Alabama § 45-37A-51.284 - Actuarial Assumptions.

§ 45-37A-51.284. Actuarial Assumptions.

(a) Effective date. Except as provided by the Pension Benefit Guaranty Corporation (PBGC) and the Internal Revenue Service, the limitations of this section shall first apply in determining the amount payable to a participant having an annuity starting date in a fiscal year beginning on or after January 1, 2008.

(b) Applicable interest rate. For purposes of the fund’s provisions relating to the calculation of the present value of a benefit payment that is subject to § 417(e), Internal Revenue Code, as well as any other fund provision referring directly or indirectly to the applicable interest rate or applicable mortality table used for purposes of § 417(e), Internal Revenue Code, any provision prescribing the use of the annual rate of interest on 30-year United States Treasury securities shall be implemented by instead using the rate of interest determined by applicable interest rate described by § 417(e), Internal Revenue Code, after its amendment by the federal Pension Protection Act. Specifically, the applicable interest rate shall be the adjusted first, second, and third segment rates applied under the rules similar to the rules of § 430(h)(2)(C), Internal Revenue Code, for the calendar month, lookback month, before the first day of the fiscal year in which the annuity starting date occurs, stability period. For this purpose, the first, second, and third segment rates are the first, second, and third segment rates which would be determined under § 430(h)(2)(C), Internal Revenue Code, if:

(1) § 430(h)(2)(D), Internal Revenue Code, were applied by substituting the average yields for the month described in the preceding paragraph for the average yields for the 24-month period described in such section, and (2) § 430(h)(2)(G)(i)(II), Internal Revenue Code, were applied by substituting § 417(e)(3)(A)(ii)(II), Internal Revenue Code, for 412(b)(5)(B)(ii)(II), Internal Revenue Code, and

(3) The applicable percentage under § 430(h)(2)(G), Internal Revenue Code, is treated as being 20 percent in 2008, 40 percent in 2009, 60 percent in 2010, and 80 percent in 2011.

(c) Applicable mortality assumption. For purposes of the fund’s provisions relating to the calculation of the present value of a benefit payment that is subject to § 417(e), Internal Revenue Code, as well as any other fund provision referring directly or indirectly to the applicable interest rate, any provision directly or indirectly prescribing the use of the mortality table described in Revenue Ruling 2001-62 shall be amended to prescribe the use of the applicable annual mortality table within the meaning of § 417(e)(3)(B), Internal Revenue Code, as initially described in Revenue Ruling 2007-67.