SECTION 9. DEMONSTRATIONS OF

LACK OF CREDIBLE MORTALITY EXPERIENCE

.01 General Rule . For all plans maintained by the applicant, except as described in subsections .02 and .03 of this section, the period of time used to demonstrate a lack of credible mortality experience must be identified (the “Lack of Credible Mortality Experience Demonstration Period”). This period must consist of at least 4 consecutive years, with the last such year ending less than 3 years before the first day of the plan year for which lack of credible mortality experience is being demonstrated. However, if the Experience Study Period used for the substitute mortality tables for the Permissive Group is longer than 4 years, then the Lack of Credible Mortality Experience Demonstration Period must include the same number of years as the Experience Study Period and must end less than 3 years before the first day of the plan year for which lack of credible mortality experience is being demonstrated. See subsection .06 of this section for rules that apply when the Experience Study Period is a combination of different periods as described in subsection 7.03.

.02 General Exception . Plans described in paragraph (1), (2), or (3) of this subsection 9.02 are not required to identify a Lack of Credible Mortality Experience Demonstration Period.

(1) Plans for which the use of substitute mortality tables is requested for all populations (other than disabled populations for whom the tables prescribed under § 430(h)(3)(D) are used);

(2) Plans for which the use of substitute mortality tables has previously been approved by the Service and the term of years of such approval ends subsequent to the last day of the Requested Effective Plan Year; and

(3) Newly affiliated plans for which the last day of the plan year described in § 1.430(h)(3)–2(d)(1)(iii)(A) is a date on or after the first day of the plan year for which the use of substitute mortality tables is requested.

.03 Exception for Certain Newly Affili- ated Plans . Newly affiliated plans (as defined in § 1.430(h)(3)–2(d)(1)(iii)(B)) for which the last day of the plan year described in § 1.430(h)(3)–2(d)(1)(iii)(A) is a date prior to the first day of the plan year for which the use of substitute mortality tables is requested, and for which the applicant has elected not to include mortality experience prior to the date of the acquisition, may identify a Lack of Credible Mortality Experience Demonstration Period consisting of fewer years than otherwise required under subsection .01 of this section. For such plans, the Lack of Credible Mortality Experience Demonstration Period must begin no later than the date the plan became newly affiliated and end not more than one year and one day before the first day of the plan year for which the use of substitute mortality tables is requested.

.04 Demonstration of Plan-Wide Lack of Credible Mortality Experience . The following information must be provided in tabular form for each plan that is not within the Permissive Group and which does not fall within one of the exceptions provided in subsection .02 of this section:

(1) The number of male deaths during the Lack of Credible Mortality Experience Demonstration Period; and

(2) The number of female deaths during the Lack of Credible Mortality Experience Demonstration Period.

.05 Demonstration of Lack of Credible Mortality Experience for Certain Popula- tions . The number of male and female deaths during the Lack of Credible Mortality Experience Demonstration Period must be provided in tabular form for each relevant population within the Plan (or plans within the Permissive Group) for which the use of substitute mortality tables is not requested.

The relevant populations for this purpose would, for example, be nondisabled

2008–42 I.R.B. 940 October 20, 2008

to adjust the accrued benefits of individuals who left for reasons other than death to reflect exposure periods of less than one year.

.03 Grouping of Ages . The information requested in subsection .01 of this section may be presented in five-year age groups. In such cases, the groups at the extreme ages may include more than five ages provided such groups either do not include ages greater than age 24 or do not include ages less than age 95. Thus, for example, an age group consisting of all ages 24 and lower would be permissible whereas an age group consisting of all ages 25 and lower would not be permissible.

.04 Unadjusted Base Tables . An Unadjusted Base Table for each population for which the use of substitute mortality tables is requested shall, for all ages or all groups of ages, consist of the quotients determined in paragraph (4) of subsection .01 of this section for the Experience Study Period in its entirety. The request must include a complete copy of each such Unadjusted Base Table.