<------ Mensan (that deserves to go to AMS)

 

And the theme song.

 

Ophiuchus

 

Look in thy glass and tell the face thou viewest
Now is the time that face should form another;
Whose fresh repair if now thou not renewest,
Thou dost beguile the world, unbless some mother.
For where is she so fair whose unear'd womb
Disdains the tillage of thy husbandry?
Or who is he so fond will be the tomb
Of his self-love, to stop posterity?
Thou art thy mother's glass and she in thee
Calls back the lovely April of her prime;
So thou through windows of thine age shalt see,
Despite of wrinkles this thy golden time.
But if thou live, remember'd not to be,
Die single and thine image dies with thee.

 

The physical year.

 

� 411. Minimum vesting standards

How Current is This?
(a) General rule
A trust shall not constitute a qualified trust under section 401 (a) unless the plan of which such trust is a part provides that an employee�s right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age (as defined in paragraph (8)) and in addition satisfies the requirements of paragraphs (1), (2), and (11) of this subsection and the requirements of subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, in the case of a defined contribution plan, the requirements of subsection (b)(2).
(1) Employee contributions
A plan satisfies the requirements of this paragraph if an employee�s rights in his accrued benefit derived from his own contributions are nonforfeitable.
(2) Employer contributions
(A) Defined benefit plans
(i) In general In the case of a defined benefit plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).
(ii) 5-year vesting A plan satisfies the requirements of this clause if an employee who has completed at least 5 years of service has a nonforfeitable right to 100 percent of the employee�s accrued benefit derived from employer contributions.
(iii) 3 to 7 year vesting A plan satisfies the requirements of this clause if an employee has a nonforfeitable right to a percentage of the employee�s accrued benefit derived from employer contributions determined under the following table:
The nonforfeitable Years of service: percentage is: 3 20 4 40 5 60 6 80 7 or more 100.
(B) Defined contribution plans
(i) In general In the case of a defined contribution plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).
(ii) 3-year vesting A plan satisfies the requirements of this clause if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee�s accrued benefit derived from employer contributions.
(iii) 2 to 6 year vesting A plan satisfies the requirements of this clause if an employee has a nonforfeitable right to a percentage of the employee�s accrued benefit derived from employer contributions determined under the following table:
The nonforfeitable Years of service: percentage is: 2 20 3 40 4 60 5 80 6 or more 100.
(3) Certain permitted forfeitures, suspensions, etc.
For purposes of this subsection�
(A) Forfeiture on account of death
A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that it is not payable if the participant dies (except in the case of a survivor annuity which is payable as provided in section 401 (a)(11)).
(B) Suspension of benefits upon reemployment of retiree
A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that the payment of benefits is suspended for such period as the employee is employed, subsequent to the commencement of payment of such benefits�
(i) in the case of a plan other than a multi-employer plan, by the employer who maintains the plan under which such benefits were being paid; and
(ii) in the case of a multiemployer plan, in the same industry, the same trade or craft, and the same geographic area covered by the plan as when such benefits commenced.
The Secretary of Labor shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph, including regulations with respect to the meaning of the term �employed�.
(C) Effect of retroactive plan amendments
A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because plan amendments may be given retroactive application as provided in section 412 (c)(2).[1]
(D) Withdrawal of mandatory contribution
(i) A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that, in the case of a participant who does not have a nonforfeitable right to at least 50 percent of his accrued benefit derived from employer contributions, such accrued benefit may be forfeited on account of the withdrawal by the participant of any amount attributable to the benefit derived from mandatory contributions (as defined in subsection (c)(2)(C)) made by such participant.
(ii) Clause (i) shall not apply to a plan unless the plan provides that any accrued benefit forfeited under a plan provision described in such clause shall be restored upon repayment by the participant of the full amount of the withdrawal described in such clause plus, in the case of a defined benefit plan, interest. Such interest shall be computed on such amount at the rate determined for purposes of subsection (c)(2)(C) on the date of such repayment (computed annually from the date of such withdrawal). The plan provision required under this clause may provide that such repayment must be made
(I) in the case of a withdrawal on account of separation from service, before the earlier of 5 years after the first date on which the participant is subsequently re-employed by the employer, or the close of the first period of 5 consecutive 1-year breaks in service commencing after the withdrawal; or
(II) in the case of any other withdrawal, 5 years after the date of the withdrawal.
(iii) In the case of accrued benefits derived from employer contributions which accrued before September 2, 1974, a right to such accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that an amount of such accrued benefit may be forfeited on account of the withdrawal by the participant of an amount attributable to the benefit derived from mandatory contributions (as defined in subsection (c)(2)(C)) made by such participant before September 2, 1974 if such amount forfeited is proportional to such amount withdrawn. This clause shall not apply to any plan to which any mandatory contribution is made after September 2, 1974. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this clause.
(iv) For purposes of this subparagraph, in the case of any class-year plan, a withdrawal of employee contributions shall be treated as a withdrawal of such contributions on a plan year by plan year basis in succeeding order of time.
(v) For nonforfeitability where the employee has a nonforfeitable right to at least 50 percent of his accrued benefit, see section 401 (a)(19).
(E) Cessation of contributions under a multiemployer plan
A right to an accrued benefit derived from employer contributions under a multiemployer plan shall not be treated as forfeitable solely because the plan provides that benefits accrued as a result of service with the participant�s employer before the employer had an obligation to contribute under the plan may not be payable if the employer ceases contributions to the multi employer plan.
(F) Reduction and suspension of benefits by a multiemployer plan
A participant�s right to an accrued benefit derived from employer contributions under a multiemployer plan shall not be treated as forfeitable solely because�
(i) the plan is amended to reduce benefits under section 418D or under section 4281 of the Employee Retirement Income Security Act of 1974, or
(ii) benefit payments under the plan may be suspended under section 418E or under section 4281 of the Employee Retirement Income Security Act of 1974.
(G) Treatment of matching contributions forfeited by reason of excess deferral or contribution
A matching contribution (within the meaning of section 401 (m)) shall not be treated as forfeitable merely because such contribution is forfeitable if the contribution to which the matching contribution relates is treated as an excess contribution under section 401 (k)(8)(B), an excess deferral under section 402 (g)(2)(A), or an excess aggregate contribution under section 401 (m)(6)(B).
(4) Service included in determination of nonforfeit able percentage
In computing the period of service under the plan for purposes of determining the nonforfeitable percentage under paragraph (2), all of an employee�s years of service with the employer or employers maintaining the plan shall be taken into account, except that the following may be disregarded:
(A) years of service before age 18,[2]
(B) years of service during a period for which the employee declined to contribute to a plan requiring employee contributions;
(C) years of service with an employer during any period for which the employer did not maintain the plan or a predecessor plan (as defined under regulations prescribed by the Secretary;
(D) service not required to be taken into account under paragraph (6);
(E) years of service before January 1, 1971, unless the employee has had at least 3 years of service after December 31, 1970;
(F) years of service before the first plan year to which this section applies, if such service would have been disregarded under the rules of the plan with regard to breaks in service as in effect on the applicable date; and
(G) in the case of a multiemployer plan, years of service�
(i) with an employer after�
(I) a complete withdrawal of that employer from the plan (within the meaning of section 4203 of the Employee Retirement Income Security Act of 1974), or
(II) to the extent permitted in regulations prescribed by the Secretary, a partial withdrawal described in section 4205(b)(2)(A)(i) of such Act in conjunction with the decertification of the collective bargaining representative, and
(ii) with any employer under the plan after the termination date of the plan under section 4048 of such Act.
(5) Year of service
(A) General rule
For purposes of this subsection, except as provided in subparagraph (C), the term �year of service� means a calendar year, plan year, or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has completed 1,000 hours of service.
(B) Hours of service
For purposes of this subsection, the term �hours of service� has the meaning provided by section 410 (a)(3)(C).
(C) Seasonal industries
In the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term �year of service� shall be such period as may be determined under regulations prescribed by the Secretary of Labor.
(D) Maritime industries
For purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as 1,000 hours of service. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.
(6) Breaks in service
(A) Definition of 1-year break in service
For purposes of this paragraph, the term �1-year break in service� means a calendar year, plan year, or other 12-consecutive-month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has not completed more than 500 hours of service.
(B) 1 year of service after 1-year break in service
For purposes of paragraph (4), in the case of any employee who has any 1-year break in service, years of service before such break shall not be required to be taken into account until he has completed a year of service after his return.
(C) 5 consecutive 1-year breaks in service under defined contribution plan
For purposes of paragraph (4), in the case of any participant in a defined contribution plan, or an insured defined benefit plan which satisfies the requirements of subsection (b)(1)(F), who has 5 consecutive 1-year breaks in service, years of service after such 5-year period shall not be required to be taken into account for purposes of determining the nonforfeitable percentage of his accrued benefit derived from employer contributions which accrued before such 5-year period.
(D) Nonvested participants
(i) In general For purposes of paragraph (4), in the case of a nonvested participant, years of service with the employer or employers maintaining the plan before any period of consecutive 1-year breaks in service shall not be required to be taken into account if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of�
(I) 5, or
(II) the aggregate number of years of service before such period.
(ii) Years of service not taken into account If any years of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subsequent period of breaks in service.
(iii) Nonvested participant defined For purposes of clause (i), the term �nonvested participant� means a participant who does not have any nonforfeitable right under the plan to an accrued benefit derived from employer contributions.
(E) Special rule for maternity or paternity absences
(i) General rule In the case of each individual who is absent from work for any period�
(I) by reason of the pregnancy of the individual,
(II) by reason of the birth of a child of the individual,
(III) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or
(IV) for purposes of caring for such child for a period beginning immediately following such birth or placement,
the plan shall treat as hours of service, solely for purposes of determining under this paragraph whether a 1-year break in service has occurred, the hours described in clause (ii).
(ii) Hours treated as hours of service The hours described in this clause are�
(I) the hours of service which otherwise would normally have been credited to such individual but for such absence, or
(II) in any case in which the plan is unable to determine the hours described in subclause (I), 8 hours of service per day of absence,
except that the total number of hours treated as hours of service under this clause by reason of any such pregnancy or placement shall not exceed 501 hours.
(iii) Year to which hours are credited The hours described in clause (ii) shall be treated as hours of service as provided in this subparagraph�
(I) only in the year in which the absence from work begins, if a participant would be prevented from incurring a 1-year break in service in such year solely because the period of absence is treated as hours of service as provided in clause (i); or
(II) in any other case, in the immediately following year.
(iv) Year defined For purposes of this subparagraph, the term �year� means the period used in computations pursuant to paragraph (5).
(v) Information required to be filed A plan shall not fail to satisfy the requirements of this subparagraph solely because it provides that no credit will be given pursuant to this subparagraph unless the individual furnishes to the plan administrator such timely information as the plan may reasonably require to establish�
(I) that the absence from work is for reasons referred to in clause (i), and
(II) the number of days for which there was such an absence.
(7) Accrued benefit
(A) In general
For purposes of this section, the term �accrued benefit� means�
(i) in the case of a defined benefit plan, the employee�s accrued benefit determined under the plan and, except as provided in subsection (c)(3), expressed in the form of an annual benefit commencing at normal retirement age, or
(ii) in the case of a plan which is not a defined benefit plan, the balance of the employee�s account.
(B) Effect of certain distributions
Notwithstanding paragraph (4), for purposes of determining the employee�s accrued benefit under the plan, the plan may disregard service performed by the employee with respect to which he has received�
(i) a distribution of the present value of his entire nonforfeitable benefit if such distribution was in an amount (not more than the dollar limit under section 411 (a)(11)(A)) permitted under regulations prescribed by the Secretary, or
(ii) a distribution of the present value of his nonforfeitable benefit attributable to such service which he elected to receive.
Clause (i) of this subparagraph shall apply only if such distribution was made on termination of the employee�s participation in the plan. Clause (ii) of this subparagraph shall apply only if such distribution was made on termination of the employee�s participation in the plan or under such other circumstances as may be provided under regulations prescribed by the Secretary.
(C) Repayment of subparagraph (B) distributions
For purposes of determining the employee�s accrued benefit under a plan, the plan may not disregard service as provided in subparagraph (B) unless the plan provides an opportunity for the participant to repay the full amount of the distribution described in such subparagraph (B) with, in the case of a defined benefit plan, interest at the rate determined for purposes of subsection (c)(2)(C) and provides that upon such repayment the employee�s accrued benefit shall be recomputed by taking into account service so disregarded. This subparagraph shall apply only in the case of a participant who�
(i) received such a distribution in any plan year to which this section applies, which distribution was less than the present value of his accrued benefit,
(ii) resumes employment covered under the plan, and
(iii) repays the full amount of such distribution with, in the case of a defined benefit plan, interest at the rate determined for purposes of subsection (c)(2)(C).
The plan provision required under this subparagraph may provide that such repayment must be made
(I) in the case of a withdrawal on account of separation from service, before the earlier of 5 years after the first date on which the participant is subsequently re-employed by the employer, or the close of the first period of 5 consecutive 1-year breaks in service commencing after the withdrawal; or
(II) in the case of any other withdrawal, 5 years after the date of the withdrawal.
(D) Accrued benefit attributable to employee contributions
The accrued benefit of an employee shall not be less than the amount determined under subsection (c)(2)(B) with respect to the employee�s accumulated contributions.
(8) Normal retirement age
For purposes of this section, the term �normal retirement age� means the earlier of�
(A) the time a plan participant attains normal retirement age under the plan, or
(B) the later of�
(i) the time a plan participant attains age 65, or
(ii) the 5th anniversary of the time a plan participant commenced participation in the plan.
(9) Normal retirement benefit
For purposes of this section, the term �normal retirement benefit� means the greater of the early retirement benefit under the plan, or the benefit under the plan commencing at normal retirement age. The normal retirement benefit shall be determined without regard to�
(A) medical benefits, and
(B) disability benefits not in excess of the qualified disability benefit.
For purposes of this paragraph, a qualified disability benefit is a disability benefit provided by a plan which does not exceed the benefit which would be provided for the participant if he separated from the service at normal retirement age. For purposes of this paragraph, the early retirement benefit under a plan shall be determined without regard to any benefits commencing before benefits payable under title II of the Social Security Act become payable which�
(i) do not exceed such social security benefits, and
(ii) terminate when such social security benefits commence.
(10) Changes in vesting schedule
(A) General rule
A plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) if the nonforfeitable percentage of the accrued benefit derived from employer contributions (determined as of the later of the date such amendment is adopted, or the date such amendment becomes effective) of any employee who is a participant in the plan is less than such nonforfeitable percentage computed under the plan without regard to such amendment.
(B) Election of former schedule
A plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) unless each participant having not less than 3 years of service is permitted to elect, within a reasonable period after the adoption of such amendment, to have his nonforfeitable percentage computed under the plan without regard to such amendment.
(11) Restrictions on certain mandatory distributions
(A) In general
If the present value of any nonforfeitable accrued benefit exceeds $5,000, a plan meets the requirements of this paragraph only if such plan provides that such benefit may not be immediately distributed without the consent of the participant.
(B) Determination of present value
For purposes of subparagraph (A), the present value shall be calculated in accordance with section 417 (e)(3).
(C) Dividend distributions of ESOPS arrangement
This paragraph shall not apply to any distribution of dividends to which section 404 (k) applies.
(D) Special rule for rollover contributions
A plan shall not fail to meet the requirements of this paragraph if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term �rollover contributions� means any rollover contribution under sections 402 (c), 403 (a)(4), 403 (b)(8), 408 (d)(3)(A)(ii), and 457 (e)(16).
[(12) Repealed. Pub. L. 109�280, title IX, � 904(a)(2), Aug. 17, 2006, 120 Stat. 1049]
(13) Special rules for plans computing accrued benefits by reference to hypothetical account balance or equivalent amounts
(A) In general
An applicable defined benefit plan shall not be treated as failing to meet�
(i) subject to paragraph (2), the requirements of subsection (a)(2), or
(ii) the requirements of subsection (c) or section 417 (e) with respect to contributions other than employee contributions,
solely because the present value of the accrued benefit (or any portion thereof) of any participant is, under the terms of the plan, equal to the amount expressed as the balance in the hypothetical account described in paragraph (3) or as an accumulated percentage of the participant�s final average compensation.
(B) 3-year vesting
In the case of an applicable defined benefit plan, such plan shall be treated as meeting the requirements of subsection (a)(2) only if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee�s accrued benefit derived from employer contributions.
(C) Applicable defined benefit plan and related rules
For purposes of this subsection�
(i) In general The term �applicable defined benefit plan� means a defined benefit plan under which the accrued benefit (or any portion thereof) is calculated as the balance of a hypothetical account maintained for the participant or as an accumulated percentage of the participant�s final average compensation.
(ii) Regulations to include similar plans The Secretary shall issue regulations which include in the definition of an applicable defined benefit plan any defined benefit plan (or any portion of such a plan) which has an effect similar to an applicable defined benefit plan.
(b) Accrued benefit requirements
(1) Defined benefit plans
(A) 3-percent method
A defined benefit plan satisfies the requirements of this paragraph if the accrued benefit to which each participant is entitled upon his separation from the service is not less than�
(i) 3 percent of the normal retirement benefit to which he would be entitled if he commenced participation at the earliest possible entry age under the plan and served continuously until the earlier of age 65 or the normal retirement age specified under the plan, multiplied by
(ii) the number of years (not in excess of 331/3) of his participation in the plan.
In the case of a plan providing retirement benefits based on compensation during any period, the normal retirement benefit to which a participant would be entitled shall be determined as if he continued to earn annually the average rate of compensation which he earned during consecutive years of service, not in excess of 10, for which his compensation was the highest. For purposes of this subparagraph, social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current year for all years after such current year.
(B) 1331/3 percent rule
A defined benefit plan satisfies the requirements of this paragraph for a particular plan year if under the plan the accrued benefit payable at the normal retirement age is equal to the normal retirement benefit and the annual rate at which any individual who is or could be a participant can accrue the retirement benefits payable at normal retirement age under the plan for any later plan year is not more than 1331/3 percent of the annual rate at which he can accrue benefits for any plan year beginning on or after such particular plan year and before such later plan year. For purposes of this subparagraph�
(i) any amendment to the plan which is in effect for the current year shall be treated as in effect for all other plan years;
(ii) any change in an accrual rate which does not apply to any individual who is or could be a participant in the current year shall be disregarded;
(iii) the fact that benefits under the plan may be payable to certain employees before normal retirement age shall be disregarded; and
(iv) social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current year for all years after the current year.
(C) Fractional rule
A defined benefits plan satisfies the requirements of this paragraph if the accrued benefit to which any participant is entitled upon his separation from the service is not less than a fraction of the annual benefit commencing at normal retirement age to which he would be entitled under the plan as in effect on the date of his separation if he continued to earn annually until normal retirement age the same rate of compensation upon which his normal retirement benefit would be computed under the plan, determined as if he had attained normal retirement age on the date on which any such determination is made (but taking into account no more than the 10 years of service immediately preceding his separation from service). Such fraction shall be a fraction, not exceeding 1, the numerator of which is the total number of his years of participation in the plan (as of the date of his separation from the service) and the denominator of which is the total number of years he would have participated in the plan if he separated from the service at the normal retirement age. For purposes of this subparagraph, social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current year for all years after such current year.
(D) Accrual for service before effective date
Subparagraphs (A), (B), and (C) shall not apply with respect to years of participation before the first plan year to which this section applies, but a defined benefit plan satisfies the requirements of this subparagraph with respect to such years of participation only if the accrued benefit of any participant with respect to such years of participation is not less than the greater of�
(i) his accrued benefit determined under the plan, as in effect from time to time prior to September 2, 1974, or
(ii) an accrued benefit which is not less than one-half of the accrued benefit to which such participant would have been entitled if subparagraph (A), (B), or (C) applied with respect to such years of participation.
(E) First two years of service
Notwithstanding subparagraphs (A), (B), and (C) of this paragraph, a plan shall not be treated as not satisfying the requirements of this paragraph solely because the accrual of benefits under the plan does not become effective until the employee has two continuous years of service. For purposes of this subparagraph, the term �years of service� has the meaning provided by section 410 (a)(3)(A).
(F) Certain insured defined benefit plans
Notwithstanding subparagraphs (A), (B), and (C), a defined benefit plan satisfies the requirements of this paragraph if such plan�
(i) is funded exclusively by the purchase of insurance contracts, and
(ii) satisfies the requirements of subparagraphs (B) and (C) of section 412 (e)(3) (relating to certain insurance contract plans),
but only if an employee�s accrued benefit as of any applicable date is not less than the cash surrender value his insurance contracts would have on such applicable date if the requirements of subparagraphs (D), (E), and (F) of section 412 (e)(3) were satisfied.
(G) Accrued benefit may not decrease on account of increasing age or service
Notwithstanding the preceding subparagraphs, a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if the participant�s accrued benefit is reduced on account of any increase in his age or service. The preceding sentence shall not apply to benefits under the plan commencing before entitlement to benefits payable under title II of the Social Security Act which benefits under the plan�
(i) do not exceed such social security benefits, and
(ii) terminate when such social security benefits commence.
(H) Continued accrual beyond normal retirement age
(i) In general Notwithstanding the preceding subparagraphs, a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee�s benefit accrual is ceased, or the rate of an employee�s benefit accrual is reduced, because of the attainment of any age.
(ii) Certain limitations permitted A plan shall not be treated as failing to meet the requirements of this subparagraph solely because the plan imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number of years of service or years of participation which are taken into account for purposes of determining benefit accrual under the plan.
(iii) Adjustments under plan for delayed retirement taken into account In the case of any employee who, as of the end of any plan year under a defined benefit plan, has attained normal retirement age under such plan�
(I) if distribution of benefits under such plan with respect to such employee has commenced as of the end of such plan year, then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such plan year shall be treated as satisfied to the extent of the actuarial equivalent of inservice distribution of benefits, and
(II) if distribution of benefits under such plan with respect to such employee has not commenced as of the end of such year in accordance with section 401 (a)(14)(C), and the payment of benefits under such plan with respect to such employee is not suspended during such plan year pursuant to subsection (a)(3)(B), then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such plan year shall be treated as satisfied to the extent of any adjustment in the benefit payable under the plan during such plan year attributable to the delay in the distribution of benefits after the attainment of normal retirement age.
The preceding provisions of this clause shall apply in accordance with regulations of the Secretary. Such regulations may provide for the application of the preceding provisions of this clause, in the case of any such employee, with respect to any period of time within a plan year.
(iv) Disregard of subsidized portion of early retirement benefit A plan shall not be treated as failing to meet the requirements of clause (i) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals.
(v) Coordination with other requirements The Secretary shall provide by regulation for the coordination of the requirements of this subparagraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor of highly compensated employees.
(2) Defined contribution plans
(A) In general
A defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee�s account are not ceased, and the rate at which amounts are allocated to the employee�s account is not reduced, because of the attainment of any age.
(B) Application to target benefit plans
The Secretary shall provide by regulation for the application of the requirements of this paragraph to target benefit plans.
(C) Coordination with other requirements
The Secretary may provide by regulation for the coordination of the requirements of this paragraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor of highly compensated employees.
(3) Separate accounting required in certain cases
A plan satisfies the requirements of this paragraph if�
(A) in the case of the defined benefit plan, the plan requires separate accounting for the portion of each employee�s accrued benefit derived from any voluntary employee contributions permitted under the plan; and
(B) in the case of any plan which is not a defined benefit plan, the plan requires separate accounting for each employee�s accrued benefit.
(4) Year of participation
(A) Definition
For purposes of determining an employee�s accrued benefit, the term �year of participation� means a period of service (beginning at the earliest date on which the employee is a participant in the plan and which is included in a period of service required to be taken into account under section 410 (a)(5), determined without regard to section 410 (a)(5)(E)) as determined under regulations prescribed by the Secretary of Labor which provide for the calculation of such period on any reasonable and consistent basis.
(B) Less than full time service
For purposes of this paragraph, except as provided in subparagraph (C), in the case of any employee whose customary employment is less than full time, the calculation of such employee�s service on any basis which provides less than a ratable portion of the accrued benefit to which he would be entitled under the plan if his customary employment were full time shall not be treated as made on a reasonable and consistent basis.
(C) Less than 1,000 hours of service during year
For purposes of this paragraph, in the case of any employee whose service is less than 1,000 hours during any calendar year, plan year or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) the calculation of his period of service shall not be treated as not made on a reasonable and consistent basis solely because such service is not taken into account.
(D) Seasonal industries
In the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term �year of participation� shall be such period as determined under regulations prescribed by the Secretary of Labor.
(E) Maritime industries
For purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as a year of participation. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.
(5) Special rules relating to age
(A) Comparison to similarly situated younger individual
(i) In general A plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) if a participant�s accrued benefit, as determined as of any date under the terms of the plan, would be equal to or greater than that of any similarly situated, younger individual who is or could be a participant.
(ii) Similarly situated For purposes of this subparagraph, a participant is similarly situated to any other individual if such participant is identical to such other individual in every respect (including period of service, compensation, position, date of hire, work history, and any other respect) except for age.
(iii) Disregard of subsidized early retirement benefits In determining the accrued benefit as of any date for purposes of this clause, the subsidized portion of any early retirement benefit or retirement-type subsidy shall be disregarded.
(iv) Accrued benefit For purposes of this subparagraph, the accrued benefit may, under the terms of the plan, be expressed as an annuity payable at normal retirement age, the balance of a hypothetical account, or the current value of the accumulated percentage of the employee�s final average compensation.
(B) Applicable defined benefit plans
(i) Interest credits
(I) In general An applicable defined benefit plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the terms of the plan provide that any interest credit (or an equivalent amount) for any plan year shall be at a rate which is not greater than a market rate of return. A plan shall not be treated as failing to meet the requirements of this subclause merely because the plan provides for a reasonable minimum guaranteed rate of return or for a rate of return that is equal to the greater of a fixed or variable rate of return.
(II) Preservation of capital An interest credit (or an equivalent amount) of less than zero shall in no event result in the account balance or similar amount being less than the aggregate amount of contributions credited to the account.
(III) Market rate of return The Secretary may provide by regulation for rules governing the calculation of a market rate of return for purposes of subclause (I) and for permissible methods of crediting interest to the account (including fixed or variable interest rates) resulting in effective rates of return meeting the requirements of subclause (I).
(ii) Special rule for plan conversions If, after June 29, 2005, an applicable plan amendment is adopted, the plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the requirements of clause (iii) are met with respect to each individual who was a participant in the plan immediately before the adoption of the amendment.
(iii) Rate of benefit accrual Subject to clause (iv), the requirements of this clause are met with respect to any participant if the accrued benefit of the participant under the terms of the plan as in effect after the amendment is not less than the sum of�
(I) the participant�s accrued benefit for years of service before the effective date of the amendment, determined under the terms of the plan as in effect before the amendment, plus
(II) the participant�s accrued benefit for years of service after the effective date of the amendment, determined under the terms of the plan as in effect after the amendment.
(iv) Special rules for early retirement subsidies For purposes of clause (iii)(I), the plan shall credit the accumulation account or similar amount [3] with the amount of any early retirement benefit or retirement-type subsidy for the plan year in which the participant retires if, as of such time, the participant has met the age, years of service, and other requirements under the plan for entitlement to such benefit or subsidy.
(v) Applicable plan amendment For purposes of this subparagraph�
(I) In general The term �applicable plan amendment� means an amendment to a defined benefit plan which has the effect of converting the plan to an applicable defined benefit plan.
(II) Special rule for coordinated benefits If the benefits of 2 or more defined benefit plans established or maintained by an employer are coordinated in such a manner as to have the effect of the adoption of an amendment described in subclause (I), the sponsor of the defined benefit plan or plans providing for such coordination shall be treated as having adopted such a plan amendment as of the date such coordination begins.
(III) Multiple amendments The Secretary shall issue regulations to prevent the avoidance of the purposes of this subparagraph through the use of 2 or more plan amendments rather than a single amendment.
(IV) Applicable defined benefit plan For purposes of this subparagraph, the term �applicable defined benefit plan� has the meaning given such term by section 411 (a)(13).
(vi) Termination requirements An applicable defined benefit plan shall not be treated as meeting the requirements of clause (i) unless the plan provides that, upon the termination of the plan�
(I) if the interest credit rate (or an equivalent amount) under the plan is a variable rate, the rate of interest used to determine accrued benefits under the plan shall be equal to the average of the rates of interest used under the plan during the 5-year period ending on the termination date, and
(II) the interest rate and mortality table used to determine the amount of any benefit under the plan payable in the form of an annuity payable at normal retirement age shall be the rate and table specified under the plan for such purpose as of the termination date, except that if such interest rate is a variable rate, the interest rate shall be determined under the rules of subclause (I).
(C) Certain offsets permitted
A plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) solely because the plan provides offsets against benefits under the plan to the extent such offsets are allowable in applying the requirements of section 401 (a).
(D) Permitted disparities in plan contributions or benefits
A plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides a disparity in contributions or benefits with respect to which the requirements of section 401 (l) are met.
(E) Indexing permitted
(i) In general A plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides for indexing of accrued benefits under the plan.
(ii) Protection against loss Except in the case of any benefit provided in the form of a variable annuity, clause (i) shall not apply with respect to any indexing which results in an accrued benefit less than the accrued benefit determined without regard to such indexing.
(iii) Indexing For purposes of this subparagraph, the term �indexing� means, in connection with an accrued benefit, the periodic adjustment of the accrued benefit by means of the application of a recognized investment index or methodology.
(F) Early retirement benefit or retirement-type subsidy
For purposes of this paragraph, the terms �early retirement benefit� and �retirement-type subsidy� have the meaning given such terms in subsection (d)(6)(B)(i).
(G) Benefit accrued to date
For purposes of this paragraph, any reference to the accrued benefit shall be a reference to such benefit accrued to date.
(c) Allocation of accrued benefits between employer and employee contributions
(1) Accrued benefit derived from employer contributions
For purposes of this section, an employee�s accrued benefit derived from employer contributions as of any applicable date is the excess, if any, of the accrued benefit for such employee as of such applicable date over the accrued benefit derived from contributions made by such employee as of such date.
(2) Accrued benefit derived from employee contributions
(A) Plans other than defined benefit plans
In the case of a plan other than a defined benefit plan, the accrued benefit derived from contributions made by an employee as of any applicable date is�
(i) except as provided in clause (ii), the balance of the employee�s separate account consisting only of his contributions and the income, expenses, gains, and losses attributable thereto, or
(ii) if a separate account is not maintained with respect to an employee�s contributions under such a plan, the amount which bears the same ratio to his total accrued benefit as the total amount of the employee�s contributions (less withdrawals) bears to the sum of such contributions and the contributions made on his behalf by the employer (less withdrawals).
(B) Defined benefit plans
In the case of a defined benefit plan, the accrued benefit derived from contributions made by an employee as of any applicable date is the amount equal to the employee�s accumulated contributions expressed as an annual benefit commencing at normal retirement age, using an interest rate which would be used under the plan under section 417 (e)(3) (as of the determination date).
(C) Definition of accumulated contributions
For purposes of this subsection, the term �accumulated contribution� means the total of�
(i) all mandatory contributions made by the employee,
(ii) interest (if any) under the plan to the end of the last plan year to which subsection (a)(2) does not apply (by reason of the applicable effective date), and
(iii) interest on the sum of the amounts determined under clauses (i) and (ii) compounded annually�
(I) at the rate of 120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year) for the period beginning with the 1st plan year to which subsection (a)(2) applies (by reason of the applicable effective date) and ending with the date on which the determination is being made, and
(II) at the interest rate which would be used under the plan under section 417 (e)(3) (as of the determination date) for the period beginning with the determination date and ending on the date on which the employee attains normal retirement age.
For purposes of this subparagraph, the term �mandatory contributions� means amounts contributed to the plan by the employee which are required as a condition of employment, as a condition of participation in such plan, or as a condition of obtaining benefits under the plan attributable to employer contributions.
(D) Adjustments
The Secretary is authorized to adjust by regulation the conversion factor described in subparagraph (B) from time to time as he may deem necessary. No such adjustment shall be effective for a plan year beginning before the expiration of 1 year after such adjustment is determined and published.
(3) Actuarial adjustment
For purposes of this section, in the case of any defined benefit plan, if an employee�s accrued benefit is to be determined as an amount other than an annual benefit commencing at normal retirement age, or if the accrued benefit derived from contributions made by an employee is to be determined with respect to a benefit other than an annual benefit in the form of a single life annuity (without ancillary benefits) commencing at normal retirement age, the employee�s accrued benefit, or the accrued benefits derived from contributions made by an employee, as the case may be, shall be the actuarial equivalent of such benefit or amount determined under paragraph (1) or (2).
(d) Special rules
(1) Coordination with section 401 (a)(4)
A plan which satisfies the requirements of this section shall be treated as satisfying any vesting requirements resulting from the application of section 401 (a)(4) unless�
(A) there has been a pattern of abuse under the plan (such as a dismissal of employees before their accrued benefits become nonforfeitable) tending to discriminate in favor of employees who are highly compensated employees (within the meaning of section 414 (q)), or
(B) there have been, or there is reason to believe there will be, an accrual of benefits or forfeitures tending to discriminate in favor of employees who are highly compensated employees (within the meaning of section 414 (q)).
(2) Prohibited discrimination
Subsection (a) shall not apply to benefits which may not be provided for designated employees in the event of early termination of the plan under provisions of the plan adopted pursuant to regulations prescribed by the Secretary to preclude the discrimination prohibited by section 401 (a)(4).
(3) Termination or partial termination; discontinuance of contributions
Notwithstanding the provisions of subsection (a), a trust shall not constitute a qualified trust under section 401 (a) unless the plan of which such trust is a part provides that�
(A) upon its termination or partial termination, or
(B) in the case of a plan to which section 412 does not apply, upon complete discontinuance of contributions under the plan,
the rights of all affected employees to benefits accrued to the date of such termination, partial termination, or discontinuance, to the extent funded as of such date, or the amounts credited to the employees� accounts, are nonforfeitable. This paragraph shall not apply to benefits or contributions which, under provisions of the plan adopted pursuant to regulations prescribed by the Secretary to preclude the discrimination prohibited by section 401 (a)(4), may not be used for designated employees in the event of early termination of the plan. For purposes of this paragraph, in the case of the complete discontinuance of contributions under a profit-sharing or stock bonus plan, such plan shall be treated as having terminated on the day on which the plan administrator notifies the Secretary (in accordance with regulations) of the discontinuance.
[(4) Repealed. Pub. L. 99�514, title XI, � 1113(b), Oct. 22, 1986, 100 Stat. 2447]
(5) Treatment of voluntary employee contributions
In the case of a defined benefit plan which permits voluntary employee contributions, the portion of an employee�s accrued benefit derived from such contributions shall be treated as an accrued benefit derived from employee contributions under a plan other than a defined benefit plan.
(6) Accrued benefit not to be decreased by amendment
(A) In general
A plan shall be treated as not satisfying the requirements of this section if the accrued benefit of a participant is decreased by an amendment of the plan, other than an amendment described in section 412 (e)(2),[4] or section 4281 of the Employee Retirement Income Security Act of 1974.
(B) Treatment of certain plan amendments
For purposes of subparagraph (A), a plan amendment which has the effect of�
(i) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in regulations), or
(ii) eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment shall be treated as reducing accrued benefits. In the case of a retirement-type subsidy, the preceding sentence shall apply only with respect to a participant who satisfies (either before or after the amendment) the preamendment conditions for the subsidy. The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment which reduces or eliminates benefits or subsidies which create significant burdens or complexities for the plan and plan participants, unless such amendment adversely affects the rights of any participant in a more than de minimis manner. The Secretary may by regulations provide that this subparagraph shall not apply to a plan amendment described in clause (ii) (other than a plan amendment having an effect described in clause (i)).
(C) Special rule for ESOPS
For purposes of this paragraph, any�
(i) tax credit employee stock ownership plan (as defined in section 409 (a)), or
(ii) employee stock ownership plan (as defined in section 4975 (e)(7)),
shall not be treated as failing to meet the requirements of this paragraph merely because it modifies distribution options in a nondiscriminatory manner.
(D) Plan transfers
(i) In general A defined contribution plan (in this subparagraph referred to as the �transferee plan�) shall not be treated as failing to meet the requirements of this subsection merely because the transferee plan does not provide some or all of the forms of distribution previously available under another defined contribution plan (in this subparagraph referred to as the �transferor plan�) to the extent that�
(I) the forms of distribution previously available under the transferor plan applied to the account of a participant or beneficiary under the transferor plan that was transferred from the transferor plan to the transferee plan pursuant to a direct transfer rather than pursuant to a distribution from the transferor plan,
(II) the terms of both the transferor plan and the transferee plan authorize the transfer described in subclause (I),
(III) the transfer described in subclause (I) was made pursuant to a voluntary election by the participant or beneficiary whose account was transferred to the transferee plan,
(IV) the election described in subclause (III) was made after the participant or beneficiary received a notice describing the consequences of making the election, and
(V) the transferee plan allows the participant or beneficiary described in subclause (III) to receive any distribution to which the participant or beneficiary is entitled under the transferee plan in the form of a single sum distribution.
(ii) Special rule for mergers, etc. Clause (i) shall apply to plan mergers and other transactions having the effect of a direct transfer, including consolidations of benefits attributable to different employers within a multiple employer plan.
(E) Elimination of form of distribution
Except to the extent provided in regulations, a defined contribution plan shall not be treated as failing to meet the requirements of this section merely because of the elimination of a form of distribution previously available thereunder. This subparagraph shall not apply to the elimination of a form of distribution with respect to any participant unless�
(i) a single sum payment is available to such participant at the same time or times as the form of distribution being eliminated, and
(ii) such single sum payment is based on the same or greater portion of the participant�s account as the form of distribution being eliminated.
(e) Application of vesting standards to certain plans
(1) The provisions of this section (other than paragraph (2)) shall not apply to�
(A) a governmental plan (within the meaning of section 414 (d)),
(B) a church plan (within the meaning of section 414 (e)) with respect to which the election provided by section 410 (d) has not been made,
(C) a plan which has not, at any time after September 2, 1974, provided for employer contributions, and
(D) a plan established and maintained by a society, order, or association described in section 501 (c)(8) or (9), if no part of the contributions to or under such plan are made by employers of participants in such plan.
(2) A plan described in paragraph (1) shall be treated as meeting the requirements of this section, for purposes of section 401 (a), if such plan meets the vesting requirements resulting from the application of sections 401 (a)(4) and 401 (a)(7) as in effect on September 1, 1974.

 

22286 737-2A8F Air India Regional 16/09/1981 VT-EGJ Active

 

A licenced discovery responds in a viable tactic.

 

Unthrifty loveliness, why dost thou spend
Upon thy self thy beauty's legacy?
Nature's bequest gives nothing, but doth lend,
And being frank she lends to those are free:
Then, beauteous .....rd, why dost thou abuse
The bounteous largess given thee to give?
Profitless usurer, why dost thou use
So great a sum of sums, yet canst not live?
For having traffic with thy self alone,
Thou of thy self thy sweet self dost deceive:
Then how when nature calls thee to be gone,
What acceptable audit canst thou leave?
Thy unused beauty must be tombed with thee,
Which, used, lives th' executor to be.

 

 

Orion

 

22296 737-2K2 Ryanair 16/05/1980 EI-CKP Scrapped

 

� 412. Minimum funding standards

How Current is This?
(a) General rule
Except as provided in subsection (h), this section applies to a plan if, for any plan year beginning on or after the effective date of this section for such plan�
(1) such plan included a trust which qualified (or was determined by the Secretary to have qualified) under section 401 (a), or
(2) such plan satisfied (or was determined by the Secretary to have satisfied) the requirements of section 403 (a).
A plan to which this section applies shall have satisfied the minimum funding standard for such plan for a plan year if as of the end of such plan year, the plan does not have an accumulated funding deficiency. For purposes of this section and section 4971, the term �accumulated funding deficiency� means for any plan the excess of the total charges to the funding standard account for all plan years (beginning with the first plan year to which this section applies) over the total credits to such account for such years or, if less, the excess of the total charges to the alternative minimum funding standard account for such plan years over the total credits to such account for such years. In any plan year in which a multiemployer plan is in reorganization, the accumulated funding deficiency of the plan shall be determined under section 418B.
(b) Funding standard account
(1) Account required
Each plan to which this section applies shall establish and maintain a funding standard account. Such account shall be credited and charged solely as provided in this section.
(2) Charges to account
For a plan year, the funding standard account shall be charged with the sum of�
(A) the normal cost of the plan for the plan year,
(B) the amounts necessary to amortize in equal annual installments (until fully amortized)�
(i) in the case of a plan in existence on January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 40 plan years,
(ii) in the case of a plan which comes into existence after January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 30 plan years,
(iii) separately, with respect to each plan year, the net increase (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 30 plan years,
(iv) separately, with respect to each plan year, the net experience loss (if any) under the plan, over a period of 5 plan years (15 plan years in the case of a multiemployer plan), and
(v) separately, with respect to each plan year, the net loss (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 10 plan years (30 plan years in the case of a multiemployer plan),
(C) the amount necessary to amortize each waived funding deficiency (within the meaning of subsection (d)(3)) for each prior plan year in equal annual installments (until fully amortized) over a period of 5 plan years (15 plan years in the case of a multiemployer plan),
(D) the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 5 plan years any amount credited to the funding standard account under paragraph (3)(D), and
(E) the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 20 years the contributions which would be required to be made under the plan but for the provisions of subsection (c)(7)(A)(i)(I).
For additional requirements in the case of plans other than multiemployer plans, see subsection (l).
(3) Credits to account
For a plan year, the funding standard account shall be credited with the sum of�
(A) the amount considered contributed by the employer to or under the plan for the plan year,
(B) the amount necessary to amortize in equal annual installments (until fully amortized)�
(i) separately, with respect to each plan year, the net decrease (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 30 plan years,
(ii) separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 5 plan years (15 plan years in the case of a multiemployer plan), and
(iii) separately, with respect to each plan year, the net gain (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 10 plan years (30 plan years in the case of a multiemployer plan),
(C) the amount of the waived funding deficiency (within the meaning of subsection (d)(3) [1] for the plan year, and
(D) in the case of a plan year for which the accumulated funding deficiency is determined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the alternative minimum funding standards, the excess (if any) of any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit balance in the alternative minimum funding standard account.
(4) Combining and offsetting amounts to be amortized
Under regulations prescribed by the Secretary, amounts required to be amortized under paragraph (2) or paragraph (3), as the case may be�
(A) may be combined into one amount under such paragraph to be amortized over a period determined on the basis of the remaining amortization period for all items entering into such combined amount, and
(B) may be offset against amounts required to be amortized under the other such paragraph, with the resulting amount to be amortized over a period determined on the basis of the remaining amortization periods for all items entering into whichever of the two amounts being offset is the greater.
(5) Interest
(A) In general
The funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.
(B) Required change of interest rate
For purposes of determining a plan�s current liability and for purposes of determining a plan�s required contribution under section 412 (l) for any plan year�
(i) In general If any rate of interest used under the plan to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range.
(ii) Permissible range For purposes of this subparagraph�
(I) In general Except as provided in subclause (II) or (III), the term �permissible range� means a rate of interest which is not more than 10 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year.
(II) Special rule for years 2004, 2005, 2006, and 2007 In the case of plan years beginning after December 31, 2003, and before January 1, 2008, the term �permissible range� means a rate of interest which is not above, and not more than 10 percent below, the weighted average of the rates of interest on amounts invested conservatively in long-term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year. Such rates shall be determined by the Secretary on the basis of 2 or more indices that are selected periodically by the Secretary and that are in the top 3 quality levels available. The Secretary shall make the permissible range, and the indices and methodology used to determine the average rate, publicly available.
(III) Secretarial authority If the Secretary finds that the lowest rate of interest permissible under subclause (I) or (II) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under such subclause.
(iii) Assumptions Notwithstanding subsection (c)(3)(A)(i), the interest rate used under the plan shall be�
(I) determined without taking into account the experience of the plan and reasonable expectations, but
(II) consistent with the assumptions which reflect the purchase rates which would be used by insurance companies to satisfy the liabilities under the plan.
(6) Certain amortization charges and credits
In the case of a plan which, immediately before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, was a multiemployer plan (within the meaning of section 414 (f) as in effect immediately before such date)�
(A) any amount described in paragraph (2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the amount arose;
(B) any amount described in paragraph (2)(B)(iv) or (3)(B)(ii) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 20 plan years, beginning with the plan year in which the amount arose;
(C) any change in past service liability which arises during the period of 3 plan years beginning on or after such date, and results from a plan amendment adopted before such date, shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises; and
(D) any change in past service liability which arises during the period of 2 plan years beginning on or after such date, and results from the changing of a group of participants from one benefit level to another benefit level under a schedule of plan benefits which�
(i) was adopted before such date, and
(ii) was effective for any plan participant before the beginning of the first plan year beginning on or after such date,
shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises.
(7) Special rules for multiemployer plans
For purposes of this section�
(A) Withdrawal liability
Any amount received by a multiemployer plan in payment of all or part of an employer�s withdrawal liability under part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 shall be considered an amount contributed by the employer to or under the plan. The Secretary may prescribe by regulation additional charges and credits to a multiemployer plan�s funding standard account to the extent necessary to prevent withdrawal liability payments from being unduly reflected as advance funding for plan liabilities.
(B) Adjustments when a multiemployer plan leaves reorganization
If a multiemployer plan is not in reorganization in the plan year but was in reorganization in the immediately preceding plan year, any balance in the funding standard account at the close of such immediately preceding plan year�
(i) shall be eliminated by an offsetting credit or charge (as the case may be), but
(ii) shall be taken into account in subsequent plan years by being amortized in equal annual installments (until fully amortized) over 30 plan years.
The preceding sentence shall not apply to the extent of any accumulated funding deficiency under section 418B(a) as of the end of the last plan year that the plan was in reorganization.
(C) Plan payments to supplemental program or withdrawal liability payment fund
Any amount paid by a plan during a plan year to the Pension Benefit Guaranty Corporation pursuant to section 4222 of such Act or to a fund exempt under section 501 (c)(22) pursuant to section 4223 of such Act shall reduce the amount of contributions considered received by the plan for the plan year.
(D) Interim withdrawal liability payments
Any amount paid by an employer pending a final determination of the employer�s withdrawal liability under part 1 of subtitle E of title IV of such Act and subsequently refunded to the employer by the plan shall be charged to the funding standard account in accordance with regulations prescribed by the Secretary.
(E) For purposes of the full funding limitation under subsection (c)(7), unless otherwise provided by the plan, the accrued liability under a multiemployer plan shall not include benefits which are not nonforfeitable under the plan after the termination of the plan (taking into consideration section 411 (d)(3)).
(F) Election for deferral of charge for portion of net experience loss
(i) In general With respect to the net experience loss of an eligible multiemployer plan for the first plan year beginning after December 31, 2001, the plan sponsor may elect to defer up to 80 percent of the amount otherwise required to be charged under paragraph (2)(B)(iv) for any plan year beginning after June 30, 2003, and before July 1, 2005, to any plan year selected by the plan from either of the 2 immediately succeeding plan years.
(ii) Interest For the plan year to which a charge is deferred pursuant to an election under clause (i), the funding standard account shall be charged with interest on the deferred charge for the period of deferral at the rate determined under subsection (d) for multiemployer plans.
(iii) Restrictions on benefit increases No amendment which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted during any period for which a charge is deferred pursuant to an election under clause (i), unless�
(I) the plan�s enrolled actuary certifies (in such form and manner prescribed by the Secretary) that the amendment provides for an increase in annual contributions which will exceed the increase in annual charges to the funding standard account attributable to such amendment, or
(II) the amendment is required by a collective bargaining agreement which is in effect on the date of enactment of this subparagraph.
If a plan is amended during any such plan year in violation of the preceding sentence, any election under this paragraph shall not apply to any such plan year ending on or after the date on which such amendment is adopted.
(iv) Eligible multiemployer plan For purposes of this subparagraph, the term �eligible multiemployer plan� means a multiemployer plan�
(I) which had a net investment loss for the first plan year beginning after December 31, 2001, of at least 10 percent of the average fair market value of the plan assets during the plan year, and
(II) with respect to which the plan�s enrolled actuary certifies (not taking into account the application of this subparagraph), on the basis of the acutuarial [2] assumptions used for the last plan year ending before the date of the enactment of this subparagraph, that the plan is projected to have an accumulated funding deficiency (within the meaning of subsection (a)) for any plan year beginning after June 30, 2003, and before July 1, 2006.
For purposes of subclause (I), a plan�s net investment loss shall be determined on the basis of the actual loss and not under any actuarial method used under subsection (c)(2).
(v) Exception to treatment of eligible multiemployer plan In no event shall a plan be treated as an eligible multiemployer plan under clause (iv) if�
(I) for any taxable year beginning during the 10-year period preceding the first plan year for which an election is made under clause (i), any employer required to contribute to the plan failed to timely pay any excise tax imposed under section 4971 with respect to the plan,
(II) for any plan year beginning after June 30, 1993, and before the first plan year for which an election is made under clause (i), the average contribution required to be made by all employers to the plan does not exceed 10 cents per hour or no employer is required to make contributions to the plan, or
(III) with respect to any of the plan years beginning after June 30, 1993, and before the first plan year for which an election is made under clause (i), a waiver was granted under section 412 (d) or section 303 of the Employee Retirement Income Security Act of 1974 with respect to the plan or an extension of an amortization period was granted under subsection (e) or section 304 of such Act with respect to the plan.
(vi) Election An election under this subparagraph shall be made at such time and in such manner as the Secretary may prescribe.
(c) Special rules
(1) Determinations to be made under funding method
For purposes of this section, normal costs, accrued liability, past service liabilities, and experience gains and losses shall be determined under the funding method used to determine costs under the plan.
(2) Valuation of assets
(A) In general
For purposes of this section, the value of the plan�s assets shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary.
(B) Election with respect to bonds
The value of a bond or other evidence of indebtedness which is not in default as to principal or interest may, at the election of the plan administrator, be determined on an amortized basis running from initial cost at purchase to par value at maturity or earliest call date. Any election under this subparagraph shall be made at such time and in such manner as the Secretary shall by regulations provide, shall apply to all such evidences of indebtedness, and may be revoked only with the consent of the Secretary. In the case of a plan other than a multiemployer plan, this subparagraph shall not apply, but the Secretary may by regulations provide that the value of any dedicated bond portfolio of such plan shall be determined by using the interest rate under subsection (b)(5).
(3) Actuarial assumptions must be reasonable
For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods�
(A) in the case of�
(i) a plan other than a multiemployer plan, each of which is reasonable (taking into account the experience of the plan and reasonable expectations) or which, in the aggregate, result in a total contribution equivalent to that which would be determined if each such assumption and method were reasonable, or
(ii) a multiemployer plan, which, in the aggregate, are reasonable (taking into account the experiences of the plan and reasonable expectations), and
(B) which, in combination, offer the actuary�s best estimate of anticipated experience under the plan.
(4) Treatment of certain changes as experience gain or loss
For purposes of this section, if�
(A) a change in benefits under the Social Security Act or in other retirement benefits created under Federal or State law, or
(B) a change in the definition of the term �wages� under section 3121, or a change in the amount of such wages taken into account under regulations prescribed for purposes of section 401 (a)(5),
results in an increase or decrease in accrued liability under a plan, such increase or decrease shall be treated as an experience loss or gain.
(5) Change in funding method or in plan year requires approval
(A) In general
If the funding method for a plan is changed, the new funding method shall become the funding method used to determine costs and liabilities under the plan only if the change is approved by the Secretary. If the plan year for a plan is changed, the new plan year shall become the plan year for the plan only if the change is approved by the Secretary.
(B) Approval required for certain changes in assumptions by certain single-employer plans subject to additional funding requirement
(i) In general No actuarial assumption (other than the assumptions described in subsection (l)(7)(C)) used to determine the current liability for a plan to which this subparagraph applies may be changed without the approval of the Secretary.
(ii) Plans to which subparagraph applies This subparagraph shall apply to a plan only if�
(I) the plan is a defined benefit plan (other than a multiemployer plan) to which title IV of the Employee Retirement Income Security Act of 1974 applies;
(II) the aggregate unfunded vested benefits as of the close of the preceding plan year (as determined under section 4006(a)(3)(E)(iii) of the Employee Retirement Income Security Act of 1974) of such plan and all other plans maintained by the contributing sponsors (as defined in section 4001(a)(13) of such Act) and members of such sponsors� controlled groups (as defined in section 4001(a)(14) of such Act) which are covered by title IV of such Act (disregarding plans with no unfunded vested benefits) exceed $50,000,000; and
(III) the change in assumptions (determined after taking into account any changes in interest rate and mortality table) results in a decrease in the unfunded current liability of the plan for the current plan year that exceeds $50,000,000, or that exceeds $5,000,000 and that is 5 percent or more of the current liability of the plan before such change.
(6) Full funding
If, as of the close of a plan year, a plan would (without regard to this paragraph) have an accumulated funding deficiency (determined without regard to the alternative minimum funding standard account permitted under subsection (g)) in excess of the full funding limitation�
(A) the funding standard account shall be credited with the amount of such excess, and
(B) all amounts described in paragraphs (2)(B), (C), and (D) and (3)(B) of subsection (b) which are required to be amortized shall be considered fully amortized for purposes of such paragraphs.
(7) Full-funding limitation
(A) In general
For purposes of paragraph (6), the term �full-funding limitation� means the excess (if any) of�
(i) the lesser of
(I) in the case of plan years beginning before January 1, 2004, the applicable percentage of current liability (including the expected increase in current liability due to benefits accruing during the plan year), or
(II) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over
(ii) the lesser of�
(I) the fair market value of the plan�s assets, or
(II) the value of such assets determined under paragraph (2).
(B) Current liability
For purposes of subparagraph (D) and subclause (I) of subparagraph (A)(i), the term �current liability� has the meaning given such term by subsection (l)(7) (without regard to subparagraphs (C) and (D) thereof) and using the rate of interest used under subsection (b)(5)(B).
(C) Special rule for paragraph (6)(B)
For purposes of paragraph (6)(B), subparagraph (A)(i) shall be applied without regard to subclause (I) thereof.
(D) Regulatory authority
The Secretary may by regulations provide�
(i) for adjustments to the percentage contained in subparagraph (A)(i) to take into account the respective ages or lengths of service of the participants, and
(ii) alternative methods based on factors other than current liability for the determination of the amount taken into account under subparagraph (A)(i).
(E) Minimum amount
(i) In general In no event shall the full-funding limitation determined under subparagraph (A) be less than the excess (if any) of�
(I) 90 percent of the current liability of the plan (including the expected increase in current liability due to benefits accruing during the plan year), over
(II) the value of the plan�s assets determined under paragraph (2).
(ii) Current liability; assets For purposes of clause (i)�
(I) the term �current liability� has the meaning given such term by subsection (l)(7) (without regard to subparagraph (D) thereof), and
(II) assets shall not be reduced by any credit balance in the funding standard account.
(F) Applicable percentage
For purposes of subparagraph (A)(i)(I), the applicable percentage shall be determined in accordance with the following table:
In the case of any plan year The applicable beginning in� percentage is� 2002 165 2003 170.
(8) Certain retroactive plan amendments
For purposes of this section, any amendment applying to a plan year which�
(A) is adopted after the close of such plan year but no later than 2 and one-half months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),
(B) does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and
(C) does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,
shall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary of Labor notifying him of such amendment and the Secretary of Labor has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary of Labor unless he determines that such amendment is necessary because of a substantial business hardship (as determined under subsection (d)(2)) and that a waiver under subsection (d)(1) is unavailable or inadequate.
(9) Annual valuation
(A) In general
For purposes of this section, a determination of experience gains and losses and a valuation of the plan�s liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.
(B) Valuation date
(i) Current year Except as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year.
(ii) Use of prior year valuation The valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 100 percent of the plan�s current liability (as defined in paragraph (7)(B)).
(iii) Adjustments Information under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.
(iv) Limitation A change in funding method to use a prior year valuation, as provided in clause (ii), may not be made unless as of the valuation date within the prior plan year, the value of the assets of the plan are not less than 125 percent of the plan�s current liability (as defined in paragraph (7)(B)).
(10) Time when certain contributions deemed made
For purposes of this section�
(A) Defined benefit plans other than multiemployer plans
In the case of a defined benefit plan other than a multiemployer plan, any contributions for a plan year made by an employer during the period�
(i) beginning on the day after the last day of such plan year, and
(ii) ending on the day which is 81/2 months after the close of the plan year,
shall be deemed to have been made on such last day.
(B) Other plans
In the case of a plan not described in subparagraph (A), any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.
(11) Liability for contributions
(A) In general
Except as provided in subparagraph (B), the amount of any contribution required by this section and any required installments under subsection (m) shall be paid by the employer responsible for contributing to or under the plan the amount described in subsection (b)(3)(A).
(B) Joint and several liability where employer member of controlled group
(i) In general In the case of a plan other than a multiemployer plan, if the employer referred to in subparagraph (A) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contribution or required installment.
(ii) Controlled group For purposes of clause (i), the term �controlled group� means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.
(12) Anticipation of benefit increases effective in the future
In determining projected benefits, the funding method of a collectively bargained plan described in section 413 (a) (other than a multiemployer plan) shall anticipate benefit increases scheduled to take effect during the term of the collective bargaining agreement applicable to the plan.
(d) Variance from minimum funding standard
(1) Waiver in case of business hardship
If an employer or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan, are unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) and if application of the standard would be adverse to the interests of plan participants in the aggregate, the Secretary may waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard other than the portion thereof determined under subsection (b)(2)(C). The Secretary shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years. The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) for any plan year shall be�
(A) in the case of a plan other than a multiemployer plan, the greater of
(i) 150 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or
(ii) the rate of interest used under the plan in determining costs (including adjustments under subsection (b)(5)(B)), and
(B) in the case of a multiemployer plan, the rate determined under section 6621 (b).
(2) Determination of business hardship
For purposes of this section, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether or not�
(A) the employer is operating at an economic loss,
(B) there is substantial unemployment or underemployment in the trade or business and in the industry concerned,
(C) the sales and profits of the industry concerned are depressed or declining, and
(D) it is reasonable to expect that the plan will be continued only if the waiver is granted.
(3) Waived funding deficiency
For purposes of this section, the term �waived funding deficiency� means the portion of the minimum funding standard (determined without regard to subsection (b)(3)(C)) for a plan year waived by the Secretary and not satisfied by employer contributions.
(4) Application must be submitted before date 21/2 months after close of year
In the case of a plan other than a multiemployer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary not later than the 15th day of the 3rd month beginning after the close of such plan year.
(5) Special rule if employer is member of controlled group
(A) In general
In the case of a plan other than a multiemployer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met�
(i) with respect to such employer, and
(ii) with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).
The Secretary may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this subsection.
(B) Controlled group
For purposes of subparagraph (A), the term �controlled group� means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.
(e) Extension of amortization periods
The period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of any plan may be extended by the Secretary of Labor for a period of time (not in excess of 10 years) if he determines that such extension would carry out the purposes of the Employee Retirement Income Security Act of 1974 and would provide adequate protection for participants under the plan and their beneficiaries and if he determines that the failure to permit such extension would�
(1) result in�
(A) a substantial risk to the voluntary continuation of the plan, or
(B) a substantial curtailment of pension benefit levels or employee compensation, and
(2) be adverse to the interests of plan participants in the aggregate.
In the case of a plan other than a multiemployer plan, the interest rate applicable for any plan year under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the greater of
(A) 150 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or
(B) the rate of interest used under the plan in determining costs. In the case of a multiemployer plan, such rate shall be the rate determined under section 6621 (b).
(f) Requirements relating to waivers and extensions
(1) Benefits may not be increased during waiver or extension period
No amendment of the plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under subsection (d)(1) or an extension of time under subsection (e) is in effect with respect to the plan, or if a plan amendment described in subsection (c)(8) has been made at any time in the preceding 12 months (24 months for multiemployer plans). If a plan is amended in violation of the preceding sentence, any such waiver or extension of time shall not apply to any plan year ending on or after the date on which such amendment is adopted.
(2) Exception
Paragraph (1) shall not apply to any plan amendment which�
(A) the Secretary of Labor determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan.
(B) only repeals an amendment described in subsection (c)(8), or
(C) is required as a condition of qualification under this part.
(3) Security for waivers and extensions; consultations
(A) Security may be required
(i) In general Except as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement Income Security Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under subsection (d) or an extension under subsection (e).
(ii) Special rules Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13) of such Act), or a member of such sponsor�s controlled group (within the meaning of section 4001(a)(14) of such Act).
(B) Consultation with the pension benefit guaranty corporation
Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under subsection (d) or an extension under subsection (e) with respect to a plan described in subparagraph (A)(i)�
(i) provide the Pension Benefit Guaranty Corporation with�
(I) notice of the completed application for any waiver, extension, or modification, and
(II) an opportunity to comment on such application within 30 days after receipt of such notice, and
(ii) consider�
(I) any comments of the Corporation under clause (i)(II), and
(II) any views of any employee organization (within the meaning of section 3(4) of the Employee Retirement Income Security Act of 1974) representing participants in the plan which are submitted in writing to the Secretary in connection with such application.
Information provided to the corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103 (p).
(C) Exception for certain waivers and extensions
(i) In general The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of�
(I) the outstanding balance of the accumulated funding deficiencies (within the meaning of subsection (a) and section 302(a) of such Act) of the plan,
(II) the outstanding balance of the amount of waived funding deficiencies of the plan waived under subsection (d) or section 303 of such Act, and
(III) the outstanding balance of the amount of decreases in the minimum funding standard allowed under subsection (e) or section 304 of such Act,
is less than $1,000,000.
(ii) Accumulated funding deficiencies For purposes of clause (i)(I), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under subsection (d) or section 303 of such Act and for extensions of the amortization period under subsection (e) or section 304 of such Act which are pending with respect to such plan were denied.
(4) Additional requirements
(A) Advance notice
The Secretary shall, before granting a waiver under subsection (d) or an extension under subsection (e), require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver or extension to each employee organization representing employees covered by the affected plan, and each participant, beneficiary, and alternate payee (within the meaning of section 414 (p)(8)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of such Act and for benefit liabilities.
(B) Consideration of relevant information
The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).
(g) Alternative minimum funding standard
(1) In general
A plan which uses a funding method that requires contributions in all years not less than those required under the entry age normal funding method may maintain an alternative minimum funding standard account for any plan year. Such account shall be credited and charged solely as provided in this subsection.
(2) Charges and credits to account
For a plan year the alternative minimum funding standard account shall be�
(A) charged with the sum of�
(i) the lesser of normal cost under the funding method used under the plan or normal cost determined under the unit credit method,
(ii) the excess, if any, of the present value of accrued benefits under the plan over the fair market value of the assets, and
(iii) an amount equal to the excess (if any) of credits to the alternative minimum standard account for all prior plan years over charges to such account for all such years, and
(B) credited with the amount considered contributed by the employer to or under the plan for the plan year.
(3) Special rules
The alternative minimum funding standard account (and items therein) shall be charged or credited with interest in the manner provided under subsection (b)(5) with respect to the funding standard account.
(h) Exceptions
This section shall not apply to�
(1) any profit-sharing or stock bonus plan,
(2) any insurance contract plan described in subsection (i),
(3) any governmental plan (within the meaning of section 414 (d)),
(4) any church plan (within the meaning of section 414 (e)) with respect to which the election provided by section 410 (d) has not been made,
(5) any plan which has not, at any time after September 2, 1974, provided for employer contributions, or
(6) any plan established and maintained by a society, order, or association described in section 501 (c)(8) or (9), if no part of the contributions to or under such plan are made by employers of participants in such plan.
No plan described in paragraph (3), (4), or (6) shall be treated as a qualified plan for purposes of section 401 (a) unless such plan meets the requirements of section 401 (a)(7) as in effect on September 1, 1974.
(i) Certain insurance contract plans
A plan is described in this subsection if�
(1) the plan is funded exclusively by the purchase of individual insurance contracts.
(2) such contracts provide for level annual premium payments to be paid extending not later than the retirement age for each individual participating in the plan, and commencing with the date the individual became a participant in the plan (or, in the case of an increase in benefits, commencing at the time such increase becomes effective),
(3) benefits provided by the plan are equal to the benefits provided under each contract at normal retirement age under the plan and are guaranteed by an insurance carrier (licensed under the laws of a State to do business with the plan) to the extent premiums have been paid,
(4) premiums payable for the plan year, and all prior plan years, under such contracts have been paid before lapse or there is reinstatement of the policy,
(5) no rights under such contracts have been subject to a security interest at any time during the plan year, and
(6) no policy loans are outstanding at any time during the plan year.
A plan funded exclusively by the purchase of group insurance contracts which is determined under regulations prescribed by the Secretary to have the same characteristics as contracts described in the preceding sentence shall be treated as a plan described in this subsection.
(j) Certain terminated multiemployer plans
This section applies with respect to a terminated multiemployer plan to which section 4021 of the Employee Retirement Income Security Act of 1974 applies, until the last day of the plan year in which the plan terminates, within the meaning of section 4041A(a)(2) of that Act.
(k) Financial assistance
Any amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this section in such manner as determined by the Secretary.
(l) Additional funding requirements for plans which are not multiemployer plans
(1) In general
In the case of a defined benefit plan (other than a multiemployer plan) to which this subsection applies under paragraph (9) for any plan year, the amount charged to the funding standard account for such plan year shall be increased by the sum of�
(A) the excess (if any) of�
(i) the deficit reduction contribution determined under paragraph (2) for such plan year, over
(ii) the sum of the charges for such plan year under subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B) of subsection (b)(3), plus
(B) the unpredictable contingent event amount (if any) for such plan year.
Such increase shall not exceed the amount which, after taking into account charges (other than the additional charge under this subsection) and credits under subsection (b), is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) to 100 percent.
(2) Deficit reduction contribution
For purposes of paragraph (1), the deficit reduction contribution determined under this paragraph for any plan year is the sum of�
(A) the unfunded old liability amount,
(B) the unfunded new liability amount,
(C) the expected increase in current liability due to benefits accruing during the plan year, and
(D) the aggregate of the unfunded mortality increase amounts.
(3) Unfunded old liability amount
For purposes of this subsection�
(A) In general
The unfunded old liability amount with respect to any plan for any plan year is the amount necessary to amortize the unfunded old liability under the plan in equal annual installments over a period of 18 plan years (beginning with the 1st plan year beginning after December 31, 1988).
(B) Unfunded old liability
The term �unfunded old liability� means the unfunded current liability of the plan as of the beginning of the 1st plan year beginning after December 31, 1987 (determined without regard to any plan amendment increasing liabilities adopted after October 16, 1987).
(C) Special rules for benefit increases under existing collective bargaining agreements
(i) In general In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and the employer ratified before October 29, 1987, the unfunded old liability amount with respect to such plan for any plan year shall be increased by the amount necessary to amortize the unfunded existing benefit increase liability in equal annual installments over a period of 18 plan years beginning with�
(I) the plan year in which the benefit increase with respect to such liability occurs, or
(II) if the taxpayer elects, the 1st plan year beginning after December 31, 1988.
(ii) Unfunded existing benefit increase liabilities For purposes of clause (i), the unfunded existing benefit increase liability means, with respect to any benefit increase under the agreements described in clause (i) which takes effect during or after the 1st plan year beginning after December 31, 1987, the unfunded current liability determined�
(I) by taking into account only liabilities attributable to such benefit increase, and
(II) by reducing (but not below zero) the amount determined under paragraph (8)(A)(ii) by the current liability determined without regard to such benefit increase.
(iii) Extensions, modifications, etc. not taken into account For purposes of this subparagraph, any extension, amendment, or other modification of an agreement after October 28, 1987, shall not be taken into account.
(D) Special rule for required changes in actuarial assumptions
(i) In general The unfunded old liability amount with respect to any plan for any plan year shall be increased by the amount necessary to amortize the amount of additional unfunded old liability under the plan in equal annual installments over a period of 12 plan years (beginning with the first plan year beginning after December 31, 1994).
(ii) Additional unfunded old liability For purposes of clause (i), the term �additional unfunded old liability� means the amount (if any) by which�
(I) the current liability of the plan as of the beginning of the first plan year beginning after December 31, 1994, valued using the assumptions required by paragraph (7)(C) as in effect for plan years beginning after December 31, 1994, exceeds
(II) the current liability of the plan as of the beginning of such first plan year, valued using the same assumptions used under subclause (I) (other than the assumptions required by paragraph (7)(C)), using the prior interest rate, and using such mortality assumptions as were used to determine current liability for the first plan year beginning after December 31, 1992.
(iii) Prior interest rate For purposes of clause (ii), the term �prior interest rate� means the rate of interest that is the same percentage of the weighted average under subsection (b)(5)(B)(ii)(I) for the first plan year beginning after December 31, 1994, as the rate of interest used by the plan to determine current liability for the first plan year beginning after December 31, 1992, is of the weighted average under subsection (b)(5)(B)(ii)(I) for such first plan year beginning after December 31, 1992.
(E) Optional rule for additional unfunded old liability
(i) In general If an employer makes an election under clause (ii), the additional unfunded old liability for purposes of subparagraph (D) shall be the amount (if any) by which�
(I) the unfunded current liability of the plan as of the beginning of the first plan year beginning after December 31, 1994, valued using the assumptions required by paragraph (7)(C) as in effect for plan years beginning after December 31, 1994, exceeds
(II) the unamortized portion of the unfunded old liability under the plan as of the beginning of the first plan year beginning after December 31, 1994.
(ii) Election
(I) An employer may irrevocably elect to apply the provisions of this subparagraph as of the beginning of the first plan year beginning after December 31, 1994.
(II) If an election is made under this clause, the increase under paragraph (1) for any plan year beginning after December 31, 1994, and before January 1, 2002, to which this subsection applies (without regard to this subclause) shall not be less than the increase that would be required under paragraph (1) if the provisions of this title as in effect for the last plan year beginning before January 1, 1995, had remained in effect.
(4) Unfunded new liability amount
For purposes of this subsection�
(A) In general
The unfunded new liability amount with respect to any plan for any plan year is the applicable percentage of the unfunded new liability.
(B) Unfunded new liability
The term �unfunded new liability� means the unfunded current liability of the plan for the plan year determined without regard to�
(i) the unamortized portion of the unfunded old liability, the unamortized portion of the additional unfunded old liability, the unamortized portion of each unfunded mortality increase, and the .unamortized portion of the unfunded existing benefit increase liability, and
(ii) the liability with respect to any unpredictable contingent event benefits (without regard to whether the event has occurred).
(C) Applicable percentage
The term �applicable percentage� means, with respect to any plan year, 30 percent, reduced by the product of�
(i) .40 multiplied by
(ii) the number of percentage points (if any) by which the funded current liability percentage exceeds 60 percent.
(5) Unpredictable contingent event amount
(A) In general
The unpredictable contingent event amount with respect to a plan for any plan year is an amount equal to the greatest of�
(i) the applicable percentage of the product of�
(I) 100 percent, reduced (but not below zero) by the funded current liability percentage for the plan year, multiplied by
(II) the amount of unpredictable contingent event benefits paid during the plan year, including (except as provided by the Secretary) any payment for the purchase of an annuity contract for a participant or beneficiary with respect to such benefits,
(ii) the amount which would be determined for the plan year if the unpredictable contingent event benefit liabilities were amortized in equal annual installments over 7 plan years (beginning with the plan year in which such event occurs), or
(iii) the additional amount that would be determined under paragraph (4)(A) if the unpredictable contingent event benefit liabilities were included in unfunded new liability notwithstanding paragraph (4)(B)(ii).
(B) Applicable percentage In the case of plan The applicable years beginning in: percentage is: 1989 and 1990 5 1991 10 1992 15 1993 20 1994 30 1995 40 1996 50 1997 60 1998 70 1999 80 2000 90 2001 and thereafter 100.  
(C) Paragraph not to apply to existing benefits
This paragraph shall not apply to unpredictable contingent event benefits (and liabilities attributable thereto) for which the event occurred before the first plan year beginning after December 31, 1988.
(D) Special rule for first year of amortization
Unless the employer elects otherwise, the amount determined under subparagraph (A) for the plan year in which the event occurs shall be equal to 150 percent of the amount determined under subparagraph (A)(i). The amount under subparagraph (A)(ii) for subsequent plan years in the amortization period shall be adjusted in the manner provided by the Secretary to reflect the application of this subparagraph.
(E) Limitation
The present value of the amounts described in subparagraph (A) with respect to any one event shall not exceed the unpredictable contingent event benefit liabilities attributable to that event.
(6) Special rules for small plans
(A) Plans with 100 or fewer participants
This subsection shall not apply to any plan for any plan year if on each day during the preceding plan year such plan had no more than 100 participants.
(B) Plans with more than 100 but not more than 150 participants
In the case of a plan to which subparagraph (A) does not apply and which on each day during the preceding plan year had no more than 150 participants, the amount of the increase under paragraph (1) for such plan year shall be equal to the product of�
(i) such increase determined without regard to this subparagraph, multiplied by
(ii) 2 percent for the highest number of participants in excess of 100 on any such day.
(C) Aggregation of plans
For purposes of this paragraph, all defined benefit plans maintained by the same employer (or any member of such employer�s controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account.
(7) Current liability
For purposes of this subsection�
(A) In general
The term �current liability� means all liabilities to employees and their beneficiaries under the plan.
(B) Treatment of unpredictable contingent event benefits
(i) In general For purposes of subparagraph (A), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs.
(ii) Unpredictable contingent event benefit The term �unpredictable contingent event benefit� means any benefit contingent on an event other than�
(I) age, service, compensation, death, or disability, or
(II) an event which is reasonably and reliably predictable (as determined by the Secretary).
(C) Interest rate and mortality assumptions used
Effective for plan years beginning after December 31, 1994�
(i) Interest rate
(I) In general The rate of interest used to determine current liability under this subsection shall be the rate of interest used under subsection (b)(5), except that the highest rate in the permissible range under subparagraph (B)(ii) thereof shall not exceed the specified percentage under subclause (II) of the weighted average referred to in such subparagraph.
(II) Specified percentage For purposes of subclause (I), the specified percentage shall be determined as follows:
In the case of plan years beginning The specified in calendar year: percentage is: 1995 109 1996 108 1997 107 1998 106 1999 and thereafter 105.
(III) Special rule for 2002 and 2003 For a plan year beginning in 2002 or 2003, notwithstanding subclause (I), in the case that the rate of interest used under subsection (b)(5) exceeds the highest rate permitted under subclause (I), the rate of interest used to determine current liability under this subsection may exceed the rate of interest otherwise permitted under subclause (I); except that such rate of interest shall not exceed 120 percent of the weighted average referred to in subsection (b)(5)(B)(ii).
(IV) Special rule for 2004, 2005, 2006, and 2007 For plan years beginning in 2004, 2005, 2006, or 2007, notwithstanding subclause (I), the rate of interest used to determine current liability under this subsection shall be the rate of interest under subsection (b)(5).
(ii) Mortality tables
(I) Commissioners� standard table In the case of plan years beginning before the first plan year to which the first tables prescribed under subclause (II) apply, the mortality table used in determining current liability under this subsection shall be the table prescribed by the Secretary which is based on the prevailing commissioners� standard table (described in section 807 (d)(5)(A)) used to determine reserves for group annuity contracts issued on January 1, 1993.
(II) Secretarial authority The Secretary may by regulation prescribe for plan years beginning after December 31, 1999, mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.
(III) Periodic review The Secretary shall periodically (at least every 5 years) review any tables in effect under this subsection and shall, to the extent the Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.
(iii) Separate mortality tables for the disabled Notwithstanding clause (ii)�
(I) In general In the case of plan years beginning after December 31, 1995, the Secretary shall establish mortality tables which may be used (in lieu of the tables under clause (ii)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. The Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before January 1, 1995, and for individuals whose disabilities occur in plan years beginning on or after such date.
(II) Special rule for disabilities occurring after 1994 In the case of disabilities occurring in plan years beginning after December 31, 1994, the tables under subclause (I) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.
(III) Plan years beginning in 1995 In the case of any plan year beginning in 1995, a plan may use its own mortality assumptions for individuals who are entitled to benefits under the plan on account of disability.
(D) Certain service disregarded
(i) In general In the case of a participant to whom this subparagraph applies, only the applicable percentage of the years of service before such individual became a participant shall be taken into account in computing the current liability of the plan.
(ii) Applicable percentage For purposes of this subparagraph, the applicable percentage shall be determined as follows:
If the years of The applicable participation are: percentage is: 1 20 2 40 3 60 4 80 5 or more 100.  
(iii) Participants to whom subparagraph applies This subparagraph shall apply to any participant who, at the time of becoming a participant�
(I) has not accrued any other benefit under any defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member,
(II) who first becomes a participant under the plan in a plan year beginning after December 31, 1987, and
(III) has years of service greater than the minimum years of service necessary for eligibility to participate in the plan.
(iv) Election An employer may elect not to have this subparagraph apply. Such an election, once made, may be revoked only with the consent of the Secretary.
(8) Other definitions
For purposes of this subsection�
(A) Unfunded current liability
The term �unfunded current liability� means, with respect to any plan year, the excess (if any) of�
(i) the current liability under the plan, over
(ii) value of the plan�s assets determined under subsection (c)(2).
(B) Funded current liability percentage
The term �funded current liability percentage� means, with respect to any plan year, the percentage which�
(i) the amount determined under subparagraph (A)(ii), is of
(ii) the current liability under the plan.
(C) Controlled group
The term �controlled group� means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414.
(D) Adjustments to prevent omissions and duplications
The Secretary shall provide such adjustments in the unfunded old liability amount, the unfunded new liability amount, the unpredictable contingent event amount, the current payment amount, and any other charges or credits under this section as are necessary to avoid duplication or omission of any factors in the determination of such amounts, charges, or credits.
(E) Deduction for credit balances
For purposes of this subsection, the amount determined under subparagraph (A)(ii) shall be reduced by any credit balance in the funding standard account. The Secretary may provide for such reduction for purposes of any other provision which references this subsection.
(9) Applicability of subsection
(A) In general
Except as provided in paragraph (6)(A), this subsection shall apply to a plan for any plan year if its funded current liability percentage for such year is less than 90 percent.
(B) Exception for certain plans at least 80 percent funded
Subparagraph (A) shall not apply to a plan for a plan year if�
(i) the funded current liability percentage for the plan year is at least 80 percent, and
(ii) such percentage for each of the 2 immediately preceding plan years (or each of the 2d and 3d immediately preceding plan years) is at least 90 percent.
(C) Funded current liability percentage
For purposes of subparagraphs (A) and (B), the term �funded current liability percentage� has the meaning given such term by paragraph (8)(B), except that such percentage shall be determined for any plan year�
(i) without regard to paragraph (8)(E), and
(ii) by using the rate of interest which is the highest rate allowable for the plan year under paragraph (7)(C).
(D) Transition rules
For purposes of this paragraph:
(i) Funded percentage for years before 1995 The funded current liability percentage for any plan year beginning before January 1, 1995, shall be treated as not less than 90 percent only if for such plan year the plan met one of the following requirements (as in effect for such year):
(I) The full-funding limitation under subsection (c)(7) for the plan was zero.
(II) The plan had no additional funding requirement under this subsection (or would have had no such requirement if its funded current liability percentage had been determined under subparagraph (C)).
(III) The plan�s additional funding requirement under this subsection did not exceed the lesser of 0.5 percent of current liability or $5,000,000.
(ii) Special rule for 1995 and 1996 For purposes of determining whether subparagraph (B) applies to any plan year beginning in 1995 or 1996, a plan shall be treated as meeting the requirements of subparagraph (B)(ii) if the plan met the requirements of clause (i) of this subparagraph for any two of the plan years beginning in 1992, 1993, and 1994 (whether or not consecutive).
(10) Unfunded mortality increase amount
(A) In general
The unfunded mortality increase amount with respect to each unfunded mortality increase is the amount necessary to amortize such increase in equal annual installments over a period of 10 plan years (beginning with the first plan year for which a plan uses any new mortality table issued under paragraph (7)(C)(ii)(II) or (III)).
(B) Unfunded mortality increase
For purposes of subparagraph (A), the term �unfunded mortality increase� means an amount equal to the excess of�
(i) the current liability of the plan for the first plan year for which a plan uses any new mortality table issued under paragraph (7)(C)(ii)(II) or (III), over
(ii) the current liability of the plan for such plan year which would have been determined if the mortality table in effect for the preceding plan year had been used.
(11) Phase-in of increases in funding required by Retirement Protection Act of 1994
(A) In general
For any applicable plan year, at the election of the employer, the increase under paragraph (1) shall not exceed the greater of�
(i) the increase that would be required under paragraph (1) if the provisions of this title as in effect for plan years beginning before January 1, 1995, had remained in effect, or
(ii) the amount which, after taking into account charges (other than the additional charge under this subsection) and credits under subsection (b), is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) for the applicable plan year to a percentage equal to the sum of the initial funded current liability percentage of the plan plus the applicable number of percentage points for such applicable plan year.
(B) Applicable number of percentage points
(i) Initial funded current liability percentage of 75 percent or less Except as provided in clause (ii), for plans with an initial funded current liability percentage of 75 percent or less, the applicable number of percentage points for the applicable plan year is:
In the case The applicable of applicable number of plan years percentage beginning in: points is: 1995 3 1996 6 1997 9 1998 12 1999 15 2000 19 2001 24.
(ii) Other cases In the case of a plan to which this clause applies, the applicable number of percentage points for any such applicable plan year is the sum of�
(I) 2 percentage points;
(II) the applicable number of percentage points (if any) under this clause for the preceding applicable plan year;
(III) the product of .10 multiplied by the excess (if any) of (a) 85 percentage points over (b) the sum of the initial funded current liability percentage and the number determined under subclause (II);
(IV) for applicable plan years beginning in 2000, 1 percentage point; and
(V) for applicable plan years beginning in 2001, 2 percentage points.
(iii) Plans to which clause (ii) applies
(I) In general Clause (ii) shall apply to a plan for an applicable plan year if the initial funded current liability percentage of such plan is more than 75 percent.
(II) Plans initially under clause (i) In the case of a plan which (but for this subclause) has an initial funded current liability percentage of 75 percent or less, clause (ii) (and not clause (i)) shall apply to such plan with respect to applicable plan years beginning after the first applicable plan year for which the sum of the initial funded current liability percentage and the applicable number of percentage points (determined under clause (i)) exceeds 75 percent. For purposes of applying clause (ii) to such a plan, the initial funded current liability percentage of such plan shall be treated as being the sum referred to in the preceding sentence.
(C) Definitions
For purposes of this paragraph:
(i) The term �applicable plan year� means a plan year beginning after December 31, 1994, and before January 1, 2002.
(ii) The term �initial funded current liability percentage� means the funded current liability percentage as of the first day of the first plan year beginning after December 31, 1994.
(12) Election for certain plans
(A) In general
In the case of a defined benefit plan established and maintained by an applicable employer, if this subsection did not apply to the plan for the plan year beginning in 2000 (determined without regard to paragraph (6)), then, at the election of the employer, the increased amount under paragraph (1) for any applicable plan year shall be the greater of�
(i) 20 percent of the increased amount under paragraph (1) determined without regard to this paragraph, or
(ii) the increased amount which would be determined under paragraph (1) if the deficit reduction contribution under paragraph (2) for the applicable plan year were determined without regard to subparagraphs (A), (B), and (D) of paragraph (2).
(B) Restrictions on benefit increases
No amendment which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted during any applicable plan year, unless�
(i) the plan�s enrolled actuary certifies (in such form and manner prescribed by the Secretary) that the amendment provides for an increase in annual contributions which will exceed the increase in annual charges to the funding standard account attributable to such amendment, or
(ii) the amendment is required by a collective bargaining agreement which is in effect on the date of enactment of this subparagraph.
If a plan is amended during any applicable plan year in violation of the preceding sentence, any election under this paragraph shall not apply to any applicable plan year ending on or after the date on which such amendment is adopted.
(C) Applicable employer
For purposes of this paragraph, the term �applicable employer� means an employer which is�
(i) a commercial passenger airline,
(ii) primarily engaged in the production or manufacture of a steel mill product or the processing of iron ore pellets, or
(iii) an organization described in section 501 (c)(5) and which established the plan to which this paragraph applies on June 30, 1955.
(D) Applicable plan year
For purposes of this paragraph�
(i) In general The term �applicable plan year� means any plan year beginning after December 27, 2003, and before December 28, 2005, for which the employer elects the application of this paragraph.
(ii) Limitation on number of years which may be elected An election may not be made under this paragraph with respect to more than 2 plan years.
(E) Election
An election under this paragraph shall be made at such time and in such manner as the Secretary may prescribe.
(m) Quarterly contributions required
(1) In general
If a defined benefit plan (other than a multiemployer plan) which has a funded current liability percentage (as defined in subsection (l)(8)) for the preceding plan year of less than 100 percent fails to pay the full amount of a required installment for the plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of�
(A) 175 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or
(B) the rate of interest used under the plan in determining costs (including adjustments under subsection (b)(5)(B)).
(2) Amount of underpayment, period of underpayment
For purposes of paragraph (1)�
(A) Amount
The amount of the underpayment shall be the excess of�
(i) the required installment, over
(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment.
(B) Period of underpayment
The period for which interest is charged under this subsection with regard to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(10)).
(C) Order of crediting contributions
For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.
(3) Number of required installments; due dates
For purposes of this subsection�
(A) Payable in 4 installments
There shall be 4 required installments for each plan year.
(B) Time for payment of installments

In the case of the following required installments: The due date is:
1st April 15
2nd July 15
3rd October 15
4th January 15 of the following year.
(4) Amount of required installment
For purposes of this subsection�
(A) In general
The amount of any required installment shall be the applicable percentage of the required annual payment.
(B) Required annual payment
For purposes of subparagraph (A), the term �required annual payment� means the lesser of�
(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 (without regard to any waiver under subsection (d) thereof), or
(ii) 100 percent of the amount so required for the preceding plan year.
Clause (ii) shall not apply if the preceding plan year was not a year of 12 months.
(C) Applicable percentage
For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:
For plan years The applicable beginning in: percentage is: 1989 6.25 1990 12.5   1991 18.75 1992 and thereafter 25.
(D) Special rules for unpredictable contingent event benefits
In the case of a plan to which subsection (1) [3] applies for any calendar year and which has any unpredictable contingent event benefit liabilities�
(i) Liabilities not taken into account Such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B).
(ii) Increase in installments Each required installment shall be increased by the greatest of�
(I) the unfunded percentage of the amount of benefits described in subsection (l)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs,
(II) 25 percent of the amount determined under subsection (l)(5)(A)(ii) for the plan year, or
(III) 25 percent of the amount determined under subsection (l)(5)(A)(iii) for the plan year.
(iii) Unfunded percentage For purposes of clause (ii)(I), the term �unfunded percentage� means the percentage determined under subsection (l)(5)(A)(i)(I) for the plan year.
(iv) Limitation on increase In no event shall the increases under clause (ii) exceed the amount necessary to increase the funded current liability percentage (within the meaning of subsection (l)(8)(B)) for the plan year to 100 percent.
(5) Liquidity requirement
(A) In general
A plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).
(B) Plans to which paragraph applies
This paragraph shall apply to a defined benefit plan (other than a multiemployer plan or a plan described in subsection (l)(6)(A)) which�
(i) is required to pay installments under this subsection for a plan year, and
(ii) has a liquidity shortfall for any quarter during such plan year.
(C) Period of underpayment
For purposes of paragraph (1), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.
(D) Limitation on increase
If the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) to 100 percent.
(E) Definitions
For purposes of this paragraph:
(i) Liquidity shortfall The term �liquidity shortfall� means, with respect to any required installment, an amount equal to the excess (as of the last day of the quarter for which such installment is made) of the base amount with respect to such quarter over the value (as of such last day) of the plan�s liquid assets.
(ii) Base amount
(I) In general The term �base amount� means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter.
(II) Special rule If the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.
(iii) Disbursements from the plan The term �disbursements from the plan� means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.
(iv) Adjusted disbursements The term �adjusted disbursements� means disbursements from the plan reduced by the product of�
(I) the plan�s funded current liability percentage (as defined in subsection (l)(8)) for the plan year, and
(II) the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary shall provide in regulations.
(v) Liquid assets The term �liquid assets� means cash, marketable securities and such other assets as specified by the Secretary in regulations.
(vi) Quarter The term �quarter� means, with respect to any required installment, the 3-month period preceding the month in which the due date for such installment occurs.
(F) Regulations
The Secretary may prescribe such regulations as are necessary to carry out this paragraph.
(6) Fiscal years and short years
(A) Fiscal years
In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto.
(B) Short plan year
This subsection shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.
(7) Special rule for 2002
In any case in which the interest rate used to determine current liability is determined under subsection (l)(7)(C)(i)(III), for purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2002, the current liability for the preceding plan year shall be redetermined using 120 percent as the specified percentage determined under subsection (l)(7)(C)(i)(II).
(n) Imposition of lien where failure to make required contributions
(1) In general
In the case of a plan to which this section applies, if�
(A) any person fails to make a required installment under subsection (m) or any other payment required under this section before the due date for such installment or other payment, and
(B) the unpaid balance of such installment or other payment (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000,
then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member.
(2) Plans to which subsection applies
This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection (l)(8)(B)) of such plan is less than 100 percent. This subsection shall not apply to any plan to which section 4021 of the Employee Retirement Income Security Act of 1974 does not apply (as such section is in effect on the date of the enactment of the Retirement Protection Act of 1994).
(3) Amount of lien
For purposes of paragraph (1), the amount of the lien shall be equal to the aggregate unpaid balance of required installments and other payments required under this section (including interest)�
(A) for plan years beginning after 1987, and
(B) for which payment has not been made before the due date.
(4) Notice of failure; lien
(A) Notice of failure
A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment.
(B) Period of lien
The lien imposed by paragraph (1) shall arise on the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.
(C) Certain rules to apply
Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien.
(5) Enforcement
Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor).
(6) Definitions
For purposes of this subsection�
(A) Due date; required installment
The terms �due date� and �required installment� have the meanings given such terms by subsection (m), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section.
(B) Controlled group
The term �controlled group� means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414.

 

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