When Should You Consider the New Mortality Tables?

Most entities that sponsor defined benefit plans are aware that the Society of Actuaries released in October 2014 updated mortality tables to be considered in the calculation of the benefit liability for financial reporting purposes.  However, the question being asked by many sponsors is, “When should these new tables be considered?” 

The AICPA Financial Reporting Executive Committee (FinREC) with input by the Employee Benefit Plans Expert Panel issued Technical Questions and Answers (TIS) 3700.1, Pension Obligations, Effect of New Mortality Tables on Nongovernmental Employee Benefit Plans (EBPs) and Nongovernmental Entities that Sponsor EBPs, which provides nonauthoratative guidance for considering the new mortality tables.  It addresses the GAAP requirement that management use a mortality assumption that reflects the best estimate of the plan's future experience for purposes of estimating the plan's obligation as of the current measurement date.  In making this estimate, GAAP requires that all available information through the date the financial statements are available to be issued should be evaluated to determine if the information provides additional evidence about conditions that existed at the balance sheet date.    Many defined benefit plans report their obligations as of the beginning of the year (as of January 1, 2014 for the 2014 plan year-ends); however, since these tables are currently available and 2014 statements are not yet issued, these tables should still be considered in order to reflect management’s best estimate of the plan’s obligation.  Management should continue to document its evaluation and the basis for selecting the mortality tables it decided to use for its current financial reporting period. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
2024 Cost-of-Living Adjustments for Retirement Plans and IRAs
ERISA BY Justin Mudryk
Employee Benefit Plans Can Do More Than Satisfy Regulatory Requirements
How Safe Are Your 401(k) Assets?
SECURE 2.0 Act – Section 334. Long-term Care Contracts Purchased with Retirement Plan Distributions
SECURE 2.0 Act – Section 348.Cash Balance
SECURE 2.0 Act – Section 312. Employer May Rely On Employee Certifying That Deemed Hardship Distribution Conditions Are Met
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.