SECTION 3. GENERAL

ADMINISTRATIVE PROCEDURES

.01 Compliance with regulations . A request for approval to use substitute mortality tables for a plan that would first

cordance with § 412(a)(2)(A), § 430 specifies the minimum funding requirements for defined benefit plans other than multiemployer plans and CSEC plans. Section 430(h)(3)(A) sets forth rules regarding the use of generally applicable mortality tables for purposes of § 430, and § 430(h)(3)(B) requires the Secretary of the Treasury to make periodic revisions (at least every 10 years) to those mortality tables. Section 430(h)(3)(C) provides that the Secretary may approve plan-specific substitute mortality tables to be used for a plan for a period not to exceed 10 years in determining any present value or making any computation under § 430. Substitute mortality tables meet the requirements for approval if the pension plan has enough participants and has been maintained for a long enough period of time to have credible mortality experience, and those tables reflect the actual experience of the plan 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 subject to § 430 of the Code that is maintained by the plan sponsor or a member of the plan sponsor’s controlled group (as defined in § 1.430(h)(3)–2(c)(1)(i)).

.02 Bipartisan Budget Act of 2015 . Section 503 of the Bipartisan Budget Act of 2015, Pub. L. 114–74, 129 Stat. 584, which was enacted November 2, 2015, provides for changes to the rules on the use of substitute mortality tables. Under that section, “the determination of whether plans have credible information shall be made in accordance with established actuarial credibility theory, which (1) is materially different from the rules under [section 430(h)(3)(C)], including Revenue Procedure 2007–37, ³⁵ that are in effect on [November 2, 2015]; and (2) permits the use of tables that reflect adjustments to the tables described in [section 430(h)(3)(A) and (B)]” if those adjustments are based on the actual experience of the pension plan maintained by the plan sponsor.

.03 Regulations . Under both the 2008 and 2017 regulations, substitute mortality

tables must reflect the actual mortality experience of the pension plan for which the tables are to be used, and that mortality experience must be credible. Separate mortality tables must be established for each gender under the plan and, in general, substitute mortality tables are permitted to be established for a gender only if the plan has credible mortality experience with respect to that gender. The 2017 regulations provide an option for determining the credibility of mortality experience using the plan’s combined mortality experience for both genders (and using that combined experience to develop separate substitute mortality tables for each gender).

.04 Credibility . Under the 2008 regulations, a population has credible mortality experience if and only if the population experienced at least 1,000 deaths during the period covered by the experience study. The 2017 regulations permit the use of substitute mortality tables derived from mortality experience that does not have full credibility, if the population’s mortality experience has partial credibility. The 2017 regulations also revise the standard for mortality experience to have full credibility. In lieu of the previous 1,000actual-death standard, the 2017 regulations require a population-specific calculation of the full credibility standard that takes into account the dispersion of benefits within the population.

.05 Use of mortality ratios . Development of substitute mortality tables under both the 2008 and 2017 regulations requires creation of a base substitute mortality table (“Substitute Base Table”), with an associated base year that is used in conjunction with mortality improvement factors to construct generational mortality tables. Unlike the 2008 regulations, which generally required that a base substitute mortality table be created by applying a graduation method to the raw mortality rates from the experience study, the 2017 regulations require a Substitute Base Table to be constructed in a multiple-step process based on (1) a projection of the generally applicable mortality table to the base year for the Substitute Base Table, (2) a mortality ratio calculated from the

35Rev. Proc. 2007–37, 2007–1 C.B. 1433, was not in effect on November 2, 2015. It was issued in 2007 in conjunction with proposed regulations regarding substitute mortality tables (REG–143601–06, 72 FR 29456) and was replaced by Rev. Proc. 2008–62 when those regulations were finalized in 2008.

October 23, 2017 374 Bulletin No. 2017–43

apply for a plan year beginning on or after January 1, 2018, must satisfy the requirements of the 2017 regulations and this revenue procedure.

.02 Address and user fee for applica- tion . A request for approval to use substitute mortality tables must be submitted to the address specified in Section 31.01(1) of Rev. Proc. 2017–4, 2017–1 I.R.B. 146 (or the corresponding section of its successors).

The user fee required by section 6.01(10) of Rev. Proc. 2017–4, 2017–1 I.R.B. 146 (or the corresponding section of its successors) must be sent with the request.

.03 Necessary procedural documents . A request will not be considered for approval unless it complies with section 3.03(1)–(4) of this revenue procedure. (1) The request (and any subsequently provided additional information) must be signed by the plan sponsor (“applicant”) or an authorized representative of the applicant who is described in section 6.02(11)(a), (b), (c), (d) or (e) of Rev. Proc. 2017–4 (or the corresponding sections of its successors). If an authorized representative signs the request or will appear before the IRS in connection with the request, a properly signed and dated Form 2848, Power of Attorney and Dec- laration of Representative, must be submitted with the request. An individual is not an authorized representative of the applicant merely because the individual is the administrator or a trustee of the plan.

(2) The request must include a declaration in the following form: “Under penalties of perjury, I declare that I have examined this request, or this modification to the request, including accompanying documents, and, to the best of my knowledge and belief, the request or the modification includes all the relevant facts relating to the request, and such facts are true, correct, and complete.” This declaration must be signed by the applicant (for example, by an authorized officer of a corporate applicant), in compliance with section 6.02(14) of Rev. Proc. 2017–4 (or the corresponding section of its successors). The signature of an individual with a power of attorney will not satisfy the requirements of this section 3.03(2).

(3) Because a request for approval to use substitute mortality tables constitutes

a request for a ruling, compliance with § 6110 of the Code is required. Section 601.201 of the Statement of Procedural Rules sets forth the requirements applicable to requests for rulings and determination letters which are subject to § 6110. Section 601.201(e) provides specific instructions to applicants.

The applicant must provide with the request either a statement of proposed deletions and the statutory basis for each proposed deletion, or a statement that no information other than names, addresses, and taxpayer identifying numbers need be deleted.

(4) The checklist set forth in Appendix A of this revenue procedure must be completed, signed and dated by the applicant or authorized representative, and included at the front of the request.

.04 Optional use of electronic format for certain information . In addition to providing the submission in written format, an applicant may provide the information required under sections 7.04 and 7.05 of this revenue procedure and section 10.02 or 10.03 of this revenue procedure, as applicable, in electronic format (such as a spreadsheet on a USB drive). Providing that information in electronic format may expedite the IRS review of the applicant’s request.