American Benefits Council
Benefits Byte


August 3, 2015

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

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Agencies Release Updated Static Mortality Tables for Defined Benefit Plans for 2016

On July 31, the Treasury Department and Internal Revenue Service (IRS) issued Notice 2015-53 regarding updated static mortality tables for defined benefit pension plans for 2016. The Notice specifies updated mortality tables to be used for purposes of calculating pension funding requirements, benefit restrictions, lump-sum calculations, Pension Benefit Guaranty Corporation (PBGC) premium payments, and other related purposes.

As requested by the Council in our March 23, 2015, letter to Treasury and the IRS, the updated tables for 2016 do not reflect the Society of Actuaries’ (SOA) RP-2014 Mortality Tables Report and the MP-2014 Mortality Improvement Scale published late last year. Those reports are controversial, and many Council members believe they overstate mortality improvement, and would thus inflate funding liabilities, lump sums, and PBGC premiums. For this reason, the Council’s letter asked that new tables reflecting the SOA reports not be adopted until 2017 following notice and comment. 

In 2014, the Council sent letters to the SOA on May 30 and October 17 expressing concerns regarding the SOA process while urging the SOA not to rush the release of its final mortality table reports. The Council recognized the appropriateness of updating mortality assumptions to reflect greater longevity; there is considerable concern, however, among plan sponsors and within the actuarial profession that important data provided to the SOA was not considered during the process of developing the tables. In recent months, the Council has been in close contact with the Treasury Department and IRS and, as noted, formally requested a delay in the year for which the SOA tables are taken into account by Treasury and the IRS. The Council met with Treasury and IRS officials in June 2015 to outline its member concerns with the SOA’s reports. The Council continues to work with the agencies as the regulatory process unfolds.

For more information, contact Diann Howland, vice president, legislative affairs, Jan Jacobson, senior counsel, retirement policy, or Lynn Dudley, senior vice president, global retirement and compensation policy. All can be reached at (202) 289-6700.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).