The IRS published the 2016 required mortality rates for purposes of minimum funding in defined benefit plans via Notice 2015-53. The 2016 rates will NOT be based on the newly published Society of Actuaries (SOA) RP2014 rates along with the improvement scale MP2014, but will be an extension of the “old” RP2000 rates required in previous years. This means that the pending impact of the new rates (i.e. increase in pension liabilities – see December 2014 blog on Mortality Improvements) is put off another year, at least with regard to minimum funding calculations and lump sum payout values. Keep in mind, that even though new rates are not yet required for these specific purposes in 2016, auditors will likely require use of the newer rates for accounting (FASB) and disclosure on company financial statements in 2015, if they weren’t already reflected in 2014.
Blog authored by Cheryl Gabriel, CPC.