Internal Revenue Bulletin 2017-43 (PDF rendition): IRS Notices

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

# INTERNAL REVENUE BULLETIN

IRS

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## ADMINISTRATIVE

### T.D. 9826, page 337.

This document contains final regulations prescribing mortality
tables to be used by most defined benefit pension plans. The
tables specify the probability of survival year-by-year for an
individual based on age, gender, and other factors. This infor-
mation is used (together with other actuarial assumptions) to
calculate the present value of a stream of expected future
benefit payments for purposes of determining the minimum
funding requirements for a defined benefit plan. These mortal-
ity tables are also relevant in determining the minimum re-
quired amount of a lump-sum distribution from such a plan. In
addition, this document contains final regulations updating the
requirements that a plan sponsor must meet to obtain IRS
approval to use mortality tables specific to the plan for mini-
mum funding purposes (instead of using the generally applica-
ble mortality tables). These regulations affect participants in,
beneficiaries of, employers maintaining, and administrators of
certain retirement plans.

### Rev. Proc. 2017-55, page 373.

This revenue procedure sets forth the procedure by which the
sponsor of a defined benefit plan that is subject to the funding
requirements of § 430 of the Internal Revenue Code may
request approval from the Internal Revenue Service for the use
of plan-specific substitute mortality tables in accordance with
§ 430(h)(3)(C) and § 1.430(h)(3)-2 of the Treasury Regulations.

Bulletin No.

2017-43

October 23,

2017

## INCOME TAX

Notice 2017-56, page 365.

Notice 2017-56 provides relief under I.R.C. § 937 to individ-
uals who would otherwise qualify as bona fide residents of
Puerto Rico and the U.S. Virgin Islands, but for their need to
leave (or inability to return to) these territories as a result of
Hurricanes Irma or Maria. Notice 2017-56 expands the 14-day
period under Treas. Reg. § 1.937-1(c)(3)(i)(C)(1) to a fixed
period of 117 days beginning on September 6, 2017, and
ending on December 31, 2017. An affected individual who is
outside of an impacted U.S. territory on any day during this
117-day period will be treated as leaving or being unable to
return to the relevant U.S. territory as a result of Hurricane
Irma and Hurricane Maria on such day.

### Rev. Proc. 2017-46, page 372.

This revenue procedure supplements Section 3 of Rev. Proc.
2014-64 by providing an updated list of countries with which
the United States has in force an information exchange agree-
ment, such that bank deposit interest paid to residents of such
countries must be reported by payors to the extent required
under Treas. Reg. §§ 1.6049-4(b)(5) and 1.6049-8(a). This
revenue procedures also supplements Section 4 of Rev. Proc.
2014-64 by providing an updated list of countries with which
the Treasury Department and the IRS have determined that it is
appropriate to have an automatic exchange relationship with
respect to bank deposit interest income information under
§§ 1.6049-4(b)(5) and 1.6049-8(a). This supplement adds
two countries (Faroe Islands and Greenland) to the Section 3
list and two countries (Croatia and Panama) to the Section 4
list.

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## EMPLOYEE PLANS

### Notice 2017-60, page 365.

This notice sets forth the mortality table that is used for
purposes of determining minimum present value under
§ 417(e)(3) of the Internal Revenue Code for 2018. This notice
also sets forth static mortality tables for 2018 determined
under the methodology of § 1.430(h)(3)-1 prior to its amend-
ment, which apply for certain plans.

### Rev. Proc. 2017-55, page 373.

This revenue procedure sets forth the procedure by which the
sponsor of a defined benefit plan that is subject to the funding
requirements of § 430 of the Internal Revenue Code may
request approval from the Internal Revenue Service for the use
of plan-specific substitute mortality tables in accordance with
§ 430(h)(3)(C) and § 1.430(h)(3)-2 of the Treasury Regulations.

## EXCISE TAX

Notice 2017-61, page 371.

Sections 4375 and 4376, added to the Code by the Affordable
Care Act, impose a fee on issuers of specified health insurance
policies and plan sponsors of applicable self-insured health
plans to help fund the Patient-Centered Outcomes Research
Trust Fund (PCORTF). This notice provides that the adjusted
applicable dollar amount that applies for determining the
PCORTF fee for policy years and plan years ending on or after
October 1, 2017 and before October 1, 2018, is $2.39. This
adjusted applicable dollar amount has been determined using
the percentage increase in the projected per capita amount of
the National Health Expenditures published by HHS in February
2017.

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## The IRS Mission

Provide America's taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury's Office of the Assistant Sec-
retary (Enforcement).

### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

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# Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

26 CFR 1.430(h)(3)-1 Mortality tables used to de-
termine present value;

26 CFR 1.430(h)(3)-2 Plan-specific substitute mor-
tality tables used to determine present value

## T.D. 9826

DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1

## Mortality Tables for Determining Present Value under Defined Benefit Pension Plans

AGENCY: Internal Revenue Service (IRS),
Treasury.

ACTION: Final regulations.

SUMMARY: This document contains fi-
nal regulations prescribing mortality ta-
bles to be used by most defined benefit
pension plans. The tables specify the
probability of survival year-by-year for an
individual based on age, gender, and other
factors. This information is used (together
with other actuarial assumptions) to cal-
culate the present value of a stream of
expected future benefit payments for pur-
poses of determining the minimum fund-
ing requirements for a defined benefit
plan. These mortality tables are also rele-
vant in determining the minimum required
amount of a lump-sum distribution from
such a plan. In addition, this document
contains final regulations updating the re-
quirements that a plan sponsor must meet
to obtain IRS approval to use mortality
tables specific to the plan for minimum
funding purposes (instead of using the
generally applicable mortality tables).
These regulations affect participants in,
beneficiaries of, employers maintaining,

and administrators of certain retirement
plans.

DATES: Effective date: These regulations
are effective on October 5, 2017.

Applicability date: These regulations
apply to plan years beginning on or after
January 1, 2018.

FOR FURTHER INFORMATION
CONTACT: Concerning the regulations,
Arslan Malik at (202) 317-6700; concern-
ing the construction of the base mortality
tables and the static mortality tables for
2018, Michael Spaid at (206) 946-3480.

## SUPPLEMENTARY INFORMATION:

### Background

A. Generally Applicable Mortality
Tables

Section 412 of the Internal Revenue
Code (Code) prescribes minimum funding
requirements for defined benefit pension
plans. Section 430 specifies the minimum
funding requirements that apply generally
to defined benefit plans that are not mul-
tiemployer plans.1 Section 430(a) defines
the minimum required contribution for a
plan year by reference to the plan's fund-
ing target for the plan year. Under section
430(d)(1), a plan's funding target for a
plan year generally is the present value of
all benefits accrued or earned under the
plan as of the first day of that plan year.

Section 430(h)(3) contains rules regard-
ing the mortality tables to be used under
section 430. Under section 430(h)(3)(A),
except as provided in section 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 section 430. Those
mortality tables must be based on the ac-
tual mortality experience of pension plan
participants and projected trends in that

experience. In prescribing those mortality
tables, the Secretary is required to take
into account results of available indepen-
dent studies of mortality of individuals
covered by pension plans.2 Under section
430(h)(3)(B), the Secretary is required to
make revisions to any table in effect under
section 430(h)(3)(A) at least every 10
years to reflect actual mortality experience
of pension plan participants and projected
trends in that experience.

Section 430(h)(3)(C) prescribes rules
for a plan sponsor's use of substitute mor-
tality tables reflecting the specific mortality
experience of a plan's population instead of
using the generally applicable mortality ta-
bles. Under section 430(h)(3)(C), the plan
sponsor may request the Secretary's ap-
proval to use plan-specific substitute mortal-
ity tables that meet requirements specified in
the statute.

Section 430(h)(3)(D) provides for the
use of separate mortality tables with re-
spect to certain individuals who are enti-
tled to benefits on account of disability.
These separate mortality tables are permit-
ted to be used with respect to disabled indi-
viduals in lieu of the generally applicable
mortality tables provided pursuant to section
430(h)(3)(A) or the substitute mortality ta-
bles under section 430(h)(3)(C). The Secre-
tary is to establish separate tables for indi-
viduals with disabilities occurring in plan
years beginning before January 1, 1995, and
in later plan years, with the mortality tables
for individuals with disabilities occurring in
those later plan years applying only to indi-
viduals who are disabled within the mean-
ing of Title II of the Social Security Act.

Final regulations (TD 9419) under sec-
tion 430(h)(3) were published in the Fed-
eral Register for July 31, 2008 (73 FR
44632). The final regulations issued in
2008 include rules regarding generally ap-
plicable mortality tables, which are set
forth in § 1.430(h)(3)-1 (the 2008 general

1Section 302 of the Employee Retirement Income Security Act of 1974, Public Law No. 93-406, as amended (ERISA), sets forth funding rules that are parallel to those in section 412 of
the Code, and section 303 of ERISA sets forth additional funding rules for defined benefit plans (other than multiemployer plans) that are parallel to those in section 430 of the Code. Under
section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713) and section 302 of ERISA, the Secretary of the Treasury has interpretive jurisdiction over the subject matter addressed
in these regulations for purposes of ERISA, as well as the Code. Thus, these Treasury regulations issued under section 430 of the Code also apply for purposes of section 303 of ERISA.

2The standards prescribed for developing these mortality tables are the same as the standards that are prescribed for developing mortality tables for multiemployer plans under section
431(c)(6)(D)(iv)(II) (which are used to determine current liability as part of the calculation of the minimum full funding limitation under section 431(c)(6)(B)). These standards also apply
for purposes of determining current liability as part of the calculation of the minimum full funding limitation under section 433(c)(7)(C) for a CSEC plan (as defined in section 414(y)).

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mortality table regulations), as well as
rules regarding substitute mortality tables,
which are set forth in § 1.430(h)(3)-2 (the
2008 substitute mortality table regula-
tions).

The 2008 general mortality table regu-
lations prescribe a base mortality table
and a set of mortality improvement rates
that are used to project mortality rates for
years after the year 2000. The mortality
tables included in those regulations are
based on the mortality tables included in
the RP-2000 Mortality Tables Report
(based on an experience study for the pe-
riod 1990-1994 and referred to in this
preamble as the RP-2000 mortality ta-
bles) released by the Society of Actuaries
in July 2000 (updated in May 2001). The
mortality improvement rates included in
those regulations are the Scale AA Pro-
jection Factors (which are based on mor-
tality improvement for the period 1977
through 1993), which were included in the
RP-2000 Mortality Tables Report for use
in conjunction with the RP-2000 mortal-
ity tables.3

The 2008 general mortality table regu-
lations prescribe the use of generational
mortality tables,4 but include an option for
plans to use static mortality tables. The
static mortality tables (which are updated
annually) use a single mortality table for
all years of birth to approximate the pres-
ent value that would be determined using
the generational mortality tables. The
2008 general mortality table regulations
set forth static mortality tables for valua-
tion dates occurring in 2008 and provide
that static mortality tables for valuation
dates occurring in later years will be pub-
lished in the Internal Revenue Bulletin.
Static mortality tables for valuation dates
occurring during 2009-2013 were pub-
lished in Notice 2008-85 (2008-1 C.B.
747 (March 28, 2008)). Updated static
mortality tables for valuation dates occur-
ring during 2014 and 2015 were published
in Notice 2013-49 (2013-32 I.R.B. 127
(July 10, 2013)). Updated static mortality
tables for valuation dates occurring in 2016
and 2017 were published in Notice 2015-53
(2015-33 I.R.B. 190 (July 31, 2015)) and

Notice 2016-50 (2016-38 I.R.B. 371 (Sep-
tember 2, 2016)), respectively.

Notice 2013-49 also requested com-
ments on whether a separate disability
mortality table is still warranted with re-
spect to participants who became disabled
before 1995. In addition, Notice 2013-49
noted that the Treasury Department (Trea-
sury) and the IRS were aware that the
Society of Actuaries was conducting a
mortality study of pension plan partici-
pants and specifically requested com-
ments on whether other studies of actual
mortality experience of pension plan
participants and projected trends of that
experience were available that should be
considered for use in developing mor-
tality tables for future use under section
430(h)(3).

In October 2014, the Retirement Plans
Experience Committee (RPEC) of the So-
ciety of Actuaries issued a new mortality
study of participants in private pension
plans. The study, which is based on mor-
tality experience for the years 2004 to
2008, is referred to as the RP-2014 Mor-
tality Tables Report (and sets forth mor-
tality tables that are referred to as the
RP-2014 mortality tables). The RP-2014
Mortality Tables Report, as revised No-
vember 2014, is available at www.soa.
org/Research/Experience-Study/pension/
research-2014-rp.aspx. At the same time,
RPEC issued a companion study of mor-
tality improvement, referred to as the
Mortality Improvement Scale MP-2014
Report (which sets forth mortality im-
provement rates that are referred to as the
Scale MP-2014 rates). As described in the
Mortality Improvement Scale MP-2014
Report (available at www.soa.org/
Research/Experience-Study/pension/
research-2014-mp.aspx), the Scale MP-
2014 rates were based on mortality
improvement experience for the general
population through 2009.

In October 2015, RPEC released an
update to the Scale MP-2014 rates. The
updated rates, referred to as the Scale
MP-2015 rates, were released as part of
the Mortality Improvement Scale MP-
2015 Report (available at https://www.
soa.org/Research/Experience-Study/Pension/

research-2015-mp.aspx). The Scale MP-
2015 rates were created using historical data
for mortality improvement for the general
population through 2011 and the same
model and parameters that were used to
produce the Scale MP-2014 rates. In con-
junction with the release of the updated
rates, RPEC indicated the intent to reflect
the latest data available by providing future
annual updates to the model as soon as
practicable following the public release of
updated data upon which the model is
constructed.

In October 2016, RPEC released a fur-
ther update to the Scale MP-2014 rates,
which are referred to as the Scale MP-
2016 rates. The Scale MP-2016 rates take
into account data for mortality improve-
ment for the general population for 2012
and 2013, along with an estimate of mor-
tality rates for 2014. As described in the
Mortality Improvement Scale MP-2016
Report (available at www.soa.org/Research/
Experience-Study/Pension/research-2016-
mp.aspx), in developing the Scale MP-2016
rates, RPEC changed some of the parame-
ters from those that were used in developing
the Scale MP-2014 rates.

#### B. Plan-Specific Substitute Mortality Tables

Section 430(h)(3)(C) permits a plan
sponsor to request approval by the Secre-
tary to use plan-specific substitute mortal-
ity tables in lieu of the generally applica-
ble mortality tables. If the Secretary
determines that the proposed tables meet
the statutory standards and approves the
request, the substitute mortality tables are
used to determine present values and
make computations under section 430
during the period of consecutive plan
years (not to exceed 10) specified in the
request. Under the statute, a substitute
mortality table may be used for a plan,
only if: (1) the plan has a sufficient num-
ber of plan participants and has been
maintained for a sufficient period of time
to have credible mortality information
necessary to create a substitute mortality
table; and (2) the table reflects the actual
mortality experience of the plan's partic-

3The RP-2000 Mortality Tables Report is available at https://www.soa.org/experience-studies/2000-2004/research-rp-2000-mortality-tables/.

4Generational mortality tables are a series of mortality tables, one for each year of birth, each of which fully reflects projected trends in mortality for individuals who are born in a particular
year.

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ipants and projected trends in general
mortality experience. Except as provided
by the Secretary, a plan sponsor may not
use substitute mortality tables for any plan
unless substitute mortality tables are es-
tablished and used for each plan main-
tained by the plan sponsor or a member of
its controlled group.

The 2008 substitute mortality table
regulations provide for review by the
Commissioner of a plan sponsor's request
for approval to use substitute mortality
tables. Under those regulations, to use
substitute mortality tables with respect to
a plan, a plan sponsor must submit a writ-
ten request to the Commissioner that dem-
onstrates that those substitute mortality
tables comply with applicable require-
ments. A request for approval to use sub-
stitute mortality tables must specify the
first plan year and the term of years for
which the tables are requested to be used.

Substitute mortality tables may not be
used for a plan year unless the plan spon-
sor submits the request at least 7 months
before the first day of the first plan year
for which the substitute mortality tables
are to apply. The Commissioner has 180
days to review a request for approval to
use substitute mortality tables. If the Com-
missioner does not deny the request
within this 180-day period, the request is
deemed to have been approved unless the
Commissioner and the plan sponsor have
agreed to extend that period.

Under the 2008 substitute mortality ta-
ble regulations, substitute mortality tables
for a plan must be established separately
for each gender, and a substitute mortality
table may be established for a gender only
if there is credible mortality experience
with respect to that gender. If the mortal-
ity experience for one gender is credible
but the mortality experience for the other
gender is not credible, the substitute mor-
tality tables are used for the gender that
has credible mortality experience, and the
generally applicable mortality tables are
used for the gender that does not have
credible mortality experience.

Under the 2008 substitute mortality ta-
ble regulations, there is credible mortality
experience with respect to a gender if and
only if, over the period covered by the
experience study, there are at least 1,000
deaths of individuals of that gender.5 For
this purpose, the minimum length of the
experience study period is 2 years and the
maximum length of the experience study
period generally is 5 years. Furthermore,
the last day of the final year reflected in
the experience data must be less than three
years before the first day of the first plan
year for which the substitute mortality ta-
bles are to apply.

Under the 2008 substitute mortality ta-
ble regulations, development of substitute
mortality tables for a plan requires cre-
ation of a base table and identification of a
base year, which are then used to deter-
mine the substitute mortality tables. The
base table must be developed from a
study of the mortality experience of the
plan using amounts-weighted data. Un-
der those regulations, a plan's substitute
mortality tables must be generational mor-
tality tables that are determined using the
base mortality tables developed from the
experience study and the Scale AA Pro-
jection Factors (that is, using the same
basis for mortality improvement that is
used under 2008 general mortality table
regulations).

Under the 2008 substitute mortality ta-
ble regulations, the use of substitute mor-
tality tables is terminated early in certain
circumstances, including pursuant to a re-
placement of the generally applicable
mortality tables. The early termination pur-
suant to such a replacement must be effec-
tive as of a date specified in guidance pub-
lished in the Internal Revenue Bulletin.

Rev. Proc. 2008-62 (2008-2 C.B. 935)
sets forth the procedure by which a plan
sponsor of a defined benefit plan may re-
quest and obtain approval to use plan-
specific substitute mortality tables in ac-
cordance with section 430(h)(3)(C). The
revenue procedure specifies the informa-
tion that must be provided in a request for
approval to use substitute mortality tables

and specifies two alternative acceptable
methods of construction for base substi-
tute mortality tables. Under section 11 of
Rev. Proc. 2008-62, a base table for a
population may be created from the unad-
justed base table for the population through
the application of a graduation method gen-
erally used by the actuarial profession in the
United States.6 Section 12 of Rev. Proc.
2008-62 provides for an alternative method
of constructing a base table through the ap-
plication of a fixed percentage to the mor-
tality rates of a standard mortality table,
projected to the base year.

Section 503 of the Bipartisan Budget
Act of 2015, Public Law No. 114-74 (129
Stat. 584 (2015)), which was enacted No-
vember 2, 2015, provides for changes to
the rules on the use of substitute mortality
tables. Under that section, "the determina-
tion of whether plans have credible infor-
mation shall be made in accordance with
established actuarial credibility theory,
which (1) is materially different from the
rules under [section 430(h)(3)(C)], includ-
ing Revenue Procedure 2007-37,7 that are
in effect on [November 2, 2015]; and (2)
permits the use of tables that reflect adjust-
ments to the tables described in [section
430(h)(3)(A) and (B)]" if those adjust-
ments are based on the actual experience
of the pension plan maintained by the plan
sponsor.

Proposed regulations regarding revi-
sions to mortality tables under section
430(h)(3) (REG-112324-15) were pub-
lished in the Federal Register on De-
cember 29, 2016 (81 FR 95911). The
proposed regulations contain revisions
to the generally applicable mortality ta-
bles (based on the RP-2014 Mortality Ta-
bles Report), as well as new rules regard-
ing substitute mortality tables that reflect
section 503 of the Bipartisan Budget Act
of 2015. Comments were received on the
proposed regulations, and a public hearing
was held on April 13, 2017. After consid-
eration of the comments, the proposed
regulations are adopted by this Treasury
decision subject to certain changes, the
most significant of which are described in

5The 1,000-death threshold for credible mortality experience under the regulations was intended to provide a high degree of confidence that the plan's past mortality experience will be
predictive of its future mortality, and is consistent with relevant actuarial literature (see, for example, Thomas N. Herzog, Introduction to Credibility Theory (1999); Stuart A. Klugman,
et. al., Loss Models: From Data to Decisions (2004)).

6The revenue procedure identifies the Whittaker-Henderson Type B graduation method or the Karup-King graduation method as acceptable methods.

7Rev. Proc. 2007-37, 2007-1 CB 1433, was not in effect on November 2, 2015. It was issued in 2007 in conjunction with proposed regulations regarding substitute mortality tables
(REG-143601-06, 72 FR 29456) and was replaced by Rev. Proc. 2008-62 when those regulations were finalized in 2008.

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this preamble under the heading Explana-
tion of Provisions.

### Explanation of Provisions

#### I. Overview

These final regulations revise the meth-
odology for developing the generally ap-
plicable mortality tables that are used to
determine present value or make any com-
putation under section 430. Pursuant to
section 417(e)(3)(B), a modified version
of these tables will be used for purposes of
determining the amount of a single-sum dis-
tribution (or another accelerated form of dis-
tribution). This revised methodology for de-
veloping tables under section 430(h)(3)(A)
is being issued pursuant to the requirement
under section 430(h)(3)(B) to revise the
mortality tables used under section 430 at
least every 10 years to reflect the actual
mortality experience of pension plan par-
ticipants and projected trends in that ex-
perience. As under the 2008 general mor-
tality table regulations, the methodology
involves the separate determination of
base tables and the projection of mortality
improvement.

These regulations also revise the rules
regarding substitute mortality tables. This
revision is being made pursuant to section
503 of the Bipartisan Budget Act of 2015,
which requires that the determination of
whether a plan has credible information
be made in accordance with established
actuarial credibility theory. Following en-
actment of that requirement, Treasury and
the IRS undertook a review of actuarial
literature regarding credibility theory and
consulted with experts on that topic from
the Society of Actuaries. Based on that
review and analysis, these regulations set
forth a method for developing substitute
mortality tables that is materially different
from the method that is required under the
2008 substitute mortality table regulations
and the associated revenue procedure. The
method for developing substitute mortal-
ity tables that is set forth in the final
regulations is simpler than the graduation
method that applies under the 2008 sub-
stitute mortality table regulations and also
accommodates the use of substitute mor-

tality tables for plans with smaller popu-
lations that have only partially credible
mortality experience.

#### II. Generally Applicable Mortality Tables

##### A. Base Mortality Tables

Under these regulations, the generally
applicable base mortality tables are de-
rived from the tables contained in the RP-
2014 Mortality Tables Report. In response
to Notice 2013-49, commenters generally
recommended that the RP-2014 mortality
tables form the basis for the mortality
tables used under section 430. After re-
viewing the RP-2014 mortality tables, the
accompanying report published by the So-
ciety of Actuaries, and related public com-
ments, Treasury and the IRS determined
that the experience study used to develop
the RP-2014 mortality tables is the best
available study of the actual mortality ex-
perience of pension plan participants
(other than disabled individuals). As a re-
sult, Treasury and the IRS issued pro-
posed regulations that use the RP-2014
mortality tables as the foundation for the
base mortality tables used to project the
mortality rates of pension plan partici-
pants (other than disabled individuals).8

Most commenters supported the selec-
tion of the base mortality tables in the
proposed regulations. One commenter op-
posed this selection but did not suggest
any alternative. Accordingly, the base
mortality tables under these final regula-
tions are the same as in the proposed
regulations. Like the mortality tables pro-
vided in the 2008 general mortality table
regulations, the mortality tables under
these final regulations are gender-distinct
because of significant differences between
expected male mortality and expected fe-
male mortality. In addition, as under the
2008 general mortality table regulations,
these regulations set forth separate mor-
tality rates for annuitants and nonannui-
tants.

The base tables that are set forth in
these final regulations are used to develop
the mortality tables for future years. These
base tables have a base year of 2006 (the

central year of the experience study used
to develop the mortality tables in the RP-
2014 Mortality Tables Report). These
base tables generally have the same mor-
tality rates as the RP-2014 mortality ta-
bles after factoring out the mortality im-
provements from 2007 to 2014 (calculated
using the Scale MP-2014 rates). How-
ever, these base tables also include non-
annuitant mortality rates for ages below
age 18 and above age 80 and annuitant
mortality rates for ages below age 50. This
generally is the same approach that was
used to develop the base tables included in
the 2008 general mortality table regulations.

#### B. Mortality Improvement and Static Mortality Tables

The proposed regulations, like the
2008 general mortality table regulations,
provided that expected trends in mortality
experience must be taken into account
through the use of either generational or
annually updated static mortality tables. In
accordance with section 430(h)(3)(B), the
proposed regulations updated the mortal-
ity improvement rates used under the
2008 general mortality table regulations.
To select up-to-date mortality improve-
ment rates, Treasury and the IRS reviewed
the Mortality Improvement Scale MP-
2014 Report, related public comments, the
data sources cited in those comments, the
Mortality Improvement Scale MP-2015
Report, the Mortality Improvement Scale
MP-2016 Report, and other published
data sources.9 After that review, Treasury
and the IRS issued proposed regulations
that applied the MP-2016 rates to develop
mortality tables for use in 2018.

Some commenters supported the se-
lection of the mortality improvement rates
in the proposed regulations, while other
commenters expressed concerns about the
selection of those rates. Those comment-
ers who expressed concern about the mor-
tality improvement rates noted that the
selection of a long-term mortality im-
provement rate assumption is inherently
speculative and cautioned against using
the assumptions regarding the rate of
long-term mortality improvement that

8Mortality tables that may be used as an alternative to the tables provided in these regulations with respect to certain disabled individuals are provided in Rev. Rul. 96-7 (1996-1 CB 59).
9See the August 2013 Literature Review and Assessment of Mortality Improvement Rates in the U.S. Population: Past Experience and Future Long-Term Trends, available at
www.soa.org/Files/Research/Exp-Study/research-2013-lit-review.pdf.

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were used by RPEC (which are a long-
term rate of 1.0 percent per year for ages
85 and younger, grading down to 0.85
percent at age 95, and further grading
down to 0 at age 115). Instead of the
RPEC assumptions, these commenters
suggested that Treasury and the IRS use
assumptions regarding the rate of long-
term mortality improvement that are
closer to the rates that are used by the
Office of the Actuary within the Social
Security Administration. Those rates also
vary by age group, and the documentation
accompanying the 2017 report of the
Board of Trustees of the Federal Old-Age,
Survivors Insurance and Disability Insur-
ance Trust Funds indicates that, under the
intermediate assumptions (which reflect
the Trustees' best estimates of future ex-
perience), the weighted average over all
ages of those assumed long-term mortality
improvement rates is 0.72 percent per
year.10

Treasury and the IRS carefully consid-
ered the assumptions used by Office of the
Actuary within the Social Security Ad-
ministration and compared it with the
long-term assumptions currently recom-
mended by RPEC. In evaluating the mer-
its of each, Treasury and the IRS took into
consideration the views of the Technical
Panel of the Social Security Advisory
Board. The Social Security Advisory
Board is an independent federal govern-
ment agency, and the Technical Panel,
which is comprised of actuaries, econo-
mists and demographers, is charged by the
Advisory Board with reviewing the as-
sumptions and methods used in the annual
report of the Board of Trustees of the
Federal Old-Age, Survivors Insurance and
Disability Insurance Trust Funds. The
Technical Panel, which issues a report
every 4 years, has consistently recom-
mended that the mortality improvement
assumption used by the Office of the Ac-
tuary be increased.11 In addition, the Con-
gressional Budget Office uses a faster rate
of mortality improvement in evaluating

Social Security solvency than the Office
of the Actuary.12

After review and consideration of the
comments, the documentation accompa-
nying the Trustees' Report, and the views
of the Technical Panel of the Social Se-
curity Advisory Board, Treasury and the
IRS have concluded that the procedures
that RPEC used to develop the Scale MP-
2016 rates generate mortality improve-
ment rates that currently are the appropri-
ate rates for use in developing mortality
tables to be used for purposes of pension
funding. Accordingly, these regulations
provide that the mortality improvement
rates for valuation dates in 2018 are the
Scale MP-2016 rates.

Treasury and the IRS understand that
RPEC expects to issue updated mortality
improvement rates that reflect new data
for mortality improvement trends for the
general population on an annual basis. As
noted by the commenters, while the rate of
mortality improvement has fluctuated sig-
nificantly on a year-to-year basis, there
has been a significant reduction in the rate
of improvement over the past few years
compared to the rate of improvement for
the past 25 years. RPEC has indicated the
intent to continually review the methodol-
ogy used in its mortality improvement
model in an effort to improve the overall
effectiveness of the model, especially with
respect to year-over-year stability and
forecast accuracy, and it has identified the
assumed long-term rate of mortality im-
provement and graduation techniques as
two of the items included in this review.
In establishing the mortality improvement
rates to be used under section 430(h)(3)
for valuation dates in years after 2018,
Treasury and the IRS will continue to take
into account RPEC's updates (including
any modifications to RPEC's methodol-
ogy), as well as other sources of data or
analyses regarding mortality improve-
ment. These regulations provide that the
mortality improvement rates applicable
for those future valuation dates will be
specified in guidance to be published in

the Internal Revenue Bulletin. See
§ 601.601(d)(2)(ii)(b) of this chapter. If
Treasury and the IRS determine that sig-
nificant revisions to the mortality im-
provement rates are appropriate, the revi-
sions may first be proposed in a new
rulemaking in order to allow for public
comment before the rule is finalized.

Some commenters asked that Treasury
and the IRS commit to providing the mor-
tality improvement rates for a calendar
year at least 12 months before the start of
that year. Treasury and the IRS under-
stand that a significant motivation for this
request is to avoid the issuance of new
mortality improvement rates in the early
part of a calendar year (because issuance
of new mortality improvement rates at
that time could result in the need to revise
calculations that have already been made
in the course of preparing a plan sponsor's
financial statement as of the previous De-
cember 31). While Treasury and the IRS
intend that the mortality improvement
rates for a calendar year generally will be
issued more than 12 months in advance of
that year, the final regulations do not in-
clude a provision requiring that the mor-
tality improvement rates for a calendar
year be issued within this timeframe. Re-
taining the flexibility to issue mortality
improvement rates closer to the date they
would become effective will allow addi-
tional time for the possibility that certain
revisions to the mortality improvement
rates will first be published in proposed
form.

Other commenters requested that Trea-
sury and the IRS consider updating the
mortality tables on a less frequent basis
than annually. Although the RPEC indi-
cated its intent to issue updated mortality
improvement rates on an annual basis, the
final regulations do not require the mor-
tality improvement rates under section
430(h)(3) to be updated annually. How-
ever, to minimize the discontinuities in
mortality rates that could arise from infre-
quent updates, Treasury and the IRS con-
template that generally the rates will be

10See "The Long-Range Demographic Assumptions for the 2017 Trustees Report," Office of the Chief Actuary, Social Security Administration (July 13, 2017), at Mortality, page 17
(available at https://www.ssa.gov/OACT/TR/2017/2017_Long-Range_Demographic_Assumptions.pdf).

11See "2015 Technical Panel on Assumptions and Methods Report to the Social Security Advisory Board," available at www.ssab.gov/Details-Page/ArticleID/656/2015-Technical-Panel-
on-Assumptions-and-Methods-A-Report-to-the-Board-September-2015.

12See Comparing CBO's Long-Term Projections with Those of the Social Security Trustees: Hearing before the Subcommittee on Social Security, Committee on Ways and Means, U.S.
House of Representatives, 114th Cong. September 21, 2016 (Testimony of Keith Hall), available at https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51988-
socialsecuritytestimony.pdf".

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updated annually. If the changes from one
year to the next are minimal, Treasury and
the IRS may choose not to update the rates
for that year.

As under the 2008 general mortality
table regulations, the proposed regulations
take into account the limitations of some
current actuarial software that is not de-
signed to use generational mortality tables
and continue to permit the use of static
mortality tables. These static mortality ta-
bles, when used to determine the present
value of an annuity, approximate the pres-
ent value that would be determined using
the generational mortality tables. All but
one commenter supported the option to
use static mortality tables, and these final
regulations provide for this option. These
static tables consist of separate gender-
specific tables, which are updated annually.
The static mortality tables that will be used
for 2018 are included in these regulations.
For later years, updated static mortality ta-
bles will be set forth in guidance published
in the Internal Revenue Bulletin. See
§ 601.601(d)(2)(ii)(b) of this chapter.

##### C. Use of Section 430 Mortality Tables for Other Provisions

Section 417(e)(3) generally provides
that the present value of certain benefits
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 appli-
cable mortality table. Section 417(e)(3)(B)
defines the term "applicable mortality ta-
ble" as the mortality table specified for the
plan year for minimum funding purposes
under section 430(h)(3)(A) (without re-
gard to the rules for substitute mortality
tables under section 430(h)(3)(C) or mor-
tality tables for disabled individuals under
section 430(h)(3)(D)), modified as appro-
priate by the Secretary. The modifications
to the section 430(h)(3)(A) mortality table
used to determine the section 417(e)(3)(B)

applicable mortality table are not addressed
in these regulations and are currently pro-
vided in Revenue Ruling 2007-67 (2007-2
C.B. 1047).

As under the proposed regulations, the
final regulations provide that the same mor-
tality assumptions that apply for purposes of
section 430(h)(3)(A) and § 1.430(h)(3)-
1(a)(2) are used to determine a plan's cur-
rent liability for purposes of applying the
full-funding rules of section 431(c)(6) (in
the case of a multiemployer plan) and sec-
tion 433(c)(7)(C) (in the case of a CSEC
plan). For this purpose, a multiemployer
plan or CSEC plan is permitted to apply
either the annually-adjusted static mortality
tables or the generational mortality tables.

##### D. Effective Date

The proposed regulations provide that
the regulations will be effective beginning
in 2018. Some commenters expressed
concern that this effective date would not
allow adequate time for compliance. One
commenter requested that the effective
date of the regulations be no sooner than
18 months after the regulations are final-
ized in order to give plan sponsors ade-
quate time to plan for the higher level of
contributions that will be required under
the new mortality assumptions. Treasury
and the IRS understand that most employ-
ers have been planning for the issuance of
updated mortality tables for the purposes
of section 430 since the RP-2014 Mortal-
ity Tables Report was issued in 2014 and
many of those employers are already using
updated mortality tables for financial report-
ing purposes. Furthermore, any additional
required contributions for a plan resulting
from the adoption of the new tables will not
be due before September 15, 2019. For a
plan with a calendar plan year, this date is
81/2 months after the end of the first plan
year for which the regulations apply.13

Moreover, as described in section II.C
of this Explanation of Provisions, the

amount of a single-sum distribution com-
puted as the present value of an annuity is
determined using a mortality table that is
based on the generally applicable mortal-
ity tables used for minimum funding pur-
poses. Thus, retaining the mortality tables
under existing regulations for the 2018
plan year, as requested by some comment-
ers, would result in inappropriately de-
pressing the amount of single-sum distri-
butions payable to affected participants
during the 2018 plan year (resulting in a
permanent loss of retirement assets for
those participants). A 2013 study indicates
that approximately 56 percent of retiring
participants in a traditional defined benefit
plan with an unlimited single-sum option
choose that option.14 In addition, the Gov-
ernment Accountability Office recently is-
sued a study examining the increase in
"lump-sum window" offers - typically, lim-
ited time offers to participants who are no
longer employed by the sponsor but still
waiting for their pension benefit to begin in
the future, or retirees already receiving their
pension annuity payments.15 Similarly, Wil-
lis Towers Watson reported significant risk
transferring activity in recent years through
lump sum windows and other means.16

Because these rules were proposed in
December of 2016 to be applicable as
final regulations for plan years beginning
on and after January 1, 2018, the Treasury
Department and the IRS believe that many
plan sponsors have had adequate time to
set aside funds needed for additional pen-
sion contributions for the 2018 plan year.
Furthermore, because the steps that plan
sponsors will need to take to update their
administrative systems in response to
these final regulations are not significantly
different from the steps they would need
to take in response to the annual update of
mortality tables that has previously oc-
curred at this time of the year, the Trea-
sury Department and the IRS believe that
plan sponsors generally will have suffi-

13However, new mortality tables may affect plan operations relating to the requirements of section 436 during the 2018 plan year.

14Sudipto Banerjee, Ph.D., Employee Benefits Research Institute, Issue Brief: Annuity and Lump-Sum Decisions in Defined Benefit Plans: The Role of Plan Rules, January 2013, available
at https://www.ebri.org/pdf/briefspdf/EBRI_IB_01-13.No381.LSDs2.pdf.

15U. S. Government Accountability Office, GAO 15-74, Participants Need Better Information When Offered Lump Sums That Replace Their Lifetime Benefits (January 2015). This report
also notes the substantial financial advantages that exist for plan sponsors implementing lump sum windows and attributes the recent increase in lump-sum window offers, in part, to the
outdated mortality tables in the current regulations, which result in reduced payments to plan participants. Id. at pp. 16-17.

16Brendan McFarland, After a few ups and downs, corporate pension funding levels showed little change in 2016: Late-year rise in interest rates and stock market performance mitigate
earlier downturn in funded status, Willis Towers Watson Insider, Vol. 27, No. 2 (February 2017) at p. 3, available at https://www.towerswatson.com/en-US/Insights/Newsletters/Americas/
insider.

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cient time to make any needed changes to
these administrative systems.17

The final regulations generally retain
the effective date that was proposed, and
apply to plan years beginning on or after
January 1, 2018. In response to comments
indicating that this effective date may cre-
ate certain administrative or financial dif-
ficulties, the final regulations provide an
option that may be used in certain circum-
stances for the 2018 plan year to apply the
regulations that were formerly in effect.
Specifically, for a plan for which substi-
tute mortality tables are not used for the
2018 plan year, mortality tables deter-
mined in accordance with regulations pre-
viously in effect may be used for purposes
of applying the rules of section 430 for a
valuation date occurring during 2018 if
the plan sponsor (1) concludes that the use
of mortality tables determined in accor-
dance with the final regulations for the
plan year would be administratively im-
practicable or would result in an adverse
business impact that is greater than de
minimis, and (2) informs the actuary of
the intent to apply this option. While this
option provides significant flexibility to
plan sponsors, the use of the option will not
affect the mortality table used to determine
minimum present value for distributions
with annuity starting dates in stability peri-
ods that begin during 2018 (which is based
on the generally applicable mortality tables
under section 430(h)(3)(A) that apply if this
option is not used). Therefore, the lump-sum
distributions received by participants retir-
ing in 2018 will appropriately reflect their
expected longevity.

### III. Plan-Specific Substitute Mortality Tables

#### A. Application of Established Actuarial Credibility Theory

These final regulations contain a com-
prehensive revision of the rules regarding

plan-specific substitute mortality tables
for plans that are subject to the rules of
section 430.18 These regulations carry
over many of the rules regarding substi-
tute mortality tables from the 2008 substi-
tute mortality table regulations. However,
after analyzing the actuarial literature re-
garding credibility theory, Treasury and
the IRS made a number of changes to the
rules relating to the development of sub-
stitute mortality tables. Specifically, these
final regulations, like the proposed regu-
lations, generally require that a substitute
mortality table be constructed by multiply-
ing the mortality rates from a projected ver-
sion of the generally applicable base mor-
tality table by a mortality ratio (that is, a
ratio of the actual deaths for the population
to the expected deaths determined using the
standard mortality tables for that popula-
tion).

Use of mortality ratios (rather than pro-
viding for the graduation of raw mortality
rates as under the 2008 substitute mortal-
ity table regulations) will make it easier
for plan sponsors to develop substitute
mortality tables because it eliminates the
need to apply a complex graduation tech-
nique. It also facilitates efficient IRS re-
view of applications for approval to use
substitute mortality tables, which is par-
ticularly important in light of the other
major change made in the regulations
(permitting the use of substitute mortality
tables for a plan that has mortality expe-
rience that is only partially credible). As a
result of the changes made in these regu-
lations, Treasury and the IRS expect that
significantly more plan sponsors will re-
quest approval to use substitute mortality
tables.

#### B. Development of Substitute Mortality Tables for Plans with Full Credibility

The substitute mortality table for a
population with full credibility must be

determined by applying projected mortal-
ity improvement to a base substitute mor-
tality table developed using an experience
study of the population. Like the proposed
regulations, the final regulations use the
same general requirements for an experi-
ence study as under the 2008 substitute
mortality table regulations but reflect cer-
tain changes from the proposed regula-
tions in response to comments. Specifi-
cally, the experience study generally must
cover a period of at least 2 (and no more
than 5) consecutive 12-month periods that
ends less than 3 years before the first day
of the first plan year for which the substi-
tute mortality tables are to apply, and must
cover the same period for all populations
within a plan.19 However the final regula-
tions include an exception that permits the
use of an earlier study period if the sub-
mission is made more than 1 year (and
less than 2 years) before the first day of
the first plan year for which the substitute
mortality tables are proposed to apply.
Under this exception, the last day of the
experience study period is permitted to be
3 years or more before the first day of
the first plan year for which the substitute
mortality tables are proposed to apply,
provided that the last day of the experi-
ence study period is less than 2 years
before the application is submitted.

A base substitute mortality table gen-
erally is determined by multiplying the
mortality rates from the corresponding
standard mortality table (that is, the gen-
erally applicable base mortality table for
the population, projected with mortality
improvement to the base year for the base
substitute mortality table) by the mortality
ratio for the population. For this purpose,
the mortality improvement rates that ap-
ply for the calendar year during which the
plan sponsor submits the request for ap-
proval to use substitute mortality tables
are used to project the generally applica-
ble base mortality table to the base year
for the base substitute mortality table.20

17See section 4. of the Regulatory Impact Assessment provided under the heading Special Analyses, Regulatory Planning and Review (Executive Orders 12866 and 13563) in this
preamble for a discussion of needed changes in administrative systems.

18There is no provision for defined benefit plans that are not subject to the requirements of section 430 (such as multiemployer plans) to request approval to use of substitute mortality tables.
However, the mortality tables under section 430(h)(3) are required to be used for those plans only for very limited purposes (and the mortality tables used for those plans for most purposes,
while subject to the requirements of section 431(c)(3) or 433(c)(3), are not tables specified by statute or regulations).

19 As under the 2008 regulations and the proposed regulations, the final regulations provide for permissive aggregation of plans of a plan sponsor for purposes of developing and using
substitute mortality tables. The final regulations clarify that if two or more plans with different plan years are aggregated, the experience study may consist of data that is collected over
different periods for plans with different plan years, subject to certain conditions.

20If the plan sponsor submits such a request during 2017, then mortality improvement is reflected using the mortality improvement rates that generally apply for use for 2018, which are
the Scale MP-2016 rates.

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The mortality ratio is determined as a
fraction, the numerator of which is the
number of actual deaths during the expe-
rience study period (with each death
weighted by the benefit amount) and the
denominator of which is the number of
expected deaths during that period (deter-
mined using the standard mortality table)
weighted by the benefit amount. An indi-
vidual's benefit amount (which is used to
determine amounts-weighted mortality
rates and for other purposes in the con-
struction of base substitute mortality ta-
bles) is the individual's accrued benefit
expressed in the form of an annual benefit
commencing at normal retirement age (or
at the current age, if later) if the individual
has not commenced benefits, and the in-
dividual's annual payment if the individ-
ual has commenced benefits. Consistent
with section 503 of the Bipartisan Budget
Act of 2015 (and unlike § 1.430(h)(3)-
2(c)(2)(ii)(D) of the 2008 substitute mor-
tality table regulations, which provides
that the Commissioner may permit the use
of other recognized mortality tables to
construct the base substitute mortality ta-
ble), the regulations provide that the stan-
dard mortality table that must be used for
this purpose is the generally applicable
base mortality table projected with mor-
tality improvement to the base year for the
base substitute mortality table.

Some commenters pointed out that
multiplying mortality ratios for a popula-
tion by the mortality rates in the applica-
ble standard mortality table could yield
inappropriate results at extremely old
ages. In response to those comments, the
final regulations provide that mortality
rates under the base substitute mortality
tables must be the same as the mortality
rates under the standard mortality table for
ages above 109 and that a modified mor-
tality ratio is used for ages from 96
through 109 (to accomplish a gradual
transition to the standard mortality table
while avoiding inappropriate results). If

the mortality ratio for the population is
greater than 1.0, the modified mortality
ratio for an age within this range is equal
to the mortality ratio for the population
reduced by 1/15th of the excess of the
mortality ratio over 1.0 for each year by
which the age exceeds 95. If the mortality
ratio for the population is less than 1.0, the
modified mortality ratio for an age within
this range is equal to the mortality ratio for
the population increased by 1/15th of the
excess of 1.0 over the mortality ratio for
each year by which the age exceeds 95.

#### C. Standards for Full Credibility

The proposed regulations revised the
standard for full credibility of a popula-
tion under the 2008 substitute mortality
table regulations (which is 1,000 actual
deaths for the relevant population during
the experience study period) to better re-
flect established actuarial credibility the-
ory. Under established actuarial credibil-
ity theory, the 1,000-death threshold
(which is a rounding down of the 1,082
actual deaths that would be needed for a
90% confidence level that the measured
rate is within 5% of the underlying mor-
tality rate) should apply to the credibility
for a single mortality rate and not an entire
mortality table.21 Moreover, the 1,000
death threshold did not take into account
the well-established actuarial principle
that mortality experience within a popula-
tion will vary predictably based on the
amount of the annuity (or life insurance,
as applicable). The base tables for the
generally applicable mortality tables were
constructed on an amounts-weighted basis
(under which the individuals with higher
benefit amounts have a greater weight in
the computation of the mortality rate for a
particular age); accordingly, substitute
mortality tables should be constructed us-
ing the same principle.

Using established actuarial credibility
theory to evaluate whether a population

has fully credible mortality experience
entails the use of a threshold that takes
into account the dispersion of benefits
within the population. Accordingly, under
the proposed regulations, the number of
deaths that are needed for a population
within a plan to have fully credible mor-
tality experience is determined as the
product of 1,082 and the benefit disper-
sion factor for the population.22 The ben-
efit dispersion factor for a population is
equal to the number of expected deaths
for the population during the experience
study period, multiplied by the sum of the
mortality-weighted squares of the bene-
fits, divided by the square of the sum of
the mortality-weighted benefits.23

Commenters supported the actuarial
soundness of the standard for fully credible
mortality information under the proposed
regulations, and the final regulations adopt
the provisions of the proposed regulations
regarding full credibility. At the request of
commenters, the regulations include expres-
sions of various formulas in mathematical
notation to assist actuaries in making com-
putations under the regulations.24

One commenter noted that the increase
of the threshold for full credibility (to-
gether with the inability to reflect the pat-
tern of the plan's mortality experience at
different ages) may produce substitute
mortality tables that are substantially dif-
ferent than those that are currently in use.
To address this concern, in part, the final
regulations include an option to increase
the credibility of a plan's mortality expe-
rience by basing it on the combined mor-
tality experience of both genders.25

#### D. Partial Credibility

As under the proposed regulations, the
final regulations permit substitute mortal-
ity tables to be used for a plan that does
not have sufficient deaths to have fully
credible mortality information. In accor-
dance with established actuarial credibil-

21 Although the use of a graduation technique under Rev. Proc. 2008-62 enables a plan with fewer than 1,000 deaths at each age to have credible mortality experience that may be used
to establish a substitute mortality table, the statutory instruction providing that the determination of whether a plan has credible mortality information be made in accordance with established
actuarial credibility theory which is materially different than the rules in effect on November 2, 2015, led to the elimination of that technique.

22 This formula for the number of deaths needed for full credibility is based on the assumption that the distribution of releases from liability due to deaths follows a compound Poisson model.
See www.actuaries.ca/members/publications/2002/202037e.pdf.

23See Gavin Benjamin, Selecting Mortality Tables: A Credibility Approach, available at www.soa.org/Files/Research/Projects/research-2008-benjamin.pdf.

24In the proposed regulations, these formulas were stated as amounts to be computed separately for each age and then summed for the population. The final regulations instead state these
formulas more concisely as amounts to be computed for the entire population. These two approaches yield mathematically identical results.

25This option is described in section III.F.2 of this Explanation of Provisions (Option to use combined male and female mortality experience).

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ity theory, the substitute mortality table
used for such a plan is the weighted aver-
age of the standard mortality table and
the substitute mortality table that would
be developed for the plan if it were to
have fully credible mortality information.
The weight for the substitute mortality
table that would be developed for the plan
if the plan were to have fully credible
mortality information is the square root of
a fraction, the numerator of which is the
actual number of deaths for the population
within the experience study period and the
denominator of which is the number of
deaths needed for the plan to have fully
credible mortality information.

##### E. Controlled Group Consistency Requirement

Under section 430(h)(3)(iv) there is a
general consistency requirement for the use
of substitute mortality tables with respect to
all plans within a controlled group. Thus,
use of substitute mortality tables for a plan is
generally permitted only if substitute mor-
tality tables are used for all plans subject to
section 430 that are maintained within the
controlled group of the plan sponsor.

The 2008 substitute mortality table
regulations set forth an exception from
this consistency requirement for plans that
did not have credible mortality experi-
ence. As a result of the change permitting
the use of substitute mortality tables for
plans that have only partially credible
mortality information, Treasury and the
IRS concluded that the exception should
be modified so that it only applies to plans
with a relatively small population. Ac-
cordingly, the regulations provide that a
population does not have credible mortal-
ity information (and so a substitute mor-
tality table is neither permitted nor re-
quired to be used for that population) if
the actual number of deaths for that pop-
ulation during the experience study period
is less than 100. For this purpose, the
length of the experience study period must
be the same length as the longest experi-
ence study period for any plan in the con-
trolled group26 and must end less than 3
years before the first day of the first plan
year for which the substitute mortality ta-
bles are to apply. Treasury and the IRS

proposed the use of a threshold of 100
deaths to balance the benefit of the use
of substitute mortality tables for a plan
with a relatively small population (which
would be small, given the relatively low
weight assigned to that plan's partially
credible mortality experience) against the
burden of developing substitute mortality
tables for that plan (which would be re-
quired to comply with the controlled
group consistency requirement). No com-
ments were received objecting to this
threshold or recommending a different
threshold. As a result, the final regulations
adopt the proposed 100-death threshold.

F. Other Rules Relating to the Use of
Substitute Mortality Tables

###### 1. Multiple-Employer Plans

In response to comments, the final reg-
ulations provide rules regarding the use of
substitute mortality tables in connection
with multiple-employer plans. Under the
final regulations, the application for use of
substitute mortality tables in the case of a
multiple-employer plan must be made by
the plan administrator, and the substitute
mortality tables must apply on a plan-
wide basis (even if the plan is subject to
the rules of section 413(c)(4)(A)).

In addition, the final regulations pro-
vide special rules for the application of the
controlled group consistency rule in the
case of a multiple-employer plan. Under
this special rule, an employer participating
in a multiple-employer plan is treated as
maintaining that plan if and only if the
proportion of the plan's funding target
attributable to the employees and former
employees of the employer and members
of the employer's controlled group is
greater than 50 percent. Thus, such an
employer is subject to the controlled
group consistency rule with respect to the
multiple-employer plan and any other
plans subject to section 430 maintained by

that employer (or any member of that em-
ployer's controlled group). By contrast, if
the proportion of the multiple-employer
plan's funding target attributable to the
employees and former employees of the
employer and members of the employer's
controlled group is less than or equal to 50

percent, then that employer is not subject to
the controlled group consistency rule with
respect to the multiple-employer plan and
any other plans subject to section 430 main-
tained by that employer (and any member of
that employer's controlled group).

##### 2. Option to Use Combined Male and Female Mortality Experience

Some commenters requested the ability
to develop and use substitute mortality
tables based on the combined experience
of both males and females in the plan, to
increase the credibility of mortality expe-
rience for a smaller population. Treasury
and the IRS have determined that this
approach is consistent with established ac-
tuarial credibility theory. Accordingly, the
final regulations provide that a single mor-
tality ratio may be developed for both
genders and then used to construct sepa-
rate gender-specific base substitute mor-
tality tables for the plan. If this option is
applied for a plan, then substitute mortal-
ity tables used for all plans in the plan
sponsor's controlled group must be con-
structed in this manner (except for plans
for which both the male and female pop-
ulations, considered separately, have mor-
tality experience with full credibility). In
addition, if this option is applied for a
plan, then the mortality experience for
both genders must be combined for all
other purposes under the regulations, in-
cluding the determination of: (1) whether
a plan has credible mortality information
for purposes of the controlled group con-
sistency requirement; (2) whether the
mortality experience for a plan has full
credibility; and (3) the partial credibility
weighting factor.

##### 3. Special Rules for Newly-Affiliated Plans

The proposed regulations provide for a
transition period during which the con-
trolled group consistency requirement
does not apply with respect to a newly-
affiliated plan (that is, a plan that has
become maintained within the new con-
trolled group in connection with a trans-
action described in § 1.410(b)-2(f)). In
response to comments, the final regula-

26If a plan has credible mortality information for one gender but not for the other gender, the length of the period of this demonstration is the length of the experience study for that plan.

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tions extend the transition period during
which the controlled group consistency
requirement does not apply with respect to
a newly-affiliated plan so that it ends on
the last day of the plan year that immedi-
ately follows the period described in sec-
tion 410(b)(6)(C)(ii) for any of the plans
in the controlled group (whichever ends
latest). For example, if all of the plans
involved have a plan year that is the cal-
endar year and a corporate transaction oc-
curs during 2017, then the transition pe-
riod during which the controlled group
consistency requirement does not apply
ends on December 31, 2019 (the end of
the plan year that immediately follows
December 31, 2018, which is the end of
the period described in section 410(b)
(6)(C)(ii)). This longer transition period
will ensure that the plan sponsor has ade-
quate time to complete an experience
study covering the newly-affiliated plan
for use in its submission for approval of
substitute mortality tables for a plan year
beginning January 1, 2020. As under the
proposed regulations, the final regulations
provide that this experience study may
exclude the pre-affiliation data and the
experience study period may be as short
as 1 year (instead of 2 years). Therefore,
under the facts of this example, the expe-
rience study used to develop substitute
mortality tables for the plan may cover
only calendar year 2018.27

###### 4. Early Termination of Use of Substitute Mortality Tables and Transition Rule

The final regulations retain the rules
from the 2008 substitute mortality table
regulations regarding the termination of use
of substitute mortality tables before their
originally scheduled expiration. Among
the circumstances that lead to early termi-
nation is the replacement of the generally
applicable mortality tables (other than an-
nual updates to the static mortality tables
or changes to the mortality improvement
rates).

In response to comments, the final reg-
ulations include a transition rule under
which previously approved base substitute

mortality tables continue to apply for plan
years beginning in 2018 (assuming that
plan year is covered by the original ap-
proval and that substitute mortality tables
are used by all of the plans within the
controlled group that have credible mor-
tality experience under the standards in
the 2008 substitute mortality table regula-
tions). In addition, previously approved
base substitute mortality tables continue
to apply to later plan years during the term
of their original approval, provided that
the plan sponsor satisfies the requirement
that substitute mortality tables be used for
all plans in the controlled group that have
credible mortality information under the
standards in these regulations. However,
the mortality improvement rates under the
final regulations, rather than the Scale AA
Projection Factors (which were used un-
der the 2008 substitute mortality table reg-
ulations), must be applied to previously
approved base substitute mortality tables
beginning in 2019.

### G. Effective Date

These regulations regarding substitute
mortality tables apply to plan years begin-
ning on or after January 1, 2018, subject
to certain transition relief. In addition to
the transition relief for previously ap-
proved base mortality tables described in
section III.F.4 of the Explanation of Pro-
visions portion of this preamble, the re-
quirement that a plan sponsor apply for
approval to use substitute mortality tables
at least 7 months before the beginning of
the plan year will be treated as satisfied if
the plan sponsor's application is submitted
on or before February 28, 2018, provided
that the plan sponsor agrees to a 90-day
extension of the 180-day review period.

### Statement of Availability of IRS Documents

IRS Revenue Rulings, Revenue Proce-
dures, and Notices cited in this document
are published in the Internal Revenue Bul-
letin (or Cumulative Bulletin) and are
available from the Superintendent of Doc-
uments, U.S. Government Printing Office,

Washington, DC 20402, or by visiting the
IRS website at www.irs.gov.

### Special Analyses

#### Regulatory Planning and Review (Executive Orders 12866 and 13563)

It has been determined that these reg-
ulations constitute a significant regulatory
action as defined in Executive Order
12866, as supplemented by Executive Or-
der 13563. Accordingly, these rules have
been reviewed by the Office of Manage-
ment and Budget. The Regulatory Impact
Assessment prepared by Treasury for
these regulations is provided below. This
rule is not subject to the requirements of
Executive Order 13771 because this rule
results in no more than de minimis costs.

##### 1. Description of Need for the Regulations

Section 430 of the Internal Revenue
Code specifies the minimum funding re-
quirements that apply generally to defined
benefit plans that are not multiemployer
plans. Section 430(h)(3) contains rules re-
garding the mortality tables to be used
under section 430. Under section 430(h)
(3)(A), the Secretary is to prescribe by
regulation mortality tables to be used in
determining any present value or making
any computation under section 430.28 Un-
der section 430(h)(3)(B), the Secretary is
required to revise any mortality table in
effect under section 430(h)(3)(A) at least
every 10 years to reflect actual mortality
experience of pension plan participants
and projected trends in that experience.

Section 430(h)(3)(C) prescribes rules
for a plan sponsor's use of substitute mor-
tality tables reflecting the specific mortal-
ity experience of a plan's population. Sec-
tion 503 of the Bipartisan Budget Act of
2015 requires certain changes in the rules
for developing a plan's substitute mortal-
ity tables.

The existing regulations regarding mor-
tality tables were issued in 2008, for use
beginning in 2008. Those tables were
based on a study of mortality experience
of pension plan participants covering the

27 However, if the experience study is used to demonstrate a lack of credible mortality information, the experience study period may be shorter than required under the otherwise applicable
rules only if it starts on the date the plan becomes a newly-affiliated plan.

28Those mortality tables must be based on the actual mortality experience of pension plan participants and projected trends in that experience. In prescribing those mortality tables, the
Secretary is required to take into account results of available independent studies of mortality of individuals covered by pension plans.

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years 1990-1994 that was published in
2000. Since that time, studies have shown
that people are living longer. For example,
a study that RPEC published in 2014 in-
dicates that the mortality tables issued un-
der the 2008 general mortality table reg-
ulations no longer reflect the actual
mortality experience of pension plan par-
ticipants and projected trends in that ex-
perience. In accordance with section
430(h)(3)(B), the Secretary is required to
revise the mortality tables in the existing
regulations as a result of these changes in
the actual mortality experience and pro-
jected trends in that experience. In addi-
tion, changes in the existing regulations
regarding substitute mortality tables are
required under the provisions of the Bi-
partisan Budget Act of 2015.

##### 2. Affected Population

The final regulations affect participants
in private-sector defined benefit plans and
employers sponsoring those plans.

##### 3. Baseline and Summary of Impacts

As required by OMB Circular A-4, the
following table summarizes the estimated
economic impact of the final regulations.
The baseline for this estimate is the mor-
tality tables issued under the existing reg-
ulations. Because the new tables reflect
the fact that participants are living longer,
the primary impact of the final regulations
is to increase the reported liability for
future benefit payments from pension
plans; this higher reported liability will
result in higher pension contributions. The
higher liability will also result in an in-
crease in PBGC premiums, which are a
function of a plan's funded status. Be-
cause pension contributions and premi-
ums are deductible from firms' incomes,
tax revenues will fall.

As described in the effective date dis-
cussion in section II.D of the Explanation
of Provisions portion of this preamble,
these regulations include an option for a

plan sponsor that is not using plan-specific
mortality tables to delay the application of
the new tables in certain circumstances.
Because it is difficult to predict how many
plan sponsors will utilize this option, the
following tables provide a range of esti-
mates of the economic impact of these
regulations. The first row of numbers in
the tables, labeled "full take-up amount,"
is based on the assumption that all plan
sponsors will use the option to delay the
application of the new mortality tables;
the second row of numbers, labeled "no
take-up amount," is based on the assump-
tion that no plan sponsors will use the
option to delay application of the new
mortality tables. As noted in the effective
date discussion in section II.D of the Ex-
planation of Provisions portion of this pre-
amble, the use of this option will not af-
fect the mortality table used to determine
minimum present value under section
417(e).

Estimated change in tax revenue (in millions of 2017 dollars)

Year

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Full take-up amount

0

-123

-499

-914

-1,170

-1,278

-1,216

-1,081

-807

-353

No take-up amount

-84

-362

-717

-1,025

-1,241

-1,314

-1,238

-1,042

-604

-228

Present Value29 with full take-up of de-
lay option (3% Discount Rate): - $6,372
million.

Present Value with no take-up of delay
option (3% Discount Rate): - $6,821 million.
Present Value with full take-up of de-
lay option (7% Discount Rate): - $5,245
million.

Present Value with no take-up of delay
option (7% Discount Rate): - $5,718 million.
Annualized Estimate with full take-up
of delay option (3% Discount Rate):
-$747 million.

Annualized Estimate with no take-up of
delay option (3% Discount Rate): - $800
million.

Annualized Estimate with full take-up
of delay option (7% Discount Rate):
-$747 million.

Annualized Estimate with no take-up
of delay option (7% Discount Rate):
-$814 million.

Estimated change in contributions (in millions of 2017 dollars)

Year

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Full take-up amount

0

2,933

4,873

6,071

6,574

6,069

5,322

3,667

750

407

No take-up amount

2,151

3,631

5,418

6,391

6,694

6,194

5,373

1,751

815

797

Present Value with full take-up of de-
lay option (3% Discount Rate): $32,417
million.

Present Value with no take-up of de-
lay option (3% Discount Rate): $35,100
million.

Present Value with full take-up of de-
lay option (7% Discount Rate): $27,784
million.

29The present values are discounted to the beginning of 2019.

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Present Value with no take-up of de-
lay option (7% Discount Rate): $30,595
million.

Annualized Estimate with full take-up
of delay option (3% Discount Rate):
$3,800 million.

Annualized Estimate with no take-up
of delay option (3% Discount Rate):
$4,115 million.

Annualized Estimate with full take-up
of delay option (7% Discount Rate):
$3,956 million.

Annualized Estimate with no take-up
of delay option (7% Discount Rate):
$4,356 million.

###### Estimated change in PBGC premiums (in millions of 2017 dollars)

Year

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Full take-up amount

0

293

287

187

91

0

0

0

0

81

No take-up amount

293

287

280

183

89

0

0

0

0

80

Present Value with full take-up of
delay option (3% Discount Rate): 869
million.

Present Value with no take-up of delay
option (3% Discount Rate): 1,143 million.

Present Value with full take-up of
delay option (7% Discount Rate): $791
million.

Present Value with no take-up of de-
lay option (7% Discount Rate): $1,067
million.

Annualized Estimate with full take-up
of delay option (3% Discount Rate): $102
million.

Annualized Estimate with no take-up
of delay option (3% Discount Rate):
$134 million.

Annualized Estimate with full take-up
of delay option (7% Discount Rate): $113
million.

Annualized Estimate with no take-up
of delay option (7% Discount Rate): $152
million.

For pension payments that are paid
over a retiree's lifetime, the actual liability
will depend on how long the retiree actu-
ally lives, and the impact of reflecting
longer life expectancies in the calculation
of present values under these regulations
will merely accelerate the time when ad-
ditional contributions attributable to lon-
ger lifetimes will need to be made. For
pension payments that are lump-sum set-
tlements in lieu of lifetime payments, the
new tables will increase the amount of the
lump sum. If the plan has a lump sum-

based benefit formula, such as a cash bal-
ance plan, there will be no impact on the
amount of a lump sum, but the optional
annuity may be smaller.3º However, it is
difficult to quantify the impact of these
changes.

###### 4. Cost Associated with the Regulation

Substantially all of the amounts in-
volved (decreased tax revenue, increased
plan contributions and PBGC premiums)
constitute transfer payments, rather than
costs. This is because these amounts are
monetary payments from one entity to an-
other that do not affect total resources
available to society.

We believe that the incremental admin-
istrative costs to implement this regulation
are negligible, because plan sponsors
would have to incur the same costs to
update their plan administration software
to reflect the new mortality tables under
these regulations as they would incur in
implementing the annual update to the
mortality tables that would apply in the
absence of these regulations. Moreover,
the specific mortality rates used to calcu-
late benefits for individuals normally are
not provided to individual plan partici-
pants, so there will be no need to distrib-
ute information about the new mortality
tables. Rather, plan sponsors and admin-
istrators provide individual participants
who are considering retiring in the near
future with individualized estimates of

their benefits and that process is not de-
pendent on the specific mortality rates
used to determine benefits under the plan.
Furthermore, Treasury and the IRS are
issuing these regulations at a similar time
of year as mortality tables were issued in
prior years (and close in time to the issu-
ance of the earliest interest rates that may
be used in calculating the amount of a
lump sum benefit to be distributed during
a plan year beginning in 2018). In other
words, these costs are included in the base-
line of the analysis, not as new incremental
costs associated with this rulemaking.

In terms of the use of the mortality
tables for purposes of applying the fund-
ing requirements of section 430, these reg-
ulations (like the current regulations) per-
mit actuaries to use static mortality tables
that approximate the present value deter-
mined using the generational mortality ta-
bles. Even if a plan's actuary chooses to
use generational mortality tables (includ-
ing plan-specific mortality tables) instead
of the static mortality tables, actuarial
software capable of applying that ap-
proach (including generational mortality
tables determined using mortality im-
provement rates that vary by both age and
calendar year) should be readily available,
as such generational mortality tables de-
termined using varying mortality im-
provement rates have been used routinely
for financial reporting purposes by large
employers since the Mortality Improve-
ment Scale MP-2014 Report was issued

30The optional annuity may be smaller because, when converting the lump sum in which the participant's benefit is stated under the plan to an stream of annuity payments for the life of
the participant (and the life of the participant's spouse if applicable), the lifetime(s) over which the payments must be paid will generally be assumed to be longer if the new tables are used
for this purpose rather than the prior tables. To pay a fixed sum over a longer period, the amount of the periodic payments must be reduced. However, a plan is not required to use these
tables for this purpose and a recent study indicates that relatively few participants take an annuity distribution from plans with lump sum based benefit formulas See Sudipto Banerjee, Ph.D.,
Employee Benefits Research Institute, Issue Brief: Annuity and Lump-Sum Decisions in Defined Benefit Plans: The Role of Plan Rules, January 2013, available at https://www.ebri.org/
pdf/briefspdf/EBRI_IB_01-13.No381.LSDs2.pdf.

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in 2014. In addition, these regulations per-
mit any previously approved plan-specific
mortality tables to continue to be used for
the duration of the original approval pe-
riod. Accordingly, any additional cost as a
result of the issuance of these regulations
should be negligible.

### Regulatory Flexibility Act (5 U.S.C. Chapter 6)

It is hereby certified that this rule will
not have a significant economic impact on
a substantial number of small entities.
This rule applies to all employers that
sponsor defined benefit plans regardless of
size. As stated above, this rule implements
the statutorily-required updates and any
compliance costs related to this rule are
small and are consistent with previously
issued annual updates.

Pursuant to section 7805(f) of the In-
ternal Revenue Code, the notice of pro-
posed rulemaking preceding these regula-
tions was submitted to the Chief Counsel
for Advocacy of the Small Business Ad-
ministration for comment on its impact on
small business.

### Drafting Information

The principal authors of these regula-
tions are Arslan Malik and Linda S. F.
Marshall of the Office of Associate Chief
Counsel (Tax Exempt and Government
Entities). However, other personnel from
Treasury and the IRS participated in the
development of these regulations.

### List of Subjects in 26 CFR Part 1

Income taxes, Reporting and record-
keeping requirements.

### Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended
as follows:

### PART 1-INCOME TAXES

Paragraph 1. The authority citation for
part 1 continues to read, in part, as fol-
lows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.430(h)(3)-1 is re-
vised to read as follows:

#### § 1.430(h)(3)-1 Mortality tables used to determine present value.

(a) Basis for mortality tables-(1) In
general. Pursuant to section 430(h)(3)(A),
this section provides generally applicable
mortality tables that are used to determine
present value for purposes of section 430,
and rules regarding the use of those mor-
tality tables. Either the generational mor-
tality tables under paragraph (a)(2) of this
section or the static mortality tables under
paragraph (a)(3) of this section may be
used for a plan. In lieu of using the mor-
tality tables provided under this section,
plan-specific substitute mortality tables
may be used pursuant to section 430(h)
(3)(C), provided that the requirements of
§ 1.430(h)(3)-2 are satisfied. Mortality ta-
bles that may be used with respect to
disabled individuals are provided in guid-
ance published in the Internal Revenue
Bulletin. See § 601.601(d)(2)(ii)(b) of this
chapter.

(2) Generational mortality tables-(i)
In general-(A) Use of generational mor-
tality tables. The generational mortality
tables that are permitted to be used under
section 430(h)(3)(A) and paragraph (a)(1)
of this section are determined using the
base mortality tables described in para-
graph (a)(2)(i)(B) of this section and the
mortality improvement rates described in
paragraph (a)(2)(i)(C) of this section.

(B) Base mortality tables. The base
mortality tables are set forth in paragraph
(d) of this section. The base year for those
tables is 2006.

(C) Mortality improvement rates. The
mortality improvement rates for valuation
dates occurring during 2018 are the mor-
tality improvement rates contained in the
Mortality Improvement Scale MP-2016
Report (issued by the Retirement Plans
Experience Committee (RPEC) of the
Society of Actuaries and available at
www.soa.org/Research/Experience-Study/
Pension/research-2016-mp.aspx). For
later years, updated mortality improve-
ment rates that take into account new data
for mortality improvement trends of the
general population will be provided in

guidance published in the Internal Reve-
nue Bulletin. See § 601.601(d)(2)(ii)(b) of
this chapter.

(D) Application of mortality improve-
ment rates. Under the generational mor-
tality tables described in this paragraph
(a)(2), the probability of an individual's
death at a particular age in the future is
determined as the individual's base mor-
tality rate that applies at that age (that is,
the applicable mortality rate from the
table set forth in paragraph (d) of this
section for that age, gender, and status
as an annuitant or a nonannuitant) mul-
tiplied by the cumulative mortality im-
provement factor for the individual's
gender and for that age for the period
from 2006 through the calendar year in
which the individual is projected to
reach the particular age. Paragraph
(a)(2)(ii) of this section shows how the
base mortality tables in paragraph (d) of
this section and the mortality improve-
ment rates for valuation dates occurring
during 2018 are combined to determine
projected mortality rates.

(E) Cumulative mortality improvement
factor. The cumulative mortality improve-
ment factor for an age and gender for a
period is the product of the annual mor-
tality improvement factors for that age
and gender for each year within that pe-
riod.

(F) Annual mortality improvement fac-
tor. The annual mortality improvement
factor for an age and gender for a year is
1 minus the mortality improvement rate
that applies for that age and gender for
that year.

(ii) Example of calculation-(A) Cal-
culation of mortality rate. The mortality
rate for 2018 that is applied to male an-
nuitants who are age 66 in 2018 is equal to
the product of the mortality rate for 2006
that applied to male annuitants who were
age 66 in 2006 (0.013855) and the cumu-
lative mortality improvement factor for
age 66 males from 2006 to 2018. The
cumulative mortality improvement factor
for age 66 males for the period from 2006
to 2018 is 0.8929, and the mortality rate
for 2018 for male annuitants who are age
66 in that year would be 0.012371, as
shown in the following table.

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Calendar Year

Scale MP-2016 Mortality Improvement Rate

Annual Mortality improvement factor (1- Scale MP-2016 Rate)

Cumulative Mortality Improvement Factor

Mortality Rate

2006

n/a

n/a

n/a

0.013855

2007

0.0237

0.9763

0.9763

2008

0.0211

0.9789

0.9557

2009

0.0180

0.9820

0.9385

2010

0.0142

0.9858

0.9252

2011

0.0099

0.9901

0.9160

2012

0.0053

0.9947

0.9112

2013

0.0043

0.9957

0.9072

2014

0.0035

0.9965

0.9041

2015

0.0030

0.9970

0.9014

2016

0.0028

0.9972

0.8988

2017

0.0030

0.9970

0.8961

2018

0.0036

0.9964

0.8929

0.012371

(B) Probability of survival for an indi-
vidual. After the projected mortality rates
are derived for each age for each year, the
rates are used to calculate the present
value of a benefit stream that depends on
the probability of survival year-by-year.
For example, for purposes of calculating
the present value (for a 2018 valuation
date) of future payments in a benefit
stream payable for a male annuitant who
is age 66 in 2018, the probability of sur-
vival for the annuitant is based on the
mortality rate for a male annuitant who is
age 66 in 2018 (0.012371), and the pro-
jected mortality rate for a male annuitant
who will be age 67 in 2019 (0.013302),
age 68 in 2020 (0.014321), and so on.

(3) Static mortality tables. The static
mortality tables that are permitted to be
used under section 430(h)(3)(A) and para-
graph (a)(1) of this section are updated an-
nually by the IRS according to the method-
ology described in paragraph (c)(2) of this
section. Paragraph (e) of this section sets
forth static tables that are permitted to be
used for valuation dates in 2018. For valu-
ation dates in later years, static mortality
tables will be provided in guidance pub-
lished in the Internal Revenue Bulletin. See
§ 601.601(d)(2)(ii)(b) of this chapter.

(b) Use of the tables-(1) Separate ta-
bles for annuitants and nonannuitants-
(i) In general. Separate tables are provided
for use for annuitants and nonannuitants.
The nonannuitant mortality table is applied
to determine the probability of survival for a
nonannuitant for the period before the non-

annuitant is projected to commence receiv-
ing benefits. The annuitant mortality table is
applied to determine the present value of
benefits for each annuitant. In addition, the
annuitant mortality table is applied for each
nonannuitant with respect to each assumed
commencement of benefits for the period
beginning with that assumed commence-
ment. For purposes of this section, an annu-
itant means a plan participant who has
commenced receiving benefits, and a non-
annuitant means a plan participant who has
not yet commenced receiving benefits (for
example, an active employee or a termi-
nated vested participant). A participant
whose benefit has partially commenced is
treated as an annuitant with respect to the
portion of the benefit that has commenced
and treated as a nonannuitant with respect to
the balance of the benefit. In addition, with
respect to a beneficiary of a participant, the
annuitant mortality table applies for the pe-
riod beginning with each assumed com-
mencement of benefits for the participant. If
the participant has died (or to the extent the
participant is assumed to die before com-
mencing benefits), the annuitant mortality
table applies with respect to the beneficiary
for the period beginning with each assumed
commencement of benefits for the benefi-
ciary.

(ii) Examples of calculation using sep-
arate annuitant and nonannuitant tables.
With respect to a 45-year-old active par-
ticipant who is projected to commence
receiving an annuity at age 55, the funding
target is determined using the nonannui-

tant mortality table for the period before
the participant attains age 55 (so that, if
the static mortality tables are used pursu-
ant to paragraph (a)(3) of this section, the
probability of an active male participant
living from age 45 to age 55 using the
table that applies for a valuation date in
2018 is 0.988857) and using the annuitant
mortality table for the period ages 55 and
above. Similarly, for a 45-year-old termi-
nated vested participant who is projected
to commence an annuity at age 65, the
funding target is determined using the
nonannuitant mortality table for the period
before the participant attains age 65 and
using the annuitant mortality table for
ages 65 and above.

(2) Small plan tables. If static mortality
tables are used pursuant to paragraph
(a)(3) of this section, as an alternative to
the separate static tables specified for an-
nuitants and nonannuitants pursuant to
paragraph (b)(1) of this section, combined
static tables that apply the same mortality
rates to both annuitants and nonannuitants
are permitted to be used for a small plan.
For this purpose, a small plan is defined as
a plan with 500 or fewer total participants
(including both active and inactive partic-
ipants and beneficiaries of deceased par-
ticipants) on the valuation date. The com-
bined static tables that are permitted to be
used for small plans pursuant to this para-
graph (b)(2) are constructed from the sep-
arate nonannuitant and annuitant static
mortality tables using the weighting fac-
tors for small plans that are set forth in

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paragraph (d) of this section. The weight-
ing factors are applied to develop these
combined static tables using the following
equation: Combined mortality rate =
[nonannuitant rate * (1- weighting factor)]
\+ [annuitant rate * weighting factor].

(c) Static tables-(1) Source of rates.
The static mortality tables that are used
pursuant to paragraph (a)(3) of this sec-
tion are determined using the base mortal-
ity tables described in paragraph (a)(2)
(i)(B) of this section taking into account
the mortality improvement rates described
in paragraph (a)(2)(i)(C) of this section, in
accordance with the rules of paragraph
(c)(3) of this section.

(2) Selection of static tables. The static
mortality tables that are used for a valua-
tion date are the static mortality tables for
the calendar year that contains the valua-
tion date.

(3) Projection of mortality improve-
ments-(i) General rule. Except as pro-
vided in paragraph (c)(3)(iii) of this sec-
tion, the static mortality tables for a
calendar year are determined by multiply-
ing the applicable mortality rate for each
age from the base mortality tables by
both-

(A) The cumulative mortality improve-
ment factor (determined under the rules of
paragraph (a)(2) of this section) for the

period from 2006 through that calendar
year; and

(B) The cumulative mortality improve-
ment factor (determined under the rules of
paragraph (a)(2) of this section) for the
period beginning in that calendar year and
continuing beyond that calendar year for
the number of years in the projection pe-
riod described in paragraph (c)(3)(ii) of
this section.

(ii) Projection period for static mortal-
ity tables-(A) In general. The projection
period is 8 years for males and 9 years for
females, as adjusted based on age as pro-
vided in paragraph (c)(3)(ii)(B) of this
section.

(B) Age adjustment. For ages below
80, the projection period is increased by 1
year for each year below age 80. For ages
above 80, the projection period is reduced
(but not below zero) by 1/3 year for each
year above 80.

(iii) Fractional projection periods. If
for an age the number of years in the
projection period determined under this
paragraph (c)(3) is not a whole number,
then the mortality rate for that age is de-
termined by using linear interpolation be-
tween-

(A) The mortality rate for that age that
would be determined under paragraph
(c)(3)(i) of this section if the number of

years in the projection period were the
next lower whole number; and

(B) The mortality rate for that age that
would be determined under paragraph
(c)(3)(i) of this section if the number of
years in the projection period were the
next higher whole number.

(iv) Example. The following example
illustrates how the mortality rates in the
static mortality tables issued under the
provisions of this paragraph (c) are calcu-
lated:

Example. At age 85, the projection period for a
male is 61/3 years (8 years minus 1/3 year for each of
the 5 years above age 80). For a valuation date in
2018, the mortality rate in the static mortality table
for an 85-year-old male is based on a projection of
mortality improvement for 61/3 years beyond 2018.
Under paragraph (c)(3)(iii) of this section, the mor-
tality rate for an 85-year-old male annuitant in the
static mortality table for 2018 is 2/3 times the pro-
jected mortality rate for a male annuitant that age in
2024 plus 1/3 times the projected mortality rate for a
male annuitant that age in 2025. Accordingly, the
mortality rate for an 85-year-old male annuitant in
the static mortality table for 2018 is 0.075196 (2/3
times the projected mortality rate for an 85-year old
male annuitant in 2024 (0.075447) plus 1/3 times the
projected mortality rate for an 85-year old male
annuitant in 2025 (0.074693)).

(d) Base mortality tables. The follow-
ing are the base mortality tables. The base
year for these tables is 2006.

Age

Non-Annuitant

Males Annuitant

Weighting Factor For Small Plans

Non-Annuitant

Females Annuitant

Weighting Factor For Small Plans

0

0.008878

0.008878

0

0.007278

0.007278

0

1

0.000515

0.000515

0

0.000451

0.000451

0

2

0.000348

0.000348

0

0.000295

0.000295

0

3

0.000289

0.000289

0

0.000220

0.000220

0

4

0.000225

0.000225

0

0.000165

0.000165

0

5

0.000197

0.000197

0

0.000149

0.000149

0

6

0.000177

0.000177

0

0.000137

0.000137

0

7

0.000156

0.000156

0

0.000127

0.000127

0

8

0.000132

0.000132

0

0.000117

0.000117

0

9

0.000107

0.000107

0

0.000109

0.000109

0

10

0.000090

0.000090

0

0.000102

0.000102

0

11

0.000095

0.000095

0

0.000105

0.000105

0

12

0.000142

0.000142

0

0.000121

0.000121

0

13

0.000187

0.000187

0

0.000137

0.000137

0

14

0.000230

0.000230

0

0.000151

0.000151

0

15

0.000274

0.000274

0

0.000165

0.000165

0

16

0.000318

0.000318

0

0.000177

0.000177

0

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Age

Non-Annuitant

Males Annuitant

Weighting Factor For Small Plans

Non-Annuitant

Females Annuitant

Weighting Factor For Small Plans

17

0.000364

0.000364

0

0.000187

0.000187

0

18

0.000412

0.000412

0

0.000196

0.000196

0

19

0.000463

0.000463

0

0.000202

0.000202

0

20

0.000510

0.000510

0

0.000202

0.000202

0

21

0.000552

0.000552

0

0.000197

0.000197

0

22

0.000587

0.000587

0

0.000191

0.000191

0

23

0.000599

0.000599

0

0.000190

0.000190

0

24

0.000594

0.000594

0

0.000188

0.000188

0

25

0.000545

0.000545

0

0.000186

0.000186

0

26

0.000510

0.000510

0

0.000186

0.000186

0

27

0.000486

0.000486

0

0.000188

0.000188

0

28

0.000472

0.000472

0

0.000192

0.000192

0

29

0.000468

0.000468

0

0.000198

0.000198

0

30

0.000470

0.000470

0

0.000209

0.000209

0

31

0.000480

0.000480

0

0.000222

0.000222

0

32

0.000495

0.000495

0

0.000238

0.000238

0

33

0.000514

0.000514

0

0.000257

0.000257

0

34

0.000534

0.000534

0

0.000278

0.000278

0

35

0.000557

0.000557

0

0.000301

0.000301

0

36

0.000581

0.000581

0

0.000325

0.000325

0

37

0.000611

0.000611

0

0.000355

0.000355

0

38

0.000648

0.000648

0

0.000389

0.000389

0

39

0.000694

0.000694

0

0.000428

0.000428

0

40

0.000750

0.000750

0

0.000471

0.000471

0

41

0.000814

0.000823

.0045

0.000518

0.000515

0

42

0.000890

0.000969

.0091

0.000570

0.000603

0

43

0.000982

0.001188

.0136

0.000628

0.000735

0

44

0.001088

0.001480

.0181

0.000691

0.000911

0

45

0.001207

0.001846

.0226

0.000758

0.001131

.0084

46

0.001342

0.002285

.0272

0.000831

0.001395

.0167

47

0.001487

0.002797

.0317

0.000908

0.001703

.0251

48

0.001643

0.003382

.0362

0.000986

0.002055

.0335

49

0.001807

0.004040

.0407

0.001065

0.002451

.0419

50

0.001979

0.004771

.0453

0.001151

0.002891

.0502

51

0.002159

0.005059

.0498

0.001242

0.002993

.0586

52

0.002351

0.005343

.0686

0.001344

0.003124

.0744

53

0.002539

0.005592

.0953

0.001458

0.003291

.0947

54

0.002741

0.005839

.1288

0.001588

0.003499

.1189

55

0.002967

0.006102

.2066

0.001735

0.003755

.1897

56

0.003231

0.006399

.3173

0.001902

0.004065

.2857

57

0.003548

0.006746

.3780

0.002091

0.004435

.3403

58

0.003932

0.007155

.4401

0.002302

0.004869

.3878

59

0.004396

0.007639

.4986

0.002537

0.005373

.4360

60

0.004954

0.008211

.5633

0.002795

0.005942

.4954

61

0.005616

0.008878

.6338

0.003080

0.006581

.5805

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Age

Non-Annuitant

Males Annuitant

Weighting Factor For Small Plans

Non-Annuitant

Females Annuitant

Weighting Factor For Small Plans

62

0.006392

0.009646

.7103

0.003388

0.007283

.6598

63

0.007291

0.010523

.7902

0.003724

0.008043

.7520

64

0.008320

0.011514

.8355

0.004089

0.008870

.8043

65

0.009486

0.012621

.8832

0.004482

0.009760

.8552

66

0.010668

0.013855

.9321

0.005004

0.010731

.9118

67

0.011973

0.015221

.9510

0.005575

0.011790

.9367

68

0.013414

0.016736

.9639

0.006205

0.012952

.9523

69

0.015006

0.018421

.9714

0.006898

0.014226

.9627

70

0.016761

0.020288

.9740

0.007662

0.015628

.9661

71

0.018690

0.022348

.9766

0.008507

0.017170

.9695

72

0.020824

0.024638

.9792

0.009438

0.018861

.9729

73

0.023176

0.027176

.9818

0.010470

0.020723

.9763

74

0.025770

0.029992

.9844

0.011615

0.022780

.9797

75

0.028623

0.033113

.9870

0.012887

0.025057

.9830

76

0.031761

0.036585

.9896

0.014301

0.027590

.9864

77

0.035214

0.040457

.9922

0.015885

0.030438

.9898

78

0.039007

0.044778

.9948

0.017656

0.033653

.9932

79

0.043169

0.049605

.9974

0.019639

0.037296

.9966

80

0.047750

0.055022

1.0

0.021859

0.041440

1.0

81

0.049804

0.061087

1.0

0.023791

0.046181

1.0

82

0.053911

0.067902

1.0

0.027655

0.051564

1.0

83

0.060072

0.075550

1.0

0.033451

0.057714

1.0

84

0.068286

0.084162

1.0

0.041179

0.064709

1.0

85

0.078554

0.093775

1.0

0.050838

0.072601

1.0

86

0.090876

0.104507

1.0

0.062429

0.081490

1.0

87

0.105251

0.116487

1.0

0.075952

0.091444

1.0

88

0.121680

0.129770

1.0

0.091407

0.102470

1.0

89

0.140162

0.144470

1.0

0.108794

0.114635

1.0

90

0.160698

0.160698

1.0

0.128113

0.128113

1.0

91

0.177741

0.177741

1.0

0.142619

0.142619

1.0

92

0.195154

0.195154

1.0

0.157939

0.157939

1.0

93

0.212642

0.212642

1.0

0.173886

0.173886

1.0

94

0.230055

0.230055

1.0

0.190319

0.190319

1.0

95

0.247257

0.247257

1.0

0.207191

0.207191

1.0

96

0.265940

0.265940

1.0

0.225057

0.225057

1.0

97

0.284940

0.284940

1.0

0.243507

0.243507

1.0

98

0.304432

0.304432

1.0

0.262587

0.262587

1.0

99

0.324272

0.324272

1.0

0.282171

0.282171

1.0

100

0.344364

0.344364

1.0

0.302162

0.302162

1.0

101

0.364420

0.364420

1.0

0.322282

0.322282

1.0

102

0.384058

0.384058

1.0

0.342371

0.342371

1.0

103

0.403188

0.403188

1.0

0.362210

0.362210

1.0

104

0.421533

0.421533

1.0

0.381534

0.381534

1.0

105

0.438903

0.438903

1.0

0.400321

0.400321

1.0

106

0.455492

0.455492

1.0

0.418418

0.418418

1.0

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Age

Non-Annuitant

Males

Weighting Factor For Small Plans

Non-Annuitant

Females

Weighting Factor For Small Plans

Annuitant

Annuitant

107

0.470810

0.470810

1.0

0.435390

0.435390

1.0

108

0.484965

0.484965

1.0

0.451459

0.451459

1.0

109

0.498023

0.498023

1.0

0.466408

0.466408

1.0

110

0.509768

0.509768

1.0

0.480123

0.480123

1.0

111

0.512472

0.512472

1.0

0.492664

0.492664

1.0

112

0.509296

0.509296

1.0

0.503970

0.503970

1.0

113

0.506193

0.506193

1.0

0.507361

0.507361

1.0

114

0.503061

0.503061

1.0

0.503564

0.503564

1.0

115

0.500000

0.500000

1.0

0.500000

0.500000

1.0

116

0.500000

0.500000

1.0

0.500000

0.500000

1.0

117

0.500000

0.500000

1.0

0.500000

0.500000

1.0

118

0.500000

0.500000

1.0

0.500000

0.500000

1.0

119

0.500000

0.500000

1.0

0.500000

0.500000

1.0

120

1.000000

1.000000

1.0

1.000000

1.000000

1.0

(e) Static tables for 2018. The follow-
ing static mortality tables are used pursu-
ant to paragraph (a)(3) of this section for

determining present value or making any
computation under section 430 with re-

spect to valuation dates occurring during
2018.

Age

Males Females Optional Combined Table Optional Combined Table Non-Annuitant Annuitant for Small Plans Non-Annuitant Annuitant for Small Plans

0

0.002420

0.002420

0.002420

0.002234

0.002234

0.002234

1

0.000142

0.000142

0.000142

0.000140

0.000140

0.000140

2

0.000097

0.000097

0.000097

0.000092

0.000092

0.000092

3

0.000081

0.000081

0.000081

0.000070

0.000070

0.000070

4

0.000064

0.000064

0.000064

0.000053

0.000053

0.000053

5

0.000056

0.000056

0.000056

0.000048

0.000048

0.000048

6

0.000051

0.000051

0.000051

0.000045

0.000045

0.000045

7

0.000046

0.000046

0.000046

0.000042

0.000042

0.000042

8

0.000039

0.000039

0.000039

0.000039

0.000039

0.000039

9

0.000032

0.000032

0.000032

0.000037

0.000037

0.000037

10

0.000027

0.000027

0.000027

0.000035

0.000035

0.000035

11

0.000029

0.000029

0.000029

0.000036

0.000036

0.000036

12

0.000044

0.000044

0.000044

0.000042

0.000042

0.000042

13

0.000058

0.000058

0.000058

0.000048

0.000048

0.000048

14

0.000072

0.000072

0.000072

0.000053

0.000053

0.000053

15

0.000087

0.000087

0.000087

0.000059

0.000059

0.000059

16

0.000102

0.000102

0.000102

0.000064

0.000064

0.000064

17

0.000118

0.000118

0.000118

0.000068

0.000068

0.000068

18

0.000135

0.000135

0.000135

0.000072

0.000072

0.000072

19

0.000153

0.000153

0.000153

0.000075

0.000075

0.000075

20

0.000170

0.000170

0.000170

0.000076

0.000076

0.000076

21

0.000192

0.000192

0.000192

0.000078

0.000078

0.000078

22

0.000214

0.000214

0.000214

0.000080

0.000080

0.000080

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Age

Males

Females

Non-Annuitant

Optional Combined Table

Non-Annuitant

Optional Combined Table

Annuitant

for Small Plans

Annuitant

for Small Plans

23

0.000229

0.000229

0.000229

0.000084

0.000084

0.000084

24

0.000238

0.000238

0.000238

0.000087

0.000087

0.000087

25

0.000230

0.000230

0.000230

0.000090

0.000090

0.000090

26

0.000226

0.000226

0.000226

0.000094

0.000094

0.000094

27

0.000226

0.000226

0.000226

0.000099

0.000099

0.000099

28

0.000230

0.000230

0.000230

0.000105

0.000105

0.000105

29

0.000238

0.000238

0.000238

0.000111

0.000111

0.000111

30

0.000249

0.000249

0.000249

0.000120

0.000120

0.000120

31

0.000263

0.000263

0.000263

0.000130

0.000130

0.000130

32

0.000278

0.000278

0.000278

0.000142

0.000142

0.000142

33

0.000294

0.000294

0.000294

0.000155

0.000155

0.000155

34

0.000309

0.000309

0.000309

0.000168

0.000168

0.000168

35

0.000323

0.000323

0.000323

0.000182

0.000182

0.000182

36

0.000336

0.000336

0.000336

0.000196

0.000196

0.000196

37

0.000350

0.000350

0.000350

0.000213

0.000213

0.000213

38

0.000366

0.000366

0.000366

0.000231

0.000231

0.000231

39

0.000385

0.000385

0.000385

0.000251

0.000251

0.000251

40

0.000410

0.000410

0.000410

0.000273

0.000273

0.000273

41

0.000438

0.000443

0.000438

0.000298

0.000296

0.000298

42

0.000474

0.000516

0.000474

0.000326

0.000344

0.000326

43

0.000518

0.000627

0.000519

0.000358

0.000419

0.000358

44

0.000573

0.000779

0.000577

0.000395

0.000520

0.000395

45

0.000636

0.000973

0.000644

0.000436

0.000651

0.000438

46

0.000712

0.001213

0.000726

0.000484

0.000813

0.000489

47

0.000798

0.001502

0.000820

0.000538

0.001010

0.000550

48

0.000896

0.001844

0.000930

0.000597

0.001245

0.000619

49

0.001005

0.002248

0.001056

0.000661

0.001522

0.000697

50

0.001128

0.002719

0.001200

0.000734

0.001844

0.000790

51

0.001265

0.002963

0.001350

0.000814

0.001961

0.000881

52

0.001418

0.003224

0.001542

0.000903

0.002099

0.000992

53

0.001580

0.003481

0.001761

0.001003

0.002263

0.001122

54

0.001761

0.003751

0.002017

0.001114

0.002454

0.001273

55

0.001964

0.004040

0.002393

0.001235

0.002673

0.001508

56

0.002200

0.004357

0.002884

0.001367

0.002921

0.001811

57

0.002474

0.004704

0.003317

0.001509

0.003200

0.002084

58

0.002796

0.005088

0.003805

0.001661

0.003512

0.002379

59

0.003174

0.005515

0.004341

0.001823

0.003860

0.002711

60

0.003613

0.005989

0.004951

0.001994

0.004238

0.003106

61

0.004122

0.006516

0.005639

0.002181

0.004659

0.003619

62

0.004705

0.007100

0.006406

0.002381

0.005119

0.004188

63

0.005364

0.007742

0.007243

0.002600

0.005616

0.004868

64

0.006111

0.008457

0.008071

0.002842

0.006165

0.005515

65

0.006940

0.009234

0.008966

0.003107

0.006766

0.006236

66

0.007779

0.010103

0.009945

0.003465

0.007430

0.007080

67

0.008697

0.011056

0.010940

0.003863

0.008170

0.007897

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<!-- PageBreak -->

Males

Females

Optional Combined Table

Optional Combined Table

Age

Non-Annuitant

Annuitant

for Small Plans

Non-Annuitant

Annuitant

for Small Plans

68

0.009709

0.012114

0.012027

0.004308

0.008993

0.008770

69

0.010836

0.013302

0.013231

0.004806

0.009912

0.009722

70

0.012093

0.014637

0.014571

0.005366

0.010945

0.010756

71

0.013486

0.016126

0.016064

0.006001

0.012111

0.011925

72

0.015044

0.017799

0.017742

0.006711

0.013412

0.013230

73

0.016794

0.019693

0.019640

0.007521

0.014886

0.014711

74

0.018751

0.021823

0.021775

0.008439

0.016552

0.016387

75

0.020950

0.024237

0.024194

0.009485

0.018443

0.018291

76

0.023428

0.026986

0.026949

0.010678

0.020600

0.020465

77

0.026183

0.030081

0.030051

0.012035

0.023061

0.022949

78

0.029308

0.033645

0.033622

0.013582

0.025888

0.025804

79

0.032774

0.037661

0.037648

0.015347

0.029144

0.029097

80

0.036705

0.042295

0.042295

0.017347

0.032886

0.032886

81

0.038556

0.047291

0.047291

0.019058

0.036992

0.036992

82

0.042087

0.053009

0.053009

0.022345

0.041662

0.041662

83

0.047283

0.059466

0.059466

0.027251

0.047017

0.047017

84

0.054248

0.066860

0.066860

0.033811

0.053130

0.053130

85

0.062990

0.075196

0.075196

0.042053

0.060056

0.060056

86

0.073605

0.084646

0.084646

0.052009

0.067888

0.067888

87

0.086115

0.095308

0.095308

0.063725

0.076724

0.076724

88

0.100513

0.107196

0.107196

0.077205

0.086549

0.086549

89

0.116840

0.120431

0.120431

0.092462

0.097426

0.097426

90

0.135087

0.135087

0.135087

0.109484

0.109484

0.109484

91

0.150610

0.150610

0.150610

0.122541

0.122541

0.122541

92

0.166534

0.166534

0.166534

0.136397

0.136397

0.136397

93

0.182546

0.182546

0.182546

0.150811

0.150811

0.150811

94

0.198598

0.198598

0.198598

0.165818

0.165818

0.165818

95

0.214442

0.214442

0.214442

0.181360

0.181360

0.181360

96

0.232944

0.232944

0.232944

0.198746

0.198746

0.198746

97

0.251903

0.251903

0.251903

0.216930

0.216930

0.216930

98

0.271612

0.271612

0.271612

0.235921

0.235921

0.235921

99

0.291889

0.291889

0.291889

0.255617

0.255617

0.255617

100

0.312680

0.312680

0.312680

0.275938

0.275938

0.275938

101

0.333720

0.333720

0.333720

0.296628

0.296628

0.296628

102

0.354570

0.354570

0.354570

0.317471

0.317471

0.317471

103

0.375136

0.375136

0.375136

0.338385

0.338385

0.338385

104

0.395172

0.395172

0.395172

0.358868

0.358868

0.358868

105

0.413945

0.413945

0.413945

0.379183

0.379183

0.379183

106

0.432145

0.432145

0.432145

0.398878

0.398878

0.398878

107

0.449197

0.449197

0.449197

0.417703

0.417703

0.417703

108

0.465497

0.465497

0.465497

0.435384

0.435384

0.435384

109

0.480869

0.480869

0.480869

0.452108

0.452108

0.452108

110

0.495080

0.495080

0.495080

0.467928

0.467928

0.467928

111

0.500557

0.500557 0.500557

0.482562

0.482562

0.482562

112

0.500454

0.500454 0.500454

0.496164

0.496164

0.496164

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<!-- PageBreak -->

Age

Males Females Optional Combined Table Optional Combined Table Non-Annuitant Annuitant for Small Plans Non-Annuitant Annuitant for Small Plans

113

0.500352

0.500352

0.500352

0.502110

0.502110

0.502110

114

0.500201

0.500201

0.500201

0.500952

0.500952

0.500952

115

0.500000

0.500000

0.500000

0.500000

0.500000

0.500000

116

0.500000

0.500000

0.500000

0.500000

0.500000

0.500000

117

0.500000

0.500000

0.500000

0.500000

0.500000

0.500000

118

0.500000

0.500000

0.500000

0.500000

0.500000

0.500000

119

0.500000

0.500000

0.500000

0.500000

0.500000

0.500000

120

1.000000

1.000000

1.000000

1.000000

1.000000

1.000000

(f) Effective/applicability date-(1) In
general. Except as provided in paragraph
(f)(2) of this section, this section applies
to plan years beginning or after January 1,
2018.

(2) Option to apply prior regulations in
certain circumstances. For a plan for
which substitute mortality tables are not
used pursuant to § 1.430(h)(3)-2 for a
plan year beginning during 2018, mortal-
ity tables determined in accordance with
§ 1.430(h)(3)-1 as in effect on December
31, 2017 (as contained in 26 CFR part 1
revised April 1, 2017) may be used for
purposes of applying the rules of section
430 for a valuation date occurring during
2018 if the plan sponsor-

(i) Concludes that the use of mortality
tables determined in accordance with this
section for the plan year would be admin-
istratively impracticable or would result in
an adverse business impact that is greater
than de minimis; and

(ii) Informs the actuary of the intent to
apply the option under this paragraph
(f)(2).

Par. 3. Section 1.430(h)(3)-2 is re-
vised to read as follows:

§ 1.430(h)(3)-2 Plan-specific substitute
mortality tables used to determine
present value.

(a) In general. This section provides
rules for the use of substitute mortality
tables under section 430(h)(3)(C) in deter-
mining any present value or making any
computation under section 430 in accor-
dance with § 1.430(h)(3)-1(a)(1). To use
substitute mortality tables for a plan, a
plan sponsor must first obtain approval to
use the tables in accordance with the pro-
cedures described in paragraph (b) of this

section. Paragraph (c) of this section pro-
vides rules for the development of substi-
tute mortality tables, including guidelines
providing that a plan must have either
fully or partially credible mortality infor-
mation in order to use substitute mortality
tables. Paragraph (d) of this section de-
scribes the requirements for full credibil-
ity. Paragraph (e) of this section describes
the requirements for partial credibility.
Paragraph (f) of this section provides special
rules for newly-affiliated plans. Paragraph
(g) of this section specifies the effective date
and applicability date of this section. The
Commissioner may, in revenue rulings and
procedures, notices, or other guidance pub-
lished in the Internal Revenue Bulletin (see
§ 601.601(d)(2)(ii)(b) of this chapter), pro-
vide additional guidance regarding approval
and use of substitute mortality tables under
section 430(h)(3)(C) and related matters.

(b) Procedures for obtaining approval
to use substitute mortality tables-(1)
Written request for approval to use sub-
stitute mortality tables-(i) General re-
quirements. To use substitute mortality ta-
bles, a plan sponsor must first submit a
written request to the Commissioner dem-
onstrating that those substitute mortality
tables meet the requirements of section
430(h)(3)(C) and this section. This request
must specify the first plan year, and the
term of years (not more than 10), for
which the tables are to apply.

(ii) Time for written request. Substitute
mortality tables may not be used for a plan
year unless the plan sponsor submits the
written request described in paragraph
(b)(1)(i) of this section at least 7 months
before the first day of the first plan year
for which the substitute mortality tables
are to apply.

(2) Commissioner's review of re-
quest-(i) In general. During the 180-day
period that begins on the date the plan
sponsor submits a request for approval to
use substitute mortality tables for a plan
pursuant to this section, the Commis-
sioner will determine whether the request
for approval to use substitute mortality
tables satisfies the requirements of this
section (including any published guidance
issued pursuant to paragraph (a) of this
section), and will either approve or deny
the request. The Commissioner will deny
a request if the request fails to meet the
requirements of this section or if the Com-
missioner determines that a substitute
mortality table does not reflect the actual
mortality experience of the applicable
population.

(ii) Request for additional information.
The Commissioner may request additional
information with respect to the submis-
sion and deny a request to use substitute
mortality tables if the additional informa-
tion is not provided in a timely manner.

(iii) Deemed approval. Except as pro-
vided in paragraph (b)(2)(iv) of this sec-
tion, if the Commissioner does not issue a
denial within the 180-day review period,
the request is deemed to have been ap-
proved.

(iv) Extension of time permitted. The
Commissioner and a plan sponsor may,
before the expiration of the 180-day re-
view period, agree in writing to extend
that period.

(c) Development of substitute mortality
tables-(1) Substitute mortality tables
must be used for all plans in controlled
group-(i) General rule. Except as other-
wise provided in this paragraph (c), sub-
stitute mortality tables are permitted to be

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<!-- PageBreak -->

used for a plan for a plan year only if, for
that plan year (or any portion of that plan
year), substitute mortality tables are also
approved and used for each other pension
plan subject to the requirements of section
430 that is maintained by the plan sponsor
and by each member of the plan sponsor's
controlled group. For purposes of this sec-
tion, the term controlled group means any
group that is treated as a single employer
under paragraph (b), (c), (m), or (o) of
section 414. See paragraph (c)(7) of this
section for special rules applicable to
multiple-employer plans.

(ii) Treatment of plans without credible
mortality information. The rule of para-
graph (c)(1)(i) of this section does not
prohibit use of substitute mortality tables
for one plan for a plan year if the only
other plan or plans maintained by the plan
sponsor (or by a member of the plan spon-
sor's controlled group) for which substi-
tute mortality tables are not used are too
small to have fully or partially credible
mortality information for the plan year.
For this purpose, the demonstration that
neither males nor females under a plan
have credible mortality information for a
plan year must be made by analyzing the
actual number of deaths over a period that
is the same length as the longest experi-
ence study period used for any plan within
the controlled group and that ends less
than three years before the first day of the
plan year.

(2) Mortality experience require-
ments-(i) In general. Substitute mortal-
ity tables must reflect the actual mortality
experience of the pension plan for which
the tables will be used, and that mortality
experience must consist of credible mor-
tality information as described in para-
graph (c)(2)(ii) of this section. Separate
substitute mortality tables must be estab-
lished for each gender and, except as pro-
vided in paragraph (d)(6) of this section, a
substitute mortality table is permitted to
be established for a gender only if the plan
has credible mortality information for
that gender. See paragraph (d)(5) of this
section for rules permitting the use of
substitute mortality tables for separate
populations within a gender in certain
circumstances.

(ii) Credible mortality information-
(A) In general. A plan has credible mor-
tality information for a gender if and only

if the mortality experience with respect to
that gender satisfies the requirement for
either full credibility (as described in
paragraph (d) of this section) or partial
credibility (as described in paragraph (e)
of this section).

(B) Simplified rule. Whether there is
credible mortality information for a gen-
der may be determined by only taking into
account people who are at least age 50 and
less than age 100. If there is credible
mortality information for a gender using
this simplified rule, the entire gender
(not just those who are at least age 50
and less than age 100) has credible mor-
tality information.

(iii) Gender without credible mortality
information-(A) In general. If, for the
first plan year substitute mortality tables
will be used for a plan, one gender has
credible mortality information but the
other gender does not have credible mor-
tality information, then substitute mortality
tables are established for the gender that has
credible mortality information, and the mor-
tality tables under § 1.430(h)(3)-1 are used
for the gender that does not have credible
mortality information. For a subsequent
plan year, the plan sponsor may continue to
use substitute mortality tables for the gender
with credible mortality information without
using substitute mortality tables for the other
gender only if the other gender continues to
lack credible mortality information for that
subsequent plan year.

(B) Demonstration of lack of credible
mortality information for a gender. The
demonstration that a gender does not have
credible mortality information (that is, the
individuals of that gender had fewer than
the minimum number of actual deaths to
have partial credibility, as described in
paragraph (e)(1) of this section) for a plan
year must be made by analyzing the actual
number of deaths over a period that is the
same length as the period for the experi-
ence study on which the substitute mor-
tality tables are based and that ends less
than three years before the first day of the
plan year.

(3) Determination of substitute mortal-
ity tables-(i) Requirement to use gener-
ational mortality table. A plan's substitute
mortality tables must be generational mor-
tality tables. A plan's substitute mortality
tables are determined using the plan's
base substitute mortality tables developed

pursuant to paragraph (d) or (e) of this
section and the mortality improvement
factors described in paragraph (c)(3)(ii) of
this section.

(ii) Determination of mortality im-
provement factors. The mortality im-
provement factor for an age and gender is
the cumulative mortality improvement
factor determined under § 1.430(h)(3)-
1(a)(2)(i)(E) for that age and gender for
the applicable period. The applicable pe-
riod is the period beginning with the base
year for the base substitute mortality table
determined under paragraph (d) or (e) of
this section and ending in the calendar
year in which the individual attains the
age for which the probability of death is
being determined. The base year for the
base substitute mortality table is the cal-
endar year that contains the day before the
midpoint of the experience study period.

(4) Disabled individuals. Under section
430(h)(3)(D), separate mortality tables are
permitted to be used for certain disabled
individuals. If the separate mortality ta-
bles issued under section 430(h)(3)(D) for
certain disabled individuals are used, then
those disabled individuals are disre-
garded for all purposes under this sec-
tion. Thus, if the mortality tables under
section 430(h)(3)(D) are used for dis-
abled individuals under a plan, mortality
experience with respect to those individ-
uals must be excluded in developing
mortality rates for substitute mortality
tables under this section.

(5) Aggregation-(i) Permissive ag-
gregation of plans. A plan sponsor may
use the same substitute mortality tables
for two or more of its plans provided that
the rules of this section are applied by
treating those plans as a single plan. In
such a case, the substitute mortality tables
must be based on data collected with re-
spect to those aggregated plans.

(ii) Required aggregation of plans. In
general, plans are not required to be ag-
gregated for purposes of applying the
rules of this section. However, for pur-
poses of this section, a plan is required to
be aggregated with any plan that was pre-
viously spun off from that plan if a pur-
pose of the spinoff is to avoid the use of
substitute mortality tables for any of the
plans that were involved in the spinoff.

(iii) Special rule regarding experience
study if aggregated plans have different

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<!-- PageFooter="Bulletin No. 2017-43" -->
<!-- PageBreak -->

plan years. If two or more plans are ag-
gregated pursuant to this paragraph (c)(5)
and not all of the plans have the same plan
year, then the experience study period
may be a period that is not a multiple of
12 months, provided that-

(A) The period over which mortality
experience is collected for each plan (the
data study period) is a multiple of 12
months and is based on the plan year for
that plan;

(B) The data study periods for all of the
plans consist of the same number of years;

(C) The data study periods for all of the
plans satisfy the experience study period
requirements of paragraph (d)(2)(ii) of
this section; and

(D) The data study periods for all of the
plans have been selected to minimize the
total period of time covered by the expe-
rience study period by overlapping (to the
greatest extent possible) those data study
periods.

(6) Duration of use of tables-(i) Gen-
eral rule. Except as provided in this para-
graph (c)(6), substitute mortality tables
are used for a plan for the term of consec-
utive plan years specified in the plan spon-
sor's written request for approval to use
such tables under paragraph (b)(1) of this
section and approved by the Commis-
sioner, or a shorter period prescribed by
the Commissioner in the approval to use
substitute mortality tables. Following the
end of the approved term of use, or fol-
lowing any early termination of use de-
scribed in this paragraph (c)(6), the mor-
tality tables specified in § 1.430(h)(3)-1
must be used for the plan unless approval
under paragraph (b)(1) of this section has
been received by the plan sponsor to use
substitute mortality tables based on an up-
dated experience study for a further term.

(ii) Early termination of use of tables.
A plan's substitute mortality tables must
not be used beginning with the earliest
of-

(A) For a plan using a substitute mor-
tality table for only one gender because of
a lack of credible mortality information
with respect to the other gender, the first
plan year for which there is credible mor-
tality information with respect to the gen-
der that had lacked credible mortality in-
formation (unless an approved substitute
mortality table is used for that gender);

(B) The first plan year for which the
plan fails to satisfy the requirements of
paragraph (c)(1) of this section (regarding
use of substitute mortality tables for all
plans in the controlled group), taking into
account the rules of paragraph (f)(3) of
this section (regarding the transition pe-
riod for newly-affiliated plans);

(C) The second plan year following the
plan year for which there is a significant
change in individuals covered by the plan
as described in paragraph (c)(6)(iii) of this
section;

(D) The first plan year following the
plan year for which a substitute mortality
table used for a population is no longer
accurately predictive of future mortality
of that population, as determined by the
Commissioner or as certified by the plan's
actuary to the satisfaction of the Commis-
sioner; or

(E) The date specified in guidance pub-
lished in the Internal Revenue Bulletin
(see § 601.601(d)(2)(ii)(b) of this chapter)
in conjunction with a replacement of
mortality tables specified under section
430(h)(3)(A) and § 1.430(h)(3)-1 (other
than annual updates to the static mortality
tables issued pursuant to § 1.430(h)(3)-
1(a)(3) or changes to the mortality improve-
ment rates pursuant to § 1.430(h)(3)-
1(a)(2)(i)(C)).

(iii) Significant change in coverage-
(A) Change in coverage from time of ex-
perience study. For purposes of applying
the rules of paragraph (c)(6)(ii)(C) of this
section, a significant change in the indi-
viduals covered by a substitute mortality
table for a plan year occurs if the number
of individuals covered by the substitute
mortality table for the plan year is less
than 80 percent or more than 120 percent
of the average number of individuals in
that population over the years covered by
the experience study on which the substi-
tute mortality tables are based. However,
a change in coverage is not treated as
significant if the plan's actuary certifies in
writing to the satisfaction of the Commis-
sioner that the substitute mortality tables
used for the population continue to be
accurately predictive of future mortality
of that population (taking into account the
effect of the change in the population).

(B) Change in coverage from time of
certification. For purposes of applying the
rules of paragraph (c)(6)(ii)(C) of this sec-

tion, a significant change in the individu-
als covered by a substitute mortality table
for a plan year occurs if the number of
individuals covered by the substitute mor-
tality table for the plan year is less than 80
percent or more than 120 percent of the
number of individuals covered by the sub-
stitute mortality table in a plan year for
which a certification described in para-
graph (c)(6)(iii)(A) of this section was
made on account of a prior change in
coverage. However, a change in coverage
is not treated as significant if the plan's
actuary certifies in writing to the satisfac-
tion of the Commissioner that the substi-
tute mortality tables used by the plan with
respect to the covered population continue
to be accurately predictive of future mor-
tality of that population (taking into ac-
count the effect of the change in the pop-
ulation).

(7) Multiple-employer plans-(i) Gen-
eral rule. In the case of a multiple-
employer plan described in section 413(c),
the plan administrator (as described in
section 414(g)) is treated as the plan spon-
sor for purposes of this section. If ap-
proval is received to use substitute mor-
tality tables by a plan, those tables must
apply on a plan-wide basis (even if the
plan is subject to the rules of section
413(c)(4)(A)).

(ii) Application of controlled group
consistency rules. In the case of an em-
ployer that participates in a multiple-
employer plan, if the proportion of the
plan's funding target attributable to the
employees and former employees of
the employer and members of its controlled
group represents more than 50 percent of
the plan's funding target, then the employer
is treated as maintaining the plan for pur-
poses of paragraph (c)(1) of this section.
Thus, for a multiple-employer plan with
credible mortality information that is
treated as maintained by an employer un-
der this paragraph (c)(7), unless substitute
mortality tables are used for that plan,
substitute mortality tables may not be
used for any plan maintained by that em-
ployer or a member of its controlled group
(and if substitute mortality tables are used
for any other plan maintained by any
member of the employer's controlled
group, they must be used for the multiple-
employer plan). By contrast, if the propor-
tion of the plan's funding target attribut-

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able to the employees and former
employees of the employer and members
of its controlled group represents 50 per-
cent or less of the funding target for a
multiple-employer plan in which it partic-
ipates, then the employer is not treated as
maintaining the plan for purposes of para-
graph (c)(1) of this section. Accordingly,
whether substitute mortality tables may be
used for other plans in such an employer's
controlled group is independent of whether
substitute mortality tables are used for the
multiple-employer plan.

(d) Full credibility-(1) In general.
The mortality experience with respect to a
gender or other population within a plan
has full credibility if the actual number of
deaths for that population during the ex-
perience study period described in para-
graph (d)(2) of this section is at least the
full credibility threshold described in
paragraph (d)(3) of this section. Paragraph
(d)(4) of this section provides rules for the
creation of a base substitute mortality ta-
ble from the experience study, which ap-
ply if the mortality experience for the pop-
ulation has full credibility. Paragraph
(d)(5) of this section provides rules re-
garding the use of separate substitute mor-
tality tables for plan populations within a
gender. Paragraph (d)(6) of this section
provides an option to use the combined
mortality experience of both genders to
determine the existence and extent of
credible mortality information and to de-
velop a single mortality ratio for use in
constructing substitute mortality tables.

(2) Experience study period require-
ments-(i) General rule. The base substi-
tute mortality table for a gender or other
population must be developed from an
experience study of the mortality experi-
ence of that population that is collected
over an experience study period. The ex-
perience study period must consist of 2, 3,
4, or 5 consecutive 12-month periods, and
must be the same period for all popula-
tions except as provided in paragraph
(c)(5)(iii) of this section.

(ii) Requirement to use recent experi-
ence data-(A) General rule. Except as
provided in paragraph (d)(2)(ii)(B) of this
section, the last day of the experience
study period must be less than 3 years
before the first day of the first plan year
for which the substitute mortality tables
are to apply. For example, if January 1,

2019, is the first day of the first plan
year for which the substitute mortality
tables will be used, then an experience
study using calendar year data generally
must include data collected for a period
that ends no earlier than December 31,
2016.

(B) Exception for submission between
1 and 2 years before effective date of
table. If the plan sponsor submits a re-
quest for approval to use of substitute
mortality tables more than 1 year (and less
than 2 years) before the first day of the
first plan year for which the substitute
mortality tables are to apply, then the ex-
perience study is not treated as failing to
satisfy the rule in paragraph (d)(2)(ii)(A)
of this section if the last day of the final
year reflected in the experience data is less
than 2 years before the date of submission.
For example, if an application for ap-
proval to use of substitute mortality tables
that would apply for plan years beginning
on or after January 1, 2019 year is sub-
mitted in 2017, then an experience study
using calendar year data may be based on
data collected for a period that ends as
early as December 31, 2015.

(iii) Experience study based on ben-
efit amount. As provided in paragraph
(d)(4)(i) of this section, the mortality rates
under the base substitute mortality tables
are amounts-weighted mortality rates that
are derived from the experience study. An
individual's benefit amount (which is used
to determine amounts-weighted mortality
rates and for other purposes under this
paragraph (d)) is the individual's accrued
benefit expressed in the form of an annual
benefit commencing at normal retirement
age (or at the current age, if later) if an
individual has not commenced benefits
and the individual's annual payment if the
individual has commenced benefits. Be-
cause amounts-weighted mortality rates
for a plan are determined using benefit
amounts, the experience study used to de-
velop a base substitute mortality table
may not include periods before the plan
was established.

(3) Full credibility threshold-(i)
Threshold number of deaths. The full
credibility threshold for a gender or other
population is the product of 1,082 and the
population's benefit dispersion factor. In
calculating the population's benefit dis-
persion factor, for purposes of para-

graphs (d)(3)(iii), (iv), and (v) of this
section, the population is adjusted, as
appropriate, for individuals who leave
the population on account of a reason
other than death.

(ii) Population's benefit dispersion fac-
tor. The population's benefit dispersion
factor is equal to-

(A) The number of expected deaths for
the population during the experience
study period (as defined in paragraph
(d)(3)(iii) of this section); multiplied by

(B) The sum of the mortality-weighted
squares of the benefits (as defined in para-
graph (d)(3)(iv) of this section); divided
by

(C) The square of the sum of the
mortality-weighted benefits (as defined in
paragraph (d)(3)(v) of this section).

(iii) Number of expected deaths. For a
population, the number of expected deaths
during the experience study period is
equal to the sum, for all years in the ex-
perience study period, of the expected
number of deaths in the population during
the year using the mortality rates from the
standard mortality tables determined un-
der paragraph (d)(4)(iii) of this section.
This amount is equal to:

E

Nt

Σ Σ
t=1
x=1

qxt

Where E is equal to the number of years in
the experience study period, t represents
each year during the experience study pe-
riod, x represents an individual in the pop-
ulation during year t, qxt is the mortality
rate for that individual's age and gender
for the calendar year in which year t be-
gins under the applicable standard mortal-
ity table determined under paragraph
(d)(4)(iii) of this section, and NĮ is equal
to the number of individuals in the popu-
lation in year t.

(iv) Sum of the mortality-weighted
squares of the benefits-(A) Determina-
tion. For a population, the sum of the
mortality-weighted squares of the benefits
is the sum, for all years in the experience
study period, for all individuals in the

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population at the beginning of the year, of
the product of-

(1) The probability of death for the
individual using the mortality rate for the
individual's age and gender from the stan-
dard mortality table determined under
paragraph (d)(4)(iii) of this section; and

(2) The square of the benefit amount for
the individual.

(B) Expression as formula. The sum of
the mortality-weighted squares of the ben-
efits for a population determined pursuant
to paragraph (d)(3)(iv)(A) of this section
is equal to:

E

2
t=1

Nt
2
x=1

qxtbxt

Where E is equal to the number of years in
the experience study period, t represents
each year during the experience study pe-
riod, x represents an individual in the pop-
ulation during year t, qxt is the mortality
rate for that individual's age and gender
for the calendar year in which year t be-
gins under the applicable standard mortal-
ity table determined under paragraph
(d)(4)(iii) of this section, bxt is equal to the
benefit amount for that individual for year
t, and NĮ is equal to the number of indi-
viduals in the population in year t.

(v) Square of the sum of the mortality-
weighted benefits-(A) Determination.
For a population, the square of the sum of
the mortality-weighted benefits is equal to
the square of the sum, for all years in the
experience study period, for all individu-
als in the population at the beginning of
the year, of the product of-

(1) The probability of death of the in-
dividual using the mortality rate for the
individual's age and gender from the stan-
dard mortality table determined under
paragraph (d)(4)(iii) of this section; and

(2) The benefit amount for the individ-
ual.

(B) Expression as formula. The square
of the sum of the mortality-weighted ben-
efits for a population determined pursuant
to paragraph (d)(3)(v)(A) of this section is
equal to:

E

2
t=1

Nt
E
x=1

)
2

qxtbxt

Where E is equal to the number of years in
the experience study period, t represents
each year during the experience study pe-
riod, x represents an individual in the pop-
ulation during year t, qxt is the mortality
rate for that individual's age and gender
for the calendar year in which t begins
under the applicable standard mortality table
determined under paragraph (d)(4)(iii) of
this section, bxt is equal to the benefit
amount for that individual for year t, and NI
is equal to the number of individuals in the
population in year t.

(4) Development of mortality rates-
(i) In general. The mortality rates under
the base substitute mortality tables must
be amounts-weighted mortality rates that
are derived from the experience study.
Except as provided in paragraph (d)(4)(iv)
of this section, the mortality rate for an
age and gender is determined by multiply-
ing the mortality rate for that age and
gender from the standard mortality table
determined under paragraph (d)(4)(iii) of
this section by the mortality ratio deter-
mined under paragraph (d)(4)(ii) of this
section. If the simplified rule of paragraph
(c)(2)(ii)(B) of this section is used for the
population, then the mortality ratio is de-
termined only taking into account people
who are at least 50 years old and less than
100 years old, but the mortality ratio is
applied to all ages.

(ii) Mortality ratio-(A) In general.
Except as provided in paragraph (d)(6) of
this section, a mortality ratio is deter-
mined for a gender or other population
within a gender, and is equal to the quo-
tient determined by dividing-

(1) The sum, for all years in the experi-
ence study period, of the benefit amount for
all individuals in the population at the be-
ginning of the year who died during the
year, by

(2) The sum, for all years in the expe-
rience study period, for all individuals in
the population at the beginning of the year
(adjusted, as appropriate, for individuals

who leave on account of reason other than
death), of the product of-

(i) The probability of death of the in-
dividual using the mortality rate for the
individual's age and gender from the stan-
dard mortality table determined under
paragraph (d)(4)(iii) of this section; and

(ii) The benefit amount for the individ-
ual.

(B) Expression as formula. For purposes
of determining a mortality ratio as described
in paragraph (d)(4)(ii)(A) of this section, the
amount described in paragraph (d)(4)(ii)(A)(2)
of this section is equal to:

Nt
Σ Σqxt boxt
E
t=1
x=1

Where E is equal to the number of years in
the experience study period, t represents
each year during the experience study pe-
riod, x represents an individual in the pop-
ulation during year t, qxt is the mortality
rate for that individual's age and gender
for the calendar year in which t begins
under the applicable standard mortality table
determined under paragraph (d)(4)(iii) of
this section, bxt is equal to the benefit
amount for that individual for year t, and N,
is equal to the number of individuals in the
population in year t.

(iii) Standard mortality table-(A)
Projection of base table. The standard
mortality table for a year is the mortality
table determined by applying cumulative
mortality improvement factors determined
under § 1.430(h)(3)-1(a)(2)(i)(E) to the
base mortality table under § 1.430(h)(3)-
1(d) for the period beginning with 2006
and ending in the base year for the base
substitute mortality table determined un-
der paragraph (c)(3)(ii) of this section. For
purposes of the previous sentence, the cu-
mulative mortality improvement factors are
determined using the mortality improve-
ment rates described in § 1.430(h)(3)-
1(a)(2)(i)(C) that apply for the calendar year
during which the plan sponsor submits the
request for approval to use substitute mor-
tality tables. If the plan sponsor submits
such a request during 2017, then the cumu-
lative mortality improvement factors are de-
termined using the mortality improvement

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rates contained in the Mortality Improve-
ment Scale MP-2016 Report (issued by
the Retirement Plans Experience Com-
mittee (RPEC) of the Society of Actu-
aries and available at www.soa.org/
Research/Experience-Study/Pension/
research-2016-mp.aspx).

(B) Selection of base table. If the pop-
ulation consists solely of annuitants, the
annuitant base mortality table set forth in
§ 1.430(h)(3)-1(d) must be used for pur-
poses of paragraph (d)(4)(iii)(A) of this
section. If the population consists solely
of nonannuitants, the nonannuitant base
mortality table set forth in § 1.430(h)(3)-
1(d) must be used for that purpose. If the
population includes both annuitants and
nonannuitants, a combination of the annu-
itant and nonannuitant base tables set
forth in § 1.430(h)(3)-1(d) must be used
for that purpose. The combined table is
constructed using the weighting factors
for small plans that are set forth in
§ 1.430(h)(3)-1(d). The weighting factors
are applied to develop the combined table
using the following equation: Combined
mortality rate = [nonannuitant rate * (1-
weighting factor)] + [annuitant rate *
weighting factor].

(iv) Modification for ages 96 and
older. Mortality rates for ages 96 and
older under the base substitute mortality
table are determined using the rules of
paragraph (d)(4)(i) of this section but sub-
stituting a modified mortality ratio for the
mortality ratio determined under para-
graph (d)(4)(ii) of this section. The mod-
ified mortality ratio is determined as fol-
lows-

(A) For ages 96 through 109, if the
mortality ratio is greater than 1.0, the
modified mortality ratio is equal to the
mortality ratio for the population reduced
by 1/15th of the excess of the mortality
ratio over 1.0 for each year that the age
exceeds 95.

(B) For ages 96 through 109, if the
mortality ratio is less than 1.0, the modi-
fied mortality ratio is equal to the mortal-
ity ratio for the population increased by
1/15th of the excess of 1.0 over the mor-
tality ratio for each year that the age ex-
ceeds 95.

(C) For ages 110 and older, the modi-
fied mortality ratio is equal to 1.0.

(v) Change in number of individuals
covered by table. Experience data may not

be used to develop a base table if the
number of individuals in the population
covered by the table (for example, the
male annuitant population) as of the last
day of the plan year before the year the
request for approval to use the substitute
mortality table is made is less than 80
percent or more than 120 percent of the
average number of individuals in that pop-
ulation over the years covered by the ex-
perience study on which the substitute
mortality tables are based, unless it is
demonstrated to the satisfaction of the
Commissioner that the experience data is
accurately predictive of future mortality
of that population (taking into account the
effect of the change in individuals) after
appropriate adjustments to the data are
made (for example, excluding data from
individuals with respect to a spun-off por-
tion of the plan). For this purpose, a rea-
sonable estimate of the number of individ-
uals in the population covered by the table
may be used.

(5) Separate tables for specified popu-
lations-(i) In general. Except as pro-
vided in this paragraph (d)(5), separate
substitute mortality tables are permitted to
be used for separate populations within a
gender only if-

(A) All individuals of that gender are
divided into separate populations;

(B) Each separate population has mor-
tality experience that has full credibility as
determined under the rules of paragraph
(d)(5)(iii) of this section; and

(C) The separate base substitute mor-
tality table for each separate population is
developed applying the rules of para-
graphs (d)(1) through (4) of this section
using an experience study that takes into
account solely members of that popula-
tion.

(ii) Annuitant and nonannuitant sepa-
rate populations. Notwithstanding para-
graph (d)(5)(i)(B) of this section, a gender
may be separated into separate popula-
tions of annuitants and nonannuitants for
the purpose of developing and using sub-
stitute mortality tables, even if only one of
those separate populations has credible
mortality information. Similarly, if sepa-
rate populations that satisfy paragraph
(d)(5)(i)(B) of this section are established,
then any of those populations may be fur-
ther subdivided into separate annuitant
and nonannuitant subpopulations, pro-

vided that at least one of the two resulting
subpopulations has credible mortality in-
formation. The standard mortality tables
under § 1.430(h)(3)-1 are used for a re-
sulting subpopulation that does not have
credible mortality information. For exam-
ple, if the male hourly and salaried popu-
lations under a plan each have mortality
experience with full credibility and the
male salaried annuitant population has
credible mortality information, then sub-
stitute mortality tables may be used for the
plan with respect to the male salaried an-
nuitant population even if the standard
mortality tables under § 1.430(h)(3)-1 are
used with respect to the male salaried non-
annuitant population (because that nonan-
nuitant population does not have credible
mortality information).

(iii) Credible mortality information for
separate populations. In determining
whether the mortality experience for a
separate population within a gender has
full credibility, the rules of paragraph
(d)(1) of this section must be applied to
that separate population. In demonstrating
that an annuitant (or nonannuitant) popu-
lation within a gender or within a separate
population does not have credible mortal-
ity information, the rules of paragraph
(c)(2)(iii)(B) of this section are applied by
substituting the annuitant (or nonannui-
tant) population for the gender.

(6) Option to determine a single mor-
tality ratio for both genders. Base sub-
stitute mortality tables for a plan may be
constructed by developing and applying a
single mortality ratio for both genders, but
only if the substitute mortality tables used
for all plans maintained by members of
the plan sponsor's controlled group (ex-
cept for plans for which both the male and
female populations, considered sepa-
rately, have mortality experience with full
credibility) are constructed in this manner.
If the option under this paragraph (d)(6) is
applied for a plan then, for all plans main-
tained by members of the plan sponsor's
controlled group, whether both the male
and female populations within the plan
have credible mortality information (and,
if that combined population's mortality
experience does not have full credibility,
the partial credibility weighting factor for
the plan) is determined using the com-
bined mortality experience for both gen-
ders.

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(e) Partial credibility-(1) In general.
The mortality experience with respect to a
population has partial credibility if the
actual number of deaths for that popula-
tion during the experience study period
described in paragraph (d)(2) of this sec-
tion is at least equal to 100 and is less than
the full credibility threshold described for
the population in paragraph (d)(3) of this
section. If the mortality experience for the
population has partial credibility, then in
lieu of creating a base substitute mortality
table as described in paragraph (d) of this
section, the base substitute mortality table
is created as the sum of-

(i) The product of-

(A) The partial credibility weighting
factor determined under paragraph (e)(2)
of this section; and

(B) The mortality rates that are derived
from the experience study determined un-
der paragraph (d)(4)(i) of this section, and

(ii) The product of-

(A) One minus the partial credibility
weighting factor described in paragraph
(e)(2) of this section; and

(B) The mortality rate from the stan-
dard mortality tables described in para-
graph (d)(4)(iii) of this section.

(2) Partial credibility weighting factor.
The partial credibility weighting factor is
equal to the square root of the fraction-

(i) The numerator of which is the actual
number of deaths for the population dur-
ing the experience study period, and

(ii) The denominator of which is the
full credibility threshold for the popula-
tion described in paragraph (d)(3) of this
section.

(f) Special rules for newly-affiliated
plans-(1) In general. This paragraph (f)
provides special rules that provide tempo-
rary relief from certain rules in this sec-
tion in the case of a controlled group that
includes a newly-affiliated plan (as de-
fined in paragraph (f)(2) of this section).
Paragraph (f)(3) of this section provides a
transition period during which the require-
ment in paragraph (c)(1) of this section
(that is, the requirement that all plans
within the controlled group that have
credible mortality information must use
substitute mortality tables) is not applica-
ble. Paragraph (f)(4) of this section pro-
vides special rules that permit the use of a
shorter experience study period in the case
of a newly-affiliated plan that excludes the

mortality experience data for the period
before the date the plan becomes a newly-
affiliated plan.

(2) Definition of newly-affiliated plan.
For purposes of this paragraph (f), a plan
is a newly-affiliated plan if the plan spon-
sor becomes a member of the new con-
trolled group in connection with a merger,
acquisition, or similar transaction de-
scribed in § 1.410(b)-2(f). A plan also is
treated as a newly-affiliated plan for pur-
poses of this section if the plan is estab-
lished in connection with a transfer of
assets and liabilities from another employ-
er's plan in connection with a merger,
acquisition, or similar transaction de-
scribed in § 1.410(b)-2(f).

(3) Transition period for newly-
affiliated plans. The use of substitute mor-
tality tables for a plan within a controlled
group is not prohibited merely because,
during the transition period, substitute
mortality tables are not used for a newly-
affiliated plan that fails to demonstrate a
lack of credible mortality information dur-
ing that period. Similarly, during the tran-
sition period, the use of substitute mortal-
ity tables for a newly-affiliated plan is not
prohibited merely because substitute mor-
tality tables are not used for another plan
within the controlled group that fails to
demonstrate a lack of credible mortality
information during that period. The tran-
sition period begins on the date of the
transaction that results in the plan becom-
ing a newly-affiliated plan and ends on the
last day of the plan year that immediately
follows the latest ending period described
in section 410(b)(6)(C)(ii) with respect to
that transaction for any of the plans in the
controlled group.

(4) Experience study period for newly-
affiliated plan-(i) In general. The mor-
tality experience data for a newly-
affiliated plan may either include or
exclude mortality experience data for the
period before the date the plan becomes a
newly-affiliated plan. If a plan sponsor
excludes mortality experience data for
the period before the date the plan be-
comes a newly-affiliated plan, the exclu-
sion must apply for all populations within
the plan.

(ii) Demonstration relating to lack of
credible mortality information. If the ex-
perience study for a newly-affiliated plan
excludes mortality experience data for the

period prior to the date the plan becomes
a newly-affiliated plan, then the demon-
stration that the plan does not have cred-
ible mortality information for a plan year
that begins after the transition period can
be made using a shorter experience study
period than would otherwise be permitted
under paragraph (c)(2)(iii)(B) of this sec-
tion, provided that the experience study
period begins with the date the plan be-
comes a newly-affiliated plan and ends
not more than one year and one day before
the first day of the plan year.

(iii) Demonstration relating to credible
mortality information. If the experience
study for a newly-affiliated plan excludes
mortality experience data for the period
before the date the plan becomes a newly-
affiliated plan and the plan fails to dem-
onstrate that it does not have credible
mortality information for the plan year
under the rules of paragraph (f)(4)(ii) of
this section, then other plans within the
controlled group may continue to use sub-
stitute mortality tables only if substitute
mortality tables are used for the newly-
affiliated plan for the plan year. In such a
case, the experience study period for the
newly-affiliated plan may consist of a 12-
month period.

(g) Effective/applicability date-(1)
General rule. This section applies for plan
years beginning on or after January 1,
2018. Except as provided in paragraph
(g)(2) of this section, the substitute mor-
tality table used for a plan for such a plan
year must comply with the rules of para-
graphs (a) through (f) of this section.

(2) Transition rule for previously ap-
proved substitute mortality tables-(i)
Applicability for 2018. If a plan sponsor
has received approval from the Commis-
sioner to use substitute mortality tables for
a plan year beginning in 2017, then that
previous approval applies to a plan year
beginning in 2018 provided that-

(A) The previous approval period had
not ended;

(B) Substitute mortality tables are used
for all plans in the plan sponsor's con-
trolled group in accordance with the terms
of that approval; and

(C) The projection factors provided in
Projection Scale AA, as set forth in
§ 1.430(h)(3)-1(d) as in effect on Decem-
ber 31, 2017 (as contained in 26 CFR part

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1 revised April 1, 2017) are applied to the
base substitute mortality table.

(ii) Applicability for later plan years. If
a plan sponsor is described in paragraph
(g)(2)(i) of this section, then that previous
approval applies to a later plan year pro-
vided that-

(A) The previous approval period had
not ended;

(B) Substitute mortality tables are
used for all plans in the plan sponsor's
controlled group that have credible mor-
tality information within the meaning of
paragraph (c)(2)(ii) of this section; and

(C) The mortality improvement factors
described in paragraph (c)(3)(ii) of this
section are applied to the base substitute
mortality table.

(3) Transition rule for requests for ap-
proval to use substitute mortality tables. A
written request described in paragraph
(b)(1)(i) of this section to use substitute
mortality tables for a plan year that begins
during 2018 does not fail to satisfy the
timing requirement of paragraph (b)(1)(ii)
of this section if it is submitted no later
than February 28, 2018, provided that the
plan sponsor agrees to a 90-day extension
of the 180-day review period in accor-
dance with paragraph (b)(2)(iv) of this
section.

Par. 4. Section 1.431(c)(6)-1 is re-
vised to read as follows:

§ 1.431(c)(6)-1 Mortality tables used to
determine current liability.

(a) Mortality tables used to determine
current liability. The mortality assump-
tions that apply to a defined benefit plan
for the plan year pursuant to section
430(h)(3)(A) and § 1.430(h)(3)-1(a) are
used to determine a multiemployer plan's
current liability for purposes of applying
the rules of section 431(c)(6). Either the
generational mortality tables used pur-
suant to § 1.430(h)(3)-1(a)(2) or the
static mortality tables used pursuant to
§ 1.430(h)(3)-1(a)(3) may be used for a
multiemployer plan for this purpose. How-
ever, for this purpose, substitute mortality
tables under § 1.430(h)(3)-2 may not be
used for a multiemployer plan.

(b) Effective/applicability date. This
section applies for plan years beginning
on or after January 1, 2018. For rules that
apply to plan years beginning before Jan-
uary 1, 2018 and on or after January 1,
2008, see § 1.431(c)(6)-1 (as contained in
26 CFR part 1 revised April 1, 2015).

Par. 5. Section 1.433(h)(3)-1 is added
to read as follows:

§ 1.433(h)(3)-1 Mortality tables used to
determine current liability.

(a) Mortality tables used to determine
current liability. In accordance with sec-

tion 433(h)(3)(B), the mortality assump-
tions that apply to a defined benefit plan
for the plan year pursuant to section
430(h)(3)(A) and § 1.430(h)(3)-1(a) are
used to determine a CSEC plan's current
liability for purposes of applying the
rules of section 433(c)(7)(C). Either the
static mortality tables used pursuant to
§ 1.430(h)(3)-1(a)(3) or generational
mortality tables used pursuant to
§ 1.430(h)(3)-1(a)(2) may be used for
a CSEC plan for this purpose, but
substitute mortality tables under
§ 1.430(h)(3)-2 may not be used for this
purpose.

(b) Effective/applicability date. This
section applies for plan years beginning
on or after January 1, 2018.

Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.

Approved: August 21, 2017.

David Kautter,
Assistant Secretary of the Treasury for
Tax Policy.

[Federal Register publication information was not avail-
able at time of publication in the Internal Revenue
Bulletin.]

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# Part III. Administrative, Procedural, and Miscellaneous

Presence of Certain
Individuals in the
Commonwealth of Puerto
Rico or the United States
Virgin Islands Under
Section 937(a) Following
Hurricane Irma or
Hurricane Maria

Notice 2017-56

## SECTION 1. OVERVIEW

Section 937(a) of the Internal Revenue
Code provides that an individual will be
considered a "bona fide resident" of a U.S.
territory for certain purposes if the indi-
vidual meets a "presence test" and does
not have a "tax home" or "closer connec-
tion" to a jurisdiction outside of the U.S.
territory. For purposes of the presence
test, an individual is considered to be pres-
ent in a U.S. territory on any day that the
individual is outside the relevant territory
because the individual leaves or is unable
to return to the relevant territory during
any 14-day period within which a major
disaster occurs in the relevant U.S. terri-
tory for which a Federal Emergency Man-
agement Agency ("FEMA") Notice of a
Presidential declaration of a major disas-
ter is issued in the Federal Register. Sec-
tion 1.937-1(c)(3)(i)(C)(1). In response to
the unprecedented and catastrophic dam-
age caused by Hurricane Irma and Hurri-
cane Maria to the Commonwealth of
Puerto Rico and the United States Virgin
Islands (collectively, the "impacted U.S.
territories"), FEMA has issued Notices of
a Presidential declaration of a major di-
saster for the impacted U.S. territories
with respect to both hurricanes. See
FEMA-4335-DR (issued September 7,
2017); FEMA-4336-DR (issued Septem-
ber 10, 2017); FEMA-4339-DR (issued
September 20, 2017); and FEMA-
4340-DR (issued September 20, 2017).
This Notice provides relief for individ-
uals who may otherwise lose their status
as a "bona fide resident" of an impacted
U.S. territory under section 937(a) as a
result of the unexpected and prolonged
dislocation caused by Hurricane Irma
and Hurricane Maria, absent an exten-

sion of the 14-day period contained in
§ 1.937-1(c)(3)(i)(C)(1).

## SECTION 2. RELIEF UNDER THE PRESENCE TEST

With respect to the impacted U.S. ter-
ritories, for purposes of § 1.937-
1(c)(3)(i)(C)(1), the 14-day period is ex-
tended to 117 days, effective beginning
September 6, 2017, and ending December
31, 2017. Further, for this same purpose,
an individual who is outside of an im-
pacted U.S. territory on any day during
this 117-day period will be treated as leav-
ing or being unable to return to the rele-
vant U.S. territory as a result of Hurricane
Irma and Hurricane Maria on such day.

## SECTION 3. DRAFTING INFORMATION

The principal author of this notice is
Alan S. Williams of the Office of Associ-
ate Chief Counsel (International). For fur-
ther information regarding this Notice,
contact Mr. Williams at (202) 317-6941
(not a toll-free number).

## Updated Static Mortality Tables for Defined Benefit Pension Plans for 2018 Notice 2017-60

### PURPOSE

This notice sets forth the mortality ta-
ble that is used for purposes of determin-
ing minimum present value under
§ 417(e)(3) of the Internal Revenue Code
(Code) and section 205(g)(3) of the
Employee Retirement Income Security
Act of 1974, Public Law No. 93-406, as
amended, for distributions with annuity
starting dates that occur during stability
periods beginning in the 2018 calendar
year. This mortality table is a modified
unisex version of the mortality tables
specified under § 430(h)(3)(A) of the
Code, which have been revised pursuant
to § 430(h)(3)(B) by T.D. 9826, for plan
years beginning in 2018.

This notice also provides updated static
mortality tables determined using the

methodology in § 1.430(h)(3)-1 prior to
its amendment by T.D. 9826. These up-
dated static mortality tables apply for plan
years beginning during 2017 with respect
to valuation dates occurring during 2018.
These updated static mortality tables also
apply for the plan year beginning during
2018 if the option under § 1.430(h)(3)-
1(f)(2) is used for the plan. The option
under § 1.430(h)(3)-1(f)(2), which is
available under certain circumstances for
valuation dates occurring during 2018, is
to apply mortality tables determined in
accordance with regulations previously in
effect.

## BACKGROUND

Section 412 of the Code provides min-
imum funding requirements that generally
apply for defined benefit plans. Section
412(a)(2) provides that § 430 specifies the
minimum funding requirements that gen-
erally apply to defined benefit plans that
are not multiemployer plans. Section
430(a) defines the minimum required con-
tribution for such a plan by reference to
the plan's funding target for the plan year.
Under § 430(d)(1), a plan's funding target
for a plan year generally is the present
value of all benefits accrued or earned
under the plan as of the first day of that
plan year.

Section 430(h)(3) provides rules regard-
ing the mortality tables that are generally
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 computa-
tion under § 430. Those tables are to be
based on the actual experience of pension
plans and projected trends in that experi-
ence. 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.

Section 430(h)(3)(C) provides that,
upon request by a plan sponsor and ap-
proval by the Secretary, substitute mortal-
ity tables that meet the applicable require-
ments may be used in lieu of the standard
mortality tables provided under § 430(h)

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(3)(A). Section 430(h)(3)(D) provides for
the use of separate mortality tables with
respect to certain individuals who are en-
titled to benefits on account of disability.

Section 417(e)(3) generally provides
that the present value of certain acceler-
ated forms of benefit under a qualified
pension plan (including single-sum distri-
butions) must not be less than the present
value of the accrued benefit using appli-
cable interest rates and the applicable
mortality table. Section 417(e)(3)(B) de-
fines 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.

Section 1.430(h)(3)-1 was amended on
October 5, 2017, by T.D. 9826, 82 F.R.
46388, to revise the mortality tables used
under § 430(h)(3)(A) for plan years begin-
ning on or after January 1, 2018. The mor-
tality tables used under § 430(h)(3)(A) are
based on the tables contained in the
RP-2014 Mortality Tables Report,31 ad-
justed for mortality improvement. Section
1.430(h)(3)-1 sets forth base mortality ta-
bles with a base year of 2006. For valuation
dates during 2018, these base mortality ta-
bles are adjusted for mortality improvement
using the mortality improvement rates con-
tained in the Mortality Improvement Scale
MP-2016 Report.32

Section 1.430(h)(3)-1(f)(2) provides
under certain circumstances an option to
apply mortality tables determined in ac-
cordance with regulations previously in
effect for purposes of applying the rules of
§ 430 for the 2018 plan year. Under
§ 1.430(h)(3)-1(f)(2), for a plan for which
substitute mortality tables are not used
pursuant to § 1.430(h)(3)-2 for a plan year
beginning during 2018, mortality tables
determined in accordance with § 1.430(h)
(3)-1 as in effect prior to amendment by
T.D. 9826 (referred to in this notice as
former § 1.430(h)(3)-1) may be used for
purposes of applying the rules of § 430 for
a valuation date occurring during 2018 if

the plan sponsor: (1) concludes that use of
mortality tables determined in accordance
with § 1.430(h)(3)-1 for that plan year
would be administratively impracticable
or would result in an adverse business
impact that is greater than de minimis,
and (2) informs the actuary for the plan
of the intent to apply the option under
§ 1.430(h)(3)-1(f)(2).

Former § 1.430(h)(3)-1 provided for
mortality tables based on the tables con-
tained in the RP-2000 Mortality Tables
Report, adjusted for mortality improve-
ment. The regulations permitted plan
sponsors to apply the projection of mor-
tality improvement in either of two ways:
(1) through use of static tables that were
updated annually to reflect expected
improvements in mortality, or (2)
through use of generational tables. For-
mer § 1.430(h)(3)-1(b)(1) generally re-
quired the use of separate tables for
annuitant and nonannuitant periods for
large plans (those with over 500 partic-
ipants as of the valuation date). Spon-
sors of small plans (those with 500 or
fewer participants as of the valuation
date) were permitted to use combined
tables that apply the same mortality
rates to both annuitants and nonannui-
tants pursuant to former § 1.430(h)(3)-
1(b)(2). Former § 1.430(h)(3)-1(a)(3)
provided that the static mortality tables
for valuation dates occurring in years
after 2008 were to be provided in the
Internal Revenue Bulletin.

Rev. Rul. 2007-67, 2007-2 CB 1047,
provides that, except as otherwise stated in
future guidance, the applicable mortality ta-
ble 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 mortal-
ity rates and 50 percent of the static female
combined mortality rates used under
§ 1.430(h)(3)-1. Rev. Rul. 2007-67 also pro-
vides that the applicable mortality table for a
calendar year applies to distributions with an-

nuity starting dates that occur during stability
periods that begin during that calendar year.

STATIC MORTALITY TABLES FOR
2018

Section 430

Section 1.430(h)(3)-1(e) provides the
static mortality tables that generally apply
for 2018 under section 430(h)(3)(A).

Static mortality tables for 2018
determined in accordance with former
§ 1.430(h)(3)-1 are set forth in Appen-
dix A of this Notice. These static mortal-
ity tables apply under § 430(h)(3)(A): (1)
for valuation dates occurring during 2018
with respect to plan years beginning dur-
ing 2017, and (2) with respect to plan
years beginning during 2018 if the option
under § 1.430(h)(3)-1(f)(2) is used for a
plan.

Section 417(e)(3)

The mortality table that applies under
§ 417(e)(3) for distributions with annuity
starting dates occurring during stability
periods beginning in 2018 is set forth in
Appendix B of this Notice. The mortal-
ity rates in this table are derived from
the mortality tables specified under
§ 430(h)(3)(A) for the 2018 plan year
(which are set forth in § 1.430(h)(3)-1(e))
by following the procedures set forth in
Rev. Rul. 2007-67. This mortality table
applies to a plan for 2018 (including for
purposes of § 1.430(d)-1(f)(4)(iii)(B)) re-
gardless of whether the option under
§ 1.430(h)(3)-1(f)(2) is used for the plan.

### Drafting Information

The principal authors of this notice are
Arslan Malik and Linda S. F. Marshall of
the Office of the Associate Chief Counsel
(Tax Exempt and Government Entities).
For further information regarding this no-
tice, contact Arslan Malik or Linda Mar-
shall at (202) 317-6700 (not a toll-free
number).

31The RP-2014 Mortality Tables Report, as revised November 2014, is available at www.soa.org/Research/Experience-Study/pension/research-2014-rp.aspx.

32The Mortality Improvement Scale MP-2016 Report is available at www.soa.org/Research/Experience-Study/Pension/research-2016-mp.aspx.

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# APPENDIX A

STATIC MORTALITY TABLES DETERMINED UNDER FORMER § 1.430(h)(3)-1(c) and (d) (APPLICABLE FOR VALUATION DATES IN 2018 FOR PLAN YEARS BEGINNING IN 2017 OR IF THE OPTION UNDER § 1.430(h)(3)-1(f)(2) IS USED)

Age

MALE 2018 Non-Annuitant Mortality Rate

MALE 2018 Annuitant Mortality Rate

MALE 2018 Optional Combined Table for Small Plans

FEMALE 2018 Non-Annuitant Mortality Rate

FEMALE 2018 Annuitant Mortality Rate

FEMALE 2018 Optional Combined Table for Small Plans

1

0.000327

0.000327

0.000327

0.000293

0.000293

0.000293

2

0.000221

0.000221

0.000221

0.000191

0.000191

0.000191

3

0.000183

0.000183

0.000183

0.000143

0.000143

0.000143

4

0.000143

0.000143

0.000143

0.000107

0.000107

0.000107

5

0.000131

0.000131

0.000131

0.000097

0.000097

0.000097

6

0.000125

0.000125

0.000125

0.000090

0.000090

0.000090

7

0.000120

0.000120

0.000120

0.000085

0.000085

0.000085

8

0.000111

0.000111

0.000111

0.000075

0.000075

0.000075

9

0.000107

0.000107

0.000107

0.000072

0.000072

0.000072

10

0.000109

0.000109

0.000109

0.000072

0.000072

0.000072

11

0.000112

0.000112

0.000112

0.000073

0.000073

0.000073

12

0.000117

0.000117

0.000117

0.000076

0.000076

0.000076

13

0.000123

0.000123

0.000123

0.000080

0.000080

0.000080

14

0.000135

0.000135

0.000135

0.000089

0.000089

0.000089

15

0.000143

0.000143

0.000143

0.000100

0.000100

0.000100

16

0.000151

0.000151

0.000151

0.000107

0.000107

0.000107

17

0.000160

0.000160

0.000160

0.000116

0.000116

0.000116

18

0.000168

0.000168

0.000168

0.000118

0.000118

0.000118

19

0.000176

0.000176

0.000176

0.000115

0.000115

0.000115

20

0.000183

0.000183

0.000183

0.000112

0.000112

0.000112

21

0.000196

0.000196

0.000196

0.000109

0.000109

0.000109

22

0.000208

0.000208

0.000208

0.000110

0.000110

0.000110

23

0.000227

0.000227

0.000227

0.000116

0.000116

0.000116

24

0.000244

0.000244

0.000244

0.000122

0.000122

0.000122

25

0.000270

0.000270

0.000270

0.000130

0.000130

0.000130

26

0.000310

0.000310

0.000310

0.000144

0.000144

0.000144

27

0.000324

0.000324

0.000324

0.000150

0.000150

0.000150

28

0.000333

0.000333

0.000333

0.000158

0.000158

0.000158

29

0.000349

0.000349

0.000349

0.000167

0.000167

0.000167

30

0.000376

0.000376

0.000376

0.000189

0.000189

0.000189

31

0.000423

0.000423

0.000423

0.000236

0.000236

0.000236

32

0.000476

0.000476

0.000476

0.000269

0.000269

0.000269

33

0.000535

0.000535

0.000535

0.000292

0.000292

0.000292

34

0.000595

0.000595

0.000595

0.000312

0.000312

0.000312

35

0.000655

0.000655

0.000655

0.000330

0.000330

0.000330

36

0.000713

0.000713

0.000713

0.000345

0.000345

0.000345

37

0.000766

0.000766

0.000766

0.000360

0.000360

0.000360

38

0.000790

0.000790

0.000790

0.000376

0.000376

0.000376

39

0.000810

0.000810

0.000810

0.000394

0.000394

0.000394

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Age

MALE

MALE

MALE 2018

FEMALE

FEMALE 2018 Annuitant Mortality Rate

FEMALE 2018

2018 Non-Annuitant Mortality Rate

2018 Annuitant Mortality Rate

Optional Combined Table for Small Plans

2018 Non-Annuitant Mortality Rate

Optional Combined Table for Small Plans

40

0.000828

0.000828

0.000828

0.000429

0.000429

0.000429

41

0.000847

0.000875

0.000847

0.000470

0.000470

0.000470

42

0.000872

0.000968

0.000873

0.000517

0.000517

0.000517

43

0.000902

0.001108

0.000905

0.000569

0.000569

0.000569

44

0.000938

0.001295

0.000944

0.000625

0.000625

0.000625

45

0.000979

0.001528

0.000991

0.000660

0.000668

0.000660

46

0.001015

0.001808

0.001037

0.000695

0.000754

0.000696

47

0.001053

0.002135

0.001087

0.000728

0.000883

0.000732

48

0.001092

0.002508

0.001143

0.000787

0.001055

0.000796

49

0.001133

0.002928

0.001206

0.000851

0.001270

0.000869

50

0.001174

0.003395

0.001275

0.000952

0.001527

0.000981

51

0.001215

0.003422

0.001325

0.001065

0.001643

0.001099

52

0.001257

0.003406

0.001404

0.001235

0.001861

0.001282

53

0.001346

0.003453

0.001547

0.001433

0.002141

0.001500

54

0.001444

0.003498

0.001709

0.001666

0.002481

0.001763

55

0.001608

0.003655

0.002031

0.001938

0.002889

0.002118

56

0.001815

0.003889

0.002473

0.002260

0.003377

0.002579

57

0.002060

0.004198

0.002868

0.002551

0.003869

0.003000

58

0.002347

0.004607

0.003342

0.002789

0.004341

0.003391

59

0.002592

0.005001

0.003793

0.003050

0.004880

0.003848

60

0.002865

0.005476

0.004336

0.003332

0.005470

0.004391

61

0.003268

0.006169

0.005107

0.003632

0.006104

0.005067

62

0.003594

0.006795

0.005868

0.003946

0.006783

0.005818

63

0.004064

0.007698

0.006936

0.004271

0.007507

0.006704

64

0.004413

0.008518

0.007843

0.004601

0.008288

0.007566

65

0.004756

0.009433

0.008887

0.004934

0.009143

0.008534

66

0.005259

0.010720

0.010349

0.005261

0.010069

0.009645

67

0.005583

0.011867

0.011559

0.005579

0.011063

0.010716

68

0.005695

0.012794

0.012538

0.005886

0.012149

0.011850

69

0.005972

0.014133

0.013900

0.006178

0.013368

0.013100

70

0.006026

0.015219

0.014980

0.006452

0.014770

0.014488

71

0.006827

0.016839

0.016605

0.007035

0.015984

0.015711

72

0.008428

0.018697

0.018483

0.008200

0.017778

0.017518

73

0.010830

0.020825

0.020643

0.009948

0.019270

0.019049

74

0.014033

0.023233

0.023089

0.012278

0.021358

0.021174

75

0.018037

0.026595

0.026484

0.015191

0.022993

0.022860

76

0.022841

0.029643

0.029572

0.018686

0.025332

0.025242

77

0.028446

0.033819

0.033777

0.022764

0.028612

0.028552

78

0.034852

0.038544

0.038525

0.027424

0.031540

0.031512

79

0.042059

0.043933

0.043928

0.032667

0.034821

0.034814

80

0.050067

0.050067

0.050067

0.038490

0.038490

0.038490

81

0.057467

0.057467

0.057467

0.042601

0.042601

0.042601

82

0.065843

0.065843

0.065843

0.047227

0.047227

0.047227

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Age

MALE 2018 Non-Annuitant Mortality Rate

MALE

MALE 2018

FEMALE

FEMALE

FEMALE 2018 Optional Combined Table for Small Plans

2018 Annuitant Mortality Rate

Optional Combined Table for Small

2018 Non-Annuitant Mortality Rate

2018 Annuitant Mortality Rate

Plans

83

0.073396

0.073396

0.073396

0.052439

0.052439

0.052439

84

0.083709

0.083709

0.083709

0.058321

0.058321

0.058321

85

0.092919

0.092919

0.092919

0.066628

0.066628

0.066628

86

0.103019

0.103019

0.103019

0.076203

0.076203

0.076203

87

0.117040

0.117040

0.117040

0.087152

0.087152

0.087152

88

0.132854

0.132854

0.132854

0.097072

0.097072

0.097072

89

0.146819

0.146819

0.146819

0.110532

0.110532

0.110532

90

0.165921

0.165921

0.165921

0.122153

0.122153

0.122153

91

0.180722

0.180722

0.180722

0.134140

0.134140

0.134140

92

0.200931

0.200931

0.200931

0.146213

0.146213

0.146213

93

0.216754

0.216754

0.216754

0.162113

0.162113

0.162113

94

0.232553

0.232553

0.232553

0.173875

0.173875

0.173875

95

0.254433

0.254433

0.254433

0.185013

0.185013

0.185013

96

0.270045

0.270045

0.270045

0.195353

0.195353

0.195353

97

0.285214

0.285214

0.285214

0.209923

0.209923

0.209923

98

0.307507

0.307507

0.307507

0.218415

0.218415

0.218415

99

0.322050

0.322050

0.322050

0.225671

0.225671

0.225671

100

0.336045

0.336045

0.336045

0.231601

0.231601

0.231601

101

0.358628

0.358628

0.358628

0.244834

0.244834

0.244834

102

0.371685

0.371685

0.371685

0.254498

0.254498

0.254498

103

0.383040

0.383040

0.383040

0.266044

0.266044

0.266044

104

0.392003

0.392003

0.392003

0.279055

0.279055

0.279055

105

0.397886

0.397886

0.397886

0.293116

0.293116

0.293116

106

0.400000

0.400000

0.400000

0.307811

0.307811

0.307811

107

0.400000

0.400000

0.400000

0.322725

0.322725

0.322725

108

0.400000

0.400000

0.400000

0.337441

0.337441

0.337441

109

0.400000

0.400000

0.400000

0.351544

0.351544

0.351544

110

0.400000

0.400000

0.400000

0.364617

0.364617

0.364617

111

0.400000

0.400000

0.400000

0.376246

0.376246

0.376246

112

0.400000

0.400000

0.400000

0.386015

0.386015

0.386015

113

0.400000

0.400000

0.400000

0.393507

0.393507

0.393507

114

0.400000

0.400000

0.400000

0.398308

0.398308

0.398308

115

0.400000

0.400000

0.400000

0.400000

0.400000

0.400000

116

0.400000

0.400000

0.400000

0.400000

0.400000

0.400000

117

0.400000

0.400000

0.400000

0.400000

0.400000

0.400000

118

0.400000

0.400000

0.400000

0.400000

0.400000

0.400000

119

0.400000

0.400000

0.400000

0.400000

0.400000

0.400000

120

1.000000

1.000000

1.000000

1.000000

1.000000

1.000000

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APPENDIX B APPLICABLE MORTALITY TABLE FOR DISTRIBUTIONS SUBJECT TO § 417(e)(3) WITH ANNUITY STARTING DATES OCCURRING IN STABILITY PERIODS BEGINNING IN 2018

Age

Mortality Rate

Age

Mortality Rate

Age

Mortality Rate

0

0.002327

1

0.000141

41

0.000368

81

0.042142

2

0.000095

42

0.000400

82

0.047336

3

0.000076

43

0.000439

83

0.053242

4

0.000059

44

0.000486

84

0.059995

5

0.000052

45

0.000541

85

0.067626

6

0.000048

46

0.000608

86

0.076267

7

0.000044

47

0.000685

87

0.086016

8

0.000039

48

0.000775

88

0.096873

9

0.000035

49

0.000877

89

0.108929

10

0.000031

50

0.000995

90

0.122286

11

0.000033

51

0.001116

91

0.136576

12

0.000043

52

0.001267

92

0.151466

13

0.000053

53

0.001442

93

0.166679

14

0.000063

54

0.001645

94

0.182208

15

0.000073

55

0.001951

95

0.197901

16

0.000083

56

0.002348

96

0.215845

17

0.000093

57

0.002701

97

0.234417

18

0.000104

58

0.003092

98

0.253767

19

0.000114

59

0.003526

99

0.273753

20

0.000123

60

0.004029

100

0.294309

21

0.000135

61

0.004629

101

0.315174

22

0.000147

62

0.005297

102

0.336021

23

0.000157

63

0.006056

103

0.356761

24

0.000163

64

0.006793

104

0.377020

25

0.000160

65

0.007601

105

0.396564

26

0.000160

66

0.008513

106

0.415512

27

0.000163

67

0.009419

107

0.433450

28

0.000168

68

0.010399

108

0.450441

29

0.000175

69

0.011477

109

0.466489

30

0.000185

70

0.012664

110

0.481504

31

0.000197

71

0.013995

111

0.491560

32

0.000210

72

0.015486

112

0.498309

33

0.000225

73

0.017176

113

0.501231

34

0.000239

74

0.019081

114

0.500577

35

0.000253

75

0.021243

115

0.500000

36

0.000266

76

0.023707

116

0.500000

37

0.000282

77

0.026500

117

0.500000

38

0.000299

78

0.029713

118

0.500000

39

0.000318

79

0.033373

119

0.500000

40

0.000342

80

0.037591

120

1.000000

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# Adjusted Applicable Dollar Amount for Fee Imposed by Sections 4375 and 4376

Notice 2017-61

## I. PURPOSE

This notice provides the adjusted appli-
cable dollar amount to be multiplied by the
average number of covered lives for pur-
poses of the fee imposed by §§ 4375 and
4376 of the Internal Revenue Code for pol-
icy years and plan years that end on or after
October 1, 2017, and before October 1,
2018.

## II. BACKGROUND

Section 4375 imposes a fee on the is-
suer of a specified health insurance policy
for each policy year ending after Septem-
ber 30, 2012, and before October 1, 2019.
Section 4376 imposes a fee on the plan
sponsor of an applicable self-insured health
plan for each plan year ending after Septem-
ber 30, 2012, and before October 1, 2019.
The fee imposed by §§ 4375 and 4376 helps
to fund the Patient-Centered Outcomes Re-
search Trust Fund (PCORTF) and is calcu-
lated using the average number of lives cov-
ered under the policy or plan and the
applicable dollar amount for that policy year
or plan year. Under §§ 4375(a) and 4376(a),
the applicable dollar amount is $2 for policy
and plan years ending on or after October 1,
2013, and before October 1, 2014.33 Treas.

Reg. §§ 46.4375-1(c)(4) and 46.4376-
1(c)(3).

Under §§ 4375(d) and 4376(d) and
Treas. Reg. §§ 46.4375-1(c)(4) and
46.4376-1(c)(3), the applicable dollar
amount for policy years and plan years
ending in any Federal fiscal year begin-
ning on or after October 1, 2014 is in-
creased based on increases in the pro-
jected per capita amount of National
Health Expenditures.

Specifically, the applicable dollar amount
is the sum of -

(i) The applicable dollar amount for the
policy year or plan year ending in
the previous Federal fiscal year; plus

(ii) The amount equal to the product
of -

(A) The applicable dollar amount
for the policy year or plan year
ending in the previous Federal
fiscal year; and

(B) The percentage increase in the
projected per capita amount of
the National Health Expenditures
most recently released by the De-
partment of Health and Human
Services (HHS) before the begin-
ning of the Federal fiscal year.

Notice 2016-64, 2016-46, I.R.B. 726,
provides that the adjusted applicable dol-
lar amount for policy years and plan years
that end on or after October 1, 2016, and
before October 1, 2017, is $2.26.

## III. ADJUSTED APPLICABLE DOLLAR AMOUNT

The applicable dollar amount that must
be used to calculate the fee imposed by

§§ 4375 and 4376 for policy years and plan
years that end on or after October 1, 2017,
and before October 1, 2018, is $2.39. The
increase from the prior amount is calculated
by multiplying the adjusted applicable dol-
lar amount for policy years and plan years
ending in the previous Federal fiscal year,
$2.26, by the percentage increase of the
projected per capita amount of National
Health Expenditures published by HHS on
February 14, 2017. See : https://
www.cms.gov/Research-Statistics-Data-
and-Systems/Statistics-Trends-and-Reports/
NationalHealthExpendData/
NationalHealthAccountsProjected.html,
Table 3. The percentage increase is calcu-
lated after adjustment to reflect updates to
the data used to calculate the prior
amount, $2.26, which was based on the
per capita amounts of National Health Ex-
penditures for 2016 and 2017 published
by HHS on July 12, 2016.

## IV. EFFECTIVE DATE

This notice is effective for policy years
and plan years ending on or after October
1, 2017.

## V. DRAFTING INFORMATION

The principal author of this notice is
Stephanie L. Caden of the Office of As-
sociate Chief Counsel (Tax Exempt &
Government Entities). For further infor-
mation regarding this notice, contact Ms.
Caden at (202) 317-5500 (not a toll-free
number).

33The applicable dollar amount is $1 for policy and plan years ending before October 1, 2013.

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## Part IV. Items of General Interest

### Rev. Proc. 2017-46

#### SECTION 1. PURPOSE

This revenue procedure supplements
the listing in Section 3 of Revenue Proce-
dure 2014-64, 2014-53 I.R.B. 1022, as
previously supplemented by Rev. Proc.
2016-56, 2016-52 I.R.B. 920, of the
countries with respect to which the report-
ing requirement of §§ 1.6049-4(b)(5) and
1.6049-8(a) of the Income Tax Regula-
tions applies, effective for interest paid on
or after January 1, 2018.

This revenue procedure also supple-
ments the listing in Section 4 of Revenue
Procedure 2014-64, as previously sup-
plemented by Rev. Proc. 2015-50,
2015-42 I.R.B. 583, Rev. Proc. 2016-18,
2016-17 I.R.B. 635, Rev. Proc. 2016-56,
and Rev. Proc. 2017-31, 2017-16 I.R.B.
1104, of the countries with which the De-
partment of the Treasury (Treasury De-
partment) and the Internal Revenue Ser-
vice (IRS) have determined that it is
appropriate to have an automatic ex-
change relationship with respect to the
information collected under §§ 1.6049-
4(b)(5) and 1.6049-8(a).

### SECTION 2. BACKGROUND

Sections 1.6049-4(b)(5) and 1.6049-
8(a), as revised by T.D. 9584, 2012-20
I.R.B. 900, require the reporting of certain
deposit interest paid to nonresident alien
individuals on or after January 1, 2013.
Rev. Proc. 2012-24, 2012-20 I.R.B. 913,
was published contemporaneously with
the publication of T.D. 9584. Section 3 of
that revenue procedure identified those
countries with which the United States has
in force an information exchange agree-
ment, such that interest paid to residents
of such countries must be reported by
payors to the extent required under
§§ 1.6049-4(b)(5) and 1.6049-8(a). Sec-
tion 4 of that revenue procedure identified
the countries with which the Treasury De-
partment and the IRS had determined that
it was appropriate to have an automatic
exchange relationship with respect to the
information collected under §§ 1.6049-
4(b)(5) and 1.6049-8(a). Rev. Proc.
2012-24 was updated and superseded by
Rev. Proc. 2014-64. Section 4 of Rev.

Proc. 2014-64 contained an updated list
of countries with which an automatic ex-
change relationship had been determined
appropriate. Rev. Proc. 2014-64 was sup-
plemented by Rev. Proc. 2015-50, Rev.
Proc. 2016-18, Rev. Proc. 2016-56, and
Rev. Proc. 2017-31. This revenue proce-
dure further supplements Rev. Proc.
2014-64 by adding the Faroe Islands and
Greenland to the list of countries in Sec-
tion 3 of Rev. Proc. 2014-64 and by
adding Croatia and Panama to the list of
countries in Section 4 of Rev. Proc. 2014-
64.

### SECTION 3. SUPPLEMENT TO SECTION 3 OF REV. PROC. 2014-64

Section 3 of Rev. Proc. 2014-64, as
previously supplemented by Rev. Proc.
2016-56, is further supplemented to read
as follows:

The following are the countries with
which the United States has in effect an
income tax or other convention or bilat-
eral agreement relating to the exchange of
tax information within the meaning of
section 6103(k)(4) pursuant to which the
United States agrees to provide, as well as
receive, information and under which the
competent authority is the Secretary of the
Treasury or his delegate:

Dominican Republic

Egypt
Estonia

Faroe Islands
Finland

France

Germany
Gibraltar
Greece
Greenland
Grenada

Guernsey

Guyana

Honduras

Hong Kong

Hungary

Iceland

India

Indonesia

Ireland

Isle of Man

Israel

Italy

Jamaica

Japan

Jersey

Kazakhstan

Korea, Republic of
Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Marshall Islands

Mauritius

Mexico

Monaco

Bangladesh

Morocco

Barbados

Netherlands

Belgium

Bermuda

Brazil

New Zealand

British Virgin Islands

Norway

Bulgaria

Pakistan

Canada

Panama

Cayman Islands

Peru

China

Philippines

Colombia

Poland

Costa Rica

Portugal

Croatia

Romania

Curacao

Russian Federation

Cyprus

Saint Lucia

Slovak Republic

Slovenia

South Africa

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Antigua & Barbuda

Aruba

Australia

Austria

Azerbaijan

Czech Republic

Denmark

Dominica

Netherlands island territories: Bonaire,
Saba, and St. Eustatius

<!-- PageBreak -->

Spain

Liechtenstein

approval from the Internal Revenue Ser-

Sri Lanka

Lithuania

vice (IRS) for the use of plan-specific

St. Maarten (Dutch part)

Luxembourg

substitute mortality tables in accordance

Sweden

Malta

with § 430(h)(3)(C) and § 1.430(h)(3)-2

Switzerland

Mauritius

of the Treasury Regulations.34

Thailand

Mexico

.02 This revenue procedure is an up-

Trinidad and Tobago

Netherlands

date of Rev. Proc. 2008-62, 2008-2 C.B.

Tunisia

New Zealand

935. Rev. Proc. 2008-62 was issued in

Turkey

Norway

conjunction with final regulations under

Ukraine

Panama

§ 430(h)(3)(C) that were published in the

United Kingdom

Poland

Federal Register on October 6, 2008

Venezuela

Portugal

(§ 1.430(h)(3)-2, T.D. 9419, 2008-40

Saint Lucia

I.R.B. 790) ("2008 regulations"). Amend-

SECTION 4. SUPPLEMENT TO

Slovak Republic

ments to the 2008 regulations were pub-

SECTION 4 OF REV. PROC.

Slovenia

lished in the Federal Register on October

2014-64

South Africa Spain

5, 2017 (T.D. 9826, 82 F.R. 46388) ("2017 regulations").

Section 4 of Rev. Proc. 2014-64, as

Sweden

.03 This revenue procedure includes

supplemented by Rev. Proc. 2015-50,

United Kingdom

the following significant changes from

Rev. Proc. 2016-18, Rev. Proc. 2016-56, and Rev. Proc. 2017-31, is further supple- mented to read as follows:

SECTION 5. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2008-62 to reflect the 2017 amendments to § 1.430(h)(3)-2: (1) Section 7 (Demonstrations of Cred-

The following list identifies the coun- tries with which the automatic exchange of the information collected under §§ 1.6049-4(b)(5) and 1.6049-8 has

Rev. Proc. 2014-64, as supplemented by Rev. Proc. 2015-50, Rev. Proc. 2016- 18, Rev. Proc. 2016-56, and Rev. Proc.

ible Mortality Information) has been ex- panded to require the information needed to calculate the full credibility threshold in accordance with § 1.430(h)(3)-2(d)(3),

been determined by the Treasury Depart-

2017-31, is further supplemented.

the mortality ratio in accordance with

ment and the IRS to be appropriate: Australia

SECTION 6. EFFECTIVE DATE

§ 1.430(h)(3)-2(d)(4)(ii), and the partial credibility weighting factor in accordance

Azerbaijan

With respect to the additional countries

with § 1.430(h)(3)-2(e)(2).

Belgium

listed in Section 3, this revenue procedure

(2) Section 9 (Information Regarding

Brazil

is effective for interest paid on or after

Other Plans in the Plan Sponsor's Con-

Canada

January 1, 2018.

trolled Group) has been updated to reflect changes to the rules in the regulations

Colombia

Croatia

SECTION 7. DRAFTING INFORMATION

regarding what constitutes lack of credible mortality information.

Czech Republic

Denmark

The principal author of this revenue

(3) Sections 10 through 12 (which pre-

Estonia

procedure is Jackie Bennett Manasterli of

viously provided guidance regarding sub-

Finland

the Office of Associate Chief Counsel (In-

stitute mortality table construction) have

France

ternational). For further information re-

been replaced by a new section 10 (Sub-

Germany

garding this revenue procedure, contact

stitute Base Table Construction), which

Gibraltar

Ms. Manasterli at (202) 317-6941 (not a

requests information to support the con-

Guernsey

toll-free number).

struction of base substitute mortality ta-

Hungary

bles under the 2017 regulations, including

Iceland

base substitute mortality tables for popu-

India

Rev. Proc. 2017-55

lations with mortality experience that is only partially credible.

Ireland

Isle of Man

SECTION 1. PURPOSE

Israel

SECTION 2. BACKGROUND

Italy

.01 This revenue procedure sets forth

INFORMATION

Jamaica

the procedure by which the sponsor of a

Jersey

defined benefit plan that is subject to the

.01 Statutory background. Section 412

Korea, Republic of

funding requirements of § 430 of the In-

sets forth minimum funding requirements

Latvia

ternal Revenue Code (Code) may request

for defined benefit pension plans. In ac-

34Section 302 of the Employee Retirement Income Security Act of 1974, Pub. L. 93-406, as amended (ERISA) sets forth funding rules that are parallel to those in § 412 of the Code, and
section 303 of ERISA sets forth additional funding rules for defined benefit plans (other than multiemployer plans) that are parallel to those in § 430 of the Code. Section 303(h)(3)(C) of
ERISA requires the approval of the Secretary of Treasury for the use of substitute mortality tables, and this revenue procedure applies for that purpose.

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cordance with § 412(a)(2)(A), § 430 spec-
ifies the minimum funding requirements
for defined benefit plans other than mul-
tiemployer plans and CSEC plans. Section
430(h)(3)(A) sets forth rules regarding the
use of generally applicable mortality
tables for purposes of § 430, and
§ 430(h)(3)(B) requires the Secretary of
the Treasury to make periodic revisions
(at least every 10 years) to those mortality
tables. Section 430(h)(3)(C) provides that
the Secretary may approve plan-specific
substitute mortality tables to be used for a
plan for a period not to exceed 10 years in
determining any present value or making
any computation under § 430. Substitute
mortality tables meet the requirements for
approval if the pension plan has enough
participants and has been maintained for a
long enough period of time to have cred-
ible mortality experience, and those tables
reflect the actual experience of the plan
and projected trends in general mortality
experience. Except as provided by the
Secretary, a plan sponsor may not use
substitute mortality tables for any plan
unless substitute mortality tables are es-
tablished and used for each plan subject to
§ 430 of the Code that is maintained by
the plan sponsor or a member of the plan
sponsor's controlled group (as defined in
§ 1.430(h)(3)-2(c)(1)(i)).

.02 Bipartisan Budget Act of 2015.
Section 503 of the Bipartisan Budget Act
of 2015, Pub. L. 114-74, 129 Stat. 584,
which was enacted November 2, 2015,
provides for changes to the rules on the
use of substitute mortality tables. Under
that section, "the determination of
whether plans have credible information
shall be made in accordance with estab-
lished actuarial credibility theory, which
(1) is materially different from the rules
under [section 430(h)(3)(C)], including
Revenue Procedure 2007-37,35 that are in
effect on [November 2, 2015]; and (2)
permits the use of tables that reflect ad-
justments to the tables described in [sec-
tion 430(h)(3)(A) and (B)]" if those
adjustments are based on the actual expe-
rience of the pension plan maintained by
the plan sponsor.

.03 Regulations. Under both the 2008
and 2017 regulations, substitute mortality

tables must reflect the actual mortality ex-
perience of the pension plan for which the
tables are to be used, and that mortality
experience must be credible. Separate
mortality tables must be established for
each gender under the plan and, in gen-
eral, substitute mortality tables are permit-
ted to be established for a gender only if
the plan has credible mortality experience
with respect to that gender. The 2017 reg-
ulations provide an option for determining
the credibility of mortality experience us-
ing the plan's combined mortality experi-
ence for both genders (and using that
combined experience to develop separate
substitute mortality tables for each gen-
der).

.04 Credibility. Under the 2008 regula-
tions, a population has credible mortality
experience if and only if the population
experienced at least 1,000 deaths during
the period covered by the experience
study. The 2017 regulations permit the use
of substitute mortality tables derived from
mortality experience that does not have
full credibility, if the population's mortal-
ity experience has partial credibility. The
2017 regulations also revise the standard
for mortality experience to have full
credibility. In lieu of the previous 1,000-
actual-death standard, the 2017 regula-
tions require a population-specific calcu-
lation of the full credibility standard that
takes into account the dispersion of bene-
fits within the population.

.05 Use of mortality ratios. Develop-
ment of substitute mortality tables under
both the 2008 and 2017 regulations re-
quires creation of a base substitute mor-
tality table ("Substitute Base Table"), with
an associated base year that is used in
conjunction with mortality improvement
factors to construct generational mortality
tables. Unlike the 2008 regulations, which
generally required that a base substitute
mortality table be created by applying a
graduation method to the raw mortality
rates from the experience study, the 2017
regulations require a Substitute Base Ta-
ble to be constructed in a multiple-step
process based on (1) a projection of the
generally applicable mortality table to the
base year for the Substitute Base Table,
(2) a mortality ratio calculated from the

experience study for the population, and
(3) in the case of a plan with partially
credible mortality experience, a weighting
factor based on the credibility of the
plan's experience.

.06 Controlled group consistency re-
quirement. Except as provided by the Sec-
retary, a plan sponsor may not use substi-
tute mortality tables for any plan for a
plan year unless substitute mortality tables
are established and used for each other
plan subject to § 430 that is maintained by
the plan sponsor or a member of the plan
sponsor's controlled group for that plan
year (or, for plans with different plan years,
a portion of that plan year). Under the
regulations, the use of substitute mortality
tables for one plan is not prohibited
merely because another plan maintained
by the plan sponsor (or by a member of
the plan sponsor's controlled group) may
not use substitute mortality tables because
neither the males nor the females under
that other plan have credible mortality in-
formation for a plan year.

.07 Treatment of disabled individuals.
If separate mortality tables are used for
disabled individuals pursuant to § 430(h)
(3)(D), then those individuals are disre-
garded for all purposes under this revenue
procedure.

.08 Treatment of multiple-employer
plans. A multiple-employer plan for
which the proportion of the plan's funding
target attributable to employees and for-
mer employees of the employer and mem-
bers of the employer's controlled group is
greater than 50 percent is treated as main-
tained by that employer for purposes of the
controlled group consistency requirement
pursuant to § 1.430(h)(3)-2(c)(7)(ii). By
contrast, any other multiple-employer plan
in which the employer or a member of the
employer's controlled group participates is
not treated as maintained by the employer
for purposes of the controlled group consis-
tency requirement and is disregarded under
this revenue procedure.

## SECTION 3. GENERAL ADMINISTRATIVE PROCEDURES

.01 Compliance with regulations. A re-
quest for approval to use substitute mor-
tality tables for a plan that would first

35Rev. Proc. 2007-37, 2007-1 C.B. 1433, was not in effect on November 2, 2015. It was issued in 2007 in conjunction with proposed regulations regarding substitute mortality tables
(REG-143601-06, 72 FR 29456) and was replaced by Rev. Proc. 2008-62 when those regulations were finalized in 2008.

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apply for a plan year beginning on or after
January 1, 2018, must satisfy the require-
ments of the 2017 regulations and this
revenue procedure.

.02 Address and user fee for applica-
tion. A request for approval to use substi-
tute mortality tables must be submitted to
the address specified in Section 31.01(1)
of Rev. Proc. 2017-4, 2017-1 I.R.B. 146
(or the corresponding section of its suc-
cessors).

The user fee required by section
6.01(10) of Rev. Proc. 2017-4, 2017-1
I.R.B. 146 (or the corresponding section
of its successors) must be sent with the
request.

.03 Necessary procedural documents.
A request will not be considered for ap-
proval unless it complies with section
3.03(1)-(4) of this revenue procedure.

(1) The request (and any subsequently
provided additional information) must be
signed by the plan sponsor ("applicant")
or an authorized representative of the ap-
plicant who is described in section
6.02(11)(a), (b), (c), (d) or (e) of Rev.
Proc. 2017-4 (or the corresponding sec-
tions of its successors). If an authorized
representative signs the request or will
appear before the IRS in connection with
the request, a properly signed and dated
Form 2848, Power of Attorney and Dec-
laration of Representative, must be sub-
mitted with the request. An individual is
not an authorized representative of the
applicant merely because the individual is
the administrator or a trustee of the plan.

(2) The request must include a decla-
ration in the following form: "Under pen-
alties of perjury, I declare that I have
examined this request, or this modification
to the request, including accompanying
documents, and, to the best of my knowl-
edge and belief, the request or the modi-
fication includes all the relevant facts re-
lating to the request, and such facts are
true, correct, and complete." This decla-
ration must be signed by the applicant (for
example, by an authorized officer of a
corporate applicant), in compliance with
section 6.02(14) of Rev. Proc. 2017-4 (or
the corresponding section of its succes-
sors). The signature of an individual with
a power of attorney will not satisfy the
requirements of this section 3.03(2).

(3) Because a request for approval to
use substitute mortality tables constitutes

a request for a ruling, compliance with
§ 6110 of the Code is required. Section
601.201 of the Statement of Procedural
Rules sets forth the requirements applica-
ble to requests for rulings and determina-
tion letters which are subject to § 6110.
Section 601.201(e) provides specific in-
structions to applicants.

The applicant must provide with the
request either a statement of proposed de-
letions and the statutory basis for each
proposed deletion, or a statement that no
information other than names, addresses,
and taxpayer identifying numbers need be
deleted.

(4) The checklist set forth in Appendix
A of this revenue procedure must be com-
pleted, signed and dated by the applicant
or authorized representative, and included
at the front of the request.

.04 Optional use of electronic format
for certain information. In addition to pro-
viding the submission in written format,
an applicant may provide the information
required under sections 7.04 and 7.05 of
this revenue procedure and section 10.02
or 10.03 of this revenue procedure, as
applicable, in electronic format (such as a
spreadsheet on a USB drive). Providing
that information in electronic format may
expedite the IRS review of the applicant's
request.

## SECTION 4. TIMING PROVISIONS RELATED TO REQUESTS FOR APPROVAL TO USE SUBSTITUTE MORTALITY TABLES

.01 In general. A request for approval
to use substitute mortality tables generally
must be submitted at least 7 months be-
fore the first day of the first plan year for
which the substitute mortality tables are to
apply. Thus, for example, if the first plan
year to which substitute mortality tables
are to apply is the plan year that begins
January 1, 2020, then the deadline for
submitting a request for approval to use
substitute mortality tables is June 1, 2019.

.02 Incomplete requests. An incom-
plete request for approval to use substitute
mortality tables will be denied unless the
IRS and the applicant mutually agree to
extend the 180-day period specified under
§ 430(h)(3)(C)(v)(II). Ordinarily, the IRS
will reject a request for approval to use
substitute mortality tables without consid-
ering the substance of the request (rather

than agree to extend the 180-day period
for review of the request) and refund the
user fee if the request does not include
substantially all of the applicable informa-
tion specified in sections 5 through 11 of
this revenue procedure.

.03 Request for delay for other plans. If
other plans subject to § 430 maintained by
the applicant (or members of the appli-
cant's controlled group) have credible
mortality information and a request for
approval to use substitute mortality tables
will be made for those plans in one or
more separate applications, the applicant
must request that the 180-day review pe-
riod be extended by 90 days Upon receiv-
ing the request for extension of the review
period, except as provided in section 4.02
of this revenue procedure, the IRS will
agree to that extension and give the appli-
cant 90 days to submit those additional
applications (which must be submitted no
later than the deadline that applies to each
such separate request under section 4.01
or 4.04 of this revenue procedure). The
IRS will summarily reject the initial ap-
plication if it does not include a request
for a 90 day extension of the 180-day
review period, or if all of the additional
applications are not submitted within 90
days after the submission of the initial
application (on the grounds that at least
one plan with credible mortality informa-
tion maintained by the applicant (or a
member of the applicant's controlled
group) would not be using substitute mor-
tality tables).

Example. Employer E maintains Plans
A and B, each of which have credible
mortality information. Plan A's plan year
is the calendar year and Plan B's plan year
runs from July 1 through June 30. Em-
ployer E submits a request for approval to
use substitute mortality tables for Plan A
for the 2020 plan year on May 31, 2019
("A Request"). To avoid denial of the A
Request on the grounds that substitute
mortality tables would not be used for all
plans with credible mortality information
maintained by the applicant, Employer E
requests that the 180-day review period
for the A Request be extended by 90 days
to provide Employer E additional time to
submit a separate request for approval to
use substitute mortality tables for Plan B
for the 2020 plan year. The IRS agrees to
this extension in accordance with this sec-

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tion 4.03. The IRS will summarily reject
the A Request unless Employer E submits
a separate request for approval to use sub-
stitute mortality tables for Plan B no later
than August 29, 2019.

.04 Transition rule for submissions for
plan years beginning in 2018. Notwith-
standing the generally applicable dead-
line, a request for approval to use substi-
tute mortality tables will be considered
timely if it is submitted on or before Feb-
ruary 28, 2018, provided that the plan
sponsor requests a 90-day extension of the
180-day review period. Except as pro-
vided in section 4.02 of this revenue pro-
cedure, the IRS will agree to such a re-
quest.

## SECTION 5. GENERAL RULES

.01 Contents of request. A request for
approval to use substitute mortality tables
must include the general information de-
scribed in this section 5, the plan identifi-
cation information described in section 6
of this revenue procedure, the credible
mortality information demonstrations de-
scribed in section 7 of this revenue proce-
dure, the stability demonstrations de-
scribed in section 8 of this revenue
procedure, the information regarding
other plans in the plan sponsor's con-
trolled group described in section 9 of this
revenue procedure, the Substitute Base
Table construction information described
in section 10 of this revenue procedure,
and the demonstrations described in sec-
tion 11 of this revenue procedure.

.02 General standard for approval.
The IRS will approve a request for ap-
proval to use substitute mortality tables
that meet the requirements of § 1.430(h)
(3)-2 and this revenue procedure, unless
the IRS determines that the Substitute
Base Table does not sufficiently reflect the
mortality experience of the applicable
plan population.

.03 Proposed period of use. A separate
request must be made with respect to each
plan ("Plan"), or group of plans that are
aggregated under § 1.430(h)(3)-2(c)(5)
("Aggregated Group"), for which ap-
proval to use substitute mortality tables is
requested. The request must state the first
day of the first plan year for which the
substitute mortality tables are to be appli-
cable ("Requested Effective Plan Year")
and must state the term of years (not more

than 10) for which the tables would be
used.

.04 Description of populations. The re-
quest must include a description of the
populations within the Plan (or the Aggre-
gated Group) covered by the request for
approval to use substitute mortality tables
and a description of the populations, if
any, for which the generally applicable
mortality tables will be used.

For example, if approval to use substi-
tute mortality tables is requested for non-
disabled female individuals (but no other
individuals) under a plan for which the
mortality tables set forth in Rev. Rul.
96-7, 1996-1 CB 59, are used for dis-
abled individuals pursuant to § 430(h)
(3)(D), then the population covered by the
request for approval to use substitute mor-
tality tables would be described as "Non-
disabled Females" and the population for
whom the generally applicable mortality
tables will be used would be described as
"Nondisabled Males."

Similarly, if approval to use substitute
mortality tables is requested for male an-
nuitants (but not male nonannuitants) and
for females on a combined annuitant/non-
annuitant basis, in each case including
disabled individuals, then the populations
covered by the request for approval to use
substitute mortality tables would be de-
scribed as "Male Annuitants" and "Fe-
males," and the population for whom the
generally applicable mortality tables will
be used would be described as "Male
Nonannuitants."

## SECTION 6. IDENTIFICATION OF PLANS

.01 Information for plan for which ap-
proval to use substitute mortality tables is
requested. The following plan informa-
tion must be provided for the Plan (or for
each plan within the Aggregated Group)
for which approval to use substitute mor-
tality tables is requested:

(1) Plan name;

(2) Plan number;

(3) Plan year (calendar year, or if a
fiscal year, the first and last day of the plan
year);

(4) Employer identification number;

(5) Date of plan establishment; and

(6) Copies of the actuarial valuation
reports for each plan year that begins or
ends during the Experience Study Period

as defined in section 7.01 of this revenue
procedure.

.02 Plans for which substitute mortality
tables are not intended to be used. The
following information must be provided
for each plan that is subject to § 430
covering employees of the applicant, or a
member of the applicant's controlled
group, for which substitute mortality ta-
bles are not intended to be used:

(1) Plan name;

(2) Plan number;

(3) Plan year (calendar year, or if a
fiscal year, the first and last day of the plan
year);

(4) Employer identification number;

(5) Date of plan establishment;

(6) If the plan is a newly affiliated plan
under § 1.430(h)(3)-2(f)(2), the date of
the merger, acquisition, or similar trans-
action described in § 1.410(b)-2(f), and
the last day of the transition period de-
scribed in § 1.430(h)(3)-2(f)(3); and

(7) If the applicant or a member of the
applicant's controlled group is an em-
ployer whose employees participate in a
multiple-employer plan, whether the por-
tion of the multiple-employer plan's fund-
ing target attributable to employees and
former employees of the applicant and the
members of the applicant's controlled
group is less than or equal to 50 percent
(so that the multiple-employer plan is
not treated as being maintained by the
applicant or a member of the applicant's
controlled group under § 1.430(h)(3)-
2(c)(7)(ii)).

.03 Other plans for which substitute
mortality tables are being used or are
intended to be used. The following infor-
mation must be provided for each plan
that is subject to § 430 covering employ-
ees of the applicant, or a member of the
applicant's controlled group (including a
multiple-employer plan that is treated as
maintained by the applicant or a member
of the applicant's controlled group pursu-
ant to § 1.430(h)(3)-2(c)(7)(ii)), for which
substitute mortality tables are being used
or for which a request for approval to use
substitute mortality tables has been sub-
mitted or will be submitted:

(1) Plan name;

(2) Plan number;

(3) Plan year (calendar year, or if a
fiscal year, the first and last day of the plan
year);

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(4) Employer identification number;
(5) Date of plan establishment;

(6) If the plan sponsor has received
previous approval to use substitute mor-
tality tables for that plan, the date of that
approval;

(7) If the plan sponsor has requested
approval to use substitute mortality tables
for that plan (but not yet received ap-
proval), the date of that request; and

(8) If the plan sponsor has not yet re-
quested approval to use substitute mortal-
ity tables for that plan, the expected date
of the submission.

.04 Special Rule for Multiple-Employer
Plans. If the applicant is the plan admin-
istrator of a multiple-employer plan (who
is treated as the plan sponsor under
§ 1.430(h)(3)-2(c)(7)(i)), the request for
approval to use substitute mortality tables
must include either:

(1) A statement that none of the employers
whose employees participate in the
plan are treated as maintaining the plan
under § 1.430(h)(3)-2(c)(7)(ii); or

(2) If one or more of the participating
employers is treated as maintaining the
plan under § 1.430(h)(3)-2(c)(7)(ii),
the information specified in sections
6.02 and 6.03 of this revenue proce-
dure, as applicable, treating each
such employer as the applicant.

.05 Spun-off plans. The following ad-
ditional information must be provided
with respect to each plan that is subject to
§ 430 that is maintained by the applicant,
or a member of the applicant's controlled
group, that was spun off from another plan
("original plan") that is maintained by the
applicant or a member of the applicant's
controlled group within the 5-year period
preceding the date of the request:

(1) The plan name and the plan number
of the spun-off plan, and the plan name
and number of the original plan;

(2) The employer identification num-
ber of the employer maintaining the spun-
off plan and the employer identification
number of the employer maintaining the
original plan;

(3) The date of the spinoff;

(4) The approximate number of indi-
viduals covered by the spun-off plan as of
the date of the spinoff and the approxi-
mate number of individuals covered by

the original plan immediately before the
spinoff; and

(5) The reason for the spinoff.

## SECTION 7. DEMONSTRATIONS OF CREDIBLE MORTALITY INFORMATION

.01 Experience Study Period. The ap-
plicant must identify the period of time
covered by the mortality experience study
("Experience Study Period") used to de-
velop the Substitute Base Table(s) and the
base year for the Substitute Base Table(s).
See § 1.430(h)(3)-2(d)(2) and (f)(4) (re-
garding the selection of an experience
study period) and § 1.430(h)(3)-2(c)
(3)(ii) (regarding identification of the base
year).

.02 Full credibility threshold. The ap-
plicant must identify the full credibility
threshold in § 1.430(h)(3)-2(d)(3) and the
number of actual deaths in the Experience
Study Period.

.03 Optional rules. (1) Simplified rule.
The applicant must identify whether it
used the simplified rule under which the
determination of whether there is credible
mortality information for a gender is made
by only taking into account individuals
who are at least age 50 and less than age
100. See § 1.430(h)(3)-2(c)(2)(ii)(B).

(2) Combined genders rule. The appli-
cant must identify whether it used the rule
under which a single mortality ratio is
developed and applied for both genders
to construct Substitute Base Tables for
the Plan (or Aggregated Group). See
§ 1.430(h)(3)-2(d)(6).

04\. Required information. The infor-
mation required in section 7.04(1)-(11) of
this revenue procedure must be provided
in tabular form for all individuals within
each population for whom separate ap-
proval to use substitute mortality tables is
requested, for all ages between 18 and 100
(unless the applicant is using the simpli-
fied rule as provided in section 7.03(1) of
this revenue procedure, in which case,
only those individuals who are at least age
50 and less than age 100 are considered).
This information must be provided sepa-
rately for each year of the Experience
Study Period and also as an aggregate
amount for all years in the Experience
Study Period.

(1) The total number of individuals at
that age at the beginning of the year, ex-

cluding individuals who left the popula-
tion during the year for reasons other than
death.

(2) The total number of individuals at
that age at the beginning of the year who
left the population for reasons other than
death.

(3) The total number of individuals at
that age at the beginning of the year who
died during the year.

(4) The number of expected deaths for
individuals at that age determined by mul-
tiplying the mortality rate from the stan-
dard mortality table described in section
7.05 of this revenue procedure by the total
of the individuals determined in section
7.04(1) and (2) of this revenue procedure,
adjusted for exposure periods of less than
one year.

(5) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
all individuals at that age at the beginning
of the year, excluding individuals who left
the population during the year for reasons
other than death.

(6) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
individuals at that age who left the popu-
lation during the year for reasons other
than death.

(7) The sum of the benefit amounts
described in § 1.430(h)(3)-2(d)(2)(iii) for
individuals at that age who left the popu-
lation during the year on account of death.

(8) The amount determined by multi-
plying the mortality rate for that age from
the standard mortality table described in
section 7.05 of this revenue procedure, by
the total of the amounts determined in
section 7.04(5) and (6) of this revenue
procedure, adjusted for exposure periods
of less than one year.

(9) The sum of the squares of the ben-
efit amounts described in § 1.430(h)(3)-
2(d)(2)(iii) for all individuals at that age at
the beginning of the year excluding indi-
viduals who left the population during the
year for reasons other than death.

(10) The sum of the squares of the
benefit amounts described in § 1.430(h)
(3)-2(d)(2)(iii) for individuals at that age
who left the population during the year for
reasons other than death.

(11) The amount determined by multi-
plying the mortality rate from the standard
mortality table described in section 7.05
of this revenue procedure by the total of

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the amounts determined in section 7.04(9)
and (10) of this revenue procedure, ad-
justed for exposure periods of less than
one year.

.05 Standard mortality table. The re-
quest must include the standard mortality
table for the base year for the Substitute
Base Table, determined pursuant to
§ 1.430(h)(3)-2(d)(4)(iii).

.06 Adjustment for exposure periods of
less than one year. The request must in-
clude a description of the method or meth-
ods used to make adjustments for individ-
uals who left the population for reasons
other than death to reflect exposure peri-
ods of less than one year.

.07 Adjustments to make experience
study predictive of future mortality expe-
rience in light of changes to the plan
population. The request must include a
description of any method used to adjust
the experience study data to reflect
changes in the population during the Ex-
perience Study Period.

.08 Other data adjustments. The re-
quest must include a description of any
other method used to adjust experience
study data.

## SECTION 8. DEMONSTRATION OF POPULATION STABILITY

.01 Required comparison of population
count. The following information must be
provided in tabular form for each popula-
tion within the Plan (or plans within the
Aggregated Group) for which approval to
use substitute mortality tables is re-
quested, aggregating all plans that have
the same plan year:

(1) The average number of individuals
within the population during the Experi-
ence Study Period; and

(2) The number of individuals within
the population as of the last day of the plan
year immediately preceding the plan year
during which approval to use substitute
mortality tables is requested.

.02 Additional requirement for signif-
icant change in participant count. If the
number of individuals described in sec-
tion 8.01(2) of this revenue procedure is
less than 80 percent or more than 120
percent of the number of individuals
described in section 8.01(1) of this rev-
enue procedure, then information and
analysis that shows that the mortality
experience during the Experience Study

Period (taking into account any adjust-
ments described in section 7.07 of this
revenue procedure) is accurately predic-
tive of the future mortality of the popu-
lation must be provided.

## SECTION 9. INFORMATION REGARDING OTHER PLANS IN THE PLAN SPONSOR'S CONTROLLED GROUP

.01 General rule. Under § 1.430(h)(3)-
2(e), a population lacks credible mortality
information if the number of deaths dur-
ing the experience study is less than 100.
For all plans maintained by the applicant
or a member of the applicant's controlled
group (other than a plan for which ap-
proval to use substitute mortality tables is
requested or used for all populations or a
newly affiliated plan with respect to which
the transition period has not ended before
the first day of the Requested Effective
Plan Year), the applicant must identify the
following information for any population
for which there is a lack of credible mor-
tality information (such that substitute
mortality tables may not be used for that
population):

(1) The period of time used to demon-
strate a lack of credible mortality informa-
tion ("Demonstration Period"), and

(2) The number of deaths during that
period.

.02 Alternative demonstrations of lack
of credible mortality information. In lieu
of the information described in section
9.01(2) of this revenue procedure, a lack
of credible mortality information may be
demonstrated by providing alternative in-
formation that demonstrates to the satis-
faction of the Commissioner that the num-
ber of male and/or female deaths did not
exceed 100 during the Demonstration Pe-
riod. For example, a year-by-year recon-
ciliation of the participant population
(such as might be shown in an actuarial
valuation report) might be submitted
showing that the total number of partici-
pants leaving the plan during the Demon-
stration Period is less than 100, as this
would demonstrate that the number of
male and female deaths must also be less
than 100 during that period. Similarly, if
the total number of participants in the plan
does not exceed 100 for any year during
the Demonstration Period, the year-by-
year number of participants in the plan

during such period might be submitted in
lieu of the information described in sec-
tion 9.01(2) of this revenue procedure, as
this would show that the number of male
and female deaths must also be less than
100 during that period.

## SECTION 10. SUBSTITUTE BASE TABLE CONSTRUCTION

.01 Mortality ratio. For each popula-
tion for which approval to use substitute
mortality tables is requested, the appli-
cant's request must include the mortality
ratio determined pursuant to § 1.430(h)
(3)-2(d)(4)(ii).

.02 Substitute Base Table for popula-
tion with full credibility. With respect to a
population with mortality experience that
is fully credible, the applicant's request
must contain the Substitute Base Table
constructed pursuant to § 1.430(h)(3)-
2(d)(4).

.03 Substitute Base Table for popula-
tion with partial credibility. With respect
to a population with mortality experience
that is only partially credible, the appli-
cant's request must include:

(1) A base substitute mortality table
constructed pursuant to § 1.430(h)(3)-
2(d)(4) as if the population had mortality
experience that is fully credible;

(2) The partial credibility weighting
factor for the population determined pur-
suant to § 1.430(h)(3)-2(e)(2); and

(3) The Substitute Base Table con-
structed pursuant to § 1.430(h)(3)-2(e)(1).

## SECTION 11. DEMONSTRATIONS WITH RESPECT TO BASE TABLES

.01 Funding target comparison. For
each plan for which approval to use sub-
stitute mortality tables is requested, the
applicant must provide a comparison of:
(1) the plan's funding target (determined
without regard to at-risk assumptions un-
der § 430(i)) calculated using the gener-
ally applicable generational mortality ta-
bles, and (2) the amount that funding
target would have been if the substitute
mortality tables had been used to deter-
mine the funding target, holding all other
assumptions constant.

These amounts must be determined as
of the valuation date for a plan year end-
ing no earlier than one year and one day
before the first day of the Requested Ef-

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fective Plan Year, and must be provided in
total and separately for: (1) active partic-
ipants, (2) terminated vested participants,
and (3) retired participants and beneficia-
ries receiving payment.

.02 Generational mortality tables. For
each population for which approval to
use substitute mortality tables is re-
quested, the applicant's request must in-
clude sample generational mortality ta-
bles, as of the Requested Effective Plan
Year, for individuals whose years of birth
are 1940, 1960, and 1980, respectively, con-
structed from the Substitute Base Table us-
ing the rules of § 1.430(h)(3)-2(c)(3).

.03 Annuity factors. For each popula-
tion for which approval to use substitute
mortality tables is requested, the appli-
cant's request must include the following
annuity factors based on the substitute
mortality table for an individual whose
year of birth is 20 years before the base
year for the Substitute Base Table, deter-
mined using interest assumptions consis-
tent with those used under section 11.01
of this revenue procedure.

(1) For a Substitute Base Table that is
not an annuitant Substitute Base Table,
deferred to age 55 factors at quinquennial
ages from 20 to 50.

(2) For a Substitute Base Table that is
not a nonannuitant Substitute Base Table,
immediate annuity factors at quinquennial
ages from 50 to 90.

## SECTION 12. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 2008-62 is modified and
superseded. Sections 24.01(11) and
26.02(4) of Rev. Proc. 2017-4 are modi-
fied to refer to this revenue procedure in
lieu of Rev. Proc. 2008-62.

## SECTION 13. EFFECTIVE DATE

This revenue procedure is effective for
all requests for approval to use plan-
specific substitute mortality tables in ac-
cordance with § 430(h)(3)(C) of the Code
for which the Requested Effective Plan
Year begins on or after January 1, 2018.

## SECTION 14. PAPERWORK REDUCTION ACT

The collection of information included
in this revenue procedure has been re-
viewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act (44
U.S.C. section 3507) under control num-
ber 1545-2073.

An agency may not conduct or spon-
sor, and a person is not required to re-
spond to, a collection of information un-
less the collection of information displays
a valid OMB control number.

The collection of information in this
revenue procedure is in sections 3 through
11 of this revenue procedure. This collec-
tion of information is required to provide
sufficient information to enable the IRS to

evaluate, process, and rule on the request
for approval to use substitute mortality
tables. This information will be used to
make determinations under § 430(h)(3) of
the Code. The likely respondents are busi-
nesses or other for-profit institutions and
nonprofit institutions.

The estimated total annual reporting/
recordkeeping burden is 60,000 hours.

The estimated annual burden per re-
spondent/recordkeeper varies from 167 to
900 hours, depending on individual cir-
cumstances, with an estimated average
burden of 267 hours. The estimated an-
nual number of respondents/recordkeep-
ers is 225.

The estimated annual frequency of re-
sponses is once every 10 years.

Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. Section 6103.

## DRAFTING INFORMATION

The principal author of this revenue
procedure is Arslan Malik of the Office of
the Associate Chief Counsel, Tax Exempt
and Government Entities. For further in-
formation regarding the submission of a
request for approval to use substitute mor-
tality tables, please contact Michael Spaid
at (206) 946-3480 (this is not a toll-free
number).

## Appendix A

### REQUEST FOR APPROVAL TO USE SUBSTITUTE MORTALITY TABLES CHECKLIST Instructions

You must include a completed copy of this checklist with your submission. Answer each question in the checklist by circling Yes,
No, or N/A; explanations must be provided for "No" or "N/A" responses. If a completed checklist is not included, or if explanations
are not provided for "No" and "N/A" responses, then your submission will be considered incomplete for purposes of section 4.02
of this revenue procedure.

Sign and date the checklist (as plan sponsor or authorized representative) and place it on top of your request.

Response

number Item

Description of item

Page number in application

Yes No N/A

1.

Have you included the user fee required under Rev. Proc. 2017-4 or its successors? (See section 3.02)

Yes No N/A

2.

If you are designating an authorized representative,36 have you included a properly exe- cuted Form 2848 (Power of Attorney)? (See section 3.03(1))

36It is recommended that an actuary who is able to answer technical questions about the construction of the substitute mortality tables be designated as an authorized representative. Not

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Response

number Item

Description of item

Page number in application

Yes No N/A

3.

Have you satisfied all the requirements of Rev. Proc. 2017-4 or its successors (espe- cially concerning original signatures, penalties of perjury statement, and statement of proposed deletions)? (See section 3.03(2) and (3))

Yes No N/A

4.

If any separate application for approval to use substitute mortality tables will be made for other plans maintained within the applicant's controlled group, have you requested that the 180-day review period be extended? (See section 4.03)

Yes No N/A

5.

Have you identified the first day of the first plan year for which approval to use substi- tute mortality tables is requested and the number of years for which the substitute mor- tality tables would be used? (See section 5.03)

Yes No N/A

6.

Have you included a description of the populations for which approval to use substitute mortality tables is requested? (See section 5.04)

Yes No N/A

7.

Have you included a description of the populations, if any, for which the generally ap- plicable mortality tables will be used? (See section 5.04)

Yes No N/A

8.

Have you included the identification information required under section 6.01 for the Plan (or for each plan in the Aggregated Group) for which approval to use substitute mortality tables is requested?

Yes No N/A

9.

Have you provided the information required for each plan for which substitute mortality tables are not intended to be used? (See section 6.02)

Yes No N/A

10.

Have you provided the information required for each other plan for which substitute mortality tables are being used or are intended to be used? (See section 6.03)

Yes No N/A

11.

If the applicant is a plan sponsor of a multiple-employer plan, have you provided either (1) a statement that none of the employers whose employees participate in the plan are treated as maintaining the plan under § 1.430(h)(3)-2(c)(7)(ii); or (2) if one or more of the participating employers is treated as maintaining the plan under § 1.430(h)(3)- 2(c)(7)(ii), the information specified in section 6.02 and 6.03 of this revenue procedure, as applicable, treating each such employer as the applicant? (See section 6.04)

Yes No N/A

12.

Have you provided the required information for any plans that were spun off from an- other plan maintained by the applicant or a member of the applicant's controlled group within the past 5 years? (See section 6.05)

Yes No N/A

13.

Have you identified the Experience Study Period and the base year for the Substitute Base Tables? (See section 7.01)

Yes No N/A

14.

Have you provided the full credibility threshold and the number of actual deaths during the Experience Study Period for each population within the Plan (or within the Aggre- gated Group) for which approval to use substitute mortality tables is requested (see sec- tion 7.02)?

Yes No N/A

15.

Have you identified whether the applicant used either or both of the optional rules spec- ified in section 7.03?

Yes No N/A

16.

Have you included a table showing the required information for each applicable popula- tion within the Plan (or within the Aggregated Group), for each year of the Experience Study Period and also as an aggregate amount for all years in the Experience Study Period? (See section 7.04)

Yes No N/A

17.

Have you included the relevant standard mortality tables (which is the base mortality table under § 1.430(h)(3)-1(d) projected with mortality improvement to the base year for the Substitute Base Tables)? (See section 7.05)

Yes No N/A

18.

Have you included a description of the methods used to reflect exposure periods of less than one year? (See section 7.06)

Yes No N/A

19.

Have you included a description of any methods used to adjust the experience study data? (See section 7.07 and 7.08)

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Response

number Item

Description of item

Page number in application

Yes No N/A

20.

Have you included a table showing the average number of individuals during the Expe- rience Study Period and the number of individuals within the population as of the last day of the plan year immediately preceding the date of this application, for each popu- lation within the Plan (or within the Aggregated Group) for which the approval to use substitute mortality tables is requested? (See section 8.01)

Yes No N/A

21.

Have you provided information and analysis required if the population has had a signif- icant change in the number of participants, as described in section 8.02?

Yes No N/A

22.

Have you identified the Demonstration Period for all plans maintained by the applicant or a member of the applicant's controlled group other than a plan for which approval to use substitute mortality tables is requested or used for all populations or a newly- affiliated plan with respect to which the transition period has not ended before the first day of the Requested Effective Plan Year? (See section 9.01(1))

Yes No N/A

23.

Have you identified the number of deaths during the Demonstration Period for all plans maintained by the applicant or a member of the applicant's controlled group (other than a plan for which approval to use substitute mortality tables is requested or used for all populations or a newly affiliated plan with respect to which the transition period has not ended before the first day of the Requested Effective Plan Year) for any population for which there is a lack of credible mortality information (such that substitute mortality tables may not be used for that population)? (See section 9.01(2)) Alternatively, have you provided other information for a population that demonstrates that the number of deaths during the Demonstration Period would not exceed 100? (See section 9.02)

Yes No N/A

24.

Have you provided the mortality ratio for each population for which approval to use substitute mortality tables is requested? (See section 10.01)

Yes No N/A

25.

For each population within the Plan (or within the Aggregated Group) whose mortality experience has full credibility, have you provided a full copy of the Substitute Base Table? (See section 10.02)

Yes No N/A

26.

For each population within the Plan (or within the Aggregated Group) for which ap- proval to use substitute mortality tables is requested but for which mortality experience does not have full credibility, have you provided a full copy of the base substitute mor- tality table constructed as if the population's mortality information had full credibility, the partial credibility weighting factor, and a full copy of the Substitute Base Table re- flecting credibility adjustments? (See section 10.03)

Yes No N/A

27.

Have you included a comparison of hypothetical funding targets determined using gen- tion 11.01) erally applicable mortality tables and the proposed substitute mortality tables? (See sec-

Yes No N/A

28.

Have you included the required sample generational mortality tables as of the Re- quested Effective Plan Year, developed from each Substitute Base Table? (See section 11.02)

Yes No N/A

29.

Have you included annuity factors for each Substitute Base Table based on the substi- tute mortality table for an individual whose year of birth is 20 years before the base year for the Substitute Base Table? (See section 11.03)

Yes No N/A

30.

For a request for approval to use substitute mortality tables submitted on or before Feb- ruary 28, 2018, have you included a request for a 90-day extension of the 180-day re- view period? (see section 4.04)

Signature

Date

Title or Authority Typed or printed name of person signing checklist

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## Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.

Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.

Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

## Abbreviations

The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

GP-General Partner.

GR-Grantor.

COOP-Cooperative.

IC-Insurance Company.

Ct.D .- Court Decision.

I.R.B .- Internal Revenue Bulletin.

CY-County.

LE-Lessee.

LP-Limited Partner.

LR-Lessor.

M-Minor.

Nonacq .- Nonacquiescence.

O Organization.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.

PR-Partner.

PRS-Partnership.

PTE-Prohibited Transaction Exemption.
Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S-Subsidiary.

S.P.R .- Statement of Procedural Rules.

Stat .- Statutes at Large.
T-Target Corporation.

T.C .- Tax Court.

T.D .- Treasury Decision.

TFE-Transferee.

TFR-Transferor.

T.I.R .- Technical Information Release.

TP-Taxpayer.
TR-Trust.

TT-Trustee.

U.S.C .- United States Code.

DE-Donee.

Del. Order-Delegation Order.

DISC-Domestic International Sales Corporation.
DR-Donor.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

ERISA-Employee Retirement Income Security Act.
EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

BK-Bank.

B.T.A .- Board of Tax Appeals.

C-Individual.

C.B .- Cumulative Bulletin.

CFR-Code of Federal Regulations.

CI-City.

D-Decedent.

DC-Dummy Corporation.

X-Corporation.

Y-Corporation.

Z-Corporation.

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### Numerical Finding List1

Bulletin 2017-27 through 2017-43

#### Action on Decision:

2017-5, 2017-27 I.R.B. 1
2017-6, 2017-33 I.R.B. 194
2017-7, 2017-42 I.R.B. 311

#### Announcements:

2017-05, 2017-27 I.R.B. 5
2017-08, 2017-28 I.R.B. 9

2017-09, 2017-35 I.R.B. 219
2017-10, 2017-33 I.R.B. 210

2017-11, 2017-39 I.R.B. 255
2017-12, 2017-38 I.R.B. 238
2017-13, 2017-40 I.R.B. 271

#### Notices:

2017-36, 2017-33 I.R.B. 208
2017-37, 2017-29 I.R.B. 89
2017-38, 2017-30 I.R.B. 147
2017-39, 2017-31 I.R.B. 150
2017-40, 2017-32 I.R.B. 190
2017-41, 2017-34 I.R.B. 211
2017-42, 2017-34 I.R.B. 212
2017-43, 2017-36 I.R.B. 224
2017-44, 2017-36 I.R.B. 226
2017-45, 2017-38 I.R.B. 232
2017-46, 2017-41 I.R.B. 275
2017-47, 2017-38 I.R.B. 232
2017-48, 2017-39 I.R.B. 254
2017-49, 2017-40 I.R.B. 258
2017-50, 2017-41 I.R.B. 280
2017-51, 2017-40 I.R.B. 260
2017-52, 2017-40 I.R.B. 262
2017-53, 2017-42 I.R.B. 318
2017-54, 2017-42 I.R.B. 321
2017-55, 2017-42 I.R.B. 324
2017-56, 2017-43 I.R.B. 365
2017-57, 2017-42 I.R.B. 324
2017-58, 2017-42 I.R.B. 326
2017-60, 2017-43 I.R.B. 365
2017-61, 2017-43 I.R.B. 371

### Proposed Regulations:

REG-128841-07, 2017-42 I.R.B. 327
REG-139633-08, 2017-31 I.R.B. 175

REG-128483-15, 2017-32 I.R.B. 191
REG-136118-15, 2017-28 I.R.B. 9
REG-105004-16, 2017-41 I.R.B. 295
REG-125374-16, 2017-41 I.R.B. 300

### Revenue Procedures:

2017-41, 2017-29 I.R.B. 92
2017-42, 2017-29 I.R.B. 124
2017-43, 2017-31 I.R.B. 153

Revenue Procedures :- Continued

2017-44, 2017-35 I.R.B. 216
2017-45, 2017-35 I.R.B. 216
2017-46, 2017-43 I.R.B. 372
2017-47, 2017-38 I.R.B. 233
2017-48, 2017-36 I.R.B. 229
2017-50, 2017-37 I.R.B. 230
2017-52, 2017-41 I.R.B. 283
2017-53, 2017-40 I.R.B. 263
2017-54, 2017-42 I.R.B. 336
2017-55, 2017-43 I.R.B. 373

### Revenue Rulings:

2017-14, 2017-27 I.R.B. 2
2017-15, 2017-32 I.R.B. 176
2017-16, 2017-35 I.R.B. 215

2017-17, 2017-36 I.R.B. 222
2017-18, 2017-39 I.R.B. 239
2017-19, 2017-40 I.R.B. 257
2017-20, 2017-41 I.R.B. 273

Treasury Decisions:

9819, 2017-29 I.R.B. 85
9820, 2017-32 I.R.B. 178
9821, 2017-32 I.R.B. 181
9822, 2017-33 I.R.B. 195
9823, 2017-33 I.R.B. 206
9824, 2017-42 I.R.B. 312

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017-01 through 2017-26 is in Internal Revenue Bulletin
2017-26, dated June 27, 2017.

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# Finding List of Current Actions on Previously Published Items1

Bulletin 2017-27 through 2017-43

Notices:

2015-77
Amplified by
Notice 2017-40, 2017-32 I.R.B. 190

2017-10
Modified by
Notice 2017-58, 2017-42 I.R.B. 326

2017-29
Modified by
Notice 2017-58, 2017-42 I.R.B. 326

## Revenue Procedures:

2016-27
Modified by
Rev. Proc. 2017-43, 2017-31 I.R.B. 153

2016-27
Superseded by
Rev. Proc. 2017-43, 2017-31 I.R.B. 153

2016-48
Superseded by
Rev. Proc. 2017-48, 2017-36 I.R.B. 232

1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2017-01 through 2017-26 is in Internal Revenue Bulletin
2017-26, dated June 27, 2017.

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# Internal Revenue Service Washington, DC 20224

Official Business
Penalty for Private Use, $300

# INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.

# We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.