IRS Updates Mortality Improvement Rates, Static Mortality Tables for 2021

IRS on Dec. 10 issued updated mortality improvement rates and static mortality tables for defined benefit plans for 2021. The update is contained in Notice 2019-67.

Notice 2019-67 specifies updated mortality improvement rates and static mortality tables to be used for DB plans under Code Section 430(h)(3)(A) and ERISA Section 303(h)(3)(A). These updated mortality improvement rates and static tables apply for calculating funding targets and other items for valuation dates that will occur during the 2021 calendar year.

Mortality Improvement Rates. The mortality improvement rates for valuation dates occurring during 2021 are the mortality improvement rates in the Mortality Improvement Scale MP-2019 Report.

Static Mortality Tables for 2021. The static mortality tables that apply under Section 430(h)(3)(A) for valuation dates occurring during 2021 are set forth in the appendix to Notice 2019-67. The mortality rates in these tables have been developed from the methodology and base mortality rates set forth in Treas. Reg. §1.430(h)(3)-1(c) and (d) using the mortality improvement rates the Notice specifies.

The static mortality table that applies under Section 417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2021 is set forth in the appendix to Notice 2019-67 in the column labeled “Unisex.” The mortality rates in this table are derived from the mortality tables specified under Section 430(h)(3)(A) for 2021 in accordance with the procedures set forth in Rev. Rul. 2007-67.

Comments Requested

The IRS also is requesting comments concerning studies the IRS could draw upon in the future.

The Treasury Department is required to revise the mortality tables used under Section 430(h)(3)(A) at least every 10 years to reflect the actual mortality experience of pension plans and projected trends in that experience. On Oct. 23, 2019, the Retirement Plans Experience Committee (RPEC) released the Pri-2012 Private Retirement Plans Mortality Tables Report; the tables it contains are based on a study of mortality experience of private-sector DB plans in the United States covering calendar years 2010 through 2014.

Specifically, the IRS seeks comments on:

• whether there are other studies of actual mortality experience of individuals covered by pension plans and projected trends in that experience that the IRS should consider for use in developing mortality tables in the future; and
• which of the tables in the Pri-2012 Mortality Tables Report should be used to develop Section 430(h)(3)(A) mortality tables, if the Pri-2012 Mortality Tables Report were to be used for that purpose.

Comments must be received by Feb. 28, 2020. They may be submitted:

• electronically via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and Notice 2019-0053);
• in hard copy to: CC:PA:LPD:PR (Notice 2019-67), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C., 20044; and
• by hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (Notice 2019-67), Courier's Desk, Internal Revenue Service,1111 Constitution Avenue, N.W., Washington, D.C. 20224, Attn: CC:PA:LPD:PR.