Federal Register / Vol. 88, No. 202 / Friday, October 20, 2023 / Proposed Rules 72409 

1Section 302 of the Employee Retirement Income 

Security Act of 1974, Public Law 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 proposed 

regulations for purposes of ERISA, as well as the 

Code. Thus, these proposed Treasury regulations 

issued under section 430 of the Code would also 

apply for purposes of section 303 of ERISA. 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 71 as 

follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(f), 106(g); 40103, 

40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 

1959–1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of FAA Order JO 7400.11H, 

Airspace Designations and Reporting 

Points, dated August 11, 2023, and 

effective September 15, 2023, is 

amended as follows: 

Paragraph 6005 Class E Airspace Areas 

Extending Upward From 700 Feet or More 

Above the Surface of the Earth. 

* * * * * 

ANM WA E5 Mitchell, OR [New] 

Antone Ranch Airport, OR 

(Lat. 44°29′34′′ N, long. 119°50′38′′ W) 

That airspace extending upward from 700 

feet above the surface within 2.2 miles either 

side of the 098° bearing extending to the 

airport 8.4-mile radius, and within 2.2 miles 

either side of the 278° bearing extending to 

the airport 10.4-mile radius, and within an 

area bounded by a line beginning at the 290° 

bearing at 10.4 miles, then clockwise along 

the airport’s 10.4-mile radius to the 317° 

bearing, to the 327° bearing at 7.1 miles, to 

the 310° bearing at 4.1 miles, thence to the 

point of beginning. 

* * * * * 

Issued in Des Moines, Washington, on 

October 13, 2023. 

B.G. Chew, 

Group Manager, Operations Support Group, 

Western Service Center. 

[FR Doc. 2023–23128 Filed 10–19–23; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–103525–23] 

RIN 1545–BQ67 

Plan-Specific Substitute Mortality 

Tables for Determining Present Value 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document sets forth 

proposed regulations that would update 

the requirements that a plan sponsor of 

a single-employer defined benefit plan 

must meet to obtain IRS approval to use 

mortality tables specific to the plan in 

calculating present value for minimum 

funding purposes (as a substitute for the 

generally applicable mortality tables). 

These regulations would affect 

participants in, beneficiaries of, 

employers maintaining, and 

administrators of certain retirement 

plans. 

DATES: Written or electronic comments 

and requests for a public hearing must 

be received by December 19, 2023. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at 

www.regulations.gov (indicate IRS and 

REG–103525–23) by following the 

online instructions for submitting 

comments. Requests for a public hearing 

must be submitted as prescribed in the 

‘‘Comments and Requests for a Public 

Hearing’’ section. Once submitted to the 

Federal eRulemaking Portal, comments 

cannot be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

for public availability any comments 

submitted to the IRS’s public docket. 

Send paper submissions to: 

CC:PA:LPD:PR (REG–103525–23), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations, Arslan 

Malik or Linda S. F. Marshall at (202) 

317–6700 (not a toll-free number); 

concerning submissions of comments 

and requests for a public hearing, Vivian 

Hayes at (202) 317–6901 (not a toll-free 

number) or by sending an email to 

publichearings@irs.gov (preferred). 

SUPPLEMENTARY INFORMATION: 

Background 

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 singleemployer plans (that is, not 

multiemployer plans).1 For a plan 

subject to section 430, section 430(a) 

defines the minimum required 

contribution for a plan year 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. 

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. Section 

430(h)(3)(C) prescribes rules for a plan 

sponsor’s use of substitute mortality 

tables reflecting the specific mortality 

experience of a plan’s population 

instead of using the generally applicable 

mortality tables. Under section 

430(h)(3)(C), the plan sponsor may 

request the Secretary’s approval to use 

plan-specific substitute mortality tables 

that meet requirements specified in the 

statute. 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 section 430(h)(3)(C)(iii), a 

substitute mortality table may be used 

for a plan only if: (1) the plan has a 

sufficient number 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 participants 

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 

established and used for each plan 

maintained by the plan sponsor or a 

member of its controlled group. 

Final regulations (TD 9826) under 

section 430(h)(3) were published in the 

Federal Register on October 5, 2017 (82 

FR 46388). The final regulations issued 


ddrumheller on DSK120RN23PROD with PROPOSALS1
72410 Federal Register / Vol. 88, No. 202 / Friday, October 20, 2023 / Proposed Rules 

2The Pri-2012 Report can be found at: https://

www.soa.org/49c106/globalassets/assets/files/ 

resources/experience-studies/2019/pri-2012-

mortality-tables-report.pdf. 

3This approach is similar to the fourth approach 

suggested by commenters, as described in the 

Background section of this preamble because a 

direct adjustment to the expected mortality rates 

during the COVID–19 pandemic period would be 

more appropriate than calculating mortality ratios 

using an approach that either ignores the mortality 

experience during the COVID–19 pandemic period 

or reduces the weighting of that experience. 

4https://www.cdc.gov/nchs/nvss/vsrr/covid19/ 

excess_deaths.htm. 

in 2017 include rules regarding 

generally applicable mortality tables, 

which are set forth in § 1.430(h)(3)–1 

(the 2017 general mortality table 

regulations), as well as rules regarding 

substitute mortality tables, which are set 

forth in § 1.430(h)(3)–2 (the 2017 

substitute mortality table regulations). 

The 2017 substitute mortality table 

regulations provide that any substitute 

mortality tables must be based on the 

plan’s mortality experience during an 

experience study period that consists of 

2, 3, 4, or 5 consecutive 12-month 

periods. In conjunction with the 2017 

substitute mortality table regulations, 

the Department of the Treasury 

(Treasury Department) and the IRS 

issued Rev. Proc. 2017–55, 2017–43 IRB 

373, which sets forth the procedure by 

which a plan sponsor of a defined 

benefit plan may request and obtain 

approval for the use of plan-specific 

substitute mortality tables. 

Beginning in 2020 and extending into 

2023, for many pension plans, the 

mortality experience of the plan 

participants was significantly higher 

than expected due to the COVID–19 

pandemic. The Treasury Department 

and the IRS are concerned that, if a plan 

sponsor applied for approval of planspecific substitute mortality tables using 

an experience study period that reflects 

the actual mortality experience for the 

plan’s population during those years, 

then the existing rules and procedures 

used for generating those tables would 

result in plan-specific substitute 

mortality tables that overstate the 

expected future mortality for the plan’s 

population. This is because substitute 

mortality tables are constructed based 

on a mortality ratio calculated for the 

plan’s population, which is determined 

by dividing the actual mortality 

experience for plan participants during 

the experience study period by the 

expected mortality under the generally 

applicable mortality tables. In the 

absence of any changes to the rules and 

procedures for generating plan-specific 

substitute mortality tables, a mortality 

ratio developed using an experience 

study period that includes the period in 

which the COVID–19 pandemic 

occurred (COVID–19 pandemic period) 

will likely be unusually high, as the 

numerator of the mortality ratio (the 

plan’s actual experience) will reflect the 

actual number of deaths during this 

period, while the denominator of that 

ratio (the expected deaths for the plan 

population) will be based on the 

expected number of deaths from the 

generally applicable mortality tables 

(which reflect only a small fraction of 

the significant short-term increase in 

mortality rates that occurred during the 

COVID–19 pandemic period). 

The Treasury Department and the IRS 

are issuing final regulations updating 

the generally applicable mortality tables 

under section 430(h)(3)(A) (TD 9983) in 

the Rules and Regulations section of this 

issue of the Federal Register. Those 

final regulations adopt mortality tables 

that are based on the mortality tables in 

the Pri-2012 Private Retirement Plans 

Mortality Tables Report (Pri-2012),2

which were developed using the 

mortality experience for private sector 

pension plans during the period from 

2010 to 2014. In light of the fact that the 

Pri-2012 mortality tables did not reflect 

any mortality experience from the 

COVID–19 pandemic period, the 

preamble to the proposed regulations 

that preceded those final regulations 

asked for comments about whether the 

rules and procedures relating to 

development of substitute mortality 

tables should be modified to recognize 

the potential that the mortality 

experience for the COVID–19 pandemic 

period is not accurately predictive of the 

future mortality experience for 

participants of a plan for which 

substitute mortality tables are requested. 

In response, commenters suggested 

various solutions that included: (1) 

excluding mortality data from the 

COVID–19 pandemic period, (2) 

applying a reduced weight to the 

mortality data from the COVID–19 

pandemic period in developing the 

substitute mortality tables, (3) extending 

the duration of the experience study 

period (which has a similar effect of 

reducing the weight of the mortality 

data for that period), and (4) computing 

the mortality ratio for a substitute 

mortality table by comparing pre-2020 

data to the Pri-2012 base mortality table 

and post-2019 data to the Pri-2012 base 

mortality table (as projected) with a 

specified load. 

Explanation of Provisions 

These proposed regulations would 

generally retain the methodology for 

development of substitute mortality 

tables included in the 2017 substitute 

mortality table regulations but provide 

additional rules regarding the use of 

mortality experience data for the 

COVID–19 pandemic period. In order to 

develop a mortality ratio that is more 

accurately predictive of future mortality 

experience for a plan population, these 

proposed regulations would provide 

that the expected deaths for the plan 

population used in determining the 

denominator in the mortality ratio are 

calculated by adjusting the mortality 

rates in the generally applicable 

mortality tables. Specifically, the 

proposed regulations would provide 

that, for each 12-month period that is 

included in the experience study period 

and that begins after 2019 and before 

2024, the expected mortality rate for an 

individual is determined by multiplying 

the expected mortality rate for that 

individual from the standard mortality 

tables by an adjustment factor.3 The 

adjustment factor for each of these years 

would approximate the ratio (as 

reported by the National Center for 

Health Statistics, which is part of the 

Centers for Disease Control and 

Prevention) 4 of (1) the actual number of 

deaths for the general population for the 

year to (2) the expected number of 

deaths for the general population for 

that year. 

Applicability Date 

The proposed regulations are 

proposed to apply for plan years 

beginning on or after January 1, 2025. 

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 Publishing 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. 

It is hereby certified that this 

proposed rule will not have a significant 

economic impact on a substantial 

number of small entities. Small 

employers generally cannot use planspecific substitute mortality tables 

because their defined benefit pension 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 88, No. 202 / Friday, October 20, 2023 / Proposed Rules 72411 

plans do not have credible mortality 

experience (which is defined as a 

minimum number of deaths during the 

experience study period) as is required 

to use substitute mortality tables. 

Therefore, a regulatory flexibility 

analysis under the Regulatory 

Flexibility Act is not required. 

Pursuant to section 7805(f) of the 

Code, these proposed regulations will be 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on their 

impact on small business. 

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. The proposed 

regulations do not propose any rule that 

would 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. The proposed 

regulations do not propose rules that 

would have federalism implications, 

impose substantial direct compliance 

costs on State and local governments, or 

preempt State law within the meaning 

of the Executive order. 

Comments and Requests for a Public 

Hearing 

Consideration will be given to 

comments that are submitted timely to 

the IRS as prescribed in the preamble 

under the ADDRESSES section. The 

Treasury Department and the IRS 

request comments on all aspects of these 

proposed regulations. Any comments 

submitted will be made available at 

www.regulations.gov or upon request. 

A public hearing will be scheduled if 

requested in writing by any person who 

timely submits electronic or written 

comments. Requests for a public hearing 

are also encouraged to be made 

electronically. If a public hearing is 

scheduled, notice of the date and time 

for the public hearing will be published 

in the Federal Register. 

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 

Treasury and the IRS participated in the 

development of these regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, the Treasury Department 

and the IRS propose to amend 26 CFR 

part 1 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)–2 is 

amended by: 

■ a. In paragraph (a) removing 

‘‘§ 601.601(d)(2)(ii)(b)’’ and adding in its 

place ‘‘§ 601.601(d)’’; 

■ b. In paragraph (d)(2)(ii)(B) removing 

the text ‘‘January 1, 2019 year is’’ and 

adding in its place the text ‘‘January 1, 

2019 is’’; 

■ c. Revising paragraph (d)(4)(iii)(A). 

■ d. Redesignating paragraph 

(d)(4)(iii)(B) as paragraph (d)(4)(iii)(C) 

and adding a new paragraph 

(d)(4)(iii)(B). 

■ e. Revising paragraph (g). 

The additions and revisions read as 

follows: 

§ 1.430(h)(3)–2 Plan-specific substitute 

mortality tables used to determine present 

value. 

* * * * * 

(d) * * * 

(4) * * * 

(iii) * * * 

(A) Projection of base table. Except as 

otherwise provided in this paragraph 

(d)(4)(iii), 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(b)(2)(ii) to the base mortality table 

under § 1.430(h)(3)–1(d) for the period 

beginning with the base year for that 

mortality table and ending in the base 

year for the base substitute mortality 

table determined under paragraph 

(c)(3)(ii) of this section. For purposes of 

the preceding sentence, the cumulative 

mortality improvement factors are 

determined using the mortality 

improvement rates described in 

§ 1.430(h)(3)–1(b)(1)(iii) that apply for 

the calendar year during which the plan 

sponsor submits the request for 

approval to use substitute mortality 

tables. 

(B) Adjustments to standard mortality 

table for 2020, 2021, 2022, and 2023. If 

a 12-month period in the experience 

study period begins after December 31, 

2019, and before January 1, 2024, the 

probability of death for an individual 

under paragraph (d)(4)(ii)(A)(2)(i) of this 

section is determined as the mortality 

rate for the individual’s age (at the 

beginning of the year) and gender from 

the standard mortality table determined 

under paragraph (d)(4)(iii) of this 

section multiplied by the adjustment 

factor in Table 1 for the calendar year 

that includes the first day of the 12- 

month period. For example, for an 

experience study period that begins 

April 1, 2019, and ends March 31, 2023, 

the probability of death for the year 

beginning April 1, 2022, for a male 

annuitant who is age 65 as of that date 

is the probability of death from the base 

mortality table (0.01087), multiplied by 

the cumulative mortality improvement 

factor for the period from 2012 to 2021 

(1.02292) and by the adjustment factor 

for the 2022 calendar year of 1.10, 

resulting in a probability of death of 

0.01223. 

TABLE 1 TO PARAGRAPH (d)(4)(iii)(B) 

Calendar year Adjustment 

factor 

2020 ...................................... 1.15 

2021 ...................................... 1.15 

2022 ...................................... 1.10 

2023 ...................................... 1.05 

* * * * * 

(g) Applicability date—(1) General 

rule. This section applies for plan years 

beginning on or after January 1, 2025. 

Except as provided in paragraph (g)(2) 

of this section, the substitute mortality 

table used for a plan for such a plan year 

must comply with the rules of 

paragraphs (a) through (f) of this section. 

(2) Transition rule for previously 

approved substitute mortality tables. If a 

plan sponsor has received approval 

from the Commissioner to use substitute 

mortality tables for a plan year 

beginning in 2025, then the plan’s base 

substitute mortality tables that were 

approved are treated as satisfying the 

requirements of paragraph (d) or (e) of 

this section, as applicable. 

Douglas W. O’Donnell, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2023–23268 Filed 10–19–23; 8:45 am] 

BILLING CODE 4830–01–P 


ddrumheller on DSK120RN23PROD with PROPOSALS1