Harlan M. Weller, actuary of the Department of the Treasury's
Office of Tax Policy, outlined March 21 the department's priorities
for Pension Protection Act related guidance for single-employer
defined benefit pension plans.
Weller profiled for a BNA-sponsored conference on pension plans and
executive compensation the department's priorities for an employer
specific mortality table, benefit limitations, and yield curve and
other actuarial assumptions.
Rather than waiting and dealing with the issues all at once, the
department decided to prioritize them and address them in that order,
Weller said. However, he emphasized that all three are very important
regardless of their priority.
Employer-Specific Mortality Table.
The employer-specific mortality table is the first priority, Weller
said. He indicated this priority would be addressed by the department
in “the next few months.”
Weller said a proposed employer-specific mortality table has to be
filed by May 31 and that the department is “very aware of the
time crunch.” The guidance would address how employers would
justify their table and the necessary submission requirements for
approval
Tax code Section 430, minimum funding standards for single-employer
defined benefit pension plans, was added by the PPA applicable to plan
years beginning after Dec. 31, 2007. Among other things, Section 430
provides for the requirements an employer-specific mortality table
must meet.
The department's First Periodic Update of the 2006-2007 Priority
Guidance Plan (PPG), issued March 12 (48 PBD, 3/13/07; 34 BPR 642,
3/20/07), refers to this guidance as a revenue procedure on
employer-specific mortality.
Benefit Limitations and Yield Curve.
Guidance regarding the interaction between a decision made today
and one made in the future regarding plan contributions and how this
will play out in 2008 is the second priority, Weller said.
This issue will address the requirement in Section 415, limitations
on benefits and contributions under qualified plans, as amended by the
PPA.
Referring to a yield curve and other actuarial assumptions, Weller
said the department will have to put together an overall algorithm
addressing these actuarial matters.
Weller did not specify the time frame for action on guidance
related to these two issues, saying it was too early in the process to
do so.
By Michael W. Wyand