Mortality Table update?

[david rigby]

Anyone have any insight and/or speculation about when/how the IRS will adopt the new mortality table(s)?

(Yes, I'm familiar with the discussion at the 2014 EA meeting.)

Here is mine: the PPA mandate is to upate the tables "at least every 10 years". If the current table is extended one more year (thru 2016), and then a new basis is adopted for 2017, the IRS will get two benefits:

- they beat their mandate by one year, and

- they give the software vendors more time to update for 2D projedtions scales.

Also, there is no way the IRS will recognize (ie, in the approved tables) the measured differences in "collar".

Go.

[My 2 cents]

Are there any software vendors out there who are NOT already doing whatever will be necessary to handle the structure of the new base table/projection scale? Many can probably handle it already. Don't see any reason to delay implementation for that. Even if the IRS comes out with multiple sets of rates (i.e., blue collar rates, white collar rates), which would be difficult to implement in practice, their structure will be essentially the same so additional programming (beyond providing for a choice of tables/projection scales from a system library) should not be necessary.

Those with home-grown valuation systems had better get cracking! I think most practitioners expect the new basis to be mandatory for 2016 valuations.

Even if it is not mandatory for 2016, at least some actuaries will want to use the new tables for some calculations other than those mandated for minimum funding.

Which is not necessarily the same as saying that longevity should be considered a monotonically increasing function. The possibility of future pandemics, the effects of ecological degredation, the difficulty of finding enough money for effective research and/or healthcare, the persistence of unhealthy lifestyles (i.e., the "obesity epidemic"), and inherent biological limitations could all provide pushback against the trends of the past century.

[Effen]

I would not assume there is a 100% probability the IRS adopts this table, and certainly not before 2017. Comment letters are due in a few weeks and I know several organizations are raising some concerns about the data quality used to produce it. Also, many will lobby the IRS not to use a 2D table, especially for small plans.

It will be interesting to see what kinds of comments they receive. I would not assume the IRS will just use it without other considerations.