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Mortality Tables Will Not Impact Lump Sum Valuations in 2017

In September, the IRS issued Notice 2016-50, which provides the 2017 mortality tables used for minimum funding, PBGC variable premium, and funded status reporting. The tables will continue the 2016 basis, with one additional year of longevity, but there will not be any changes to the calculation methodology. The IRS expects to issue revisions to their calculation methodology for valuations starting in 2018. As a result, the mortality methodology used to calculate lump sum payments will not change in 2017, providing plan sponsors with another opportunity to value lump sums at a more favorable mortality than is expected beginning in 2018.