IRS Mortality Table

[Gary]

IRS prescribes the 83 GAM table for 415 and 417. How can it be explained that we use a table with the year 1983, when it is 1998? Curious to hear some thoughts.

[Chester]

Using 1983GAM table in 1998 is not a big deal, as mortality has not significantly changed in the 15 years since this table was established. The Society of Actuaries is working on an updated mortality table based on 1994 data, but I don't believe this table has been published yet--in any case you would have to wait for IRS blessing to use this table for 415 and 417 calculations.

[david rigby]

The Society of Actuaries has issued the table. Actually there were 2 tables issued in 1995, published in the SOA Transactions.

The GAR-94 Table (Group Annuity Reserving Table) was proposed to be used as a reserving standard for insurance company reserves. It includes a 7% margin in the mortality rates at most ages and includes projection using a generational approach.

The UP-94 Table (Uninsured Pensioner 1994 Table) is based on the same data as the GAR-94 table, but does not include the margin. There are multiple methods proposed for projection purposes.

We have seen some movement toward using the UP-94 Table (note that it is not unisex) in actuarial valuations, but most of that has been situations where the plan is already well-funded so that the increase in measured liability does not hurt the funding.

This table, or some modification of it, is being studied by the IRS for possible use as a replacement of the 1983 table for various purposes.