PBGC mortality

[Gary]

An individual receives a lump sum in 1995. The plan requires 50% female and 50% male PBGC mortality. In 4044 of regs the PBGC mortality table is the GAM83M table. This appears to be as a result of GATT. Do you think this is the referenced mortality table, even if the plan has not amended its lump sum provisions for GATT? ANy thoughts?

[david rigby]

I think that the reference is due to the stautory change under GATT. However, the plan is not required to adopt that (as a minimum under IRC 417) until 2000, so the definition in the plan at the date of payment would seem to be the correct way to define the lump sum equivalent.

But if the plan definition is some other definition, it still should use the 417 definition as a minimum.

[Gary]

In response to your comments Pax, the plan document refers to PBGC mortality. So what is PBGC mortality? If you look in the regs PBGC mortality is Table I of Appendix A of Part 4044. Which happens to be GAM83 males (a 6 yr sb is required for females). So would it seem reasonable that that is the mortality table that is applicable? Or s/ it be something else?

[SoCalActuary]

You refer to a payment made in 1995. Do you suspect it was in error?

I understand the rules at that time as follows:

417(e) required the PBGC interest rate structure and the plan's mortality table for minimum lump sum distributions. If the plan had adopted GATT provisions to be effective on or before the distribution, then the 30 yr Treasury Rate and the blended 83GAM table is used for the minimum lump sum.

Your comment suggests that you were concerned with the PBGC tables, and that the plan document included them by reference. At one time the PBGC used the UP84 table with one year setforward for males & four year setback for females. I don't remember exactly when the PBGC changed to 83GAM, but check to see which table was in effect at the time of the distribution you are checking.