IRS Guidance on 417(e)

[My 2 cents]

The IRS has issued proposed guidance on 417(e) issues.

Is it my imagination, or has the IRS rejected outright the conclusions of the 6th Circuit Court of Appeals that if a plan's pre-retirement death benefit calls for no forfeiture of benefits in the event of death before retirement (e.g., a cash balance plan paying the full account balance in the event of the death of the participant before benefit commencement) then no pre-retirement mortality discount is permissible under Section 411? The IRS seems to be saying that (a) Section 411 permits amending out death benefits other than the mandated QPSA and (b) accordingly, discounting for pre-retirement mortality is generally permissible since there is no requirement to value ancillary death benefits.

The IRS does assert, however, that benefits attributable to mandatory employee contributions cannot be discounted for pre-retirement mortality.

Are others seeing what I think I am seeing?