The Internal (“IRS”) is limiting the circumstances under which plan sponsors wishing to use special mortality tables to calculate defined benefit plan funding requirements must obtain IRS approval.

Revenue Procedure 2024-32 specifies the procedure by which the sponsor of a defined benefit plan that is subject to the funding requirements of § 430 of the Internal Revenue Code (the “Code”) may request approval from the IRS to use plan-specific substitute mortality tables in accordance with § 430(h)(3)(C) and § 1.430(h)(3)-2 of the Treasury Regulations.

Section 12.02 of Rev. 2024-32 in conjunction with the replacement of the generally applicable mortality tables, certain plan sponsors that wish to continue using plan-specific mortality tables must develop and request Internal Revenue Service (“IRS”) approval for the use of new plan-specific substitute mortality tables for plan years beginning on or after January 1, 2026. Section 303(h)(3)(C) of Employee Retirement Income Security Act of 1974, as amended (“ERISA”) also requires covered plan sponsors to obtain this IRS approval for continued use of new plan-specific mortality tables for purposes of the parallel funding rules of Section 302 of ERISA and the additional funding rules for defined benefit plans (other than multiemployer plans) under ERISA Section 303.

In a regulatory review prompted by President Trump’s Executive Order 14219, Ensuring Lawful Governance and Implementing the President’s “ Department of Government Efficiency” Deregulatory Initiative (Executive Order 14219), the IRS determined these requirements should be simplified. Consequently, Rev. Proc. 2025-21 modifies section 12.02 of Rev. Proc. 2024-32 to provide immediate relief for certain plan sponsors by narrowing the category of plan sponsors required to request approval of new plan-specific substitute mortality tables.

Specifically, Section 12.02 of Rev. Proc. 2024-32 is revised to provide that except for plans using a mortality ratio determined with combined genders, plans with significant coverage changes cannot use a substitute mortality table first approved for use for a plan year that began before January 1, 2025 for a plan year beginning on or after January 1, 2026 when the number of individuals covered by the substitute mortality table is less than 80 percent or more than 120 percent of the average number of individuals in that population over the 12-month periods covered by the experience study regardless whether the actuary makes the certification described in § 1.430(h)(3)2(c)(6)(iii)(A) for plans using a mortality ratio determined with combined genders.
If Substitute Base Tables for a plan (or plans) were developed using the option in Treasury Regulation § 1.430(h)(3)-2(d)(6) to determine a single mortality ratio for both genders in a population, however, the early termination of the permitted use of a substitute mortality table will not apply if the total number of individuals covered by the substitute mortality tables developed using that mortality ratio is not less than 80 percent and not more than 120 percent of the average number of individuals in the population used to determine that mortality ratio over the 12-month periods covered by the experience study, provided that the plan actuary certifies in writing to the satisfaction of the Commissioner that the substitute mortality tables used for the population continue to be accurately predictive of future mortality of that population (taking into account the effect of the change in the population) as described in § 1.430(h)(3)-2(c)(6)(iii)(A).

This change applies to all requests for approval to use plan-specific substitute mortality tables in accordance with § 430(h)(3)(C) for which the first year that the substitute mortality tables would apply begins on or after January 1, 2026.

The IRS officially will publish Revenue Procedure 2025-21 in IRB 2025-22, dated May 27, 2025.

If you have questions or need help with these or other employee benefits concerns, contact the author of this update, Cynthia Marcotte Stamer, who is a Fellow in the American College of Employee Benefits Counsel with decades of employee benefits experience.

 More Information Or Help

We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, insurance, or health care legal developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or telephone at (214) 452-8297.

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About the Author

Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on health and other employee benefits, insurance, healthcare, workforce, HIPAA and other data and technology and other compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.

Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer is nationally recognized for her decades of leading edge experience on the design, sponsorship, administration and defense of health and other employee benefit, workforce, insurance, healthcare , data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.

Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.

Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.

For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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