26 C.F.R. § 1.430(h)(3)-1

Current through November 30, 2024
Section 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)

Calendar
year
Rate of mortality
improvement
from prior year to current year
Annual mortality
improvement
factor
(1 - mortality
improvement rate)
Cumulative
mortality
improvement
factor
Mortality
rate
2012n/an/an/a0.01418
20130.00710.99290.9929
20140.00470.99530.9882
20150.00290.99710.9854
20160.00170.99830.9837
20170.00090.99910.9828
20180.00010.99990.9827
2019(0.0001)1.00010.9828
20200.00010.99990.9827
20210.00001.00000.9827
20220.00001.00000.9827
20230.00001.00000.9827
20240.00001.00000.98270.01393

(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 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 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 61/3 years (8 years minus 1/3 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 61/3 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 2/3 times the projected mortality rate for a male annuitant that age in 2030 plus 1/3 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 (2/3 times the projected mortality rate for an 85-year-old male annuitant in 2030 (0.08146) plus 1/3 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)

AgeMalesFemales
Non-annuitantAnnuitantWeighting
factor
for small
plan
Non-annuitantAnnuitantWeighting
factor
for small
plans
00.006500.006500.00000.005440.005440.0000
10.000450.000450.00000.000380.000380.0000
20.000300.000300.00000.000230.000230.0000
30.000220.000220.00000.000180.000180.0000
40.000190.000190.00000.000130.000130.0000
50.000160.000160.00000.000120.000120.0000
60.000140.000140.00000.000110.000110.0000
70.000130.000130.00000.000100.000100.0000
80.000110.000110.00000.000090.000090.0000
90.000090.000090.00000.000090.000090.0000
100.000080.000080.00000.000090.000090.0000
110.000090.000090.00000.000090.000090.0000
120.000130.000130.00000.000100.000100.0000
130.000170.000170.00000.000120.000120.0000
140.000220.000220.00000.000130.000130.0000
150.000280.000280.00000.000130.000130.0000
160.000340.000340.00000.000140.000140.0000
170.000400.000400.00000.000150.000150.0000
180.000460.000460.00000.000150.000150.0000
190.000530.000530.00000.000150.000150.0000
200.000560.000560.00000.000150.000150.0000
210.000560.000560.00000.000150.000150.0000
220.000560.000560.00000.000160.000160.0000
230.000550.000550.00000.000180.000180.0000
240.000550.000550.00000.000190.000190.0000
250.000540.000540.00000.000190.000190.0000
260.000540.000540.00000.000190.000190.0000
270.000540.000540.00000.000200.000200.0000
280.000540.000540.00000.000200.000200.0000
290.000540.000540.00000.000200.000200.0000
300.000550.000550.00000.000210.000210.0000
310.000550.000550.00000.000220.000220.0000
320.000560.000560.00000.000230.000230.0000
330.000580.000580.00000.000250.000250.0000
340.000590.000590.00000.000260.000260.0000
350.000610.000610.00000.000280.000280.0000
360.000630.000630.00000.000310.000310.0000
370.000650.000650.00000.000340.000340.0000
380.000680.000680.00000.000360.000360.0000
390.000710.000710.00000.000400.000400.0000
400.000740.000740.00000.000430.000430.0000
410.000770.000820.00080.000470.000490.0010
420.000810.000990.00160.000510.000610.0020
430.000860.001240.00240.000550.000780.0030
440.000910.001580.00320.000600.001010.0040
450.000970.002000.00400.000650.001300.0051
460.001050.002510.00470.000710.001650.0061
470.001130.003100.00550.000770.002060.0071
480.001230.003780.00630.000830.002520.0081
490.001340.004540.00710.000900.003040.0091
500.001470.005390.00790.000980.003620.0101
510.001610.005440.01400.001070.004260.0185
520.001770.005650.02090.001160.004950.0262
530.001940.005880.03020.001260.005000.0349
540.002130.006160.04300.001370.005120.0449
550.002340.006470.08980.001480.005170.0853
560.002570.006860.16760.001610.005220.1535
570.002810.007280.21530.001750.005280.1923
580.003080.007700.26350.001900.005610.2291
590.003380.008110.31440.002060.006010.2680
600.003690.008480.38210.002240.006430.3192
610.004030.008820.45790.002430.006900.3731
620.004410.009180.59350.002640.007430.4705
630.004810.009600.71530.002870.007960.5668
640.005250.010140.77640.003120.008590.6230
650.005730.010870.84540.003390.009280.7172
660.006360.011780.90020.003800.010030.8006
670.007060.012880.92750.004270.010890.8414
680.007840.014180.94310.004800.011920.8658
690.008700.015640.95470.005400.013090.8857
700.009670.017290.96420.006060.014440.9046
710.010730.019140.97320.006810.015970.9240
720.011920.021210.97910.007650.017700.9365
730.013230.023540.98230.008600.019670.9437
740.014690.026130.98470.009660.021920.9512
750.016320.029050.98680.010850.024450.9568
760.018120.032330.98890.012190.027270.9637
770.020120.036040.99060.013700.030420.9682
780.022340.040260.99200.015390.033910.9727
790.024800.045040.99350.017290.037750.9765
800.027540.050461.00000.019430.041981.0000
810.029890.056571.00000.021340.046631.0000
820.034600.063431.00000.025160.051781.0000
830.041660.071141.00000.030890.057541.0000
840.051080.079771.00000.038530.064011.0000
850.062850.089461.00000.048080.071321.0000
860.076980.100321.00000.059550.079541.0000
870.093460.112481.00000.072930.088791.0000
880.112290.126001.00000.088220.099361.0000
890.133480.140881.00000.105420.111241.0000
900.157030.157031.00000.124530.124531.0000
910.174010.174011.00000.138180.138181.0000
920.191510.191511.00000.152500.152501.0000
930.209360.209361.00000.167370.167371.0000
940.227420.227421.00000.182740.182741.0000
950.245690.245691.00000.198630.198631.0000
960.264150.264151.00000.215090.215091.0000
970.282810.282811.00000.232140.232141.0000
980.301690.301691.00000.249830.249831.0000
990.320770.320771.00000.268140.268141.0000
1000.339960.339961.00000.286980.286981.0000
1010.359100.359101.00000.306190.306191.0000
1020.377940.377941.00000.325490.325491.0000
1030.396330.396331.00000.344720.344721.0000
1040.414150.414151.00000.363750.363751.0000
1050.431310.431311.00000.382430.382431.0000
1060.447710.447711.00000.400650.400651.0000
1070.463290.463291.00000.418280.418281.0000
1080.478000.478001.00000.435220.435221.0000
1090.491810.491811.00000.451390.451391.0000
1100.500000.500001.00000.466730.466731.0000
1110.500000.500001.00000.481200.481201.0000
1120.500000.500001.00000.494770.494771.0000
1130.500000.500001.00000.500000.500001.0000
1140.500000.500001.00000.500000.500001.0000
1150.500000.500001.00000.500000.500001.0000
1160.500000.500001.00000.500000.500001.0000
1170.500000.500001.00000.500000.500001.0000
1180.500000.500001.00000.500000.500001.0000
1190.500000.500001.00000.500000.500001.0000
1201.000001.000001.00001.000001.000001.0000

(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)

AgeMaleFemale
00.003560.00306
10.000250.00022
20.000170.00013
30.000120.00010
40.000110.00008
50.000090.00007
60.000080.00007
70.000080.00006
80.000060.00005
90.000050.00005
100.000050.00006
110.000050.00006
120.000080.00006
130.000100.00008
140.000130.00008
150.000170.00008
160.000210.00009
170.000250.00010
180.000290.00010
190.000340.00010
200.000360.00010
210.000370.00010
220.000370.00011
230.000380.00013
240.000390.00014
250.000400.00014
260.000410.00015
270.000430.00016
280.000440.00016
290.000460.00017
300.000490.00018
310.000500.00019
320.000530.00021
330.000560.00023
340.000590.00024
350.000620.00026
360.000650.00029
370.000670.00031
380.000700.00032
390.000720.00035
400.000740.00037
410.000750.00039
420.000770.00041
430.000790.00043
440.000810.00045
450.000840.00048
460.000880.00051
470.000920.00055
480.000980.00059
490.001040.00064
500.001130.00070
510.001240.00080
520.001370.00090
530.001530.00101
540.001730.00115
550.002060.00138
560.002530.00170
570.002960.00195
580.003440.00225
590.003970.00258
600.004580.00299
610.005230.00343
620.006150.00409
630.007030.00478
640.007740.00537
650.008610.00619
660.009570.00707
670.010540.00786
680.011630.00871
690.012830.00968
700.014190.01082
710.015750.01217
720.017500.01368
730.019490.01540
740.021750.01742
750.024330.01975
760.027290.02240
770.030690.02540
780.034600.02878
790.039120.03254
800.044420.03715
810.050080.04158
820.056490.04650
830.063720.05202
840.071920.05823
850.081260.06527
860.091800.07337
870.103640.08255
880.116880.09305
890.131480.10480
900.147330.11790
910.164040.13141
920.181110.14547
930.198470.16007
940.215880.17495
950.233190.19020
960.251520.20655
970.270100.22354
980.288990.24127
990.308360.25965
1000.327880.27862
1010.347420.29799
1020.366720.31750
1030.385740.33705
1040.404360.35650
1050.421910.37576
1060.438970.39452
1070.455200.41279
1080.470640.43024
1090.485360.44694
1100.494480.46282
1110.495520.47794
1120.496560.49215
1130.497560.49820
1140.498700.49900
1150.499750.49980
1160.499900.49990
1170.499950.50000
1180.500000.50000
1190.500000.50000
1201.000001.00000

(f)Applicability date. This section applies for valuation dates occurring on or after January 1, 2024.

26 C.F.R. §1.430(h)(3)-1

T.D. 9983, 88 FR 72361 , Oct. 20, 2023
T.D. 9826, 82 FR 46398 , 10/5/2017; T.D. 9983, 88 FR 72361 , 10/20/2023