Treasury Decision 9983
Internal Revenue Service
2023-46 I.R.B. 1237
   
   
   
 26 CFR 1.430(h)(3)-1; 26 CFR 1.431(c)(6)-1; 26 CFR 1.433(h)(3)-1      
     
 T.D. 9983      
     
 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 sets forth final regulations prescribing mortality tables to be used for 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. The tables are 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 the plan. These mortality tables are also relevant for determining the minimum required amount of a lump-sum distribution from such a plan. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain defined benefit pension plans.   
     
 DATES:    Effective date: These regulations are effective October 20, 2023.   
     
 Applicability date: These regulations apply to valuation dates occurring on or after January 1, 2024.   
     
 Incorporation by reference: The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of October 20, 2023.   
     
 FOR FURTHER INFORMATION CONTACT:    Concerning the regulations, Arslan Malik or Linda Marshall at (202) 317-6700; concerning the construction of the base mortality tables and the static mortality tables for 2024, Christopher Denning at (202) 317-5755 (not toll free).   
     
 SUPPLEMENTARY INFORMATION:      
     
 Background      
     
Section 412 of the Internal Revenue Code (Code) prescribes minimum funding requirements for defined benefit pension plans, and section 430 specifies the minimum funding requirements that apply generally to defined benefit plans that are not multiemployer plans.  1   Section 430(a) defines the minimum required contribution for a plan by reference to the plan's funding 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.   
     
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1    Section 302 of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (1974), 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. Pursuant to section 101 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App., as amended, 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. Similarly, Treasury regulations under sections 431 and 433 apply for purposes of sections 304 and 306 of ERISA.   
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Section 430(h)(3) provides rules regarding 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 are to 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. Under 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. Under section 430(h)(3)(C), a plan sponsor may request the Secretary's approval to use plan-specific substitute mortality tables that meet requirements specified in the statute rather than the generally applicable mortality tables. If approved, 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.   
     
Section 430(h)(3)(D) provides for the use of separate mortality tables with respect to certain individuals who are entitled to benefits on account of disability. These separate mortality tables are permitted to be used with respect to disabled individuals in lieu of the generally applicable mortality tables provided pursuant to section 430(h)(3)(A). The Secretary is to establish separate tables for individuals with disabilities occurring in plan years beginning before January 1, 1995, and for individuals with disabilities occurring in later plan years, with the mortality tables for individuals with disabilities occurring in those later plan years applying only to individuals who are disabled within the meaning of Title II of the Social Security Act.  2     
     
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2    Mortality tables that were permitted to be used for disabled participants under section 412(l)(7)(C)(iii)(I) as in effect before 2008 were provided in Rev.Rul. 96-7, 96-3 IRB 12. Notice 2008-29, 2008-1 CB 637, adopted those tables for use under section 430(h)(3)(D).   
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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 applicable mortality table. Section 417(e)(3)(B) defines the term "applicable mortality table" as the mortality table specified for the plan year for minimum funding purposes under section 430(h)(3)(A) (without regard to the rules for substitute mortality tables under section 430(h)(3)(C) or mortality tables for disabled individuals under section 430(h)(3)(D)), modified as appropriate by the Secretary. The modifications made by the Secretary to the section 430(h)(3)(A) mortality table to determine the section 417(e)(3)(B) applicable mortality table are not addressed in these regulations. Revenue Ruling 2007-67, 2007-2 CB 1047, describes the modifications that are currently applied to determine the section 417(e)(3)(B) applicable mortality table.   
     
Final regulations under section 430(h)(3) were published in the Federal Register  on October 5, 2017, in TD 9826, 82 FR 46388 (the 2017 regulations). Section 1.430(h)(3)-1 prescribes base mortality tables and a set of mortality improvement rates, which may be reflected through the use of either generational mortality tables or static mortality tables. The generational mortality tables are a series of mortality tables, one for each year of birth, each of which fully reflects projected trends in mortality rates. The static mortality tables (which are updated annually  3  ) use a single mortality table for all years of birth to approximate the present value that would be determined using the generational mortality tables.   
     
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3    Static mortality tables were published in Notice 2017-60, 2017-43 IRB 365, Notice 2018-02, 2018-2 IRB 281, Notice 2019-26, 2019-15 IRB 943, Notice 2019-67, 2019-52 IRB 1510, Notice 2020-85, 2020-51 IRB 1645, and Notice 2022-22, 2022-20 IRB 1057.   
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The mortality tables included in the 2017 regulations are based on the mortality tables included in the RP-2014 Mortality Tables Report  4   (referred to in this preamble as the RP-2014 mortality tables), which was released by the Retirement Plan Experience Committee (RPEC) of the Society of Actuaries (SOA) in October 2014 (as revised in November 2014), and a set of mortality improvement rates as released by RPEC in the Mortality Improvement Scale MP-2016 Report.  5   In 2016, RPEC initiated a study of private-sector retirement plans in the U.S. in order to provide an update to the RP-2014 mortality tables, and in 2019, RPEC issued the Pri-2012 Private Retirement Plans Mortality Tables Report (Pri-2012 Report).  6   In October 2021, RPEC published the Mortality Improvement Scale MP-2021 Report (MP-2021 Report), which includes the latest mortality improvement scale issued by RPEC.  7 
     
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4    This report is available at https://www.soa.org/globalassets/assets/files/research/exp-study/research-2014-rp-report.pdf.   
     
5    This report is available at https://www.soa.org/globalassets/assets/Files/Research/Exp-Study/mortality-improvement-scale-mp-2016.pdf.   
     
6    This report is available at https://www.soa.org/globalassets/assets/files/resources/experience-studies/2019/pri-2012-mortality-tables-report.pdf.   
     
7    This report is available at https://www.soa.org/globalassets/assets/files/resources/experience-studies/2021/2021-mp-scale-report.pdf.   
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The standards prescribed for developing the mortality tables under section 430(h)(3)(A) 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 in order to determine the minimum full funding limitation under section 431(c)(6)(B)). These standards also apply for CSEC plans described in section 414(y) for purposes of developing mortality tables that are used for purposes of section 433(h)(3)(B)(i) (to determine current liability in order to determine the minimum full funding limitation under section 433(c)(2)(C) and the funded current liability percentage under section 433(i)).   
     
Proposed regulations to update the mortality tables issued under section 430(h)(3) and make certain other changes regarding those tables were published in the Federal Register  on April 28, 2022 (87 FR 25161) (the proposed regulations). Five comments on the proposed regulations were received. No commenters requested to speak at the scheduled public hearing; accordingly, the public hearing was canceled.   
     
On October 27, 2022, RPEC released a report titled the "RPEC 2022 Mortality Improvement Update."  8   Unlike RPEC's previously issued reports regarding mortality improvement, this report does not include a new mortality improvement scale. RPEC noted that, as of the date of that report, the most recent year for which full-year mortality data was available was 2020, which was severely affected by the COVID-19 pandemic. RPEC concluded that it would not be appropriate to incorporate, without adjustment, the substantially higher rates of mortality experience from 2020 into the models RPEC had previously used to project future mortality.  9   Therefore, RPEC chose not to release a new mortality improvement scale in 2022. Instead, RPEC recommended the use of an assumed increase in mortality rates to reflect the impact of the COVID-19 pandemic, which would be phased out after an appropriate period. RPEC did not recommend a specific level for this assumed increase but provided data about mortality rates for 2020 through the first half of 2022 and provided examples of assumed increases that could be used (including the assumed increase used in the 2022 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds).   
     
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8    This report is available at https://www.soa.org/resources/research-reports/2022/rpec-mortality-improvement/.   
     
9    RPEC noted that, if it had used its standard graduation model and had included 2020 data in accordance with its usual practice, this would have had the effect of elevating mortality improvement rates for periods prior to the pandemic.   
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Section 335 of the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), which was enacted on December 29, 2022 as Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328 (136 Stat. 4459), instructs the Secretary or the Secretary's delegate to amend the regulations under section 430(h)(3)(A) no later than June 30, 2024. Under this provision, for valuation dates occurring during or after 2024, the mortality improvement rates specified in those regulations must not assume for years beyond the valuation date mortality improvements at any age that are greater than 0.78 percent. Section 335 of the SECURE 2.0 Act also instructs the Secretary (or delegate) to modify the 0.78 percent limitation to reflect material changes in the overall rate of improvement projected by the Social Security Administration.   
     
After consideration of public comments received on the proposed regulations (and taking into account section 335 of the SECURE 2.0 Act), the proposed regulations are adopted by this Treasury decision, with certain changes. These changes include: (1) a delay in the applicability date; (2) modifications in the mortality improvement rates to reflect the expected ongoing impact of COVID-19 on mortality rates and to reflect the 0.78 percent annual cap on mortality improvement rates as required by section 335 of the SECURE 2.0 Act; and (3) a minor change related to the treatment of individuals who are not identified as male or female.   
     
 Summary of Comments and Explanation of Revisions      
     
These regulations set forth the updated methodology for determining the generally applicable mortality tables that are used to calculate present value under section 430 of the Code. Pursuant to section 417(e)(3)(B), a modified version of these tables is used for purposes of determining the amount of a single-sum distribution (or another accelerated form of distribution). In addition, these tables are used to determine current liability for multiemployer plans under section 431(c)(6) and CSEC plans under section 433(h).   
     
The updated methodology for determining the generally applicable mortality tables under section 430(h)(3)(A) is issued pursuant to the requirement under section 430(h)(3)(B) to revise the mortality tables used under section 430 to reflect the actual mortality experience of pension plan participants and projected trends in that experience as well as the requirement under section 335 of the SECURE 2.0 Act that mortality improvement rates provided under the regulations for years after the year that includes the applicable valuation date may not exceed 0.78 percent per year. As under the 2017 regulations and the proposed regulations, the methodology for determining generally applicable mortality tables involves the separate determination of base mortality tables and the projection of mortality improvement.   
     
A. Base Mortality Tables    
     
These regulations adopt the base mortality tables set forth in the proposed regulations for use under section 430(h)(3)(A) of the Code, which are derived from the tables set forth in the Pri-2012 Report. No commenter suggested any alternative source for base mortality tables.   
     
Like the base mortality tables provided in the 2017 regulations, the base mortality tables set forth in these regulations are gender-distinct and provide separate non-annuitant and annuitant mortality rates. The base mortality tables have a base year of 2012 (the central year of the experience study used to develop the mortality tables in the Pri-2012 Report). These base tables generally have the same mortality rates as the employee and non-disabled annuitant mortality rates (amounts weighted) that were released by RPEC in connection with the Pri-2012 Report. However, these base tables also include non-annuitant mortality rates for ages below 18 and above 80 and annuitant mortality rates for ages below age 50. This generally is the same approach that was used to develop the base mortality tables in the 2017 regulations. The preamble to the proposed regulations describes the methodology that was used to develop non-annuitant mortality rates for ages below age 18 and above age 80 and annuitant mortality rates for ages below age 50. See 87 FR 25161, 25163.   
     
B. Mortality Improvement    
     
These regulations adopt the methodology set forth in the proposed regulations regarding the adjustment of the base mortality tables to reflect expected trends in mortality improvement but use different mortality improvement rates. The proposed regulations applied the Scale MP-2021 Rates (the mortality improvement scale in the MP-2021 Report) for valuation dates in the 2023 calendar year. This mortality improvement scale was developed using the same underlying methodology used to develop earlier mortality improvement scales but reflects historical population data through 2019 and the change to the RPEC-selected assumptions for the long-term rate of mortality improvement that was first incorporated in the Mortality Improvement Scale MP-2020 Report.  10     
     
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10    This report is available at https://www.soa.org/globalassets/assets/files/resources/experience-studies/2020/mortality-improvement-scale-mp-2020.pdf.   
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One commenter expressed concern that the expected long-term improvements in longevity reflected in the MP-2021 Report may be overly optimistic and suggested that regulations apply a cap on the long-term mortality improvement rates used. Another commenter recommended that future mortality rates be increased to reflect the long-term impact of COVID-19.   
     
After considering all the comments and the RPEC 2022 Mortality Improvement Update, the Department of the Treasury (Treasury Department) and the IRS have decided to adopt a modified version of the MP-2021 Mortality Improvement Scale for valuation dates occurring on or after January 1, 2024. The mortality improvement scale applicable for valuation dates occurring on or after January 1, 2024, which is referred to as the 2024 Adjusted Scale MP-2021 Rates, is based on the Scale MP-2021 Rates. However, the 2024 Adjusted Scale MP-2021 Rates reflect a modification to the Scale MP-2021 Rates that eliminates any mortality improvement during 2020, 2021, 2022, and 2023 (while retaining any projected mortality deterioration for those years under the MP-2021 Mortality Improvement Scale).  11   In addition, in response to the statutory instruction in section 335 of the SECURE 2.0 Act, the 2024 Adjusted Scale MP-2021 incorporates a cap on mortality improvement rates of 0.78 percent per year for years after 2024.  12   This cap on mortality improvement rates is statutorily required by a clear statutory instruction, and public comment on the cap rate is unnecessary.   
     
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11    Because the mortality rates provided in these regulations apply beginning in 2024 (that is, after the height of the COVID-19 pandemic), the significantly higher rates of mortality experience during 2020 through 2023 are not determinative of mortality rates for later years. However, the Treasury Department and the IRS expect that mortality in the future will be marginally higher than what was projected based on mortality experience prior to the COVID-19 pandemic. This expectation has been reflected through the elimination of any mortality improvement assumption for the years 2020 through 2023.   
     
12    Because the 0.78 percent cap applies to rates for years after the year that includes the applicable valuation date, the first impact of that cap will be on the mortality rates that are projected to apply in 2025.   
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The Treasury Department and the IRS intend to consider new data regarding mortality trends of the general population as it becomes available (including future reports and mortality improvement scales issued by RPEC, as well as projections of mortality improvement issued by the Social Security Administration) and to specify new mortality improvement rates that reflect updated data when future modifications become appropriate. Those new mortality improvement rates will incorporate the cap on mortality improvement rates described in section 335 of the SECURE 2.0 Act (including a change to the level of the 0.78 percent cap on annual mortality improvement rates as a result of any material changes in the overall rate of improvement projected by the Social Security Administration).   
     
C. Use of Static Tables for Small Plans    
     
The 2017 regulations provide for the use of separate generational non-annuitant and annuitant mortality tables and separate static non-annuitant and annuitant mortality tables. However, the proposed regulations provided for the elimination of the use of static mortality tables other than for small plans. This change was proposed because the Treasury Department and the IRS believe that there was no longer a need to allow the use of static mortality tables for larger plans (as most actuarial firms have the capability to use generational mortality tables) and to minimize anti-selection by plan sponsors who determine that the use of static mortality tables results in lower minimum funding requirements. No commenters objected to this change, and these regulations adopt that change.   
     
D. Individuals not identified as male or female    
     
One commenter requested that final regulations clarify how the mortality tables under section 430(h)(3)(A) are applied in the case of a participant or beneficiary who identifies as nonbinary. To address this issue, and to clarify how these tables should be applied for the portion of a plan's population for whom gender data is not available, the regulations provide that the plan's actuary must use a reasonable approach in applying the section 430(h)(3)(A) mortality tables with respect to the portion of a plan's population whose gender is not identified as male or female (for example, a plan participant who identifies as nonbinary or for whom gender is not known). The regulations include two examples of reasonable approaches that may be used for this purpose. These two approaches are merely two reasonable methods for determining liabilities with respect to individuals for whom male or female gender is not identified, and other reasonable approaches may be appropriate.  13     
     
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13    For example, it might be reasonable to apply an approach based on an equal weighting of male mortality rates and female mortality rates if the gender ratio of the portion of the plan population for whom male or female gender is identified is sufficiently close to 50 percent male and 50 percent female.   
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Under the first approach, the liability for an individual is determined as the weighted average of the liability calculated as if the individual were male and the liability calculated as if the individual were female, using an appropriate weighting that takes into account the distribution of gender in the plan's population for individuals for whom gender is identified. For example, if the gender distribution in a plan's population for whom the gender is identified is 2/3 male and 1/3 female, the liability calculated for the individual would be equal to 2/3 of the liability calculated as if the individual were male and 1/3 of the liability calculated as if the individual were female.   
     
The second approach might be used in connection with actuarial software that is not able to apply a weight to individuals in the plan census. Under the second approach, either male or female status is assigned randomly to an individual for whom male or female gender is not identified in a manner that is expected to result in an appropriate proportion of males and females for the plan population that takes into account the distribution of gender for individuals in the plan's population for whom gender is identified. For example, if the gender distribution in a plan population for whom the gender is identified is 2/3 male and 1/3 female, a gender may be assigned to an individual for whom gender is not identified based on the individual's birthdate, with someone born in the first 8 months of the year assigned male gender and someone born in the last 4 months of the year assigned female gender.   
     
 Applicability Date      
     
These regulations apply for valuation dates occurring on or after January 1, 2024.   
     
 Effect of Regulations on Previously Approved Substitute Mortality Tables      
     
The 2017 regulations also included rules regarding the use of plan-specific substitute mortality tables under section 430(h)(3)(C), which are set forth in§ 1.430(h)(3)-2. Section 1.430(h)(3)-2(c)(6)(ii) provides for the early termination of the use of substitute mortality tables in certain circumstances, including in conjunction with a replacement of the mortality tables specified in§ 1.430(h)(3)-1. Under§    1.430(h)(3)-2(c)(6)(ii)(E), the early termination in conjunction with a replacement of the generally applicable mortality tables will apply as of a date specified in guidance published in the Internal Revenue Bulletin. As stated in the preamble to the proposed regulations, the Treasury Department and the IRS generally will not require that the use of previously approved substitute mortality tables be terminated solely as a result of replacement of the generally applicable mortality tables.   
     
Proposed regulations modifying the rules for approving plan-specific substitute mortality tables are being published in the proposed rules section of this issue of the Federal Register. Those regulations are proposed to apply to plan years beginning on or after January 1, 2025. Until amendments to the plan-specific substitute mortality regulations are finalized--and an updated revenue procedure that reflects the final regulations is issued--the Treasury Department and the IRS will not require that any previously approved plan-specific substitute mortality tables be terminated pursuant to§ 1.430(h)(3)-2(c)(6)(ii)(E).   
     
 Incorporation by Reference      
     
Section 1.430(h)(3)-1(b)(1)(iii) of these regulations provides that the mortality improvement rates used to construct generational tables to be used for valuation dates occurring on or after January 1, 2024, are the 2024 Adjusted Scale MP-2021 Rates as described in the third paragraph of section B of the Summary of Comments and Explanation of Revisions in this preamble. The Office of the Federal Register (OFR) has regulations concerning incorporation by reference. 1 CFR part 51. These regulations require that agencies must discuss in the preamble to a rule or proposed rule the way in which materials that the agency incorporates by reference are reasonably available to interested persons, and how interested parties can obtain the materials. 1 CFR 51.5(b). The 2024 Adjusted Scale MP-2021 Rates may be found at www.irs.gov/retirement-plans/pension-plan-mortality-tables.   
     
 Statement of Availability of IRS Documents      
     
IRS Revenue Rulings, Revenue Procedures, and Notices cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS website at www.irs.gov.   
     
 Special Analyses      
     
Pursuant to the Memorandum of Agreement, Review of Treasury Regulations under Executive Order 12866 (June 9, 2023), tax regulatory actions issued by the IRS are not subject to the requirements of section 6 of Executive Order 12866, as amended.    Therefore, a regulatory impact assessment is not required.   
     
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that the regulations will not have a significant economic impact on a substantial number of small entities. The only provision that increases regulatory burden is§ 1.430(h)(3)-1(b), which generally requires the use of generational mortality tables. However, under§ 1.430(h)(3)-1(c), small entities are not required to use generational mortality tables. Therefore, these regulations will not have a significant economic impact on a substantial number of small entities.   
     
Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These regulations do not include any Federal mandate that may result in expenditures by State, local, or tribal governments, or by the private sector in excess of that threshold.   
     
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These regulations do not have federalism implications, impose substantial direct compliance costs on State and local governments, or preempt State law within the meaning of the Executive order.   
     
Pursuant to section 7805(f) of the Code, the proposed regulations that preceded these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.   
     
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).   
     
 Drafting Information      
     
The principal authors of these regulations are Arslan Malik and Linda S. F. Marshall of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other personnel from the Treasury Department and the IRS participated in the development of these regulations.   
     
 List of Subjects in 26 CFR Part 1      
     
Income taxes, Incorporation by reference, Reporting and recordkeeping requirements.   
     
 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 follows:   
     
Authority: 26 U.S.C. 7805 * * *   
     
Par. 2. Section 1.430(h)(3)-1 is revised to read as follows:§ 1.430(h)(3)-1 Mortality tables used to determine present value.      
     
(a) Overview --(1) Standard mortality tables. This section sets forth rules for the mortality tables to be used in determining present value or making any computation under section 430. These mortality tables include--   
     
(i) Generational mortality tables described in paragraph (b) of this section; and   
     
(ii) Static mortality tables for small plans described in paragraph (c) of this section.   
     
(2) Alternative tables --(i) Plan-specific mortality tables. In lieu of using the mortality tables provided under this section, plan-specific substitute mortality tables are permitted to be used for purposes of section 430 pursuant to section 430(h)(3)(C), provided that the requirements of§ 1.430(h)(3)-2 are satisfied.   
     
(ii) Disabled individuals. In lieu of using the mortality tables provided under this section, mortality tables for disabled individuals are permitted to be used pursuant to section 430(h)(3)(D). These tables are provided in guidance published in the Internal Revenue Bulletin. See§ 601.601(d) of this chapter.   
     
(3) Individuals not identified as either male or female. The mortality tables in this section are applied for an individual based on the individual's gender. With respect to the portion of a plan's population for which male or female gender is not identified (for example, because an individual identifies as nonbinary or because the gender information for an individual is not available), the plan's actuary must use a reasonable approach for determining liability. Some reasonable approaches for these individuals include--   
     
(i) Determining the liability for an individual for whom male or female gender is not identified as the weighted average of the liability calculated as if the individual were male and the liability calculated as if the individual were female, with an appropriate weighting that takes into account the distribution of gender for individuals in the plan's population for whom gender is identified; and   
     
(ii) Assigning either male or female status randomly to an individual for whom male or female gender is not identified in a manner that is expected to result in an appropriate proportion of males and females for the plan's population that takes into account the distribution of gender for individuals in the plan's population for whom gender is identified.   
     
(b) Generational mortality tables --(1) In general --(i) Construction of generational mortality tables. The generational mortality tables that are permitted to be used under section 430(h)(3)(A) and paragraph (a)(1)(i) of this section are constructed from the base mortality tables described in paragraph (b)(1)(ii) of this section and the mortality improvement rates described in paragraph (b)(1)(iii) of this section, as adjusted in accordance with paragraph (b)(1)(v) of this section.   
     
(ii) Base mortality tables. The base mortality tables are set forth in paragraph (d) of this section.   
     
(iii) Mortality improvement rates --(A) Mortality improvement rates for valuation dates occurring on or after January 1, 2024. Except as otherwise provided in this paragraph (b)(1)(iii), the mortality improvement rates for valuation dates occurring on or after January 1, 2024, are the 2024 Adjusted Scale MP-2021 Rates as incorporated by reference pursuant to paragraph (b)(1)(iv)(A) of this section.   
     
(B) [Reserved.]   
     
(iv) Incorporation by reference. The material listed in this paragraph (b)(1)(iv) is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This material is available for inspection at the IRS and at the National Archives and Records Administration (NARA). Contact IRS at: IRS Office of Chief Counsel, Qualified Plans Branch 1, CC:EEE:EB:QP1, 1111 Constitution Avenue NW, Washington, DC 20224; (202) 317-6700; www.irs.gov/retirement-plans/pension-plan-mortality-tables. For information on the availability of this material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations or email fr.inspection@nara.gov. The material may be obtained from IRS: www.irs.gov/retirement-plans/pension-plan-mortality-tables.   
     
(A) 2024 Adjusted Scale MP-2021 Rates, dated August 11, 2023.   
     
(B) [Reserved]   
     
(2) Application of mortality improvement rates --(i) In general. Under the generational mortality tables described in this paragraph (b), the probability of an individual's death at a particular age in the future is determined as the individual's base mortality rate that applies at that age (that is, the applicable mortality rate from the tables set forth in paragraph (d) of this section for that age, gender, and status as an annuitant or a non-annuitant) multiplied by the cumulative mortality improvement factor for the individual's gender and for that age for the period from the base year for those mortality tables through the calendar year in which the individual is projected to reach the particular age. Paragraph (b)(3) of this section provides an example that shows how the base mortality tables in paragraph (d) of this section and the mortality improvement rates for valuation dates occurring during 2024 are combined to determine projected mortality rates.   
     
(ii) Cumulative mortality improvement factor. The cumulative mortality improvement factor for an age and gender for a period is the product of the annual mortality improvement factors for that age and gender for each year within that period.   
     
(iii) Annual mortality improvement factor. 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. If that annual mortality improvement rate is greater than 1 (corresponding to a negative mortality improvement rate), then the projected mortality rate for that age and gender for that year is greater than the projected mortality rate for the same age and gender for the preceding year.   
     
(3) Example of calculation --(i) Calculation of mortality rate.  The mortality rate for 2024 that is applied to a male annuitant who is age 68 in 2024 is equal to the product of the mortality rate under paragraph (d) of this section for a male annuitant who was age 68 in 2012 (0.01418) and the cumulative mortality improvement factor calculated from the 2024 Adjusted Scale MP-2021 Rates for an age 68 male from 2012 to 2024. The cumulative mortality improvement factor for age 68 males for the period from 2012 to 2024 is 0.9827, and the mortality rate for 2024 for male annuitants who are age 68 in that year is 0.01393, as shown in the following table.   
   
Table 1 to paragraph (b)(3)(i)   
     
                              
     
           
     
(ii) Probability of survival for an individual.  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 2024 valuation date) of future payments in a benefit stream payable for a male annuitant who is age 68 in 2024, the probability of survival for the annuitant is based on the mortality rate for a male annuitant who is age 68 in 2024 (0.01393), and the projected mortality rate for a male annuitant who will be age 69 in 2025 (0.01507), age 70 in 2026 (0.01635), and so on.    
     
(4) Use of the tables --(i) Separate tables for annuitants and non-annuitants. Separate mortality tables are provided for use with respect to annuitants and non-annuitants. The non-annuitant mortality tables are applied to determine the probability of survival for a non-annuitant for the period before the non-annuitant is projected to commence receiving benefits. The annuitant mortality tables are applied to determine the present value of benefits for each annuitant. In addition, the annuitant mortality tables are applied for each non-annuitant with respect to each assumed commencement of benefits for the period beginning with that assumed commencement. For purposes of this section, an annuitant 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 terminated 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 non-annuitant with respect to the balance of the benefit. In addition, with respect to a beneficiary of a participant, the annuitant mortality tables apply for the period beginning with each assumed commencement of benefits for the participant. If the participant has died (or to the extent the participant is assumed to die before commencing benefits), the annuitant mortality tables apply with respect to the beneficiary for the period beginning with each assumed commencement of benefits for the beneficiary.   
     
(ii) Examples of calculation using separate non-annuitant and annuitant tables. With respect to a 45-year-old active participant who is projected to commence receiving an annuity at age 55, the funding target is determined using the non-annuitant mortality tables for the period before the participant attains age 55 and using the annuitant mortality tables for the period ages 55 and above. Similarly, for a 45-year-old terminated vested participant who is projected to commence an annuity at age 65, the funding target is determined using the non-annuitant mortality tables for the period before the participant attains age 65 and using the annuitant mortality tables for ages 65 and above.   
     
(c) Static mortality tables --(1) Availability of alternative tables for small plans --(i) In general. As an alternative to the generational mortality tables defined in paragraph (b) of this section, static mortality tables may be used for a small plan. The static mortality tables described in this paragraph (c) are constructed from the separate non-annuitant and annuitant static mortality tables described in paragraph (c)(2)(i) of this section, combined using the procedure described in paragraph (c)(2)(ii) of this section.   
     
(ii) Definition of small plan. For purposes of this paragraph (c), a small plan is defined as a plan with 500 or fewer total participants (including both active and inactive participants and beneficiaries of deceased participants) on the valuation date.   
     
(iii) Use of static mortality tables. The static mortality tables that are used for a valuation date are the static mortality tables for the calendar year that includes the valuation date.   
     
(iv) Publication of mortality tables. The static mortality tables for the 2024 calendar year are set forth in paragraph (e) of this section.   
     
Note 1 to paragraph (c)(1)(iv): The static mortality tables for valuation dates occurring in later calendar years will be published in the Internal Revenue Bulletin. See§ 601.601(d) of this chapter.   
     
(2) Development of static mortality tables --(i) Non-annuitant and annuitant mortality tables. The non-annuitant and annuitant static mortality tables are determined using the base mortality tables described in paragraph (b)(1)(ii) of this section. The rates in those base mortality tables are adjusted using the mortality improvement rates described in paragraph (b)(1)(iii) of this section, in accordance with the rules set forth in paragraph (c)(3) of this section.   
     
(ii) Combined static mortality tables. The static mortality tables described in this paragraph (c) are constructed from the separate non-annuitant and annuitant static mortality tables pursuant to paragraph (c)(2)(i) of this section, blended using the weighting factors in paragraph (d) of this section. The weighting factors are applied to develop these combined static tables using the following equation: Combined mortality rate = [non-annuitant rate * (1- weighting factor)] + [annuitant rate * weighting factor].   
     
(3) Projection of mortality improvements --(i) General rule. Except as provided in paragraph (c)(3)(iii) of this section, the static mortality tables for a calendar year are determined by multiplying the applicable mortality rate for each age from the base mortality tables by both--   
     
(A) The cumulative mortality improvement factor (determined under paragraph (b)(2)(ii) of this section) for the period from 2012 through that calendar year; and   
     
(B) The cumulative mortality improvement factor (determined under paragraph (b)(2)(ii) 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 period described in paragraph (c)(3)(ii) of this section.   
     
(ii) Projection period for static mortality tables --(A) In general. The projection period is 8 years for males and 9 years for females, as adjusted based on age as provided 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 year for each year above 80.   
     
(iii) Fractional projection periods. If for an age the number of years in the projection period determined under paragraph (c)(3)(ii) of this section is not a whole number, then the mortality rate for that age is determined by using linear interpolation between--   
     
(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. For example, at age 85 the projection period for a male is 6 years (8 years minus year for each of the 5 years above age 80). For a valuation date in 2024, the mortality rate in the static mortality table for an 85-year-old male is based on a projection of mortality improvement for 6 years beyond 2024. Under paragraph (c)(3)(iii) of this section, the mortality rate for an 85-year-old male annuitant in the static mortality table for 2024 is times the projected mortality rate for a male annuitant that age in 2030 plus times the projected mortality rate for a male annuitant that age in 2031. Accordingly, the mortality rate for an 85-year-old male annuitant in the static mortality table for 2024 is 0.08126 ( times the projected mortality rate for an 85  -  year-old male annuitant in 2030 (0.08146) plus times the projected mortality rate for an 85-year-old male annuitant in 2031 (0.08086)).   
     
(d) Base mortality tables.  The following are the base mortality tables. The base year for these tables is 2012.   
     
  Table 2 to paragraph (d)       
     
           
     
           
     
           
     
           
     
(e) Static tables for 2024. The following static mortality tables are used pursuant to paragraph (a)(1)(ii) of this section for determining present value or making any computation under section 430 with respect to valuation dates occurring during 2024.   
     
 Table 3 to paragraph (e)      
     
           
           
     
           
     
(f) Applicability date. This section applies for valuation dates occurring on or after January 1, 2024.
   
Par. 3. Section 1.430(h)(3)-2 is amended by:
   
a. In paragraph (c)(3)(ii) deleting the text "§ 1.430(h)(3)-1(a)(2)(i)(E)" and adding in its place "§ 1.430(h)(3)-1(b)(2)(ii)";
   
b. Revising paragraph (c)(6)(ii)(E); and
   
c. In paragraph (d)(4)(iii)(A):
   
i. Deleting the text "§ 1.430(h)(3)-1 (a)(2)(i)(E)" and adding in its place "§ 1.430(h)(3)-1(b)(2)(ii)";   
     
ii. Deleting "2006" and adding in its place "2012"; and   
     
iii. Deleting the text "§ 1.430(h)(3)-1(a)(2)(i)(C)" and adding in its place "§ 1.430(h)(3)-1(b)(1)(iii)."   
     
The revision reads as follows:§ 1.430(h)(3)-2 Plan-specific substitute mortality tables used to determine present value.      
     
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(c) ***   
     
(6) ***   
     
(ii) ***   
     
(E) The date specified in guidance published in the Internal Revenue Bulletin (see§ 601.601(d) 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 changes to the mortality improvement rates under§ 1.430(h)(3)-1(b)(1)(iii) or annual updates to the static mortality tables issued as noted in§ 1.430(h)(3)-1(c)(1)(iv)).   
     
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Par. 4. Section 1.431(c)(6)-1 is revised to read as follows:§ 1.431(c)(6)-1 Mortality tables used to determine current liability.      
     
(a) Mortality tables used to determine current liability. In accordance with section 431(c)(6)(D), the mortality assumptions that apply to a single-employer defined benefit plan for the plan year pursuant to section 430(h)(3)(A) and (D) and§§ 1.430(h)(3)-1(a)(1) and (a)(2)(ii) are used to determine a multiemployer plan's current liability for purposes of applying the rules of section 431(c)(6). For purposes of this paragraph (a), either the generational mortality tables used pursuant to§ 1.430(h)(3)-1(b) or the static mortality tables used pursuant to§ 1.430(h)(3)-1(c) are permitted to be used without regard to whether the plan is a small plan. However, substitute mortality tables under§§ 1.430(h)(3)-1(a)(2)(i) and 1.430(h)(3)-2 are not permitted to be used for purposes of this paragraph (a).   
     
(b) Applicability date. This section applies for valuation dates occurring on or after January 1, 2024.   
     
Par. 5. Section 1.433(h)(3)-1 is revised 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 section 433(h)(3)(B), the mortality assumptions that apply to a single-employer defined benefit plan for the plan year pursuant to section 430(h)(3)(A) and (D) and§§    1.430(h)(3)-1(a)(1) and (a)(2)(ii) are used to determine a cooperative and small employer charity (CSEC) plan's current liability under section 433(h). For purposes of this paragraph (a), either the generational mortality tables used pursuant to§    1.430(h)(3)-1(b) or the static mortality tables used pursuant to§ 1.430(h)(3)-1(c) are permitted to be used without regard to whether the plan is a small plan as defined in§ 1.430(h)(3)-1(c)(1)(ii). However, substitute mortality tables under§§ 1.430(h)(3)-1(a)(2)(i) and 1.430(h)(3)-2 are not permitted to be used for purposes of this paragraph (a).   
     
(b) Applicability date. This section applies for valuation dates occurring on or after January 1, 2024.   
     
Douglas W. O'Donnell,   
 Deputy Commissioner for Services and    
 Enforcement.      
     
Approved: October 4, 2023.   
     
Lily L. Batchelder,   
 Assistant Secretary of the Treasury    
 (Tax Policy).      
     
(Filed by the Office of the Federal Register October 19, 2023, 8:45 a.m., and published in the issue of the Federal Register for October 20, 2023, 88 FR 72357)