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Department of the Treasury, Internal Revenue Service: Mortality Tables for Determining Present Value Under Defined Benefit Pension Plans

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Highlights

GAO reviewed the Department of the Treasury, Internal Revenue Service's (IRS) new rule on mortality tables for determining present value under defined pension plans. GAO found that (1) the final rule (a) prescribes new mortality tables to be used by most defined benefit pension plans to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for a defined benefit plan as well as in determining the minimum required amount of a lump-sum distribution from such plan; and (b) updates requirements that a plan sponsor must meet to obtain IRS approval to use mortality tables specific to the plan for minimum funding purposes instead of using the generally applicable mortality tables; and (2) with the exception of the 60-day delay in effective date requirement, the IRS complied with applicable requirements in promulgating the rule.

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