29 U.S.C. § 1083 — Minimum funding standards for single-

Page 453 TITLE 29—LABOR § 1083 ment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–280, title II, § 202(f), Aug. 17, 2006, 120 Stat. 885, provided that: ‘‘(1) IN GENERAL.—The amendments made by this sec- tion [enacting section 1085 of this title and amending this section and section 1132 of this title] shall apply with respect to plan years beginning after 2007. ‘‘(2) SPECIAL RULE FOR CERTAIN NOTICES.—In any case in which a plan’s actuary certifies that it is reasonably expected that a multiemployer plan will be in critical status under section 305(b)(3) of the Employee Retire- ment Income Security Act of 1974 [29 U.S.C. 1085(b)(3)], as added by this section, with respect to the first plan year beginning after 2007, the notice required under subparagraph (D) of such section may be provided at any time after the date of enactment [Aug. 17, 2006], so long as it is provided on or before the last date for pro- viding the notice under such subparagraph. ‘‘(3) SPECIAL RULE FOR CERTAIN RESTORED BENEFITS.— In the case of a multiemployer plan— ‘‘(A) with respect to which benefits were reduced pursuant to a plan amendment adopted on or after January 1, 2002, and before June 30, 2005, and ‘‘(B) which, pursuant to the plan document, the trust agreement, or a formal written communication from the plan sponsor to participants provided before June 30, 2005, provided for the restoration of such ben- efits, the amendments made by this section shall not apply to such benefit restorations to the extent that any re- striction on the providing or accrual of such benefits would otherwise apply by reason of such amendments.’’ EFFECTIVE DATE Pub. L. 109–280, title I, § 101(d), Aug. 17, 2006, 120 Stat. 789, provided that: ‘‘The amendments made by this sec- tion [enacting this section and repealing former section 1082 of this title and sections 1083 to 1085, 1085a, 1085b, and 1086 of this title] shall apply to plan years begin- ning after 2007.’’ REGULATIONS Secretary authorized, effective Sept. 2, 1974, to pro- mulgate regulations wherever provisions of this sub- chapter call for the promulgation of regulations, see section 1031 of this title. APPLICABILITY OF AMENDMENTS BY SUBTITLES A AND B OF TITLE I OF PUB. L. 109–280 For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code. SPECIAL RULE FOR CERTAIN BENEFITS FUNDED UNDER AN AGREEMENT APPROVED BY THE PENSION BENEFIT GUARANTY CORPORATION For applicability of amendment by section 202(d) of Pub. L. 109–280 to a multiemployer plan that is a party to an agreement that was approved by the Pension Ben- efit Guaranty Corporation prior to June 30, 2005, and that increases benefits and provides for certain with- drawal liability rules, see section 206 of Pub. L. 109–280, set out as a note under section 412 of Title 26, Internal Revenue Code. § 1083. Minimum funding standards for single- employer defined benefit pension plans (a) Minimum required contribution For purposes of this section and section 1082(a)(2)(A) of this title, except as provided in subsection (f), the term ‘‘minimum required con- tribution’’ means, with respect to any plan year of a single-employer plan— (1) in any case in which the value of plan as- sets of the plan (as reduced under subsection (f)(4)(B)) is less than the funding target of the plan for the plan year, the sum of— (A) the target normal cost of the plan for the plan year, (B) the shortfall amortization charge (if any) for the plan for the plan year deter- mined under subsection (c), and (C) the waiver amortization charge (if any) for the plan for the plan year as determined under subsection (e); or (2) in any case in which the value of plan as- sets of the plan (as reduced under subsection (f)(4)(B)) equals or exceeds the funding target of the plan for the plan year, the target nor- mal cost of the plan for the plan year reduced (but not below zero) by such excess. (b) Target normal cost For purposes of this section: (1) In general Except as provided in subsection (i)(2) with respect to plans in at-risk status, the term ‘‘target normal cost’’ means, for any plan year, the excess of— (A) the sum of— (i) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, plus (ii) the amount of plan-related expenses expected to be paid from plan assets dur- ing the plan year, over (B) the amount of mandatory employee contributions expected to be made during the plan year. (2) Special rule for increase in compensation For purposes of this subsection, if any ben- efit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the cur- rent plan year, the increase in such benefit shall be treated as having accrued during the current plan year. (c) Shortfall amortization charge (1) In general For purposes of this section, the shortfall amortization charge for a plan for any plan year is the aggregate total (not less than zero) of the shortfall amortization installments for such plan year with respect to any shortfall amortization base which has not been fully amortized under this subsection. (2) Shortfall amortization installment For purposes of paragraph (1)— (A) Determination The shortfall amortization installments are the amounts necessary to amortize the shortfall amortization base of the plan for any plan year in level annual installments over the 7-plan-year period beginning with such plan year. (B) Shortfall installment The shortfall amortization installment for any plan year in the 7-plan-year period Page 454 TITLE 29—LABOR § 1083 under subparagraph (A) with respect to any shortfall amortization base is the annual in- stallment determined under subparagraph (A) for that year for that base. (C) Segment rates In determining any shortfall amortization installment under this paragraph, the plan sponsor shall use the segment rates deter- mined under subparagraph (C) of subsection (h)(2), applied under rules similar to the rules of subparagraph (B) of subsection (h)(2). (D) Special election for eligible plan years (i) In general If a plan sponsor elects to apply this sub- paragraph with respect to the shortfall amortization base of a plan for any eligible plan year (in this subparagraph and para- graph (7) referred to as an ‘‘election year’’), then, notwithstanding subpara- graphs (A) and (B)— (I) the shortfall amortization install- ments with respect to such base shall be determined under clause (ii) or (iii), whichever is specified in the election, and (II) the shortfall amortization install- ment for any plan year in the 9-plan-year period described in clause (ii) or the 15- plan-year period described in clause (iii), respectively, with respect to such short- fall amortization base is the annual in- stallment determined under the applica- ble clause for that year for that base. (ii) 2 plus 7 amortization schedule The shortfall amortization installments determined under this clause are— (I) in the case of the first 2 plan years in the 9-plan-year period beginning with the election year, interest on the short- fall amortization base of the plan for the election year (determined using the ef- fective interest rate for the plan for the election year), and (II) in the case of the last 7 plan years in such 9-plan-year period, the amounts necessary to amortize the remaining bal- ance of the shortfall amortization base of the plan for the election year in level annual installments over such last 7 plan years (using the segment rates under subparagraph (C) for the election year). (iii) 15-year amortization The shortfall amortization installments determined under this subparagraph are the amounts necessary to amortize the shortfall amortization base of the plan for the election year in level annual install- ments over the 15-plan-year period begin- ning with the election year (using the seg- ment rates under subparagraph (C) for the election year). (iv) Election (I) In general The plan sponsor of a plan may elect to have this subparagraph apply to not more than 2 eligible plan years with re- spect to the plan, except that in the case of a plan described in section 106 of the Pension Protection Act of 2006, the plan sponsor may only elect to have this sub- paragraph apply to a plan year beginning in 2011. (II) Amortization schedule Such election shall specify whether the amortization schedule under clause (ii) or (iii) shall apply to an election year, except that if a plan sponsor elects to have this subparagraph apply to 2 eligi- ble plan years, the plan sponsor must elect the same schedule for both years. (III) 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. The Secretary of the Treasury shall, before granting a revocation re- quest, provide the Pension Benefit Guar- anty Corporation an opportunity to com- ment on the conditions applicable to the treatment of any portion of the election year shortfall amortization base that re- mains unamortized as of the revocation date. (v) 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 shall only be treat- ed as an eligible plan year if the due date under subsection (j)(1) for the payment of the minimum required contribution for such plan year occurs on or after June 25, 2010. (vi) Reporting A plan sponsor of a plan who makes an election under clause (i) shall— (I) give notice of the election to par- ticipants and beneficiaries of the plan, and (II) inform the Pension Benefit Guar- anty Corporation of such election in such form and manner as the Director of the Pension Benefit Guaranty Corpora- tion may prescribe. (vii) Increases in required installments in certain cases For increases in required contributions in cases of excess compensation or extraor- dinary dividends or stock redemptions, see paragraph (7). (3) Shortfall amortization base For purposes of this section, the shortfall amortization base of a plan for a plan year is— (A) the funding shortfall of such plan for such plan year, minus (B) the present value (determined using the segment rates determined under sub- paragraph (C) of subsection (h)(2), applied under rules similar to the rules of subpara- graph (B) of subsection (h)(2)) of the aggre- gate total of the shortfall amortization in- Page 455 TITLE 29—LABOR § 1083 1 So in original. Probably should be followed by ‘‘to’’. stallments and waiver amortization install- ments which have been determined for such plan year and any succeeding plan year with respect to the shortfall amortization bases and waiver amortization bases of the plan for any plan year preceding such plan year. (4) Funding shortfall For purposes of this section, the funding shortfall of a plan for any plan year is the ex- cess (if any) of— (A) the funding target of the plan for the plan year, over (B) the value of plan assets of the plan (as reduced under subsection (f)(4)(B)) for the plan year which are held by the plan on the valuation date. (5) Exemption from new shortfall amortization base In any case in which the value of plan as- sets of the plan (as reduced under subsection (f)(4)(A)) is equal to or greater than the funding target of the plan for the plan year, the shortfall amortization base of the plan for such plan year shall be zero. (6) Early deemed amortization upon attain- ment of funding target In any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the shortfall amortization charge for such plan year and succeeding plan years, the shortfall amortization bases for all pre- ceding plan years (and all shortfall amortiza- tion installments determined with respect to such bases) shall be reduced to zero. (7) Increases in alternate required installments in cases of excess compensation or extraor- dinary dividends or stock redemptions (A) In general If there is an installment acceleration amount with respect to a plan for any plan year in the restriction period with respect to an election year under paragraph (2)(D), then the shortfall amortization installment otherwise determined and payable under such paragraph for such plan year shall, sub- ject to the limitation under subparagraph (B), be increased by such amount. (B) Total installments limited to shortfall base Subject to rules prescribed by the Sec- retary of the Treasury, if a shortfall amorti- zation installment with respect to any shortfall amortization base for an election year is required to be increased for any plan year under subparagraph (A)— (i) such increase shall not result in the amount of such installment exceeding the present value of such installment and all succeeding installments with respect to such base (determined without regard to such increase but after application of clause (ii)), and (ii) subsequent shortfall amortization in- stallments with respect to such base shall, in reverse order of the otherwise required installments, be reduced to the extent nec- essary to limit the present value of such subsequent shortfall amortization install- ments (after application of this paragraph) to the present value of the remaining unamortized shortfall amortization base. (C) Installment acceleration amount For purposes of this paragraph— (i) In general The term ‘‘installment acceleration amount’’ means, with respect to any plan year in a restriction period with respect to an election year, the sum of— (I) the aggregate amount of excess em- ployee compensation determined under subparagraph (D) with respect to all em- ployees for the plan year, plus (II) the aggregate amount of extraor- dinary dividends and redemptions deter- mined under subparagraph (E) for the plan year. (ii) Annual limitation The installment acceleration amount for any plan year shall not exceed the excess (if any) of— (I) the sum of the shortfall amortiza- tion installments for the plan year and all preceding plan years in the amortiza- tion period elected under paragraph (2)(D) with respect to the shortfall amor- tization base with respect to an election year, determined without regard to para- graph (2)(D) and this paragraph, over (II) the sum of the shortfall amortiza- tion installments for such plan year and all such preceding plan years, deter- mined after application of paragraph (2)(D) (and in the case of any preceding plan year, after application of this para- graph). (iii) Carryover of excess installment accel- eration amounts (I) In general If the installment acceleration amount for any plan year (determined without regard to clause (ii)) exceeds the limita- tion under clause (ii), then, subject to subclause (II), such excess shall be treat- ed as an installment acceleration amount with respect to the succeeding plan year. (II) Cap to apply If any amount treated as an install- ment acceleration amount under sub- clause (I) or this subclause with respect 1 any succeeding plan year, when added to other installment acceleration amounts (determined without regard to clause (ii)) with respect to the plan year, ex- ceeds the limitation under clause (ii), the portion of such amount representing such excess shall be treated as an install- ment acceleration amount with respect to the next succeeding plan year. (III) Limitation on years to which amounts carried for No amount shall be carried under sub- clause (I) or (II) to a plan year which be- Page 456 TITLE 29—LABOR § 1083 gins after the first plan year following the last plan year in the restriction pe- riod (or after the second plan year fol- lowing such last plan year in the case of an election year with respect to which 15-year amortization was elected under paragraph (2)(D)). (IV) Ordering rules For purposes of applying subclause (II), installment acceleration amounts for the plan year (determined without re- gard to any carryover under this clause) shall be applied first against the limita- tion under clause (ii) and then carryovers to such plan year shall be ap- plied against such limitation on a first- in, first-out basis. (D) Excess employee compensation For purposes of this paragraph— (i) In general The term ‘‘excess employee compensa- tion’’ means, with respect to any employee for any plan year, the excess (if any) of— (I) the aggregate amount includible in income under chapter 1 of title 26 for re- muneration during the calendar year in which such plan year begins for services performed by the employee for the plan sponsor (whether or not performed dur- ing such calendar year), over (II) $1,000,000. (ii) Amounts set aside for nonqualified de- ferred compensation If during any calendar year assets are set aside or reserved (directly or indirectly) in a trust (or other arrangement as deter- mined by the Secretary of the Treasury), or transferred to such a trust or other ar- rangement, by a plan sponsor for purposes of paying deferred compensation of an em- ployee under a nonqualified deferred com- pensation plan (as defined in section 409A of such title) of the plan sponsor, then, for purposes of clause (i), the amount of such assets shall be treated as remuneration of the employee includible in income for the calendar year unless such amount is other- wise includible in income for such year. An amount to which the preceding sentence applies shall not be taken into account under this paragraph for any subsequent calendar year. (iii) Only remuneration for certain post- 2009 services counted Remuneration shall be taken into ac- count under clause (i) only to the extent attributable to services performed by the employee for the plan sponsor after Feb- ruary 28, 2010. (iv) Exception for certain equity payments (I) In general There shall not be taken into account under clause (i)(I) any amount includible in income with respect to the granting after February 28, 2010, of service recipi- ent stock (within the meaning of section 409A of title 26) that, upon such grant, is subject to a substantial risk of forfeiture (as defined under section 83(c)(1) of such title) for at least 5 years from the date of such grant. (II) Secretarial authority The Secretary of the Treasury may by regulation provide for the application of this clause in the case of a person other than a corporation. (v) Other exceptions The following amounts includible in in- come shall not be taken into account under clause (i)(I): (I) Commissions Any remuneration payable on a com- mission basis solely on account of in- come directly generated by the indi- vidual performance of the individual to whom such remuneration is payable. (II) Certain payments under existing con- tracts Any remuneration consisting of non- qualified deferred compensation, re- stricted stock, stock options, or stock appreciation rights payable or granted under a written binding contract that was in effect on March 1, 2010, and which was not modified in any material respect before such remuneration is paid. (vi) Self-employed individual treated as employee The term ‘‘employee’’ includes, with re- spect to a calendar year, a self-employed individual who is treated as an employee under section 401(c) of such title for the taxable year ending during such calendar year, and the term ‘‘compensation’’ shall include earned income of such individual with respect to such self-employment. (vii) Indexing of amount In the case of any calendar year begin- ning after 2010, the dollar amount under clause (i)(II) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment de- termined under section 1(f)(3) of such title for the calendar year, determined by substituting ‘‘calendar year 2009’’ for ‘‘calendar year 1992’’ in subparagraph (B) thereof. If the amount of any increase under clause (i) is not a multiple of $1,000, such increase shall be rounded to the next lowest mul- tiple of $1,000. (E) Extraordinary dividends and redemp- tions (i) In general The amount determined under this sub- paragraph for any plan year is the excess (if any) of the sum of the dividends de- clared during the plan year by the plan sponsor plus the aggregate amount paid for the redemption of stock of the plan sponsor redeemed during the plan year over the greater of— Page 457 TITLE 29—LABOR § 1083 (I) the adjusted net income (within the meaning of section 1343 of this title) of the plan sponsor for the preceding plan year, determined without regard to any reduction by reason of interest, taxes, depreciation, or amortization, or (II) in the case of a plan sponsor that determined and declared dividends in the same manner for at least 5 consecutive years immediately preceding such plan year, the aggregate amount of dividends determined and declared for such plan year using such manner. (ii) Only certain post-2009 dividends and redemptions counted For purposes of clause (i), there shall only be taken into account dividends de- clared, and redemptions occurring, after February 28, 2010. (iii) Exception for intra-group dividends Dividends paid by one member of a con- trolled group (as defined in section 1082(d)(3) of this title) to another member of such group shall not be taken into ac- count under clause (i). (iv) Exception for certain redemptions Redemptions that are made pursuant to a plan maintained with respect to employ- ees, or that are made on account of the death, disability, or termination of em- ployment of an employee or shareholder, shall not be taken into account under clause (i). (v) Exception for certain preferred stock (I) In general Dividends and redemptions with re- spect to applicable preferred stock shall not be taken into account under clause (i) to the extent that dividends accrue with respect to such stock at a specified rate in all events and without regard to the plan sponsor’s income, and interest accrues on any unpaid dividends with re- spect to such stock. (II) Applicable preferred stock For purposes of subclause (I), the term ‘‘applicable preferred stock’’ means pre- ferred stock which was issued before March 1, 2010 (or which was issued after such date and is held by an employee benefit plan subject to the provisions of this subchapter). (F) Other definitions and rules For purposes of this paragraph— (i) Plan sponsor The term ‘‘plan sponsor’’ includes any member of the plan sponsor’s controlled group (as defined in section 1082(d)(3) of this title). (ii) Restriction period The term ‘‘restriction period’’ means, with respect to any election year— (I) except as provided in subclause (II), the 3-year period beginning with the election year (or, if later, the first plan year beginning after December 31, 2009), and (II) if the plan sponsor elects 15-year amortization for the shortfall amortiza- tion base for the election year, the 5- year period beginning with the election year (or, if later, the first plan year be- ginning after December 31, 2009). (iii) Elections for multiple plans If a plan sponsor makes elections under paragraph (2)(D) with respect to 2 or more plans, the Secretary of the Treasury shall provide rules for the application of this paragraph to such plans, including rules for the ratable allocation of any install- ment acceleration amount among such plans on the basis of each plan’s relative reduction in the plan’s shortfall amortiza- tion installment for the first plan year in the amortization period described in sub- paragraph (A) (determined without regard to this paragraph). (iv) Mergers and acquisitions The Secretary of the Treasury shall pre- scribe rules for the application of para- graph (2)(D) and this paragraph in any case where there is a merger or acquisition in- volving a plan sponsor making the election under paragraph (2)(D). (8) 15-year amortization With respect to plan years beginning after December 31, 2021 (or, at the election of the plan sponsor, plan years beginning after De- cember 31, 2018, December 31, 2019, or Decem- ber 31, 2020)— (A) the shortfall amortization bases for all plan years preceding the first plan year be- ginning after December 31, 2021 (or after whichever earlier date is elected pursuant to this paragraph), and all shortfall amortiza- tion installments determined with respect to such bases, shall be reduced to zero, and (B) subparagraphs (A) and (B) of paragraph (2) shall each be applied by substituting ‘‘15- plan-year period’’ for ‘‘7-plan-year period’’. (d) Rules relating to funding target For purposes of this section— (1) Funding target Except as provided in subsection (i)(1) with respect to plans in at-risk status, the funding target of a plan for a plan year is the present value of all benefits accrued or earned under the plan as of the beginning of the plan year. (2) Funding target attainment percentage The ‘‘funding target attainment percentage’’ of a plan for a plan year is the ratio (expressed as a percentage) which— (A) the value of plan assets for the plan year (as reduced under subsection (f)(4)(B)), bears to (B) the funding target of the plan for the plan year (determined without regard to subsection (i)(1)). (e) Waiver amortization charge (1) Determination of waiver amortization charge The waiver amortization charge (if any) for a plan for any plan year is the aggregate total Page 458 TITLE 29—LABOR § 1083 of the waiver amortization installments for such plan year with respect to the waiver am- ortization bases for each of the 5 preceding plan years. (2) Waiver amortization installment For purposes of paragraph (1)— (A) Determination The waiver amortization installments are the amounts necessary to amortize the waiv- er amortization base of the plan for any plan year in level annual installments over a pe- riod of 5 plan years beginning with the suc- ceeding plan year. (B) Waiver installment The waiver amortization installment for any plan year in the 5-year period under sub- paragraph (A) with respect to any waiver amortization base is the annual installment determined under subparagraph (A) for that year for that base. (3) Interest rate In determining any waiver amortization in- stallment under this subsection, the plan sponsor shall use the segment rates deter- mined under subparagraph (C) of subsection (h)(2), applied under rules similar to the rules of subparagraph (B) of subsection (h)(2). (4) Waiver amortization base The waiver amortization base of a plan for a plan year is the amount of the waived funding deficiency (if any) for such plan year under section 1082(c) of this title. (5) Early deemed amortization upon attain- ment of funding target In any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the waiver amortization charge for such plan year and succeeding plan years, the waiver amortization bases for all pre- ceding plan years (and all waiver amortization installments determined with respect to such bases) shall be reduced to zero. (f) Reduction of minimum required contribution by prefunding balance and funding standard carryover balance (1) Election to maintain balances (A) Prefunding balance The plan sponsor of a single-employer plan may elect to maintain a prefunding balance. (B) Funding standard carryover balance (i) In general In the case of a single-employer plan de- scribed in clause (ii), the plan sponsor may elect to maintain a funding standard car- ryover balance, until such balance is re- duced to zero. (ii) Plans maintaining funding standard ac- count in 2007 A plan is described in this clause if the plan— (I) was in effect for a plan year begin- ning in 2007, and (II) had a positive balance in the fund- ing standard account under section 1082(b) of this title as in effect for such plan year and determined as of the end of such plan year. (2) Application of balances A prefunding balance and a funding standard carryover balance maintained pursuant to this paragraph— (A) shall be available for crediting against the minimum required contribution, pursu- ant to an election under paragraph (3), (B) shall be applied as a reduction in the amount treated as the value of plan assets for purposes of this section, to the extent provided in paragraph (4), and (C) may be reduced at any time, pursuant to an election under paragraph (5). (3) Election to apply balances against min- imum required contribution (A) In general Except as provided in subparagraphs (B) and (C), in the case of any plan year in which the plan sponsor elects to credit against the minimum required contribution for the cur- rent plan year all or a portion of the prefunding balance or the funding standard carryover balance for the current plan year (not in excess of such minimum required contribution), the minimum required con- tribution for the plan year shall be reduced as of the first day of the plan year by the amount so credited by the plan sponsor. For purposes of the preceding sentence, the min- imum required contribution shall be deter- mined after taking into account any waiver under section 1082(c) of this title. (B) Coordination with funding standard car- ryover balance To the extent that any plan has a funding standard carryover balance greater than zero, no amount of the prefunding balance of such plan may be credited under this para- graph in reducing the minimum required contribution. (C) Limitation for underfunded plans The preceding provisions of this paragraph shall not apply for any plan year if the ratio (expressed as a percentage) which— (i) the value of plan assets for the pre- ceding plan year (as reduced under para- graph (4)(C)), bears to (ii) the funding target of the plan for the preceding plan year (determined without regard to subsection (i)(1)), is less than 80 percent. In the case of plan years beginning in 2008, the ratio under this subparagraph may be determined using such methods of estimation as the Secretary of the Treasury may prescribe. (D) Special rule for certain years of plans maintained by charities (i) In general For purposes of applying subparagraph (C) for plan years beginning after August 31, 2009, and before September 1, 2011, the ratio determined under such subparagraph for the preceding plan year shall be the greater of— Page 459 TITLE 29—LABOR § 1083 2 So in original. Probably should be ‘‘paragraph (3).’’ (I) such ratio, as determined without regard to this subparagraph, or (II) the ratio for such plan for the plan year beginning after August 31, 2007, and before September 1, 2008, as determined under rules prescribed by the Secretary of the Treasury. (ii) Special rule In the case of a plan for which the valu- ation date is not the first day of the plan year— (I) clause (i) shall apply to plan years beginning after December 31, 2008, and before January 1, 2011, and (II) clause (i)(II) shall apply based on the last plan year beginning before Sep- tember 1, 2007, as determined under rules prescribed by the Secretary of the Treas- ury. (iii) Limitation to charities This subparagraph shall not apply to any plan unless such plan is maintained exclu- sively by one or more organizations de- scribed in section 501(c)(3) of title 26. (4) Effect of balances on amounts treated as value of plan assets In the case of any plan maintaining a prefunding balance or a funding standard car- ryover balance pursuant to this subsection, the amount treated as the value of plan assets shall be deemed to be such amount, reduced as provided in the following subparagraphs: (A) Applicability of shortfall amortization base For purposes of subsection (c)(5), the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance, but only if an election under para- graph (3) applying any portion of the prefunding balance in reducing the min- imum required contribution is in effect for the plan year. (B) Determination of excess assets, funding shortfall, and funding target attainment percentage (i) In general For purposes of subsections (a), (c)(4)(B), and (d)(2)(A), the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance and the funding standard carryover balance. (ii) Special rule for certain binding agree- ments with PBGC For purposes of subsection (c)(4)(B), the value of plan assets shall not be deemed to be reduced for a plan year by the amount of the specified balance if, with respect to such balance, there is in effect for a plan year a binding written agreement with the Pension Benefit Guaranty Corporation which provides that such balance is not available to reduce the minimum required contribution for the plan year. For pur- poses of the preceding sentence, the term ‘‘specified balance’’ means the prefunding balance or the funding standard carryover balance, as the case may be. (C) Availability of balances in plan year for crediting against minimum required con- tribution For purposes of paragraph (3)(C)(i) of this subsection, the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance. (5) Election to reduce balance prior to deter- minations of value of plan assets and cred- iting against minimum required contribu- tion (A) In general The plan sponsor may elect to reduce by any amount the balance of the prefunding balance and the funding standard carryover balance for any plan year (but not below zero). Such reduction shall be effective prior to any determination of the value of plan as- sets for such plan year under this section and application of the balance in reducing the minimum required contribution for such plan for such plan year pursuant to an elec- tion under paragraph (2).2 (B) Coordination between prefunding bal- ance and funding standard carryover balance To the extent that any plan has a funding standard carryover balance greater than zero, no election may be made under sub- paragraph (A) with respect to the prefunding balance. (6) Prefunding balance (A) In general A prefunding balance maintained by a plan shall consist of a beginning balance of zero, increased and decreased to the extent pro- vided in subparagraphs (B) and (C), and ad- justed further as provided in paragraph (8). (B) Increases (i) In general As of the first day of each plan year be- ginning after 2008, the prefunding balance of a plan shall be increased by the amount elected by the plan sponsor for the plan year. Such amount shall not exceed the ex- cess (if any) of— (I) the aggregate total of employer contributions to the plan for the pre- ceding plan year, over— (II) the minimum required contribu- tion for such preceding plan year. (ii) Adjustments for interest Any excess contributions under clause (i) shall be properly adjusted for interest ac- cruing for the periods between the first day of the current plan year and the dates on which the excess contributions were made, determined by using the effective interest rate for the preceding plan year and by treating contributions as being first used to satisfy the minimum required contribution. (iii) Certain contributions necessary to avoid benefit limitations disregarded The excess described in clause (i) with respect to any preceding plan year shall be Page 460 TITLE 29—LABOR § 1083 reduced (but not below zero) by the amount of contributions an employer would be required to make under para- graph (1), (2), or (4) of section 1056(g) of this title to avoid a benefit limitation which would otherwise be imposed under such paragraph for the preceding plan year. Any contribution which may be taken into account in satisfying the re- quirements of more than 1 of such para- graphs shall be taken into account only once for purposes of this clause. (C) Decrease The prefunding balance of a plan shall be decreased (but not below zero) by— (i) as of the first day of each plan year after 2008, the amount of such balance credited under paragraph (2) (if any) in re- ducing the minimum required contribution of the plan for the preceding plan year, and (ii) as of the time specified in paragraph (5)(A), any reduction in such balance elect- ed under paragraph (5). (7) Funding standard carryover balance (A) In general A funding standard carryover balance maintained by a plan shall consist of a be- ginning balance determined under subpara- graph (B), decreased to the extent provided in subparagraph (C), and adjusted further as provided in paragraph (8). (B) Beginning balance The beginning balance of the funding standard carryover balance shall be the posi- tive balance described in paragraph (1)(B)(ii)(II). (C) Decreases The funding standard carryover balance of a plan shall be decreased (but not below zero) by— (i) as of the first day of each plan year after 2008, the amount of such balance credited under paragraph (2) (if any) in re- ducing the minimum required contribution of the plan for the preceding plan year, and (ii) as of the time specified in paragraph (5)(A), any reduction in such balance elect- ed under paragraph (5). (8) Adjustments for investment experience In determining the prefunding balance or the funding standard carryover balance of a plan as of the first day of the plan year, the plan sponsor shall, in accordance with regula- tions prescribed by the Secretary of the Treas- ury, adjust such balance to reflect the rate of return on plan assets for the preceding plan year. Notwithstanding subsection (g)(3), such rate of return shall be determined on the basis of fair market value and shall properly take into account, in accordance with such regula- tions, all contributions, distributions, and other plan payments made during such period. (9) Elections Elections under this subsection shall be made at such times, and in such form and manner, as shall be prescribed in regulations of the Secretary of the Treasury. (g) Valuation of plan assets and liabilities (1) Timing of determinations Except as otherwise provided under this sub- section, all determinations under this section for a plan year shall be made as of the valu- ation date of the plan for such plan year. (2) Valuation date For purposes of this section— (A) In general Except as provided in subparagraph (B), the valuation date of a plan for any plan year shall be the first day of the plan year. (B) Exception for small plans If, on each day during the preceding plan year, a plan had 100 or fewer participants, the plan may designate any day during the plan year as its valuation date for such plan year and succeeding plan years. For purposes of this subparagraph, all defined benefit plans which are single-employer plans and are maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only participants with respect to such employer or member shall be taken into account. (C) Application of certain rules in determina- tion of plan size For purposes of this paragraph— (i) Plans not in existence in preceding year In the case of the first plan year of any plan, subparagraph (B) shall apply to such plan by taking into account the number of participants that the plan is reasonably expected to have on days during such first plan year. (ii) Predecessors Any reference in subparagraph (B) to an employer shall include a reference to any predecessor of such employer. (3) Determination of value of plan assets For purposes of this section— (A) In general Except as provided in subparagraph (B), the value of plan assets shall be the fair market value of the assets. (B) Averaging allowed A plan may determine the value of plan as- sets on the basis of the averaging of fair market values, but only if such method— (i) is permitted under regulations pre- scribed by the Secretary of the Treasury, (ii) does not provide for averaging of such values over more than the period be- ginning on the last day of the 25th month preceding the month in which the valu- ation date occurs and ending on the valu- ation date (or a similar period in the case of a valuation date which is not the 1st day of a month), and (iii) does not result in a determination of the value of plan assets which, at any time, is lower than 90 percent or greater than 110 percent of the fair market value of such assets at such time. Page 461 TITLE 29—LABOR § 1083 Any such averaging shall be adjusted for contributions, distributions, and expected earnings (as determined by the plan’s actu- ary on the basis of an assumed earnings rate specified by the actuary but not in excess of the third segment rate applicable under sub- section (h)(2)(C)(iii)), as specified by the Sec- retary of the Treasury. (4) Accounting for contribution receipts For purposes of determining the value of as- sets under paragraph (3)— (A) Prior year contributions If— (i) an employer makes any contribution to the plan after the valuation date for the plan year in which the contribution is made, and (ii) the contribution is for a preceding plan year, the contribution shall be taken into account as an asset of the plan as of the valuation date, except that in the case of any plan year beginning after 2008, only the present value (determined as of the valuation date) of such contribution may be taken into ac- count. For purposes of the preceding sen- tence, present value shall be determined using the effective interest rate for the pre- ceding plan year to which the contribution is properly allocable. (B) Special rule for current year contribu- tions made before valuation date If any contributions for any plan year are made to or under the plan during the plan year but before the valuation date for the plan year, the assets of the plan as of the valuation date shall not include— (i) such contributions, and (ii) interest on such contributions for the period between the date of the contribu- tions and the valuation date, determined by using the effective interest rate for the plan year. (h) Actuarial assumptions and methods (1) In general Subject to this subsection, the determina- tion of any present value or other computa- tion under this section shall be made on the basis of actuarial assumptions and methods— (A) each of which is reasonable (taking into account the experience of the plan and reasonable expectations), and (B) which, in combination, offer the actu- ary’s best estimate of anticipated experience under the plan. (2) Interest rates (A) Effective interest rate For purposes of this section, the term ‘‘ef- fective interest rate’’ means, with respect to any plan for any plan year, the single rate of interest which, if used to determine the present value of the plan’s accrued or earned benefits referred to in subsection (d)(1), would result in an amount equal to the fund- ing target of the plan for such plan year. (B) Interest rates for determining funding target For purposes of determining the funding target and normal cost of a plan for any plan year, the interest rate used in determining the present value of the benefits of the plan shall be— (i) in the case of benefits reasonably de- termined to be payable during the 5-year period beginning on the valuation date for the plan year, the first segment rate with respect to the applicable month, (ii) in the case of benefits reasonably de- termined to be payable during the 15-year period beginning at the end of the period described in clause (i), the second segment rate with respect to the applicable month, and (iii) in the case of benefits reasonably de- termined to be payable after the period de- scribed in clause (ii), the third segment rate with respect to the applicable month. (C) Segment rates For purposes of this paragraph— (i) First segment rate The term ‘‘first segment rate’’ means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into ac- count only that portion of such yield curve which is based on bonds maturing during the 5-year period commencing with such month. (ii) Second segment rate The term ‘‘second segment rate’’ means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into ac- count only that portion of such yield curve which is based on bonds maturing during the 15-year period beginning at the end of the period described in clause (i). (iii) Third segment rate The term ‘‘third segment rate’’ means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into ac- count only that portion of such yield curve which is based on bonds maturing during periods beginning after the period de- scribed in clause (ii). (iv) Segment rate stabilization (I) In general If a segment rate described in clause (i), (ii), or (iii) with respect to any appli- cable month (determined without regard to this clause) is less than the applicable minimum percentage, or more than the applicable maximum percentage, of the average of the segment rates described in such clause for years in the 25-year pe- riod ending with September 30 of the cal- endar year preceding the calendar year in which the plan year begins, then the segment rate described in such clause Page 462 TITLE 29—LABOR § 1083 3 See References in Text note below. with respect to the applicable month shall be equal to the applicable min- imum percentage or the applicable max- imum percentage of such average, which- ever is closest. The Secretary of the Treasury shall determine such average on an annual basis and may prescribe equivalent rates for years in any such 25- year period for which the rates described in any such clause are not available. Notwithstanding anything in this sub- clause, if the average of the first, second, or third segment rate for any 25-year pe- riod is less than 5 percent, such average shall be deemed to be 5 percent. (II) Applicable minimum percentage; ap- plicable maximum percentage For purposes of subclause (I), the ap- plicable minimum percentage and the applicable maximum percentage for a plan year beginning in a calendar year shall be determined in accordance with the following table: If the calendar year is: The applicable minimum percentage is: The applicable maximum percentage is: Any year in the period start- ing in 2012 and ending in 2019 .................................... 90% 110% Any year in the period start- ing in 2020 and ending in 2030 .................................... 95% 105% 2031 ....................................... 90% 110% 2032 ....................................... 85% 115% 2033 ....................................... 80% 120% 2034 ....................................... 75% 125% After 2034 ............................. 70% 130%. (D) Corporate bond yield curve For purposes of this paragraph— (i) In general The term ‘‘corporate bond yield curve’’ means, with respect to any month, a yield curve which is prescribed by the Secretary of the Treasury for such month and which reflects the average, for the 24-month pe- riod ending with the month preceding such month, of monthly yields on investment grade corporate bonds with varying matu- rities and that are in the top 3 quality lev- els available. (ii) Election to use yield curve Solely for purposes of determining the minimum required contribution under this section, the plan sponsor may, in lieu of the segment rates determined under sub- paragraph (C), elect to use interest rates under the corporate bond yield curve. For purposes of the preceding sentence such curve shall be determined without regard to the 24-month averaging described in clause (i). Such election, once made, may be revoked only with the consent of the Secretary of the Treasury. (E) Applicable month For purposes of this paragraph, the term ‘‘applicable month’’ means, with respect to any plan for any plan year, the month which includes the valuation date of such plan for such plan year or, at the election of the plan sponsor, any of the 4 months which precede such month. Any election made under this subparagraph shall apply to the plan year for which the election is made and all suc- ceeding plan years, unless the election is re- voked with the consent of the Secretary of the Treasury. (F) Publication requirements The Secretary of the Treasury shall pub- lish for each month the corporate bond yield curve (and the corporate bond yield curve re- flecting the modification described in sec- tion 1055(g)(3)(B)(iii)(I) 3 of this title for such month) and each of the rates determined under subparagraph (C) and the averages de- termined under subparagraph (C)(iv) for such month. The Secretary of the Treasury shall also publish a description of the method- ology used to determine such yield curve and such rates which is sufficiently detailed to enable plans to make reasonable projec- tions regarding the yield curve and such rates for future months based on the plan’s projection of future interest rates. (3) Mortality tables (A) In general Except as provided in subparagraph (C) or (D), the Secretary of the Treasury shall by regulation prescribe mortality tables to be used in determining any present value or making any computation under this section. Such tables shall be based on the actual ex- perience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary of the Treasury shall take into account results of available independent studies of mortality of individ- uals covered by pension plans. (B) Periodic revision The Secretary of the Treasury shall (at least every 10 years) make revisions in any table in effect under subparagraph (A) to re- flect the actual experience of pension plans and projected trends in such experience. (C) Substitute mortality table (i) In general Upon request by the plan sponsor and ap- proval by the Secretary of the Treasury, a mortality table which meets the require- ments of clause (iii) shall be used in deter- mining any present value or making any computation under this section during the period of consecutive plan years (not to ex- ceed 10) specified in the request. (ii) Early termination of period Notwithstanding clause (i), a mortality table described in clause (i) shall cease to be in effect as of the earliest of— (I) the date on which there is a signifi- cant change in the participants in the plan by reason of a plan spinoff or merg- er or otherwise, or Page 463 TITLE 29—LABOR § 1083 (II) the date on which the plan actuary determines that such table does not meet the requirements of clause (iii). (iii) Requirements A mortality table meets the require- ments of this clause if— (I) there is a sufficient number of plan participants, and the pension plans have been maintained for a sufficient period of time, to have credible information necessary for purposes of subclause (II), and (II) such table reflects the actual expe- rience of the pension plans maintained by the sponsor and projected trends in general mortality experience. (iv) All plans in controlled group must use separate table Except as provided by the Secretary of the Treasury, a plan sponsor may not use a mortality table under this subparagraph for any plan maintained by the plan spon- sor unless— (I) a separate mortality table is estab- lished and used under this subparagraph for each other plan maintained by the plan sponsor and if the plan sponsor is a member of a controlled group, each member of the controlled group, and (II) the requirements of clause (iii) are met separately with respect to the table so established for each such plan, deter- mined by only taking into account the participants of such plan, the time such plan has been in existence, and the ac- tual experience of such plan. (v) Deadline for submission and disposition of application (I) Submission The plan sponsor shall submit a mor- tality table to the Secretary of the Treasury for approval under this sub- paragraph at least 7 months before the 1st day of the period described in clause (i). (II) Disposition Any mortality table submitted to the Secretary of the Treasury for approval under this subparagraph shall be treated as in effect as of the 1st day of the period described in clause (i) unless the Sec- retary of the Treasury, during the 180- day period beginning on the date of such submission, disapproves of such table and provides the reasons that such table fails to meet the requirements of clause (iii). The 180-day period shall be extended upon mutual agreement of the Secretary of the Treasury and the plan sponsor. (D) Separate mortality tables for the disabled Notwithstanding subparagraph (A)— (i) In general The Secretary of the Treasury shall es- tablish mortality tables which may be used (in lieu of the tables under subpara- graph (A)) under this subsection for indi- viduals who are entitled to benefits under the plan on account of disability. The Sec- retary of the Treasury shall establish sepa- rate tables for individuals whose disabil- ities 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 clause (i) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Secu- rity Act [42 U.S.C. 401 et seq.] and the reg- ulations thereunder. (iii) Periodic revision The Secretary of the Treasury shall (at least every 10 years) make revisions in any table in effect under clause (i) to reflect the actual experience of pension plans and projected trends in such experience. (4) Probability of benefit payments in the form of lump sums or other optional forms For purposes of determining any present value or making any computation under this section, there shall be taken into account— (A) the probability that future benefit pay- ments under the plan will be made in the form of optional forms of benefits provided under the plan (including lump sum distribu- tions, determined on the basis of the plan’s experience and other related assumptions), and (B) any difference in the present value of such future benefit payments resulting from the use of actuarial assumptions, in deter- mining benefit payments in any such op- tional form of benefits, which are different from those specified in this subsection. (5) Approval of large changes in actuarial as- sumptions (A) In general No actuarial assumption used to deter- mine the funding target for a plan to which this paragraph applies may be changed with- out the approval of the Secretary of the Treasury. (B) Plans to which paragraph applies This paragraph shall apply to a plan only if— (i) the plan is a single-employer plan to which subchapter III applies, (ii) the aggregate unfunded vested bene- fits as of the close of the preceding plan year (as determined under section 1306(a)(3)(E)(iii) of this title) of such plan and all other plans maintained by the con- tributing sponsors (as defined in section 1301(a)(13) of this title) and members of such sponsors’ controlled groups (as de- fined in section 1301(a)(14) of this title) which are covered by subchapter III (dis- regarding plans with no unfunded vested benefits) exceed $50,000,000, and (iii) the change in assumptions (deter- mined after taking into account any Page 464 TITLE 29—LABOR § 1083 changes in interest rate and mortality table) results in a decrease in the funding shortfall of the plan for the current plan year that exceeds $50,000,000, or that ex- ceeds $5,000,000 and that is 5 percent or more of the funding target of the plan be- fore such change. (i) Special rules for at-risk plans (1) Funding target for plans in at-risk status (A) In general In the case of a plan which is in at-risk status for a plan year, the funding target of the plan for the plan year shall be equal to the sum of— (i) the present value of all benefits ac- crued or earned under the plan as of the beginning of the plan year, as determined by using the additional actuarial assump- tions described in subparagraph (B), and (ii) in the case of a plan which also has been in at-risk status for at least 2 of the 4 preceding plan years, a loading factor de- termined under subparagraph (C). (B) Additional actuarial assumptions The actuarial assumptions described in this subparagraph are as follows: (i) All employees who are not otherwise assumed to retire as of the valuation date but who will be eligible to elect benefits during the plan year and the 10 succeeding plan years shall be assumed to retire at the earliest retirement date under the plan but not before the end of the plan year for which the at-risk funding target and at- risk target normal cost are being deter- mined. (ii) All employees shall be assumed to elect the retirement benefit available under the plan at the assumed retirement age (determined after application of clause (i)) which would result in the highest present value of benefits. (C) Loading factor The loading factor applied with respect to a plan under this paragraph for any plan year is the sum of— (i) $700, times the number of participants in the plan, plus (ii) 4 percent of the funding target (de- termined without regard to this para- graph) of the plan for the plan year. (2) Target normal cost of at-risk plans In the case of a plan which is in at-risk sta- tus for a plan year, the target normal cost of the plan for such plan year shall be equal to the sum of— (A) the excess of— (i) the sum of— (I) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, determined using the additional actuarial assumptions described in para- graph (1)(B), plus (II) the amount of plan-related ex- penses expected to be paid from plan as- sets during the plan year, over (ii) the amount of mandatory employee contributions expected to be made during the plan year, plus (B) in the case of a plan which also has been in at-risk status for at least 2 of the 4 preceding plan years, a loading factor equal to 4 percent of the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year. (3) Minimum amount In no event shall— (A) the at-risk funding target be less than the funding target, as determined without regard to this subsection, or (B) the at-risk target normal cost be less than the target normal cost, as determined without regard to this subsection. (4) Determination of at-risk status For purposes of this subsection— (A) In general A plan is in at-risk status for a plan year if— (i) the funding target attainment per- centage for the preceding plan year (deter- mined under this section without regard to this subsection) is less than 80 percent, and (ii) the funding target attainment per- centage for the preceding plan year (deter- mined under this section by using the ad- ditional actuarial assumptions described in paragraph (1)(B) in computing the fund- ing target) is less than 70 percent. (B) Transition rule In the case of plan years beginning in 2008, 2009, and 2010, subparagraph (A)(i) shall be applied by substituting the following per- centages for ‘‘80 percent’’: (i) 65 percent in the case of 2008. (ii) 70 percent in the case of 2009. (iii) 75 percent in the case of 2010. In the case of plan years beginning in 2008, the funding target attainment percentage for the preceding plan year under subpara- graph (A) may be determined using such methods of estimation as the Secretary of the Treasury may provide. (C) Special rule for employees offered early retirement in 2006 (i) In general For purposes of subparagraph (A)(ii), the additional actuarial assumptions described in paragraph (1)(B) shall not be taken into account with respect to any employee if— (I) such employee is employed by a specified automobile manufacturer, (II) such employee is offered a substan- tial amount of additional cash com- pensation, substantially enhanced retire- ment benefits under the plan, or materi- ally reduced employment duties on the condition that by a specified date (not later than December 31, 2010) the em- ployee retires (as defined under the terms of the plan), (III) such offer is made during 2006 and pursuant to a bona fide retirement in- centive program and requires, by the terms of the offer, that such offer can be accepted not later than a specified date (not later than December 31, 2006), and Page 465 TITLE 29—LABOR § 1083 (IV) such employee does not elect to accept such offer before the specified date on which the offer expires. (ii) Specified automobile manufacturer For purposes of clause (i), the term ‘‘specified automobile manufacturer’’ means— (I) any manufacturer of automobiles, and (II) any manufacturer of automobile parts which supplies such parts directly to a manufacturer of automobiles and which, after a transaction or series of transactions ending in 1999, ceased to be a member of a controlled group which in- cluded such manufacturer of auto- mobiles. (5) Transition between applicable funding tar- gets and between applicable target normal costs (A) In general In any case in which a plan which is in at- risk status for a plan year has been in such status for a consecutive period of fewer than 5 plan years, the applicable amount of the funding target and of the target normal cost shall be, in lieu of the amount determined without regard to this paragraph, the sum of— (i) the amount determined under this section without regard to this subsection, plus (ii) the transition percentage for such plan year of the excess of the amount de- termined under this subsection (without regard to this paragraph) over the amount determined under this section without re- gard to this subsection. (B) Transition percentage For purposes of subparagraph (A), the transition percentage shall be determined in accordance with the following table: If the consecutive number of years (including the plan year) the plan is in at-risk status is— The transition percentage is— 1 ................................................. 20 2 ................................................. 40 3 ................................................. 60 4 ................................................. 80. (C) Years before effective date For purposes of this paragraph, plan years beginning before 2008 shall not be taken into account. (6) Small plan exception If, on each day during the preceding plan year, a plan had 500 or fewer participants, the plan shall not be treated as in at-risk status for the plan year. For purposes of this para- graph, all defined benefit plans (other than multiemployer plans) maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only participants with respect to such em- ployer or member shall be taken into account and the rules of subsection (g)(2)(C) shall apply. (j) Payment of minimum required contributions (1) In general For purposes of this section, the due date for any payment of any minimum required con- tribution for any plan year shall be 81⁄2 months after the close of the plan year. (2) Interest Any payment required under paragraph (1) for a plan year that is made on a date other than the valuation date for such plan year shall be adjusted for interest accruing for the period between the valuation date and the payment date, at the effective rate of interest for the plan for such plan year. (3) Accelerated quarterly contribution sched- ule for underfunded plans (A) Failure to timely make required install- ment In any case in which the plan has a fund- ing shortfall for the preceding plan year, the employer maintaining the plan shall make the required installments under this para- graph and if the employer fails to pay the full amount of a required installment for the plan year, then the amount of interest charged under paragraph (2) on the under- payment for the period of underpayment shall be determined by using a rate of inter- est equal to the rate otherwise used under paragraph (2) plus 5 percentage points. In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary of the Treasury may provide. (B) Amount of underpayment, period of un- derpayment For purposes of subparagraph (A)— (i) Amount The amount of the underpayment shall be the excess of— (I) the required installment, over (II) the amount (if any) of the install- ment contributed to or under the plan on or before the due date for the install- ment. (ii) Period of underpayment The period for which any interest is charged under this paragraph with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is con- tributed to or under the plan. (iii) Order of crediting contributions For purposes of clause (i)(II), contribu- tions shall be credited against unpaid re- quired installments in the order in which such installments are required to be paid. (C) Number of required installments; due dates For purposes of this paragraph— (i) Payable in 4 installments There shall be 4 required installments for each plan year. (ii) Time for payment of installments The due dates for required installments are set forth in the following table: Page 466 TITLE 29—LABOR § 1083 4 So in original. Probably should be ‘‘subclause’’. In the case of the following required installment: The due date is: 1st ................................. April 15 2nd ................................ July 15 3rd ................................ October 15 4th ................................ January 15 of the fol- lowing year. (D) Amount of required installment For purposes of this paragraph— (i) In general The amount of any required installment shall be 25 percent of the required annual payment. (ii) Required annual payment For purposes of clause (i), the term ‘‘re- quired annual payment’’ means the lesser of— (I) 90 percent of the minimum required contribution (determined without regard to this subsection) to the plan for the plan year under this section, or (II) 100 percent of the minimum re- quired contribution (determined without regard to this subsection or to any waiv- er under section 1082(c) of this title) to the plan for the preceding plan year. Subclause (II) shall not apply if the pre- ceding plan year referred to in such clause 4 was not a year of 12 months. (E) Fiscal years, short years, and years with alternate valuation date (i) Fiscal years In applying this paragraph to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this paragraph, the months which correspond thereto. (ii) Short plan year This subparagraph shall be applied to plan years of less than 12 months in ac- cordance with regulations prescribed by the Secretary of the Treasury. (iii) Plan with alternate valuation date The Secretary of the Treasury shall pre- scribe regulations for the application of this paragraph in the case of a plan which has a valuation date other than the first day of the plan year. (F) Quarterly contributions not to include certain increased contributions Subparagraph (D) shall be applied without regard to any increase under subsection (c)(7). (4) Liquidity requirement in connection with quarterly contributions (A) In general A plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment under paragraph (3) 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 plan (other than a plan described in subsection (g)(2)(B)) which— (i) is required to pay installments under paragraph (3) for a plan year, and (ii) has a liquidity shortfall for any quar- ter during such plan year. (C) Period of underpayment For purposes of paragraph (3)(A), any por- tion 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 in- stallment 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 install- ments for the plan year, is necessary to in- crease the funding target attainment per- centage of the plan for the plan year (taking into account the expected increase in fund- ing target due to benefits accruing or earned 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 in- stallment is made) of— (I) the base amount with respect to such quarter, over (II) 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 dis- bursements from the plan for the 12 months ending on the last day of such quarter. (II) Special rule If the amount determined under sub- clause (I) exceeds an amount equal to 2 times the sum of the adjusted disburse- ments from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satis- faction of the Secretary of the Treasury that such excess is the result of non- recurring 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, Page 467 TITLE 29—LABOR § 1083 5 So in original. Probably should be ‘‘paragraph (1)’’. including purchases of annuities, pay- ments of single sums and other benefits, and administrative expenses. (iv) Adjusted disbursements The term ‘‘adjusted disbursements’’ means disbursements from the plan re- duced by the product of— (I) the plan’s funding target attain- ment percentage for the plan year, and (II) the sum of the purchases of annu- ities, payments of single sums, and such other disbursements as the Secretary of the Treasury shall provide in regula- tions. (v) Liquid assets The term ‘‘liquid assets’’ means cash, marketable securities, and such other as- sets as specified by the Secretary of the Treasury 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 of the Treasury may pre- scribe such regulations as are necessary to carry out this paragraph. (k) Imposition of lien where failure to make re- quired contributions (1) In general In the case of a plan to which this subsection applies (as provided under paragraph (2)), if— (A) any person fails to make a contribu- tion payment required by section 1082 of this title and this section before the due date for such payment, and (B) the unpaid balance of such payment (including interest), when added to the ag- gregate unpaid balance of all preceding such payments for which payment was not made before the due date (including interest), ex- ceeds $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 single-em- ployer plan covered under section 1321 of this title for any plan year for which the funding target attainment percentage (as defined in subsection (d)(2)) of such plan is less than 100 percent. (3) Amount of lien For purposes of paragraph (1), the amount of the lien shall be equal to the aggregate unpaid balance of contribution payments required under this section and section 1082 of this title 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 Ben- efit Guaranty Corporation of such failure within 10 days of the due date for the re- quired contribution payment. (B) Period of lien The lien imposed by paragraph (1) shall arise on the due date for the required con- tribution 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 with- out regard to whether such plan continues to be described in paragraph (2) during the pe- riod 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 1368 of this title shall apply with respect to a lien imposed by subsection (a) 5 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 direc- tion of the Pension Benefit Guaranty Corpora- tion, by the contributing sponsor (or any member of the controlled group of the contrib- uting sponsor). (6) Definitions For purposes of this subsection— (A) Contribution payment The term ‘‘contribution payment’’ means, in connection with a plan, a contribution payment required to be made to the plan, in- cluding any required installment under paragraphs (3) and (4) of subsection (j). (B) Due date; required installment The terms ‘‘due date’’ and ‘‘required in- stallment’’ have the meanings given such terms by subsection (j). (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 of title 26. (l) Qualified transfers to health benefit accounts In the case of a qualified transfer (as defined in section 420 of title 26), any assets so trans- ferred shall not, for purposes of this section, be treated as assets in the plan. (m) Special rules for community newspaper plans (1) In general An eligible newspaper plan sponsor of a plan under which no participant has had the par- ticipant’s accrued benefit increased (whether because of service or compensation) after April 2, 2019, may elect to have the alternative standards described in paragraph (4) apply to such plan. (2) Eligible newspaper plan sponsor The term ‘‘eligible newspaper plan sponsor’’ means the plan sponsor of— Page 468 TITLE 29—LABOR § 1083 (A) any community newspaper plan, or (B) any other plan sponsored, as of April 2, 2019, by a member of the same controlled group of a plan sponsor of a community newspaper plan if such member is in the trade or business of publishing 1 or more newspapers. (3) Election An election under paragraph (1) shall be made at such time and in such manner as pre- scribed by the Secretary of the Treasury. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Sec- retary of the Treasury. (4) Alternative minimum funding standards The alternative standards described in this paragraph are the following: (A) Interest rates (i) In general Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent. (ii) New benefit accruals Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits ac- crued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be de- termined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year. (iii) United States Treasury obligation yield curve For purposes of this subsection, the term ‘‘United States Treasury obligation yield curve’’ means, with respect to any day, a yield curve which shall be prescribed by the Secretary of the Treasury for such day on interest-bearing obligations of the United States. (B) Shortfall amortization base (i) Previous shortfall amortization bases The shortfall amortization bases deter- mined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) ap- plies (and all shortfall amortization in- stallments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6). (ii) New shortfall amortization base Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)). (C) Determination of shortfall amortization installments (i) 30-year period Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting ‘‘30- plan-year’’ for ‘‘7-plan-year’’ each place it appears. (ii) No special election The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies. (D) Exemption from at-risk treatment Subsection (i) shall not apply. (5) Community newspaper plan For purposes of this subsection— (A) In general The term ‘‘community newspaper plan’’ means a plan to which this section applies maintained as of December 31, 2018, by an employer which— (i) maintains the plan on behalf of par- ticipants and beneficiaries with respect to employment in the trade or business of publishing 1 or more newspapers which were published by the employer at any time during the 11-year period ending on December 20, 2019, (ii)(I) is not a company the stock of which is publicly traded (on a stock ex- change or in an over-the-counter market), and is not controlled, directly or indi- rectly, by such a company, or (II) is controlled, directly, or indirectly, during the entire 30-year period ending on December 20, 2019, by individuals who are members of the same family, and does not publish or distribute a daily newspaper that is carrier-distributed in printed form in more than 5 States, and (iii) is controlled, directly, or indi- rectly— (I) by 1 or more persons residing pri- marily in a State in which the commu- nity newspaper has been published on newsprint or carrier-distributed, (II) during the entire 30-year period ending on December 20, 2019, by individ- uals who are members of the same fam- ily, (III) by 1 or more trusts, the sole trust- ees of which are persons described in subclause (I) or (II), or (IV) by a combination of persons de- scribed in subclause (I), (II), or (III). (B) Newspaper The term ‘‘newspaper’’ does not include any newspaper (determined without regard to this subparagraph) to which any of the following apply: (i) Is not in general circulation. (ii) Is published (on newsprint or elec- tronically) less frequently than 3 times per week. (iii) Has not ever been regularly pub- lished on newsprint. (iv) Does not have a bona fide list of paid subscribers. Page 469 TITLE 29—LABOR § 1083 (C) Control A person shall be treated as controlled by another person if such other person pos- sesses, directly or indirectly, the power to direct or cause the direction and manage- ment of such person (including the power to elect a majority of the members of the board of directors of such person) through the own- ership of voting securities. (6) Controlled group For purposes of this subsection, the term ‘‘controlled group’’ means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of title 26 as of De- cember 20, 2019. (7) Effect on premium rate calculation In the case of a plan for which an election is made to apply the alternative standards de- scribed in paragraph (3), the additional pre- mium under section 1306(a)(3)(E) of this title shall be determined as if such election had not been made. (Pub. L. 93–406, title I, § 303, as added Pub. L. 109–280, title I, § 102(a), Aug. 17, 2006, 120 Stat. 789; amended Pub. L. 110–458, title I, §§ 101(b)(1), 121(a), title II, § 202(a), Dec. 23, 2008, 122 Stat. 5093, 5113, 5117; Pub. L. 111–192, title II, §§ 201(a), 204(a), June 25, 2010, 124 Stat. 1283, 1300; Pub. L. 112–141, div. D, title II, § 40211(b)(1), (3)(A), July 6, 2012, 126 Stat. 847, 849; Pub. L. 113–159, title II, § 2003(b)(1), (d)(2), Aug. 8, 2014, 128 Stat. 1849, 1851; Pub. L. 113–295, div. A, title II, § 221(a)(57)(C)(ii), (D)(ii), Dec. 19, 2014, 128 Stat. 4046; Pub. L. 114–74, title V, § 504(b)(1), Nov. 2, 2015, 129 Stat. 593; Pub. L. 116–94, div. O, title I, § 115(b), Dec. 20, 2019, 133 Stat. 3158; Pub. L. 117–2, title IX, §§ 9705(b), 9706(b)(1), (2), 9707(b), Mar. 11, 2021, 135 Stat. 200, 201, 204; Pub. L. 117–58, div. H, title VI, § 80602(b)(1), Nov. 15, 2021, 135 Stat. 1339.) Editorial Notes REFERENCES IN TEXT Section 106 of the Pension Protection Act of 2006, re- ferred to in subsec. (c)(2)(D)(iv)(I), is section 106 of Pub. L. 109–280, which is set out as a note under section 401 of Title 26, Internal Revenue Code. Section 1055(g)(3)(B)(iii)(I) of this title, referred to in subsec. (h)(2)(F), was redesignated section 1055(g)(3)(B)(iii) of this title by Pub. L. 113–295, div. A, title II, § 221(a)(57)(B)(ii), Dec. 19, 2014, 128 Stat. 4046. The Social Security Act, referred to in subsec. (h)(3)(D)(ii), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title II of the Act is classified generally to subchapter II (§ 401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables. PRIOR PROVISIONS A prior section 1083, Pub. L. 93–406, title I, § 303, Sept. 2, 1974, 88 Stat. 872; Pub. L. 99–272, title XI, §§ 11015(b)(1)(A), 11016(c)(2), Apr. 7, 1986, 100 Stat. 267, 273; Pub. L. 100–203, title IX, § 9306(a)(2), (b)(2), (c)(2)(A), (d)(2), Dec. 22, 1987, 101 Stat. 1330–353 to 1330–355; Pub. L. 101–239, title VII, §§ 7881(b)(6)(B)(ii), (7), (8), (c)(2), 7891(a)(1), Dec. 19, 1989, 103 Stat. 2438, 2439, 2445, related to variance from minimum funding standard, prior to repeal by Pub. L. 109–280, title I, § 101(a), (d), Aug. 17, 2006, 120 Stat. 784, 789, applicable to plan years begin- ning after 2007. AMENDMENTS 2021—Subsec. (c)(8). Pub. L. 117–2, § 9705(b), added par. (8). Subsec. (h)(2)(C)(iv)(I). Pub. L. 117–2, § 9706(b)(2), in- serted at end ‘‘Notwithstanding anything in this sub- clause, if the average of the first, second, or third seg- ment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.’’ Subsec. (h)(2)(C)(iv)(II). Pub. L. 117–58 amended table generally. Prior to amendment, table related to appli- cable minimum and maximum percentages for each cal- endar year from 2020 to 2029 and for calendar years after 2029. Pub. L. 117–2, § 9706(b)(1), amended table generally. Prior to amendment, table related to applicable min- imum and maximum percentages for each calendar year from 2012 to 2023 and for calendar years after 2023. Subsec. (m). Pub. L. 117–2, § 9707(b), amended subsec. (m) generally. Prior to amendment, subsec. (m) set out special rules for community newspaper plans under which no participant has had the participant’s accrued benefit increased after December 31, 2017. 2019—Subsec. (m). Pub. L. 116–94 added subsec. (m). 2015—Subsec. (h)(2)(C)(iv)(II). Pub. L. 114–74 amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for each calendar year from 2012 to 2020 and for calendar years after 2020. 2014—Subsec. (c)(5). Pub. L. 113–295, § 221(a)(57)(C)(ii), struck out subpar. (A) designation and heading and struck out subpar. (B) which related to transition rule and availability of transition relief. Subsec. (h)(2)(B)(i). Pub. L. 113–159, § 2003(d)(2), sub- stituted ‘‘the valuation date for the plan year’’ for ‘‘the first day of the plan year’’. Subsec. (h)(2)(C)(iv)(II). Pub. L. 113–159, § 2003(b)(1), amended table generally. Prior to amendment, table re- lated to applicable minimum and maximum percent- ages for each calendar year from 2012 to 2015 and for calendar years after 2015. Subsec. (h)(2)(G). Pub. L. 113–295, § 221(a)(57)(D)(ii), struck out subpar. (G) which related to transition rule for plan years beginning in 2008 or 2009. 2012—Subsec. (h)(2)(C)(iv). Pub. L. 112–141, § 40211(b)(1), added cl. (iv). Subsec. (h)(2)(F). Pub. L. 112–141, § 40211(b)(3)(A), in- serted ‘‘and the averages determined under subpara- graph (C)(iv)’’ after ‘‘subparagraph (C)’’. 2010—Subsec. (c)(1). Pub. L. 111–192, § 201(a)(3)(A), sub- stituted ‘‘any shortfall amortization base which has not been fully amortized under this subsection’’ for ‘‘the shortfall amortization bases for such plan year and each of the 6 preceding plan years’’. Subsec. (c)(2)(D). Pub. L. 111–192, § 201(a)(1), added sub- par. (D). Subsec. (c)(7). Pub. L. 111–192, § 201(a)(2), added par. (7). Subsec. (f)(3)(D). Pub. L. 111–192, § 204(a), added sub- par. (D). Subsec. (j)(3)(F). Pub. L. 111–192, § 201(a)(3)(B), added subpar. (F). 2008—Subsec. (b). Pub. L. 110–458, § 101(b)(1)(A), amended subsec. (b) generally. Prior to amendment, text read as follows: ‘‘For purposes of this section, ex- cept as provided in subsection (i)(2) with respect to plans in at-risk status, the term ‘target normal cost’ means, for any plan year, the present value of all bene- fits which are expected to accrue or to be earned under the plan during the plan year. For purposes of this sub- section, if any benefit attributable to services per- formed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase in such benefit shall be treated as having accrued during the current plan year.’’ Subsec. (c)(5)(B)(i). Pub. L. 110–458, § 202(a)(2), added cl. (i) and struck out former cl. (i). Prior to amend- ment, text read as follows: ‘‘Except as provided in clauses (iii) and (iv), in the case of plan years beginning after 2007 and before 2011, only the applicable percent- age of the funding target shall be taken into account under paragraph (3)(A) in determining the funding shortfall for the plan year for purposes of subparagraph (A).’’ Page 470 TITLE 29—LABOR § 1083 Subsec. (c)(5)(B)(iii). Pub. L. 110–458, § 202(a)(1), redes- ignated cl. (iv) as (iii) and struck out former cl. (iii). Prior to amendment, text read as follows: ‘‘Clause (i) shall not apply with respect to any plan year beginning after 2008 unless the shortfall amortization base for each of the preceding years beginning after 2007 was zero (determined after application of this subpara- graph).’’ Pub. L. 110–458, § 101(b)(1)(B), inserted ‘‘beginning’’ be- fore ‘‘after 2008’’. Subsec. (c)(5)(B)(iv). Pub. L. 110–458, § 202(a)(1), redes- ignated cl. (iv) as (iii). Subsec. (c)(5)(B)(iv)(II). Pub. L. 110–458, § 101(b)(1)(C), inserted ‘‘for such year’’ after ‘‘beginning in 2007)’’. Subsec. (f)(4)(A). Pub. L. 110–458, § 101(b)(1)(D), sub- stituted ‘‘paragraph (3)’’ for ‘‘paragraph (2)’’. Subsec. (g)(3)(B). Pub. L. 110–458, § 121(a), amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: ‘‘Any such aver- aging shall be adjusted for contributions and distribu- tions (as provided by the Secretary of the Treasury).’’ Subsec. (h)(2)(F). Pub. L. 110–458, § 101(b)(1)(E), sub- stituted ‘‘section 1055(g)(3)(B)(iii)(I) of this title for such month)’’ for ‘‘section 1055(g)(3)(B)(iii)(I) of this title) for such month’’ and ‘‘subparagraph (C)’’ for ‘‘subparagraph (B)’’. Subsec. (i)(2)(A). Pub. L. 110–458, § 101(b)(1)(F)(i)(I), added subpar. (A) and struck out former subpar. (A) which read as follows: ‘‘the present value of all benefits which are expected to accrue or be earned under the plan during the plan year, determined using the addi- tional actuarial assumptions described in paragraph (1)(B), plus’’. Subsec. (i)(2)(B). Pub. L. 110–458, § 101(b)(1)(F)(i)(II), substituted ‘‘the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year’’ for ‘‘the target normal cost (determined without regard to this paragraph) of the plan for the plan year’’. Subsec. (i)(4)(B). Pub. L. 110–458, § 101(b)(1)(F)(ii), sub- stituted ‘‘subparagraph (A)’’ for ‘‘subparagraph (A)(ii)’’ in concluding provisions. Subsec. (j)(3)(A). Pub. L. 110–458, § 101(b)(1)(G)(i), in- serted last sentence. Subsec. (j)(3)(E). Pub. L. 110–458, § 101(b)(1)(G)(ii), (iii), substituted ‘‘, short years, and years with alternate valuation date’’ for ‘‘and short years’’ in heading and added cl. (iii). Subsec. (k)(6)(B). Pub. L. 110–458, § 101(b)(1)(H), struck out ‘‘, 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 sec- tion’’ after ‘‘subsection (j)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 117–58 applicable to plan years beginning after Dec. 31, 2021, see section 80602(c) of Pub. L. 117–58, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 9705(b) of Pub. L. 117–2 appli- cable to plan years beginning after Dec. 31, 2018, see section 9705(c) of Pub. L. 117–2, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 9706(b)(1), (2) of Pub. L. 117–2 applicable with respect to plan years beginning after Dec. 31, 2019, with certain exceptions, see section 9706(c) of Pub. L. 117–2, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 9707(b) of Pub. L. 117–2 appli- cable to plan years ending after Dec. 31, 2017, see sec- tion 9707(c) of Pub. L. 117–2, set out as a note under sec- tion 430 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2019 AMENDMENT Amendment by Pub. L. 116–94 applicable to plan years ending after Dec. 31, 2017, see section 115(c) of Pub. L. 116–94, set out as a note under section 430 of Title 26, In- ternal Revenue Code. EFFECTIVE DATE OF 2015 AMENDMENT Amendment by Pub. L. 114–74 applicable with respect to plan years beginning after Dec. 31, 2015, see section 504(c) of Pub. L. 114–74, set out as a note under section 430 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of Title 26, Internal Revenue Code. Amendment by Pub. L. 113–159 applicable with re- spect to plan years beginning after Dec. 31, 2012, except as otherwise provided, see section 2003(e) of Pub. L. 113–159, set out as a note under section 430 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2012 AMENDMENT Amendment by Pub. L. 112–141 applicable with re- spect to plan years beginning after Dec. 31, 2011, except as otherwise provided, see section 40211(c) of Pub. L. 112–141, set out as a note under section 404 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 201(a) of Pub. L. 111–192 appli- cable to plan years beginning after Dec. 31, 2007, see section 201(c) of Pub. L. 111–192, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 204(a) of Pub. L. 111–192 appli- cable to plan years beginning after Aug. 31, 2009, with certain exceptions, see section 204(c) of Pub. L. 111–192, set out as a note under section 430 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2008 AMENDMENT Amendment by section 101(b)(1)(A), (F)(i) of Pub. L. 110–458 applicable to plan years beginning after Dec. 31, 2008, and applicable to a plan for the first plan year be- ginning after Dec. 31, 2007, under certain conditions, see section 101(b)(3) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 101(b)(1)(B)–(E), (F)(ii)–(H) of Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, ex- cept as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, In- ternal Revenue Code. Amendment by section 121(a) of Pub. L. 110–458 effec- tive as if included in the provisions of Pub. L. 109–280 to which the amendment relates, see section 121(c) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code. Amendment by section 202(a) of Pub. L. 110–458 appli- cable as if included in the enactment of this section, see section 202(c) of Pub. L. 110–458, set out as a note under section 430 of Title 26, Internal Revenue Code. EFFECTIVE DATE Pub. L. 109–280, title I, § 102(c), Aug. 17, 2006, 120 Stat. 809, provided that: ‘‘The amendments made by this sec- tion [enacting this section] shall apply with respect to plan years beginning after 2007.’’ APPLICABILITY OF AMENDMENTS BY SUBTITLES A AND B OF TITLE I OF PUB. L. 109–280 For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code. MODIFICATION OF TRANSITION RULE TO PENSION FUNDING REQUIREMENTS For modification of transition rule to pension fund- ing requirements in the case of a plan that was not re- Page 471 TITLE 29—LABOR § 1084 quired to pay a variable rate premium for the plan year beginning in 1996, has not, in any plan year beginning after 1995, 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 is sponsored by a company that is engaged primarily in the inter- urban or interstate passenger bus service, see section 115(a)–(c) of Pub. L. 109–280, set out as a note under sec- tion 430 of Title 26, Internal Revenue Code. § 1084. Minimum funding standards for multiem- ployer plans (a) In general For purposes of section 1082 of this title, the accumulated funding deficiency of a multiem- ployer plan for any plan year is the amount, de- termined as of the end of the plan year, equal to the excess (if any) of the total charges to the funding standard account of the plan for all plan years (beginning with the first plan year for which this part applies to the plan) over the total credits to such account for such years. (b) Funding standard account (1) Account required Each multiemployer plan to which this part applies shall establish and maintain a funding standard account. Such account shall be cred- ited and charged solely as provided in this sec- tion. (2) Charges to account For a plan year, the funding standard ac- count 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 amor- tized)— (i) in the case of a plan which comes into existence on or after January 1, 2008, 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 15 plan years, (ii) separately, with respect to each plan year, the net increase (if any) in unfunded past service liability under the plan aris- ing from plan amendments adopted in such year, over a period of 15 plan years, (iii) separately, with respect to each plan year, the net experience loss (if any) under the plan, over a period of 15 plan years, and (iv) 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 15 plan years, (C) the amount necessary to amortize each waived funding deficiency (within the mean- ing of section 1082(c)(3) of this title) for each prior plan year in equal annual installments (until fully amortized) over a period of 15 plan years, (D) the amount necessary to amortize in equal annual installments (until fully amor- tized) over a period of 5 plan years any amount credited to the funding standard ac- count under section 1082(b)(3)(D) of this title (as in effect on the day before August 17, 2006), and (E) the amount necessary to amortize in equal annual installments (until fully amor- tized) over a period of 20 years the contribu- tions which would be required to be made under the plan but for the provisions of sec- tion 1082(c)(7)(A)(i)(I) of this title (as in ef- fect on the day before August 17, 2006). (3) Credits to account For a plan year, the funding standard ac- count 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 amor- tized)— (i) separately, with respect to each plan year, the net decrease (if any) in unfunded past service liability under the plan aris- ing from plan amendments adopted in such year, over a period of 15 plan years, (ii) separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 15 plan years, 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 15 plan years, (C) the amount of the waived funding defi- ciency (within the meaning of section 1082(c)(3) of this title) for the plan year, and (D) in the case of a plan year for which the accumulated funding deficiency is deter- mined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the al- ternative minimum funding standard under section 1085 of this title (as in effect on the day before August 17, 2006), the excess (if any) of any debit balance in the funding standard account (determined without re- gard to this subparagraph) over any debit balance in the alternative minimum funding standard account. (4) Special rule for amounts first amortized in plan years before 2008 In the case of any amount amortized under section 1082(b) of this title (as in effect on the day before August 17, 2006) over any period be- ginning with a plan year beginning before 2008, in lieu of the amortization described in para- graphs (2)(B) and (3)(B), such amount shall continue to be amortized under such section as so in effect. (5) Combining and offsetting amounts to be amortized Under regulations prescribed by the Sec- retary of the Treasury, 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 re- maining amortization period for all items entering into such combined amount, and (B) may be offset against amounts re- quired to be amortized under the other such