SECTION 7. DEMONSTRATIONS

OF CREDIBLE MORTALITY EXPERIENCE

.01 The applicant’s request must identify the period of time covered by the mortality experience study (the “Experience Study Period”) used to develop the Base Table(s) and must identify the Base Year. Different Experience Study Periods for different populations within a plan are not permitted. Except as provided in subsections .02 and .03 of this section, different Experience Study Periods for different plans within the Permissive Group are not permitted. Thus, a plan that does not have mortality experience for the entire Experience Study Period may not be included in the Permissive Group. Similarly, a plan that was acquired subsequent to the first day of the Experience Study Period may be included in the Permissive Group only if the applicant includes mortality experience for the full Experience Study Period. Thus, in such cases, the mortality experience study must include mortality experience that occurred before the date of acquisition.

.02 A plan that came into existence by reason of a spinoff from the Plan (or from a plan within the Permissive Group) during the Experience Study Period may be included in the Permissive Group. In such a case, the period of time covered by the mortality experience study with respect to the spun off plan will begin as of the date of the spinoff. However, the mortality experience of the individuals covered by the spun off plan from the first day of the Experience Study Period to the date of the spinoff would be included as part of the experience of the single plan that existed before the spinoff.

.03 If separate plans within a Permissive Group have different plan years, the Experience Study Period may consist of a combination of different periods for analyzing the experience data for each plan, provided that the period for each plan:

(1) is based on the plan year for that plan,

(2) consists of the same number of years,

(3) ends less than 3 years before the first day of the first plan year for which the substitute mortality table is to apply for any plan in the Permissive Group, and

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females if the request was to use a substitute mortality table for nondisabled males (but for no other individuals) where separate mortality tables were used for disabled individuals pursuant to § 430(h)(3)(D). Similarly, the relevant populations would be male nonannuitants and females, in each case including disabled individuals, if the request was to use a substitute mortality table for male annuitants (but not for male nonannuitants) where separate mortality tables were not used for disabled individuals pursuant to § 430(h)(3)(D).

.06 Application when Experience Study Period is a Combination of Different Peri- ods as Described in Subsection 7.03 . For plans or populations within a Permissive Group, if the Experience Study Period covers a period of more than 4 years because it consists of a combination of 4-year (or longer) periods for analyzing the experience data for individual plans included in the Permissive Group, the Lack of Credible Mortality Experience Demonstration Period must also consist of a combination of 4-year periods for each plan (or such longer periods as used for the Experience Study Period), subject to the same constraints as in subsection 7.03.

For example, the Permissive Group illustrated in subsection 7.03 used an Experience Study Period consisting of 4 years based on the plan year for Plan A and 4 years based on the plan year of Plan B (for an overall Experience Study Period of 4 years and 2 months). Therefore, lack of credible mortality experience must be demonstrated for any populations within that Permissive Group for which substitute mortality tables are not requested, on the basis of a Lack of Credible Mortality Experience Demonstration Period covering a 4-year period corresponding to the plan year for the plan covering the population (for an overall Lack of Credible Mortality Experience Demonstration Period of 4 years and 2 months). Accordingly, for demonstrations applying to plan years beginning in 2011, the Lack of Credible Mortality Experience Demonstration Period could either be based on 4-year periods ending December 31, 2008, for populations covered under Plan A and February 28, 2009, for populations covered under Plan B, or on 4-year periods ending December 31, 2009, for populations covered under Plan A and February 28, 2010, for populations covered under Plan B.

A reasonable estimate of the number of plan individuals, such as the estimated number of participants and beneficiaries used for purposes of PBGC Form 1–ES, may be used to provide the information requested in paragraph (2) of this subsection 8.01. .02 If the difference between paragraphs (1) and (2) of subsection 8.01 within any population, for any plan year, reflects a difference of 20 percent or more, then an analysis that shows that the mortality experience during the Experience Study Period is still accurately predictive of the future mortality of the population must be submitted.