Notice 2023-73

Notice 2023-73

PURPOSE

This notice specifies a mortality table for use in determining minimum present value under § 417(e)(3) of the Code and section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2024 calendar year.

BACKGROUND

Section 412 of the Code provides minimum funding requirements that generally apply for defined benefit plans. Section 412(a)(2) provides that § 430 sets forth the minimum funding requirements that apply to defined benefit plans that are not multiemployer plans or CSEC plans.

Section 430(h)(3) provides rules regarding the mortality tables that generally are used under § 430. Under § 430(h)(3)(A), except as provided in § 430(h)(3)(C) or (D), the Secretary is to prescribe by regulation mortality tables to be used in determining any present value or making any computation under § 430. Those tables are to be based on the actual experience of pension plans and projected trends in that experience. Section 430(h)(3)(B) requires the Secretary to revise any table in effect under § 430(h)(3)(A) at least every 10 years to reflect the actual experience of pension plans and projected trends in that experience.

In TD 9983 (88 FR 72357), the Department of the Treasury and Internal Revenue Service issued § 1.430(h)(3)-1, which provides updated mortality tables, mortality improvement rates, and static mortality tables for defined benefit pension plans, applicable for valuation dates occurring on or after January 1, 2024. Section 1.430(h)(3)-1(a) provides that the mortality tables to be used in determining present value under section 430 are the generational mortality tables described in § 1.430(h)(3)-1(b) and the static mortality tables for small plans described in § 1.430(h)(3)-1(c). The static mortality tables for small plans for valuation dates occurring in 2024, which consist of separate mortality rates that apply for each gender, are set forth in § 1.430(h)(3)-1(e).

Section 417(e)(3) generally provides that the present value of certain accelerated forms of benefit under a qualified pension plan (including single-sum distributions) must not be less than the present value of the accrued benefit using applicable interest rates and the applicable mortality table. Section 417(e)(3)(B) defines the term “applicable mortality table” as the mortality table specified for the plan year under § 430(h)(3)(A) (without regard to § 430(h)(3)(C) or (D)), modified as appropriate by the Secretary.

Rev. Rul. 2007-67, 2007-2 CB 1047, provides that, except as otherwise stated in future guidance, the applicable mortality table under § 417(e)(3) is a static mortality table set forth in published guidance that is developed based on a fixed blend of 50 percent of the static male combined mortality rates and 50 percent of the static female combined mortality rates used under § 1.430(h)(3)-1. Rev. Rul. 2007-67 also provides that the applicable mortality table for a calendar year applies to distributions with annuity starting dates that occur during stability periods that begin during that calendar year.

STATIC MORTALITY TABLE APPLICABLE UNDER § 417(e)(3) FOR 2024

The static mortality table that applies under § 417(e)(3) for distributions with annuity starting dates occurring during stability periods beginning in 2024 is set forth in the appendix to this notice. The mortality rates in this table are derived from the mortality tables specified under § 430(h)(3)(A) for 2024 in accordance with the procedures set forth in Rev. Rul. 2007-67.

Drafting Information

The principal authors of this notice are Arslan Malik and Linda S. F. Marshall of the Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further information regarding this notice, contact Arslan Malik or Linda Marshall at (202) 317-6700 (not a toll-free number).

APPENDIX Mortality Table for Distributions Subject to § 417(e)(3) with Annuity Starting Dates during Stability Periods That Begin in 2024