................................. 0.005918 0.009915 0.015 0.7103 0.004656 0.007689 0.005 0.6598
63............................................. 0.006472 0.010951 0.014 0.7902 0.005039 0.008509 0.005 0.7520
[[Page 72266]]
64............................................. 0.007028 0.012117 0.014 0.8355 0.005429 0.009395 0.005 0.8043
65............................................. 0.007573 0.013419 0.014 0.8832 0.005821 0.010364 0.005 0.8552
66............................................. 0.008099 0.014868 0.013 0.9321 0.006207 0.011413 0.005 0.9118
67............................................. 0.008598 0.016460 0.013 0.9510 0.006583 0.012540 0.005 0.9367
68............................................. 0.009069 0.018200 0.014 0.9639 0.006945 0.013771 0.005 0.9523
69............................................. 0.009510 0.020105 0.014 0.9714 0.007289 0.015153 0.005 0.9627
70............................................. 0.009922 0.022206 0.015 0.9740 0.007613 0.016742 0.005 0.9661
71............................................. ........... 0.024570 0.015 0.9766 ........... 0.018579 0.006 0.9695
72............................................. ........... 0.027281 0.015 0.9792 ........... 0.020665 0.006 0.9729
73............................................. ........... 0.030387 0.015 0.9818 ........... 0.022970 0.007 0.9763
74............................................. ........... 0.033900 0.015 0.9844 ........... 0.025458 0.007 0.9797
75............................................. ........... 0.037834 0.014 0.9870 ........... 0.028106 0.008 0.9830
76............................................. ........... 0.042169 0.014 0.9896 ........... 0.030966 0.008 0.9864
77............................................. ........... 0.046906 0.013 0.9922 ........... 0.034105 0.007 0.9898
78............................................. ........... 0.052123 0.012 0.9948 ........... 0.037595 0.007 0.9932
79............................................. ........... 0.057927 0.011 0.9974 ........... 0.041506 0.007 0.9966
80............................................. ........... 0.064368 0.010 1.0000 ........... 0.045879 0.007 1.0000
81............................................. ........... 0.072041 0.009 1.0000 ........... 0.050780 0.007 1.0000
82............................................. ........... 0.080486 0.008 1.0000 ........... 0.056294 0.007 1.0000
83............................................. ........... 0.089718 0.008 1.0000 ........... 0.062506 0.007 1.0000
84............................................. ........... 0.099779 0.007 1.0000 ........... 0.069517 0.007 1.0000
85............................................. ........... 0.110757 0.007 1.0000 ........... 0.077446 0.006 1.0000
86............................................. ........... 0.122797 0.007 1.0000 ........... 0.086376 0.005 1.0000
87............................................. ........... 0.136043 0.006 1.0000 ........... 0.096337 0.004 1.0000
88............................................. ........... 0.150590 0.005 1.0000 ........... 0.107303 0.004 1.0000
89............................................. ........... 0.166420 0.005 1.0000 ........... 0.119154 0.003 1.0000
90............................................. ........... 0.183408 0.004 1.0000 ........... 0.131682 0.003 1.0000
91............................................. ........... 0.199769 0.004 1.0000 ........... 0.144604 0.003 1.0000
92............................................. ........... 0.216605 0.003 1.0000 ........... 0.157618 0.003 1.0000
93............................................. ........... 0.233662 0.003 1.0000 ........... 0.170433 0.002 1.0000
94............................................. ........... 0.250693 0.003 1.0000 ........... 0.182799 0.002 1.0000
95............................................. ........... 0.267491 0.002 1.0000 ........... 0.194509 0.002 1.0000
96............................................. ........... 0.283905 0.002 1.0000 ........... 0.205379 0.002 1.0000
97............................................. ........... 0.299852 0.002 1.0000 ........... 0.215240 0.001 1.0000
98............................................. ........... 0.315296 0.001 1.0000 ........... 0.223947 0.001 1.0000
99............................................. ........... 0.330207 0.001 1.0000 ........... 0.231387 0.001 1.0000
100............................................ ........... 0.344556 0.001 1.0000 ........... 0.237467 0.001 1.0000
101............................................ ........... 0.358628 0.000 1.0000 ........... 0.244834 0.000 1.0000
102............................................ ........... 0.371685 0.000 1.0000 ........... 0.254498 0.000 1.0000
103............................................ ........... 0.383040 0.000 1.0000 ........... 0.266044 0.000 1.0000
104............................................ ........... 0.392003 0.000 1.0000 ........... 0.279055 0.000 1.0000
105............................................ ........... 0.397886 0.000 1.0000 ........... 0.293116 0.000 1.0000
106............................................ ........... 0.400000 0.000 1.0000 ........... 0.307811 0.000 1.0000
107............................................ ........... 0.400000 0.000 1.0000 ........... 0.322725 0.000 1.0000
108............................................ ........... 0.400000 0.000 1.0000 ........... 0.337441 0.000 1.0000
109............................................ ........... 0.400000 0.000 1.0000 ........... 0.351544 0.000 1.0000
110............................................ ........... 0.400000 0.000 1.0000 ........... 0.364617 0.000 1.0000
111............................................ ........... 0.400000 0.000 1.0000 ........... 0.376246 0.000 1.0000
112............................................ ........... 0.400000 0.000 1.0000 ........... 0.386015 0.000 1.0000
113............................................ ........... 0.400000 0.000 1.0000 ........... 0.393507 0.000 1.0000
114............................................ ........... 0.400000 0.000 1.0000 ........... 0.398308 0.000 1.0000
115............................................ ........... 0.400000 0.000 1.0000 ........... 0.400000 0.000 1.0000
116............................................ ........... 0.400000 0.000 1.0000 ........... 0.400000 0.000 1.0000
117............................................ ........... 0.400000 0.000 1.0000 ........... 0.400000 0.000 1.0000
118............................................ ........... 0.400000 0.000 1.0000 ........... 0.400000 0.000 1.0000
119............................................ ........... 0.400000 0.000 1.0000 ........... 0.400000 0.000 1.0000
120............................................ ........... 1.000000 0.000 1.0000 ........... 1.000000 0.000 1.0000
--------------------------------------------------------------------------------------------------------------------------------------------------------
(e) Tables for plan years beginning during 2007. The following
tables are to be used for determining current liability under section
412(l)(7)(C)(ii) for plan years beginning during 2007.
[[Page 72267]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Male Female
------------------------------------------------------------------------------------------------
Optional
Age Non-annuitant Annuitant Optional Non-annuitant Annuitant combined table
table table combined table table table for small
for small plans plans
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................................... 0.000408 0.000408 0.000408 0.000366 0.000366 0.000366
2...................................................... 0.000276 0.000276 0.000276 0.000239 0.000239 0.000239
3...................................................... 0.000229 0.000229 0.000229 0.000178 0.000178 0.000178
4...................................................... 0.000178 0.000178 0.000178 0.000133 0.000133 0.000133
5...................................................... 0.000163 0.000163 0.000163 0.000121 0.000121 0.000121
6...................................................... 0.000156 0.000156 0.000156 0.000113 0.000113 0.000113
7...................................................... 0.000150 0.000150 0.000150 0.000106 0.000106 0.000106
8...................................................... 0.000138 0.000138 0.000138 0.000094 0.000094 0.000094
9...................................................... 0.000134 0.000134 0.000134 0.000090 0.000090 0.000090
10..................................................... 0.000136 0.000136 0.000136 0.000090 0.000090 0.000090
11..................................................... 0.000140 0.000140 0.000140 0.000092 0.000092 0.000092
12..................................................... 0.000146 0.000146 0.000146 0.000095 0.000095 0.000095
13..................................................... 0.000154 0.000154 0.000154 0.000099 0.000099 0.000099
14..................................................... 0.000167 0.000167 0.000167 0.000109 0.000109 0.000109
15..................................................... 0.000176 0.000176 0.000176 0.000119 0.000119 0.000119
16..................................................... 0.000186 0.000186 0.000186 0.000127 0.000127 0.000127
17..................................................... 0.000197 0.000197 0.000197 0.000135 0.000135 0.000135
18..................................................... 0.000207 0.000207 0.000207 0.000138 0.000138 0.000138
19..................................................... 0.000217 0.000217 0.000217 0.000136 0.000136 0.000136
20..................................................... 0.000226 0.000226 0.000226 0.000134 0.000134 0.000134
21..................................................... 0.000239 0.000239 0.000239 0.000132 0.000132 0.000132
22..................................................... 0.000251 0.000251 0.000251 0.000133 0.000133 0.000133
23..................................................... 0.000267 0.000267 0.000267 0.000138 0.000138 0.000138
24..................................................... 0.000282 0.000282 0.000282 0.000144 0.000144 0.000144
25..................................................... 0.000301 0.000301 0.000301 0.000152 0.000152 0.000152
26..................................................... 0.000331 0.000331 0.000331 0.000164 0.000164 0.000164
27..................................................... 0.000342 0.000342 0.000342 0.000171 0.000171 0.000171
28..................................................... 0.000352 0.000352 0.000352 0.000180 0.000180 0.000180
29..................................................... 0.000369 0.000369 0.000369 0.000190 0.000190 0.000190
30..................................................... 0.000398 0.000398 0.000398 0.000212 0.000212 0.000212
31..................................................... 0.000447 0.000447 0.000447 0.000257 0.000257 0.000257
32..................................................... 0.000503 0.000503 0.000503 0.000293 0.000293 0.000293
33..................................................... 0.000565 0.000565 0.000565 0.000323 0.000323 0.000323
34..................................................... 0.000629 0.000629 0.000629 0.000349 0.000349 0.000349
35..................................................... 0.000692 0.000692 0.000692 0.000372 0.000372 0.000372
36..................................................... 0.000753 0.000753 0.000753 0.000394 0.000394 0.000394
37..................................................... 0.000810 0.000810 0.000810 0.000415 0.000415 0.000415
38..................................................... 0.000844 0.000844 0.000844 0.000439 0.000439 0.000439
39..................................................... 0.000875 0.000875 0.000875 0.000465 0.000465 0.000465
40..................................................... 0.000904 0.000904 0.000904 0.000506 0.000506 0.000506
41..................................................... 0.000936 0.000963 0.000936 0.000555 0.000555 0.000555
42..................................................... 0.000974 0.001081 0.000975 0.000611 0.000611 0.000611
43..................................................... 0.001018 0.001258 0.001021 0.000672 0.000672 0.000672
44..................................................... 0.001071 0.001493 0.001079 0.000738 0.000738 0.000738
45..................................................... 0.001131 0.001788 0.001146 0.000788 0.000791 0.000788
46..................................................... 0.001185 0.002142 0.001211 0.000839 0.000896 0.000840
47..................................................... 0.001244 0.002554 0.001286 0.000889 0.001054 0.000893
48..................................................... 0.001304 0.003026 0.001366 0.000962 0.001265 0.000972
49..................................................... 0.001368 0.003557 0.001457 0.001039 0.001528 0.001059
50..................................................... 0.001434 0.004146 0.001557 0.001149 0.001844 0.001184
51................
