Determinations of Present Value
Effective December 8, 1994, defined benefit plans adopted on or after that date must use an IRS prescribed mortality table and the interest rate on 30- year Treasury bonds in calculating the present value of a lump sum distribution. Plans in existence on that date may adopt these assumptions, but are not required to do so until the first day of the first plan year beginning after December 31, 1999. Plan sponsors should consult their actuaries in deciding whether to adopt the new present valuation rules in advance of the required date.