Actuarial Equivalence mortality table - interpretation of table descri

[Gary]

A plan says that the mortality table s/b the 1983 GAM table. I am reviewing the plan as an independent actuary. It does not say if it is male or female rates. My position is that it is reasonable to say that the appropriate table s/b the 50/50 blended rates. The employer uses male rates. This interpretation clearly can lower lump sums paid from plan. Any thoughts. This is plan documentation prior to GATT amendment.

[Guest Steve C]

If the plan simply says 1983 GAM, without elaboration, that certainly does lead to several possible interpretations. I'd then look towards the ongoing administration of the plan to determine the "correct" interpretation. I take it from your initial message that the employer has already adopted "1983 GAM - male" as the proper interpretation of plan language.

Now, if the plan is about to make the conversion to a GATT actuarial equivalence basis, there may be the opportunity for an easy switch to the blended table. Of course, you'll want the plan document to clearly indicate the blended table.

[david rigby]

I agree with Steve. As he points out, the ER has apparently aplied an administrative interpretation. It may be perfectly reasonable. For example, it may have been the intention, but the drafting of the plan language was inadequate. Prior language or prior administration may be a guide in making such interpretation.

Also, the use of the table is important. If the definition relates to lump sum calculations, the interpretation should obviously be a unisex one. However, if the plan is defining the actuarial assumptions to use for determining top-heavy status, then a different interpretation may be reasonable.