Permission Granted to Use Substitute Mortality Tables

Significant Index No.: 0430.00-00

Date: February 28, 2019

Refer Reply To: T:EP:RA:A2

Re: Substitute Mortality Table Ruling

LEGEND:

Taxpayer = * * *

Plans for which substitute mortality tables are requested (Included Group):

Plan 1 = * * *
Plan 2 = * * *

Other plan in controlled group:

Plan 3 = * * *

Dear * * *:

This letter is to inform you that your request to use substitute mortality tables for making computations under section 430 of the Internal Revenue Code (the Code) for the Included Group has been granted with respect to the populations specified in this letter, effective for a period of 10 plan years beginning with the plan year commencing January 1, * * *. Your request has been granted in accordance with section 430(h)(3) of the Code and section 303(h)(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”).

This approval applies to the following specific populations:

• Plans 1 and 2 combined — Male annuitants, excluding disabled participants

• Plans 1 and 2 combined — Female annuitants, excluding disabled participants

• Plans 1 and 2 combined — Male nonannuitants, excluding disabled participants

• Plans 1 and 2 combined — Female nonannuitants, excluding disabled participants

Based on the information provided by the Taxpayer, Plan 3 is not subject to section 430 of the Code, but is subject to Title IV of ERISA.

In granting this approval, we have only considered whether the substitute mortality rates were developed in accordance with section 1.430(h)(3)-2 of the Treasury Regulations (“Regulations”) and Revenue Procedure 2017-55. Accordingly, we are not expressing any opinion as to the accuracy or acceptability of any calculations or other material submitted with your request.

Permission is hereby granted to use the substitute mortality rates shown in the table below for the Included Group:

The above rates were developed based on an experience study period from January 1, * * * through December 31, * * *, with a base year of * * *. The rates were calculated by adjusting the applicable standard mortality tables in section 1.430(h)(3)-1(d) of the Regulations indicated in the table below, using the mortality ratio and credibility weighting factor individually determined for each population, as shown in the table below.

The Internal Revenue Service has reviewed the substitute mortality rates and supporting information, and has determined that based on the information submitted, the rates were developed in accordance with section 1.430(h)(3)-2 of the Regulations and Revenue Procedure 2017-55.

The above rates must be applied on a generational basis, as provided in section 1.430(h)(3)-2(c)(3) of the Regulations.

Your attention is called to section 430(h)(3)(C)(ii) of the Code and section 1.430(h)(3)-2(d)(6) of the Regulations, which describe the circumstances in which the use of the substitute mortality table will terminate before the end of the 10-year period described above. In general, the substitute mortality tables can no longer be used as of the earliest of:

In particular, note that under section 1.430(h)(3)-2(c)(6)(iii) a significant change in coverage occurs if the number of individuals covered by the substitute mortality table for a plan year is less than 80 percent or more than 120 percent of either (1) the average number of individuals in that population over the years covered by the experience study on which the substitute mortality table is based, or (2) the number of individuals covered by the substitute mortality table in a plan year for which a certification described in section 1.430(h)(3)-2(6)(c)(iii)(A) of the Regulations was made.

This ruling is directed only to the taxpayer that requested it. Section 6110(k)(3) of the Code provides that it may not be used or cited by others as precedent.

When filing Form 5500 for the plan years for which the substitute mortality tables are used, please note the information that is required to be attached to Schedule SB (Actuarial Information) in accordance with the instructions to that form.

We have sent a copy of this letter to your authorized representatives pursuant to a power of attorney on file in this office and to the Manager, EP Classification in Columbus, Ohio and to the Manager, EP Compliance Unit in Chicago, Illinois.

If you require further assistance in this matter, please contact * * * (ID#* * *) at * * *.

Sincerely,

David M. Ziegler, Manager
Employee Plans Actuarial Group 2

cc:
* * *