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Internal Revenue Code, § 412. Minimum Funding Standards

I.R.C. § 412(a) Requirement To Meet Minimum Funding Standard
I.R.C. § 412(a)(1) In General
A plan to which this section applies shall satisfy the minimum funding standard applicable to the plan for any plan year.
I.R.C. § 412(a)(2) Minimum Funding Standard
For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—
I.R.C. § 412(a)(2)(A)
in the case of a defined benefit plan which is not a multiemployer plan or a CSEC plan, the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under section 430 for the plan for the plan year,
I.R.C. § 412(a)(2)(B)
in the case of a money purchase plan which is not a multiemployer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan,
I.R.C. § 412(a)(2)(C)
in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 431 as of the end of the plan year, and
I.R.C. § 412(a)(2)(D)
in the case of a CSEC plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 433 as of the end of the plan year.
I.R.C. § 412(b) Liability For Contributions
I.R.C. § 412(b)(1) In General
Except as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 430(j) or under section 433(f)) shall be paid by the employer responsible for making contributions to or under the plan.
I.R.C. § 412(b)(2) Joint And Several Liability Where Employer Member Of Controlled Group
If the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.
I.R.C. § 412(b)(3) Multiemployer Plans In Critical Status
Paragraph (1) shall not apply in the case of a multiemployer plan for any plan year in which the plan is in critical status pursuant to section 432. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 432(e) and complies with such rehabilitation plan (and any modifications of the plan).
I.R.C. § 412(c) Variance From Minimum Funding Standards
I.R.C. § 412(c)(1) Waiver In Case Of Business Hardship
I.R.C. § 412(c)(1)(A) In General
If—
I.R.C. § 412(c)(1)(A)(i)
an employer is (or in the case of a multiemployer plan or a CSEC 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
I.R.C. § 412(c)(1)(A)(ii)
application of the standard would be adverse to the interests of plan participants in the aggregate,
the Secretary may, subject to subparagraph (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. 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.
I.R.C. § 412(c)(1)(B) Effects Of Waiver
If a waiver is granted under subparagraph (A) for any plan year—
I.R.C. § 412(c)(1)(B)(i)
in the case of a defined benefit plan which is not a multiemployer plan or a CSEC plan, the minimum required contribution under section 430 for the plan year shall be reduced by the amount of the waived funding deficiency and such amount shall be amortized as required under section 430(e),
I.R.C. § 412(c)(1)(B)(ii)
in the case of a multiemployer plan, the funding standard account shall be credited under section 431(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 431(b)(2)(C), and
I.R.C. § 412(c)(1)(B)(iii)
in the case of a CSEC plan, the funding standard account shall be credited under section 433(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 433(b)(2)(C).
I.R.C. § 412(c)(1)(C) Waiver Of Amortized Portion Not Allowed
The Secretary may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any waived funding deficiency for any preceding plan year.
I.R.C. § 412(c)(2) Determination Of Business Hardship
For purposes of this subsection, 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—
I.R.C. § 412(c)(2)(A)
the employer is operating at an economic loss,
I.R.C. § 412(c)(2)(B)
there is substantial unemployment or underemployment in the trade or business and in the industry concerned,
I.R.C. § 412(c)(2)(C)
the sales and profits of the industry concerned are depressed or declining, and
I.R.C. § 412(c)(2)(D)
it is reasonable to expect that the plan will be continued only if the waiver is granted.
I.R.C. § 412(c)(3) Waived Funding Deficiency
For purposes of this section and part III of this subchapter, the term “waived funding deficiency” means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary and not satisfied by employer contributions.
I.R.C. § 412(c)(4) Security For Waivers For Single-Employer Plans, Consultations
I.R.C. § 412(c)(4)(A) Security May Be Required
I.R.C. § 412(c)(4)(A)(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 paragraph (1) or for granting an extension under section 433(d).
I.R.C. § 412(c)(4)(A)(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 the Employee Retirement Income Security Act of 1974), or a member of such sponsor's controlled group (within the meaning of section 4001(a)(14) of such Act).
I.R.C. § 412(c)(4)(B) Consultation With The Pension Benefit Guaranty Corporation
Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under this subsection or an extension under section 433(d) with respect to a plan described in subparagraph (A)(i)—
I.R.C. § 412(c)(4)(B)(i)
provide the Pension Benefit Guaranty Corporation with—
I.R.C. § 412(c)(4)(B)(i)(I)
notice of the completed application for any waiver, modification, or extension, and
I.R.C. § 412(c)(4)(B)(i)(II)
an opportunity to comment on such application within 30 days after receipt of such notice, and
I.R.C. § 412(c)(4)(B)(ii)
consider—
I.R.C. § 412(c)(4)(B)(ii)(I)
any comments of the Corporation under clause (i)(II), and
I.R.C. § 412(c)(4)(B)(ii)(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).
I.R.C. § 412(c)(4)(C) Exception For Certain Waivers Or Extensions
I.R.C. § 412(c)(4)(C)(i) In General
The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—
I.R.C. § 412(c)(4)(C)(i)(I)
the aggregate unpaid minimum required contributions (within the meaning of section 4971(c)(4)) for the plan year and all preceding plan years, or the accumulated funding deficiency under section 433, whichever is applicable,
I.R.C. § 412(c)(4)(C)(i)(II)
the present value of all waiver amortization installments determined for the plan year and succeeding plan years under section 430(e)(2) or 433(b)(2)(C), whichever is applicable, and
I.R.C. § 412(c)(4)(C)(i)(III)
the total amounts not paid by reason of an extension in effect under section 433(d),
is less than $1,000,000.
I.R.C. § 412(c)(4)(C)(ii) Treatment Of Waivers Or Extensions For Which Applications Are Pending
The amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers or extensions with respect to the minimum funding standard under this subsection which are pending with respect to such plan were denied.
I.R.C. § 412(c)(5) Special Rules For Single-Employer Plans
I.R.C. § 412(c)(5)(A) Application Must Be Submitted Before Date 2 1/2 Months After Close Of Year
In the case of a defined benefit plan which is not 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.
I.R.C. § 412(c)(5)(B) Special Rule If Employer Is Member Of Controlled Group
In the case of a defined benefit plan which is not 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.R.C. § 412(c)(5)(B)(i)
with respect to such employer, and
I.R.C. § 412(c)(5)(B)(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 paragraph.
I.R.C. § 412(c)(6) Advance Notice
I.R.C. § 412(c)(6)(A) In General
The Secretary shall, before granting a waiver under this subsection, 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 to each affected party (as defined in section 4001(a)(21) of the Employee Retirement Income Security Act of 1974). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of the Employee Retirement Income Security Act of 1974 and for benefit liabilities.
I.R.C. § 412(c)(6)(B) Consideration Of Relevant Information
The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).
I.R.C. § 412(c)(7) Restriction On Plan Amendments
I.R.C. § 412(c)(7)(A) In General
No amendment of a 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 this subsection or an extension of time under section 431(d) or section 433(d) is in effect with respect to the plan, or if a plan amendment described in subsection (d)(2) which reduces the accrued benefit of any participant has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). 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.
I.R.C. § 412(c)(7)(B) Exception
Subparagraph (A) shall not apply to any plan amendment which—
I.R.C. § 412(c)(7)(B)(i)
the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,
I.R.C. § 412(c)(7)(B)(ii)
only repeals an amendment described in subsection (d)(2), or
I.R.C. § 412(c)(7)(B)(iii)
is required as a condition of qualification under part I of subchapter D of chapter 1.
I.R.C. § 412(d) Miscellaneous Rules
I.R.C. § 412(d)(1) Change In Method Or Year
If the funding method or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary.
I.R.C. § 412(d)(2) Certain Retroactive Plan Amendments
For purposes of this section, any amendment applying to a plan year which—
I.R.C. § 412(d)(2)(A)
is adopted after the close of such plan year but no later than 2 1/2 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),
I.R.C. § 412(d)(2)(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
I.R.C. § 412(d)(2)(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 notifying him of such amendment and the Secretary 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 unless the Secretary determines that such amendment is necessary because of a temporary substantial business hardship (as determined under subsection (c)(2)) or a substantial business hardship (as so determined) in the case of a multiemployer plan and that a waiver under subsection (c) (or, in the case of a multiemployer plan or a CSEC plan, any extension of the amortization period under section 431(d) or section 433(d)) is unavailable or inadequate.
I.R.C. § 412(d)(3) Controlled Group
For purposes of this section, the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.
I.R.C. § 412(e) Plans To Which Section Applies
I.R.C. § 412(e)(1) In General
Except as provided in paragraphs (2) and (4), this section applies to a plan if, for any plan year beginning on or after the effective date of this section for such plan under the Employee Retirement Income Security Act of 1974—
I.R.C. § 412(e)(1)(A)
such plan included a trust which qualified (or was determined by the Secretary to have qualified) under section 401(a), or
I.R.C. § 412(e)(1)(B)
such plan satisfied (or was determined by the Secretary to have satisfied) the requirements of section 403(a).
I.R.C. § 412(e)(2) Exceptions
This section shall not apply to—
I.R.C. § 412(e)(2)(A)
any profit-sharing or stock bonus plan,
I.R.C. § 412(e)(2)(B)
any insurance contract plan described in paragraph (3),
I.R.C. § 412(e)(2)(C)
any governmental plan (within the meaning of section 414(d)),
I.R.C. § 412(e)(2)(D)
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,
I.R.C. § 412(e)(2)(E)
any plan which has not, at any time after September 2, 1974, provided for employer contributions, or
I.R.C. § 412(e)(2)(F)
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 subparagraph (C), (D), or (F) 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.R.C. § 412(e)(3) Certain Insurance Contract Plans
A plan is described in this paragraph if—
I.R.C. § 412(e)(3)(A)
the plan is funded exclusively by the purchase of individual insurance contracts,
I.R.C. § 412(e)(3)(B)
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),
I.R.C. § 412(e)(3)(C)
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,
I.R.C. § 412(e)(3)(D)
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,
I.R.C. § 412(e)(3)(E)
no rights under such contracts have been subject to a security interest at any time during the plan year, and
I.R.C. § 412(e)(3)(F)
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 paragraph.
I.R.C. § 412(e)(4) 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 such Act).
(Added by Pub. L. 93-406, title II, Sec. 1013(a), Sept. 2, 1974, 88 Stat. 914, and amended by Pub. L. 94-455, title XIX, Sec. 1901(a)(63), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1775, 1834; Pub. L. 96-364, title II, Sec. 203, 208(c), Sept. 26, 1980, 94 Stat. 1285, 1289; Pub. L. 98-369, div. A, title IV, Sec. 491(d)(25), July 18, 1984, 98 Stat. 850; Pub. L. 99-272, title XI, Sec. 11015(a)(2), (b)(2), 11016(c)(4), Apr. 7, 1986, 100 Stat. 265, 267, 273; Pub. L. 100-203, title IX, Sec. 9301(a), 9303(a), (d)(1), 9304(a)(1), (b)(1), (e)(1), 9305(b)(1), 9306(a)(1), (b)(1), (c)(1), (d)(1), (e)(1), 9307(a)(1), (b)(1), (e)(1), Dec. 22, 1987, 101 Stat. 1330-331, 1330-333, 1330-342 to 1330-344, 1330-348, 1330-351, 1330-352, 1330-354 to 1330-357; Pub. L. 100-647, title II, Sec. 2005(a)(2)(A), (d)(1), Nov. 10, 1988, 102 Stat. 3610, 3612; Pub. L. 101-239, title VII, Sec. 7881(a)(1)(A), (2)(A), (3)(A), (4)(A), (5)(A), (6)(A), (b)(1)(A), (2)(A), (3)(A), (4)(A), (6)(A), (c)(1), (d)(1)(A), Dec. 19, 1989, 103 Stat. 2435-2439; Dec. 8, 1994, Pub. L. 103-465, title VII, Sec. 768(a)(3), (a)(2), (a)(1), 754(a), 753, 752, 751(a)(10)(C), (a)(10)(B), (a)(10)(A), (a)(9)(A), (a)(8), (a)(7)(B)(iii), (a)(7)(B)(ii), (a)(7)(B)(i), (a)(7)(A), (a)(6)(C), (a)(6)(B), (a)(6)(A), (a)(5), (a)(4)(B), (a)(4)(A), (a)(3), (a)(2)(B), (a)(2)(A), (a)(1)(B), (a)(1)(A); Pub. L. 105-34, title XV, XVI, Sec. 1521, 1604(b)(2)(A), Aug. 5, 1997, 111 Stat 788; Pub. L. 107-16, title VI, Sec. 651, 661, June 7, 2001, 115 Stat. 38; Pub. L. 107-147, title IV, Sec. 405, 411, Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-218, Sec. 101, 102, 104, Apr. 10, 2004, 118 Stat. 596; Pub. L. 109-135, title IV, Sec. 412(x)(1), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 109-280, title I, II, III, Sec. 111(a), 212(c)(1), 301(b), Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-458, title I, Sec. 101(a)(2), 102(b)(2), Dec. 23, 2008, 122 Stat. 5092; Pub. L. 113-97, Sec. 202(c), Apr. 7, 2014, 128 Stat. 1101; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(83)-(85), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (c)(1)(A). Pub. L. 115-141, Div. U, Sec. 401(a)(83), amended subpar. (A) by adding a period at the end.
Subsec. (c)(4)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(84), amended subpar. (B) by inserting ‘‘section’’ before ‘‘433(d)’’.
Subsec. (c)(7)(B)(iii). Pub. L. 115-141, Div. U, Sec. 401(a)(85), amended clause (iii) by striking the comma after ‘‘subchapter D’’.
2014 - Subsec. (a)(2)(A). Pub. L. 113-97, Sec. 202(c)(2)(A), amended par. (2) by substituting “multiemployer plan or a CSEC plan” for “multiemployer plan”.
Subsec. (a)(2)(B)-(D). Pub. L. 113-97, Sec. 202(c)(1), amended par. (2) by striking “and” at the end of subpar. (B), by substituting “, and” for the period at the end of subpar. (C), and by adding subpar. (D).
Subsec. (b)(1). Pub. L. 113-97, Sec. 202(c)(2)(B), amended par. (1) by substituting “430(j) or under section 433(f)” for “430(j)”.
Subsec. (c)(1)(A)(i). Pub. L. 113-97, Sec. 202(c)(2)(A), amended clause (i) by substituting “multiemployer plan or a CSEC plan” for “multiemployer plan” the first place it appeared.
Subsec. (c)(1)(B)(i). Pub. L. 113-97, Sec. 202(c)(2)(A), amended clause (i) by substituting “multiemployer plan or a CSEC plan” for “multiemployer plan”.
Subsec. (c)(1)(B)(i)-(iii). Pub. L. 113-97, Sec. 202(c)(2)(C), amended subpar. (B) by striking “and” at the end of clause (i), by substituting “, and” for the period at the end of clause (ii), and by adding clause (iii).
Subsec. (c)(4)(A)(i). Pub. L. 113-97, Sec. 202(c)(2)(D), amended clause (i) by substituting “under paragraph (1) or for granting an extension under section 433(d)” for “under paragraph (1)”.
Subsec. (c)(4)(B). Pub. L. 113-97, Sec. 202(c)(2)(E), amended subpar. (B) by substituting “waiver under this subsection or an extension under 433(d)” for “waiver under this subsection”.
Subsec. (c)(4)(B)(i)(I). Pub. L. 113-97, Sec. 202(c)(2)(F), amended subclause (I) by substituting “waiver, modification, or extension” for “waiver or modification”.
Subsec. (c)(4)(C). Pub. L. 113-97, Sec. 202(c)(2)(G), amended the heading of subpar. (C) by substituting “waivers or extensions” for “waivers”.
Subsec. (c)(4)(C)(i)(I). Pub. L. 113-97, Sec. 202(c)(2)(I), amended subclause (I) by substituting “or the accumulated funding deficiency under section 433, whichever is applicable,” for “and” at the end.
Subsec. (c)(4)(C)(i)(II). Pub. L. 113-97, Sec. 202(c)(2)(J), amended subclause (II) by substituting “430(e)(2) or 433(b)(2)(C), whichever is applicable, and” for “430(e)(2),”.
Subsec. (c)(4)(C)(i)(III). Pub. L. 113-97, Sec. 202(c)(2)(K), amended clause (i) by adding subpar. (III).
Subsec. (c)(4)(C)(ii). Pub. L. 113-97, Sec. 202(c)(2)(G), amended the heading of clause (ii) by substituting “waivers or extensions” for “waivers”.
Subsec. (c)(4)(C)(ii). Pub. L. 113-97, Sec. 202(c)(2)(L), amended clause (ii) by substituting “for waivers or extensions with respect to” for “for waivers of”.
Subsec. (c)(7)(A). Pub. L. 113-97, Sec. 202(c)(2)(H), amended subpar. (A) by substituting “section 431(d) or section 433(d)” for “section 431(d)”.
Subsec. (d)(2). Pub. L. 113-97, Sec. 202(c)(2)(A), amended par. (2) by substituting “multiemployer plan or a CSEC plan” for “multiemployer plan” the last place it appeared.
Subsec. (d)(2). Pub. L. 113-97, Sec. 202(c)(2)(H), amended par. (2) by substituting “section 431(d) or section 433(d)” for “section 431(d)”.
2008 - Subsec. (b)(3). Pub. L. 110-458, Sec. 102(b)(2)(H), amended par. (3) by substituting “plan sponsor adopts” for “plan adopts”.
Subsec. (c)(1)(A)(i). Pub. L. 110-458, Sec. 101(a)(2)(A), amended clause (i) by substituting “the plan are” for “the plan is”.
Subsec. (c)(7)(A). Pub. L. 110-458, Sec. 101(a)(2)(B), amended subpar. (A) by inserting “which reduces the accrued benefit of any participant” after “subsection (d)(2)”.
Subsec. (d)(1). Pub. L. 110-458, Sec. 101(a)(2)(C), amended par. (1) by striking “, the valuation date,”.
2006 - Subsec. (b)(5)(B)(ii)(II). Pub. L. 109-280, Sec. 301(b)(1), amended subclause (II) by substituting “2008” for “2006” and by substituting “, 2005, 2006, AND 2007” for “AND 2005”.
Subsec. (l)(7)(C)(i)(IV). Pub. L. 109-280, Sec. 301(b)(2), amended subclause (IV) by substituting “, 2005, 2006, or 2007” for “or 2005” and by substituting “, 2005, 2006, AND 2007” for “AND 2005" in the heading.
Sec. 412. Pub. L. 109-280, Sec. 111(a), amended Sec. 412. Before amendment, it read as follows:
“Sec. 412 Minimum funding standards
“(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) 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 multi-employer 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 actuarial 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 (1)(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 beginning in--                   The applicable 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 8-1/2 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 2-1/2 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),
“(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, plus
“(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, 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       The specified percentage is: 
beginning in calendar year:
     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 other wise 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 (1)(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) 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.”
Subsec. (b)(3). Pub. L. 109-280, Sec. 212(c)(1), added par. (3).
2005 - Subsec. (m)(4)(B)(i). Pub. L. 109-135, Sec. 412(x)(1), amended clause (i) by substituting “subsection (d)” for “subsection (c)”.
2004 - Subsec. (b)(5)(B)(ii)(I). Pub. L. 108-218, Sec. 101(b)(1), amended subclause (I) by inserting “or (III)” after “subclause (II)”.
Subsec. (b)(5)(B)(ii). Pub. L. 108-218, Sec. 101(b)(1), amended clause (ii) by redesignating subclause (II) and subclause (III) and adding a new subclause (II).
Subsec. (b)(5)(B)(ii). Pub. L. 108-218, Sec. 101(b)(1), amended subclause (III), as redesignated, by inserting “or (II)” after “subclause (I)” the first time it appeared and by substituting “such subclause” for “subclause (I)” the second time it appeared.
Subsec. (b)(7)(F). Pub. L. 108-218, Sec. 104(b), amended par. (7) by adding subpara. (F).
Subsec. (l)(7)(C)(i)(IV). Pub. L. 108-218, Sec. 101(b)(2), amended clause (i) by adding subclause (IV).
Subsec. (l)(12). Pub. L. 108-218, Sec. 102(b), amended subsec. (l) by adding par. (12).
Subsec. (m)(7). Pub. L. 108-218, Sec. 101(b)(3), amended par. (7). Before amendment, it read as follows:
“(7) Special rules for 2002 and 2004
“In any case in which the interst rate used to determine current liability is determined under subsection (l)(7)(C)(i)(III)--
“(A) 2002
“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).
“(B) 2004
“For purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2004, the current liability for the preceding plan year shall be redetermined using 105 percent as the specified percentage determined under subsection (l)(7)(C)(i)(II).”
2002 - Subsec. (c)(9)(B)(ii). Pub. L. 107-147, Sec. 411(v)(1)(A), amended clause (ii) by substituting “100 percent” for “125 percent”.
Subsec. (c)(9)(B)(iv). Pub. L. 107-147, Sec. 411(v)(1)(B), added clause (iv).
Subsec. (l)(7)(C)(i)(III). Pub. L. 107-147, Sec. 405(a)(1), added subclause (III).
Subsec. (m)(7). Pub. L. 107-147, Sec. 405(a)(2), added par. (7).
2001 - Subsec. (c)(7)(A)(i). Pub. L. 107-16, Sec. 651(a)(1), amended clause (i) by substituting “in the case of plan years beginning before January 1, 2004, the applicable percentage” for “the applicable percentage”.
Subsec. (c)(7)(F). Pub. L. 107-16, Sec. 651(a)(2), amended subpar. (F). Before amendment it read as follows:
“(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 beginning in--                   The applicable percentage is--
  1999 or 2000.....                                     155
  2001 or 2002.....                                     160
  2003 or 2004.....                                     165
  2005 and succeeding year                              170.”
Subsec. (c)(9). Pub. L. 107-16, Sec. 661(a), amended par. (9). Before amendment, it read as follows:
“(9) Annual valuation
“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.”
1997 -- Subsec. (b)(2). Pub. L. 105-34, Sec. 1521(c)(1), amended par. (2) by striking “and” at the end of subpar. (C); by substituting “, and” for “.” at the end of subpar. (D); and by adding subpar. (E).
Subsec. (c)(7)(A)(i)(I). Pub. L. 105-34, Sec. 1521(a), amended subclause (I) by substituting “the applicable percentage” for “150 percent”.
Subsec. (c)(7)(D). Pub. L. 105-34, Sec. 1521(c)(3)(A), amended subpar. (D) by inserting “and” at the end of clause (i); by substituting “.” for “, and” at the end of clause (ii); and by striking clause (iii). Prior to amendment clause (iii) read as follows:
“(iii) for the treatment under this section of contributions which would be required to be made under the plan but for the provisions of subparagraph (A)(i)(I).”
Subsec. (c)(7)(F). Pub. L. 105-34, Sec. 1521(a), added subpar. (F).
Subsec. (m)(5)(E)(ii)(II). Pub. L. 105-34, Sec. 1604(b)(2), amended subclause (II) by substituting “subclause (I)” for “clause (i)”.
1994 -- Subsec. (n)(4)(B). Pub. L. 103-465, Sec. 768(a)(3), struck “60th day following the”, effective generally for installments and other payments required under section 412 of the Internal Revenue Code of 1986 or under part 3 of subtitle B of the Employee Retirement Income Security Act of 1974 that become due on or after the date of enactment.
Subsec. (n)(3). Pub. L. 103-465, Sec. 768(a)(2), amended (3) to read as above, effective generally for installments and other payments required under section 412 of the Internal Revenue Code of 1986 or under part 3 of subtitle B of the Employee Retirement Income Security Act of 1974 that become due on or after the date of enactment. Prior to amendment, subsec. (3) read as follows:
“(3) Amount of lien
For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of--
(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or
(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)--
(i) for plan years beginning after 1987, and
(ii) for which payment has not been made before the due date.”
Subsec. (n)(2). Pub. L. 103-465, Sec. 768(a)(1), added at the end a new sentence, effective for installments and other payments required under section 412 of the Internal Revenue Code of 1986 or under part 3 of subtitle B of the Employee Retirement Income Security Act of 1974 that become due on or after the date of enactment.
Subsec. (m)(1). Pub. L. 103-465, Sec. 754(a), inserted “which has a funded current liability percentage (as defined in subsection (l)(8)) for the preceding plan year of less than 100 percent” before “fails”, and changed “any plan year” to “the plan year”, effective for plan years beginning after the date of enactment of this Act.
Subsec. (c)(12). Pub. L. 103-465, Sec. 753, added (12), effective generally for plan years beginning after December 31, 1994, with respect to collective bargaining agreements in effect on or after January 1, 1995.
Subsec. (c)(5). Pub. L. 103-465, Sec. 752, amended (c)(5) by striking “If the funding method”, and inserted subparagraphs (A) and (B), to read as above, effective generally for changes in assumptions for plan years beginning after October 28, 1993.
Subsec. (c)(7)(B). Pub. L. 103-465, Sec. 751(a)(10)(C), amended (B) to read as above, effective generally for plan years beginning after December 31, 1994. Prior to amendment, subsec. (B) read as follows:
“(B) Current liability
For purposes of subparagraphs (A) and (D), the term “current liability” has the meaning given such term by subsection (l)(7) (without regard to subparagraph (D) thereof).”
Subsec. (c)(7)(E). Pub. L. 103-465, Sec. 751(a)(10)(B), added (E), effective for plan years beginning after December 31, 1994.
Subsec. (c)(7)(A)(i). Pub. L. 103-465, Sec. 751(a)(10)(A), amended (i) by adding a parenthetical after “current liability”, effective for plan years beginning after December 31, 1994.
Subsec. (m)(5) and (6). Pub. L. 103-465, Sec. 751(a)(9)(A), redesignated para. (5) as (6), and inserted a new (5) to read as above, effective for plan years beginning after December 31, 1994.
Subsec. (l)(11). Pub. L. 103-465, Sec. 751(a)(8), amended (l) by adding new para. (11) to read as above, effective generally for plan years beginning after December 31, 1994.
Subsec. (l)(4)(B)(i). Pub. L. 103-465, Sec. 751(a)(7)(B)(iii), amended (l)(4)(B)(i) (as amended by Sec. 751(a)(4)(B)) to read as above, effective generally for plan years beginning after December 31, 1994.
Subsec. (l)(10). Pub. L. 103-465, Sec. 751(a)(7)(B)(ii), added (10), effective for plan years beginning after December 31, 1994.
Subsec. (l)(2). Pub. L. 103-465, Sec. 751(a)(7)(B)(i), amended (l)(2) (as amended by Sec. 751(a)(2)) to read as above, and by adding at the end a new (D), effective for plan years beginning after December 31, 1994.
Subsec. (l)(7)(C). Pub. L. 103-465, Sec. 751(a)(7)(A), amended (C) to read as above, effective for plan years beginning after December 31, 1994. Prior to amendment, (C) read as follows:
“(C) Interest rates used
The rate of interest used to determine current liability shall be the rate of interest used under subsection (b)(5).”
Subsec. (m)(4)(D)(ii). Pub. L. 103-465, Sec. 751(a)(6)(C), amended (m)(4)(D)(ii) to read as above, effective for plan years beginning after December 31, 1994.
Subsec. (l)(5)(E). Pub. L. 103-465, Sec. 751(a)(6)(B), added (E), effective for plan years beginning after December 31, 1994.
Subsec. (l)(5)(A). Pub. L. 103-465, Sec. 751(a)(6)(A), amended (l)(5)(A) to read as above, effective for plan years beginning after December 31, 1994.
Subsec. (l)(4)(C). Pub. L. 103-465, Sec. 751(a)(5), amended (C) by changing “.25” to “.40”, and by changing “35” to “60”, effective for plan years beginning after December 31, 1994.
Subsec. (l)(4)(B)(i). Pub. L. 103-465, Sec. 751(a)(4)(B), amended (i) to read as above, effective for plan years beginning after December 31, 1994.
Subsec. (l)(3)(D) and (E). Pub. L. 103-465, Section 751(a)(4)(A), amended (3) by adding new (D) and (E), effective for plan years beginning after December 31, 1994.
Subsec. (l)(2). Pub. L. 103-465, Sec. 751(a)(3), amended (l)(2) to read as above, effective for plan years beginning after December 31, 1994.
Subsec. (l)(1). Pub. L. 103-465, Sec. 751(a)(2)(B), amended last sentence to read as above, effective to plan years beginning after December 31, 1994. Prior to amendment, last sentence of (l)(1) read as follows: “Such increase shall not exceed the amount necessary to increase the funded current liability percentage to 100 percent.”
Subsec. (l)(1)(A)(ii). Pub. L. 103-465, Sec. 751(a)(2)(A), amended (ii) to read as above, effective generally for plan years beginning after December 31, 1994. Prior to amendment, clause (ii) read as follows: “(ii) The sum of the charges for such plan year under subparagraphs (B) (other than clauses (iv) and (v) thereof), (C), and (D) of subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B)(i) of subsection (b)(3), plus”.
Subsec. (l)(9). Pub. L. 103-465, Sec. 751(a)(1)(B), added (9), effective for plan years beginning after December 31, 1994.
Subsec. (l)(1). Pub. L. 103-465, Sec. 751(a)(1)(A), struck “which has an unfunded current liability” and inserted “to which this subsection applies under paragraph (9)”, effective generally for plan years beginning after December 31, 1994.
1989 - Subsec. (b)(5)(B)(iii). Pub. L. 101-239, Sec. 7881(d)(1)(A), struck out ‘for purposes of this section and for purposes of determining current liability,’ before ‘the interest rate’ in introductory provisions.
Subsec. (c)(9). Pub. L. 101-239, Sec. 7881(a)(6)(A), substituted ‘Annual’ for ‘3-year’ in heading and ‘every year’ for ‘every 3 years’ in text.
Subsec. (c)(10)(A). Pub. L. 101-239, Sec. 7881(b)(1)(A), substituted ‘Defined benefit plans’ for ‘Plans’ in heading and ‘defined benefit plan other’ for ‘plan other’ in introductory provisions.
Subsec. (c)(10)(B). Pub. L. 101-239, Sec. 7881(b)(2)(A), substituted ‘Other’ for ‘Multiemployer’ in heading and ‘plan not described in subparagraph (A)’ for ‘multiemployer plan’ in text.
Subsec. (d)(1)(A)(ii). Pub. L. 101-239, Sec. 7881(b)(6)(A)(ii), substituted ‘costs (including adjustments under subsection (b)(5)(B))’ for ‘costs’.
Subsec. (f)(4)(A). Pub. L. 101-239, Sec. 7881(c)(1), substituted ‘for benefit liabilities’ for ‘the benefit liabilities’.
Subsec. (l)(3)(C)(ii)(II). Pub. L. 101-239, Sec. 7881(a)(1)(A), substituted ‘reducing (but not below zero)’ for ‘reducing’.
Subsec. (l)(4)(B)(i). Pub. L. 101-239, Sec. 7881(a)(2)(A), substituted ‘liability and the unamortized portion of the unfunded existing benefit increase liability’ for ‘liability’.
Subsec. (l)(5)(C). Pub. L. 101-239, Sec. 7881(a)(3)(A), substituted ‘the first plan year beginning after December 31, 1988’ for ‘October 17, 1987’.
Subsec. (l)(7)(D)(iii)(III). Pub. L. 101-239, Sec. 7881(a)(4)(A)(i), added subcl. (III).
Subsec. (l)(7)(D)(iv). Pub. L. 101-239, Sec. 7881(a)(4)(A)(ii), added cl. (iv).
Subsec. (l)(8)(A)(ii). Pub. L. 101-239, Sec. 7881(a)(5)(A)(i), struck out ‘reduced by any credit balance in the funding standard account’ after ‘under subsection (c)(2)’.
Subsec. (l)(8)(E). Pub. L. 101-239, Sec. 7881(a)(5)(A)(ii), added subpar. (E).
Subsec. (m)(1). Pub. L. 101-239, Sec. 7881(b)(3)(A), substituted ‘defined benefit plan (other than’ for ‘plan (other than’ in introductory provisions.
Subsec. (m)(1)(B). Pub. L. 101-239, Sec. 7881(b)(6)(A)(i), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘the rate under subsection (b)(5).’
Subsec. (m)(4)(D). Pub. L. 101-239, Sec. 7881(b)(4)(A), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: ‘In the case of a plan with any unpredictable contingent event benefit liabilities -
‘(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and
‘(ii) each required installment shall be increased by the greater of -
‘(I) 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, or
‘(II) 25 percent of the amount determined under subsection (l)(5)(A)(ii) for the plan year.’
1988 - Subsec. (l)(3)(C)(i), (iii). Pub. L. 100-647, Sec. 2005(a)(2)(A), (d)(1), amended cl. (i) identically, substituting ‘October 29’ for ‘October 17’ and amended cl. (iii) identically, substituting ‘October 28’ for ‘October 16’.
1987 - Subsec. (b)(2). Pub. L. 100-203, Sec. 9303(a)(2), inserted at end ‘For additional requirements in the case of plans other than multiemployer plans, see subsection (l).’
Subsec. (b)(2)(B)(iv). Pub. L. 100-203, Sec. 9307(a)(1)(A), substituted ‘5 plan years (15 plan years in the case of a multiemployer plan)’ for ‘15 plan years’.
Subsec. (b)(2)(B)(v). Pub. L. 100-203, Sec. 9307(a)(1)(B), substituted ‘10 plan years (30 plan years in the case of a multiemployer plan)’ for ‘30 plan years’.
Subsec. (b)(2)(C), (3)(B)(ii). Pub. L. 100-203, Sec. 9307(a)(1)(A), substituted ‘5 plan years (15 plan years in the case of a multiemployer plan)’ for ‘15 plan years’.
Subsec. (b)(3)(B)(iii). Pub. L. 100-203, Sec. 9307(a)(1)(B), substituted ‘10 plan years (30 plan years in the case of a multiemployer plan)’ for ‘30 plan years’.
Subsec. (b)(5). Pub. L. 100-203, Sec. 9307(e)(1), amended par. (5) generally. Prior to amendment, par. (5) read as follows: ‘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.’
Subsec. (c)(2)(B). Pub. L. 100-203, Sec. 9303(d)(1), inserted at end ‘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).’
Subsec. (c)(3). Pub. L. 100-203, Sec. 9307(b)(1), amended par. (3) generally. Prior to amendment, par. (3) read as follows: ‘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 which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary's best estimate of anticipated experience under the plan.'
Subsec. (c)(7). Pub. L. 100-203, Sec. 9301(a), substituted ‘Full-funding’ for ‘Full funding’ in heading and amended text generally. Prior to amendment, text read as follows: ‘For purposes of paragraph (6), the term full funding limitation means the excess (if any) of -
‘(A) 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
‘(B) the lesser of the fair market value of the plan's assets or the value of such assets determined under paragraph (2).'
Subsec. (c)(10). Pub. L. 100-203, Sec. 9304(a)(1), amended par. (10) generally. Prior to amendment, par. (10) read as follows: ‘For purposes of this section, 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 paragraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.’
Subsec. (c)(11). Pub. L. 100-203, Sec. 9305(b)(1), added par. (11).
Subsec. (d)(1). Pub. L. 100-203, Sec. 9306(a)(1)(B), struck out ‘substantial’ after ‘in case of’ in heading, and substituted ‘temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)’ for ‘substantial business hardship’ in text.
Pub. L. 100-203, Sec. 9306(b)(1), substituted ‘more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan)’ for ‘more than 5 of any 15’.
Pub. L. 100-203, Sec. 9306(c)(1)(A), substituted ‘The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) for any plan year shall be - ‘ and subpars. (A) and (B) for ‘The interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection shall be the rate determined under section 6621(b).’
Subsec. (d)(2). Pub. L. 100-203, Sec. 9306(a)(1)(B), struck out ‘substantial’ after ‘Determination of’ in heading, and substituted ‘temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)’ for ‘substantial business hardship’ in introductory provisions.
Subsec. (d)(4). Pub. L. 100-203, Sec. 9306(a)(1)(A), added par. (4).
Subsec. (d)(5). Pub. L. 100-203, Sec. 9306(a)(1)(C), added par. (5).
Subsec. (e). Pub. L. 100-203, Sec. 9306(c)(1)(B), substituted last two sentences for ‘The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b).’
Subsec. (f)(3)(C)(i). Pub. L. 100-203, Sec. 9306(e)(1), substituted ‘$1,000,000’ for ‘$2,000,000’ at end.
Subsec. (f)(4)(A). Pub. L. 100-203, Sec. 9306(d)(1), substituted ‘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 the benefit liabilities.’ for ‘plan.’
Subsec. (l). Pub. L. 100-203, Sec. 9303(a)(1), added subsec. (l).
Subsec. (m). Pub. L. 100-203, Sec. 9304(b)(1), added subsec. (m).
Subsec. (n). Pub. L. 100-203, Sec. 9304(e)(1), added subsec. (n).
1986 - Subsec. (d)(1). Pub. L. 99-272, Sec. 11015(b)(2)(A), inserted provision that the interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection be the rate determined under section 6621(b).
Subsec. (e). Pub. L. 99-272, Sec. 11015(b)(2)(B), inserted provision that the interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection be the rate determined under section 6621(b).
Subsec. (f). Pub. L. 99-272, Sec. 11015(a)(2), substituted in heading ‘Requirements relating to waivers and extensions’ for ‘Benefits may not be increased during waiver or extension period’ and in par. (1) heading ‘Benefits may not be increased during waiver or extension period’ for ‘In general’, and added par. (3).
Pub. L. 99-272, Sec. 11016(c)(4), added par. (4).
1984 - Subsec. (a)(2). Pub. L. 98-369 struck out ‘or 405(a)’ after ‘section 403(a)’.
1980 - Subsec. (a). Pub. L. 96-364, Sec. 208(c), inserted provisions relating to plan years where multiemployer plan is in reorganization.
Subsec. (b). Pub. L. 96-364, Sec. 203(1), (2), struck out in pars. (2)(B)(ii), (iii), and (3)(B)(i) provisions respecting applicability of multiemployer plans with 40 plan years and in pars. (2)(B)(iv) and (3)(B)(ii) provisions respecting applicability of multiemployer plans with 20 year plans and added pars. (6) and (7).
Subsecs. (j), (k). Pub. L. 96-364, Sec. 203(3), added subsecs. (j) and (k).
1976 - Subsecs. (a) to (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (h). Pub. L. 94-455, Sec. 1901(a)(63), substituted reference to Sept. 2, 1974, for reference to the date of enactment of the Employee Retirement Income Security Act of 1974 in par. (5) and substituted reference to Sept. 1, 1974, for reference to the day before the date of enactment of the Employee Retirement Income Security Act of 1974 in the provisions following par. (6).
Subsec. (i). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(83)-(85), effective March 23, 2018.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by section 202(c) of Pub. L. 113-97 effective for years beginning after December 31, 2013.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Sec. 101(a)(2) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 111] to which they relate.
Amendment by Sec. 102(b)(2) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 112] to which it relates.
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendment by Sec. 111 of Pub. L. 109-280 effective for plan years beginning after 2007.
Amendment by Sec. 212(c) of Pub. L. 109-280 effective with respect to plan years beginning after 2007. However, Sec. 221(c) of Pub. L. 109-280, before being repealed by Pub. L. 113-235, Div. O, Sec. 101(a) effective with respect to plans years beginning after Dec. 31, 2014 (and subsequently amended by Pub. L. 113-295, Div. A, Sec. 172, after repeal), provided the following sunset provision:
“(1) IN GENERAL- Except as provided in this subsection, notwithstanding any other provision of this Act, the provisions of, and the amendments made by, sections 201(b), 202, and 212 shall not apply to plan years beginning after December 31, 2015.
“(2) FUNDING IMPROVEMENT AND REHABILITATION PLANS- If a plan is operating under a funding improvement or rehabilitation plan under section 305 of such Act or 432 of such Code for its last year beginning before January 1, 2016, such plan shall continue to operate under such funding improvement or rehabilitation plan during any period after December 31, 2015, such funding improvement or rehabilitation plan is in effect and all provisions of such Act or Code relating to the operation of such funding improvement or rehabilitation plan shall continue in effect during such period.”
Amendments by Sec. 301(b) of Pub. L. 109-280 effective on the date of the enactment of this Act [Enacted: Aug. 17, 2006].
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendment by Sec. 412(x)(1) of Pub. L. 109-135 effective on the date of the enactment of this Act [Enacted: Dec. 21, 2005].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 101 of Pub. L. 108-218 effective for plan years beginning after December 31, 2003. Sec. 101(d)(2)-(3) of Pub. L. 108-218 provided the following lookback and transition rules-
“(2) LOOKBACK RULES.--For purposes of applying subsections (d)(9)(B)(ii) and (e)(1) of section 302 of the Employee Retirement Income Security Act of 1974 and subsections (l)(9)(B)(ii) and (m)(1) of section 412 of the Internal Revenue Code of 1986 to plan years beginning after December 31, 2003, the amendments made by this section may be applied as if such amendments had been in effect for all prior plan years. The Secretary of the Treasury may prescribe simplified assumptions which may be used in applying the amendments made by this section to such prior plan years.
“(3) TRANSITION RULE FOR SECTION 415 LIMITATION.--In the case of any participant or beneficiary receiving a distribution after December 31, 2003 and before January 1, 2005, the amount payable under any form of benefit subject to section 417(e)(3) of the Internal Revenue Code of 1986 and subject to adjustment under section 415(b)(2)(B) of such Code shall not, solely by reason of the amendment made by subsection (b)(4), be less than the amount that would have been so payable had the amount payable been determined using the applicable interest rate in effect as of the last day of the last plan year beginning before January 1, 2004.”
Amendment by Sec. 102 of Pub. L. 108-218 effective on the date of the enactment of this Act.
Amendment by Sec. 104 of Pub. L. 108-218 effective on the date of the enactment of this Act.
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendments by Sec. 405 of Pub. L. 107-147 effective on the date of the enactment of this Act [Enacted: Mar. 9, 2002].
Amendments by Sec. 411(v) of Pub. L. 107-147 effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [Pub. L. 107-16, Sec. 661] to which they relate.
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendments by Sec. 651(a) of Pub. L. 107-16 applicable to plan years beginning after December 31, 2001.
Amendments by Sec. 661(a) of Pub. L. 107-16 applicable to plan years beginning after December 31, 2001.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358, provided that:
“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2010, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 MADE PERMANENT
Section 811 of Pub. L. 109-280 provided that:
“Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the provisions of, and amendments made by, subtitles A through F of title VI of such Act (relating to pension and individual retirement arrangement provisions).”
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 1521 of Pub. L. 105-34 applicable to plan years beginning after December 31, 1998. Sec. 1521(e)(2) provided the following special rule:
“(2) Special rule for unamortized balances under existing law.--The unamortized balance (as of the close of the plan year preceding the plan's first year beginning in 1999) of any amortization base established under section 412(c)(7)(D)(iii) of such Code and section 302(c)(7)(D)(iii) of such Act (as repealed by subsection (c)(3)) for any plan year beginning before 1999 shall be amortized in equal annual installments (until fully amortized) over a period of years equal to the excess of--
(A) 20 years, over
(B) the number of years since the amortization base was established.”
Amendment by Sec. 1604(b)(2)(A) of Pub. L. 105-34 effective as if included in the sections of the Uruguay Round Agreements Act to which they relate.
EFFECTIVE DATE OF 1994 AMENDMENTS
Amendment by section 752 of Pub. L. 103-465 effective for plan years beginning after October 28, 1993.
EXCEPTION--CERTAIN CHANGES CEASE TO BE EFFECTIVE.--In the case of changes in assumptions for plan years beginning after December 31, 1992, and on or before October 28, 1993, such changes shall cease to be effective for plan years beginning after December 31, 1994, if--
(A) such change would have required the approval of the Secretary of the Treasury had such amendment applied to such change, and
(B) such change is not so approved.
EFFECTIVE DATE OF 1989 AMENDMENTS
Amendment by Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, Pub. L. 100-203, Sec. 9302-9346, to which such amendment relates, see section 7882 of Pub. L. 101-239, set out as a note under section 401 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective as if included in the amendments made by the provisions of the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-203, to which it relates, see section 2005(e) of Pub. L. 100-647, as amended, set out as a note under section 404 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Section 9301(c)(1), (2) of Pub. L. 100-203 provided that:
‘(1) In general. - The amendments made by this section (amending this section and section 1082 of Title 29, Labor) shall apply to years beginning after December 31, 1987.
‘(2) Regulations. - The Secretary of the Treasury or his delegate shall prescribe such regulations as are necessary to carry out the amendments made by this section no later than August 15, 1988.’
Section 9303(e) of Pub. L. 100-203, as amended by Pub. L. 101-239, title VII, Sec. 7881(a)(7), Dec. 19, 1989, 103 Stat. 2436, provided that:
‘(1) In general. - Except as provided in this subsection, the amendments made by this section (amending this section and section 1082 of Title 29, Labor) shall apply with respect to plan years beginning after December 31, 1988.
‘(2) Subsections (c) and (d). - The amendments made by subsections (c) (set out as a note below) and (d) (amending this section and section 1082 of Title 29) shall apply with respect to years beginning after December 31, 1987.
‘(3) Special rule for steel companies. -
‘(A) In general. - For any plan year beginning before January 1, 1994, any increase in the funding standard account under section 412(l) of the 1986 Code or section 302(d) of ERISA (as added by this section) (29 U.S.C. 1082(d)) with respect to any steel employee plan shall not exceed the sum of -
‘(i) the required percentage of the current liability under such plan, plus
‘(ii) the amount determined under subparagraph (C)(i) for such plan year.
‘(B) Required percentage. - For purposes of subparagraph (A), the term ‘required percentage’ means, with respect to any plan year, the excess (if any) of -
‘(i) the sum of -
‘(I) the funded current liability percentage as of the beginning of the 1st plan year beginning after December 31, 1988 (determined without regard to any plan amendment adopted after June 30, 1987), plus
‘(II) 1 percentage point for the plan year for which the determination under this paragraph is being made and for each prior plan year beginning after December 31, 1988, over
‘(ii) the funded current liability percentage as of the beginning of the plan year for which such determination is being made.
‘(C) Special rules for contingent events. - In the case of any unpredictable contingent event benefit with respect to which the event on which such benefits are contingent occurs after December 17, 1987 -
‘(i) Amortization amount. - For purposes of subparagraph (A)(ii), the amount determined under this clause for any plan year is the amount which would be determined if the unpredictable contingent event benefit liability were amortized in equal annual installments over 10 plan years (beginning with the plan year in which such event occurs).
‘(ii) Benefit and contributions not taken into account. - For purposes of subparagraph (B), in determining the funded current liability percentage for any plan year, there shall not be taken into account -
‘(I) the unpredictable contingent event benefit liability, or
‘(II) any amount contributed to the plan which is attributable to clause (i) (and any income allocable to such amount).
‘(D) Steel employee plan. - For purposes of this paragraph, the term ‘steel employee plan’ means any plan if -
‘(i) such plan is maintained by a steel company, and
‘(ii) substantially all of the employees covered by such plan are employees of such company.
‘(E) Other definitions. - For purposes of this paragraph -
‘(i) Steel company. - The term ‘steel company’ means any corporation described in section 806(b) of the Steel Import Stabilization Act (section 806(b) of Pub. L. 98-573, 19 U.S.C. 2253 note).
‘(ii) Other definitions. - The terms ‘current liability’, ‘funded current liability percentage’, and ‘unpredictable contingent event benefit’ have the meanings given such terms by section 412(l) of the 1986 Code (as added by this section).
‘(F) Special rule. - The provisions of this paragraph shall apply in the case of a company which was originally incorporated on April 25, 1927, in Michigan and reincorporated on June 3, 1968, in Delaware in the same manner as if such company were a steel company.’
Section 9304(a)(3) of Pub. L. 100-203 provided that: ‘The amendments made by this subsection (amending this section and section 1082 of Title 29, Labor) shall apply to plan years beginning after December 31, 1987.’
Section 9304(b)(3) of Pub. L. 100-203 provided that: ‘The amendments made by this subsection (amending this section and section 1082 of Title 29) shall apply with respect to plan years beginning after 1988.’
Section 9304(e)(3) of Pub. L. 100-203 provided that: ‘The amendments made by this subsection (amending this section and section 1082 of Title 29) shall apply to plan years beginning after December 31, 1987.’
Section 9305(d) of Pub. L. 100-203 provided that: ‘The amendments made by this section (amending this section and sections 414 and 4971 of this title and section 1082 of Title 29) shall apply with respect to plan years beginning after December 31, 1987.’
Section 9306(f) of Pub. L. 100-203, as amended by Pub. L. 101-239, title VII, Sec. 7881(c)(3), Dec. 19, 1989, 103 Stat. 2439, provided that:
‘(1) In general. - Except as provided in this subsection, the amendments made by this section (amending this section and sections 1083, 1084, and 1085a of Title 29, Labor) shall apply in the case of -
‘(A) any application submitted after December 17, 1987, and
‘(B) any waiver granted pursuant to such an application.
‘(2) Special rule for application requirement. -
‘(A) In general. - The amendments made by subsections (a)(1)(A) and (a)(2)(A) (amending this section and section 1083 of Title 29) shall apply to plan years beginning after December 31, 1987.
‘(B) Transitional rule for years beginning in 1988. - In the case of any plan year beginning during calendar 1988, section 412(d)(4) of the 1986 Code and section 303(d)(1) of ERISA (29 U.S.C. 1083(d)(1)) (as added by subsection (a)(1) (and (2))) shall be applied by substituting ‘6th month’ for ‘3rd month’.
‘(3) Subsection (b). - The amendments made by subsection (b) (amending this section and section 1083 of Title 29) shall apply to waivers for plan years beginning after December 31, 1987. For purposes of applying such amendments, the number of waivers which may be granted for plan years after December 31, 1987, shall be determined without regard to any waivers granted for plan years beginning before January 1, 1988.
‘(4) Subsection (d). - The amendments made by subsection (d) (amending this section and section 1083 of Title 29) shall apply to applications submitted more than 90 days after the date of the enactment of this Act (Dec. 22, 1987).’
Amendment by section 9307(a)(1), (b)(1), (e)(1) of Pub. L. 100-203 applicable to years beginning after Dec. 31, 1987, except that subsec. (b)(2)(B)(iv) and (3)(B)(ii) of this section (as amended by section 9307(a)(1)(A) of Pub. L. 100-203) is applicable to gains and losses established in years beginning after Dec. 31, 1987, see section 9307(f) of Pub. L. 100-203, as amended, set out as a note under section 404 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 11015(a)(2) of Pub. L. 99-272 applicable with respect to applications for waivers, extensions, and modifications filed on or after Apr. 7, 1986, see section 11015(a)(3) of Pub. L. 99-272, set out as an Effective Date note under section 1085a of Title 29, Labor.
Amendment by sections 11015(b)(2) and 11016(c)(4) of Pub. L. 99-272 effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99-272, set out as a note under section 1341 of Title 29.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98-369, set out as a note under section 62 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-364 effective Sept. 26, 1980, see section 210(a) of Pub. L. 96-364, set out as an Effective Date note under section 418 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(63) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
EFFECTIVE DATE
Section applicable, except as otherwise provided in section 1017(c) through (i) of Pub. L. 93-406, for plan years beginning after Sept. 2, 1974, and, in the case of plans in existence on Jan. 1, 1974, for plan years beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93-406, set out as an Effective Date; Transitional Rules note under section 410 of this title.
SPECIAL RULES FOR MULTIPLE EMPLOYER PLANS OF CERTAIN COOPERATIVES
Section 104 of Pub. L. 109-280, as amended by Pub. L. 111-192, Sec. 202(b), provided that:
“(a) General Rule- Except as provided in this section, if a plan in existence on July 26, 2005, was an eligible cooperative plan or an eligible charity plan for its plan year which includes such date, the amendments made by this subtitle and subtitle B shall not apply to plan years beginning before the earlier of--
“(1) the first plan years for which the plan ceases to be an eligible cooperative plan or an eligible charity plan, or
“(2) January 1, 2017.
“(b) Interest Rate- In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B) to an eligible cooperative plan or an eligible charity plan for plan years beginning after December 31, 2007, and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used.
“(c) Eligible Cooperative Plan Defined- For purposes of this section, a plan shall be treated as an eligible cooperative plan for a plan year if the plan is maintained by more than 1 employer and at least 85 percent of the employers are-
“(1) rural cooperatives (as defined in section 401(k)(7)(B) of such Code without regard to clause (iv) thereof), or
“(2) organizations which are-
“(A) cooperative organizations described in section 1381(a) of such Code which are more than 50-percent owned by agricultural producers or by cooperatives owned by agricultural producers, or
“(B) more than 50-percent owned, or controlled by, one or more cooperative organizations described in subparagraph (A).
“A plan shall also be treated as an eligible cooperative plan for any plan year for which it is described in section 210(a) of the Employee Retirement Income Security Act of 1974 and is maintained by a rural telephone cooperative association described in section 3(40)(B)(v) of such Act.
“(d) Eligible Charity Plan Defined- For purposes of this section, a plan shall be treated as an eligible charity plan for a plan year if the plan is maintained by more than one employer (determined without regard to section 414(c) of the Internal Revenue Code) and 100 percent of the employers are described in section 501(c)(3) of such Code.”
TEMPORARY RELIEF FOR CERTAIN PBGC SETTLEMENT PLANS
Section 105 of Pub. L. 109-280 provided that:
“(a) General Rule- Except as provided in this section, if a plan in existence on July 26, 2005, was a PBGC settlement plan as of such date, the amendments made by this subtitle and subtitle B shall not apply to plan years beginning before January 1, 2014.
“(b) Interest Rate- In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B), to a PBGC settlement plan for plan years beginning after December 31, 2007, and before January 1, 2014, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used.
“(c) PBGC Settlement Plan- For purposes of this section, the term “PBGC settlement plan” means a defined benefit plan (other than a multiemployer plan) to which section 302 of such Act and section 412 of such Code apply and-
“(1) which was sponsored by an employer which was in bankruptcy, giving rise to a claim by the Pension Benefit Guaranty Corporation of not greater than $150,000,000, and the sponsorship of which was assumed by another employer that was not a member of the same controlled group as the bankrupt sponsor and the claim of the Pension Benefit Guaranty Corporation was settled or withdrawn in connection with the assumption of the sponsorship, or
“(2) which, by agreement with the Pension Benefit Guaranty Corporation, was spun off from a plan subsequently terminated by such Corporation under section 4042 of the Employee Retirement Income Security Act of 1974.”
SPECIAL RULES FOR PLANS OF CERTAIN GOVERNMENT CONTRACTORS
Section 106 of Pub. L. 109-280 provided that:
“(a) General Rule- Except as provided in this section, if a plan is an eligible government contractor plan, this subtitle and subtitle B shall not apply to plan years beginning before the earliest of-
“(1) the first plan year for which the plan ceases to be an eligible government contractor plan,
“(2) the effective date of the Cost Accounting Standards Pension Harmonization Rule, or
“(3) January 1, 2011.
“(b) Interest Rate- In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B) to an eligible government contractor plan for plan years beginning after December 31, 2007, and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used.
“(c) Eligible Government Contractor Plan Defined- For purposes of this section, a plan shall be treated as an eligible government contractor plan if it is maintained by a corporation or a member of the same affiliated group (as defined by section 1504(a) of the Internal Revenue Code of 1986), whose primary source of revenue is derived from business performed under contracts with the United States that are subject to the Federal Acquisition Regulations (Chapter 1 of Title 48, C.F.R.) and that are also subject to the Defense Federal Acquisition Regulation Supplement (Chapter 2 of Title 48, C.F.R.), and whose revenue derived from such business in the previous fiscal year exceeded $5,000,000,000, and whose pension plan costs that are assignable under those contracts are subject to sections 412 and 413 of the Cost Accounting Standards (48 C.F.R. 9904.412 and 9904.413).
“(d) Cost Accounting Standards Pension Harmonization Rule- The Cost Accounting Standards Board shall review and revise sections 412 and 413 of the Cost Accounting Standards (48 C.F.R. 9904.412 and 9904.413) to harmonize the minimum required contribution under the Employee Retirement Income Security Act of 1974 of eligible government contractor plans and government reimbursable pension plan costs not later than January 1, 2010. Any final rule adopted by the Cost Accounting Standards Board shall be deemed the Cost Accounting Standards Pension Harmonization Rule.”
APPLICATION OF EXTENDED AMORTIZATION PERIODS TO PLANS WITH DELAYED EFFECTIVE DATE
Section 107 of Pub. L. 109-280 as added by Pub. L. 111-192, Sec. 202(a) provided that:
“‘(a) In General- If the plan sponsor of a plan to which section 104, 105, or 106 of this Act applies elects to have this section apply for any eligible plan year (in this section referred to as an ‘election year’), section 302 of the Employee Retirement Income Security Act of 1974 and section 412 of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B) shall apply to such year in the manner described in subsection (b) or (c), whichever is specified in the election. All references in this section to ‘such Act’ or ‘such Code’ shall be to such Act or such Code as in effect before the amendments made by this subtitle and subtitle B.
“‘(b) Application of 2 and 7 Rule- In the case of an election year to which this subsection applies—
“‘(1) 2-YEAR LOOKBACK FOR DETERMINING DEFICIT REDUCTION CONTRIBUTIONS FOR CERTAIN PLANS- For purposes of applying section 302(d)(9) of such Act and section 412(l)(9) of such Code, the funded current liability percentage (as defined in subparagraph (C) thereof) for such plan for such plan year shall be such funded current liability percentage of such plan for the second plan year preceding the first election year of such plan.
“‘(2) CALCULATION OF DEFICIT REDUCTION CONTRIBUTION- For purposes of applying section 302(d) of such Act and section 412(l) of such Code to a plan to which such sections apply (after taking into account paragraph (1))—
“(A) in the case of the increased unfunded new liability of the plan, the applicable percentage described in section 302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code shall be the third segment rate described in sections 104(b), 105(b), and 106(b) of this Act, and
“(B) in the case of the excess of the unfunded new liability over the increased unfunded new liability, such applicable percentage shall be determined without regard to this section.
“(c) Application of 15-year Amortization- In the case of an election year to which this subsection applies, for purposes of applying section 302(d) of such Act and section 412(l) of such Code—
“(1) in the case of the increased unfunded new liability of the plan, the applicable percentage described in section 302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code for any pre-effective date plan year beginning with or after the first election year shall be the ratio of—
“(A) the annual installments payable in each year if the increased unfunded new liability for such plan year were amortized over 15 years, using an interest rate equal to the third segment rate described in sections 104(b), 105(b), and 106(b) of this Act, to
“(B) the increased unfunded new liability for such plan year, and
“(2) in the case of the excess of the unfunded new liability over the increased unfunded new liability, such applicable percentage shall be determined without regard to this section.
“(d) Election-
“‘(1) IN GENERAL- The plan sponsor of a plan may elect to have this section apply to not more than 2 eligible plan years with respect to the plan, except that in the case of a plan to which section 106 of this Act applies, the plan sponsor may only elect to have this section apply to 1 eligible plan year.
“‘(2) AMORTIZATION SCHEDULE- Such election shall specify whether the rules under subsection (b) or (c) shall apply to an election year, except that if a plan sponsor elects to have this section apply to 2 eligible plan years, the plan sponsor must elect the same rule for both years.
“(3) OTHER RULES- Such election shall be made at such time, and in such form and manner, as shall be prescribed by the Secretary of the Treasury, and may be revoked only with the consent of the Secretary of the Treasury.
“(e) Definitions- For purposes of this section—
“(1) ELIGIBLE PLAN YEAR- For purposes of this subparagraph, the term ‘eligible plan year’ means any plan year beginning in 2008, 2009, 2010, or 2011, except that a plan year beginning in 2008 shall only be treated as an eligible plan year if the due date for the payment of the minimum required contribution for such plan year occurs on or after the date of the enactment of this clause.
“(2) PRE-EFFECTIVE DATE PLAN YEAR- The term ‘pre-effective date plan year’ means, with respect to a plan, any plan year prior to the first year in which the amendments made by this subtitle and subtitle B apply to the plan.
“(3) INCREASED UNFUNDED NEW LIABILITY- The term ‘increased unfunded new liability’ means, with respect to a year, the excess (if any) of the unfunded new liability over the amount of unfunded new liability determined as if the value of the plan's assets determined under subsection 302(c)(2) of such Act and section 412(c)(2) of such Code equaled the product of the current liability of the plan for the year multiplied by the funded current liability percentage (as defined in section 302(d)(8)(B) of such Act and 412(l)(8)(B) of such Code) of the plan for the second plan year preceding the first election year of such plan.
“‘(4) OTHER DEFINITIONS- The terms ‘unfunded new liability’ and ‘current liability’ shall have the meanings set forth in section 302(d) of such Act and section 412(l) of such Code.”
SHORTFALL FUNDING METHOD
Section 201(b) of Pub. L. 109-280 provided that:
“(1) IN GENERAL- A multiemployer plan meeting the criteria of paragraph (2) may adopt, use, or cease using, the shortfall funding method and such adoption, use, or cessation of use of such method, shall be deemed approved by the Secretary of the Treasury under section 302(d)(1) of the Employee Retirement Income Security Act of 1974 and section 412(d)(1) of the Internal Revenue Code of 1986.
“(2) CRITERIA- A multiemployer pension plan meets the criteria of this clause if-
“(A) the plan has not used the shortfall funding method during the 5-year period ending on the day before the date the plan is to use the method under paragraph (1); and
“(B) the plan is not operating under an amortization period extension under section 304(d) of such Act and did not operate under such an extension during such 5-year period.
“(3) SHORTFALL FUNDING METHOD DEFINED- For purposes of this subsection, the term ‘shortfall funding method’ means the shortfall funding method described in Treasury Regulations section 1.412(c)(1)-2 (26 CFR 1.412(c)(1)-2).
“(4) BENEFIT RESTRICTIONS TO APPLY- The benefit restrictions under section 302(c)(7) of such Act and section 412(c)(7) of such Code shall apply during any period a multiemployer plan is on the shortfall funding method pursuant to this subsection.
“(5) USE OF SHORTFALL METHOD NOT TO PRECLUDE OTHER OPTIONS- Nothing in this subsection shall be construed to affect a multiemployer plan's ability to adopt the shortfall funding method with the Secretary's permission under otherwise applicable regulations or to affect a multiemployer plan's right to change funding methods, with or without the Secretary's consent, as provided in applicable rules and regulations.”
EXTENSION OF SPECIAL RULE FOR ADDITIONAL FUNDING REQUIREMENTS
Section 402(i) of Pub. L. 109-280, as amended by Pub. L. 110-28, Sec. 6614(a), provided that:
(i) EXTENSION OF SPECIAL RULE FOR ADDITIONAL FUNDING REQUIREMENTS.- In the case of an employer which is a commercial passenger airline, section 302(d)(12) of the Employee Retirement Income Security Act of 1974 and section 412(l)(12) of the Internal Revenue Code of 1986, as in effect before the date of the enactment of this Act, shall each be applied-
(1) by substituting “January 1, 2008” for “December 28, 2005” in subparagraph (D)(i) thereof, and
(2) without regard to subparagraph (D)(ii).
PROVISIONS RELATING TO PLAN AMENDMENTS
Section 101(c) of Pub. L. 108-218, as amended by Pub. L. 109-280, Sec. 301(c), and Pub. L. 110-458, Sec. 103(a), provided that:
“(c) PROVISIONS RELATING TO PLAN AMENDMENTS.--
“(1) IN GENERAL.--If this subsection applies to any plan or annuity contract amendment--
“(A) such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i), and
“(B) except as provided by the Secretary of the Treasury, such plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 by reason of such amendment.
“(2) AMENDMENTS TO WHICH SECTION APPLIES.--
“(A) IN GENERAL.--This subsection shall apply to any amendment to any plan or annuity contract which is made--
“(i) pursuant to any amendment made by this section, and
“(ii) on or before the last day of the first plan year beginning on or after January 1, 2009.
“(B) CONDITIONS.--This subsection shall not apply to any plan or annuity contract amendment unless--
“(i) during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and
“(ii) such plan or contract amendment applies retroactively for such period.”
FUNDING RULES FOR CERTAIN PLANS
Section 1508 of Pub. L. 105-34 amended Sec. 769 of the Retirement Protection Act of 1994 by adding subsec. (c), effective for plan years beginning after December 31, 1996. Pub. L. 108-218, Sec. 201, amended Act Sec. 769 by adding par. (3), effective for plan years beginning after 2003. Pub. L. 109-280, Sec. 115(d), amended subsec. (3) by substituting “, 2005, 2006, and 2007” for “and 2005”, effective for plan years beginning after December 31, 2005. Pub. L. 109-280, Sec. 115(e), struck subsec. (c), effective December 31, 2007 for plan years beginning after such date.
“(c) Transition Rules for Certain Plans--
“(1) In General--In the case of a plan that--
“(A) was not required to pay a variable rate premium for the plan year beginning in 1996;
“(B) has not, in any plan year beginning after 1995 and before 2009, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor); and
“(C) is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service,
“except as provided in paragraph (3), the transition rules described in paragraph (2) shall apply for any plan year beginning after 1996 and before 2010.
“(2) Transition rules.--The transition rules described in this paragraph are as follows:
“(A) For purposes of section 412(l)(9)(A) of the Internal Revenue Code of 1986 and section 302(d)(9)(A) of the Employee Retirement Income Security Act of 1974--
“(i) the funded current liability percentage for any plan year beginning after 1996 and before 2005 shall be treated as not less than 90 percent if for such plan year the funded current liability percentage is at least 85 percent, and
“(ii) the funded current liability percentage for any plan year beginning after 2004 and before 2010 shall be treated as not less than 90 percent if for such plan year the funded current liability percentage satisfies the minimum percentage determined according to the following table:
 

“In the case of a plan year beginning in:    The minimum percentage is:
                    2005                             86 percent
                    2006                             87 percent
                    2007                             88 percent
                    2008                             89 percent
            2009 and thereafter                      90 percent.
“(B) Sections 412(c)(7)(E)(i)(I) of such Code and 302(c)(7)(E)(i)(I) of such Act shall be applied--
“(i) by substituting ‘85 percent’ for ‘90 percent’ for plan years beginning after 1996 and before 2005, and
“(ii) by substituting the minimum percentage specified in the table contained in subparagraph (A)(ii) for ‘90 percent’ for plan years beginning after 2004 and before 2010.
“(C) In the event the funded current liability percentage of a plan is less than 85 percent for any plan year beginning after 1996 and before 2005, the transition rules under subparagraphs (A) and (B) shall continue to apply to the plan if contributions for such a plan year are made to the plan in an amount equal to the lesser of--
“(i) the amount necessary to result in a funded current liability percentage of 85 percent, or
“(ii) the greater of--
“(I) 2 percent of the plan's current liability as of the beginning of such plan year, or
“(II) the amount necessary to result in a funded current liability percentage of 80 percent as of the end of such plan year.
“For the plan year beginning in 2005 and for each of the 3 succeeding plan years, the transition rules under subparagraphs (A) and (B) shall continue to apply to the plan for such plan year only if contributions to the plan for such plan year equal at least the expected increase in current liability due to benefits accruing during such plan year.”
“(c) SPECIAL RULES.--In the case of plan years beginning in 2004 and 2005, the following transition rules shall apply in lieu of the transition rules described in paragraph (2):
“(A) For purposes of section 412(l)(9)(A) of the Internal Revenue Code of 1986 and section 302(d)(9)(A) of the Employee Retirement Income Security Act of 1974, the funded current liability percentage for any plan year shall be treated as not less than 90 percent.
“(B) For purposes of section 412(m) of the Internal Revenue Code of 1986 and section 302(e) of the Employee Retirement Income Security Act of 1974, the funded current liability percentage for any plan year shall be treated as not less than 100 percent.
“(C) For purposes of determining unfunded vested benefits under section 4006(a)(3)(E)(iii) of the Employee Retirement Income Security Act of 1974, the mortality table shall be the mortality table used by the plan.”
SPECIAL FUNDING RULES FOR CERTAIN PLANS
Section 769 of the Retirement Protection Act of 1994 provided that:
“(a) FUNDING RULES NOT TO APPLY TO CERTAIN PLANS.--Any changes made by this Act to section 412 of the Internal Revenue Code of 1986 or to part 3 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 shall not apply to-;
“(1) a plan which is, on the date of enactment of this Act, subject to a restoration payment schedule order issued by the Pension Benefit Guaranty Corporation that meets the requirements of section 1.412(c)(1)-3 of the Treasury Regulations, or
“(2) a plan established by an affected air carrier (as defined under section 4001(a)(14)(C)(ii)(I) of such Act) and assumed by a new plan sponsor pursuant to the terms of a written agreement with the Pension Benefit Guaranty Corporation dated January 5, 1993, and approved by the United States Bankruptcy Court for the District of Delaware on December 30, 1992.
“(b) CHANGE IN ACTUARIAL METHOD.--Any amortization installments for bases established under section 412(b) of the Internal Revenue Code of 1986 and section 302 (b) of the Employee Retirement Income Security Act of 1974 for plan years beginning after December 31, 1987, and before January 1, 1993, by reason of nonelective changes under the frozen entry age actuarial cost method shall not be included in the calculation of offsets under section 412(l)(1)(A)(ii) of such Code and section 302(d)(1)(A) (ii) of such Act for the 1st 5 plan years beginning after December 31, 1994.”
REVISION OF VALUATION REGULATIONS
Section 9303(c) of Pub. L. 100-203 provided that: ‘Effective with respect to plan years beginning after December 31, 1987, the provisions of the regulations prescribed under section 412(c)(2) of the 1986 Code which permit asset valuations to be based on a range between 85 percent and 115 percent of average value shall have no force and effect with respect to plans other than multiemployer plans (as defined in section 414(f) of the 1986 Code). The Secretary of the Treasury or his delegate shall amend such regulations to carry out the purposes of the preceding sentence.’
ALTERNATIVE AMORTIZATION METHOD FOR CERTAIN MULTIEMPLOYER PLANS
Section 1013(d) of Pub. L. 93-406, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) General rule. - In the case of any multiemployer plan (as defined in section 414(f) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)) to which section 412 of such Code applies, if -
‘(A) on January 1, 1974, the contributions under the plan were based on a percentage of pay,
‘(B) the actuarial assumptions with respect to pay are reasonably related to past and projected experience, and
‘(C) the rates of interest under the plan are determined on the basis of reasonable actuarial assumptions, the plan may elect (in such manner and at such time as may be provided under regulations prescribed by the Secretary of the Treasury or his delegate) to fund the unfunded past service liability under the plan existing as of the date 12 months following the first date on which such section 412 first applies to the plan by charging the funding standard account with an equal annual percentage of the aggregate pay of all participants in the plan in lieu of the level dollar charges to such account required under clauses (i), (ii), and (iii) of section 412(b)(2)(B) of such Code and section 302(b)(2)(B)(i), (ii), and (iii) of this Act (section 1082(b)(2)(B)(i), (ii), and (iii) of Title 29, Labor).
‘(2) Limitation. - In the case of a plan which makes an election under paragraph (1), the aggregate of the charges required under such paragraph for a plan year shall not be less than the interest on the unfunded past service liabilities described in clauses (i), (ii), and (iii) of section 412(b)(2)(B) of the Internal Revenue Code of 1986.’