Written By John R. Markley (ASA, FCA, MAAA, FSPA, CPC)
For the last several years, in August and September, Pension sponsors and actuaries have been waiting anxiously to know whether new updated mortality tables would apply for lump sum distributions and funding requirements. The new mortality tables would reflect more recent improved experience and would result in increased plan liabilities for termination, lump sums, funding requirements, and PBGC premiums.
The RP 2000 mortality tables currently utilized were implemented in 2008 and the Pension Protection Act indicated that the tables had to be updated every 10 years. So, 2018 would be the last possible year for the new mortality tables, correct?
The IRS recently sent the final mortality regulations to the OMB (Office of Management and Budget). The OMB can take up to 90 days to release the regulations. There are many issues to be resolved before the regulations are to be released, including whether the “two regulation reduction for each regulation added” guidance of the Trump administration applies. In the last two years, the mortality tables were released in late August or early September. So, I am writing this update to let Pension Plan sponsors know that the RP 2000 mortality tables may continue to apply for 2018.
Impact for Pension Plan Sponsors
What can another year do for your Pension Plan? The stock market is up and with another year for contributions, is funding the Plan on a termination basis within reach?
The next month will give the answer to whether an additional year with old mortality tables will apply. We will let you know as soon as possible when the final conclusion is reached!
Regardless of the conclusion of this issue, Markley Actuarial can help guide your Pension Plan through challenging times. Contact us for additional information.