IRS Issues 2019 DB Mortality Improvement Rates and Static Mortality Tables

By John Iekel • December 20, 2017 • 0 Comments
The IRS has updated the Mortality Improvement Rates and Static Mortality Tables for Defined Benefit Pension Plans for 2019. The updated rates and tables are contained in Notice 2018-02.

On Oct. 5, 2017, the Treasury Department and the IRS had amended Treas. Reg. §1.430(h)(3)-1 to revise the mortality tables used under Section 430(h)(3)(A) for plan years beginning on or after Jan. 1, 2018.

Notice 2018-02 specifies updated mortality improvement rates and static mortality tables to be used for DB plans under Internal Revenue Code Section 430(h)(3)(A) and Section 303(h)(3)(A) of ERISA. These updated mortality improvement rates and static tables apply for calculating the funding target and other items for valuation dates occurring during calendar year 2019.

Notice 2018-02 also includes a modified unisex version of the mortality tables for use in determining minimum present value under Internal Revenue Code Section 417(e)(3) and Section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2019 calendar year.

Mortality Improvement Rates for 2019

The mortality improvement rates for valuation dates occurring during 2019 are the mortality improvement rates in the Mortality Improvement Scale MP-2017 Report.

Static Mortality Tables for 2019

The static mortality tables that apply under Section 430(h)(3)(A) for valuation dates occurring during 2019 are set forth in the appendix to the notice. The mortality rates in these tables have been developed from the base mortality rates and methodology set forth in Treas. Reg. §1.430(h)(3)-1(c) and (d) using the mortality improvement rates specified in Notice 2018-02.

The static mortality table that applies under Section 417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2019 is set forth in the appendix to Notice 2018-02 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 2019 in accordance with the procedures set forth in Rev. Rul. 2007-67.