Such increase shall not exceed the amount which, after taking into account charges (other than the additional charge under this subsection) and credits under subsection (b) of this section, is necessary to increase the funded current liability percentage
      (taking into account the expected increase in current liability due to benefits accruing during the plan year) to 100 percent.
      (2) Deficit reduction contribution
For purposes of paragraph (1), the deficit reduction contribution determined under this paragraph for any plan year is the sum of -
          (A) the unfunded old liability amount,
          (B) the unfunded new liability amount,
          (C) the expected increase in current liability due to benefits accruing during the plan year, and
          (D) the aggregate of the unfunded mortality increase amounts.
      (3) Unfunded old liability amount
For purposes of this subsection -
        (A) In general
The unfunded old liability amount with respect to any plan for any plan year is the amount necessary to amortize the unfunded old liability under the plan in equal annual installments over a period of 18 plan years (beginning with the 1st plan year beginning after December 31, 1988).
        (B) Unfunded old liability
The term "unfunded old liability" means the unfunded current liability of the plan as of the beginning of the 1st plan year beginning after December 31, 1987 (determined without regard to any plan amendment increasing liabilities adopted after October 16, 1987).
        (C) Special rules for benefit increases under existing collective bargaining agreements
          (i) In general
In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and the employer ratified before October 29, 1987, the unfunded old liability amount with respect to such plan for any plan year shall be increased by the amount necessary to amortize the unfunded existing benefit increase liability in equal annual installments over a period of 18 plan years beginning with -
              (I) the plan year in which the benefit increase with respect to such liability occurs, or
              (II) if the taxpayer elects, the 1st plan year beginning after December 31, 1988.
          (ii) Unfunded existing benefit increase liabilities
For purposes of clause (i), the unfunded existing benefit increase liability means, with respect to any benefit increase under the agreements described in clause (i) which takes effect during or after the 1st plan year beginning after December 31, 1987, the unfunded current liability determined -
              (I) by taking into account only liabilities attributable to such benefit increase, and
              (II) by reducing (but not below zero) the amount determined under paragraph (8)(A)(ii) by the current liability determined without regard to such benefit increase.
          (iii) Extensions, modifications, etc. not taken into account
For purposes of this subparagraph, any extension, amendment, or other modification of an agreement after October 28, 1987, shall not be taken into account.
        (D) Special rule for required changes in actuarial assumptions
          (i) In general
The unfunded old liability amount with respect to any plan for any plan year shall be increased by the amount necessary to amortize the amount of additional unfunded old liability under the plan in equal annual installments over a period of 12 plan years (beginning with the first plan year beginning after December 31, 1994).
          (ii) Additional unfunded old liability
For purposes of clause (i), the term "additional unfunded old liability" means the amount (if any) by which -
              (I) the current liability of the plan as of the beginning of the first plan year beginning after December 31, 1994, valued using the assumptions required by paragraph (7)(C) as in effect for plan years beginning after December 31, 1994, exceeds
              (II) the current liability of the plan as of the beginning of such first plan year, valued using the same assumptions used under subclause (I) (other than the assumptions required by paragraph (7)(C)), using the prior interest rate, and using such mortality assumptions as were used to determine current liability for the first plan year beginning after December 31, 1992.
          (iii) Prior interest rate
For purposes of clause (ii), the term "prior interest rate" means the rate of interest that is the same percentage of the weighted average under subsection (b)(5)(B)(ii)(I) of this section for the first plan year beginning after December 31, 1994, as the rate of interest used by the plan to determine current liability for the first plan year beginning after December 31, 1992, is of the weighted average under subsection (b)(5)(B)(ii)(I) of this section for such first plan year beginning after December 31, 1992.
        (E) Optional rule for additional unfunded old liability
          (i) In general
If an employer makes an election under clause (ii), the additional unfunded old liability for purposes of subparagraph (D) shall be the amount (if any) by which -
              (I) the unfunded current liability of the plan as of the beginning of the first plan year beginning after December 31, 1994, valued using the assumptions required by paragraph (7)(C) as in effect for plan years beginning after December 31, 1994, exceeds
              (II) the unamortized portion of the unfunded old liability under the plan as of the beginning of the first plan year beginning after December 31, 1994.
          (ii) Election
            (I) An employer may irrevocably elect to apply the provisions of this subparagraph as of the beginning of the first plan year beginning after December 31, 1994.
            (II) If an election is made under this clause, the increase under paragraph (1) for any plan year beginning after December 31, 1994, and before January 1, 2002, to which this subsection applies (without regard to this subclause) shall not be less than the increase that would be required under paragraph (1) if the provisions of this subchapter as in effect for the last plan year beginning before January 1, 1995, had remained in effect.
      (4) Unfunded new liability amount
For purposes of this subsection -
        (A) In general
The unfunded new liability amount with respect to any plan for any plan year is the applicable percentage of the unfunded new liability.
        (B) Unfunded new liability
The term "unfunded new liability" means the unfunded current liability of the plan for the plan year determined without regard to -
            (i) the unamortized portion of the unfunded old liability, the unamortized portion of the additional unfunded old liability, the unamortized portion of each unfunded mortality increase, and the unamortized portion of the unfunded existing benefit increase liability, and
            (ii) the liability with respect to any unpredictable contingent event benefits (without regard to whether the event has occurred).
        (C) Applicable percentage
The term "applicable percentage" means, with respect to any plan year, 30 percent, reduced by the product of -
            (i) .40 multiplied by
            (ii) the number of percentage points (if any) by which the funded current liability percentage exceeds 60 percent.
      (5) Unpredictable contingent event amount
        (A) In general
The unpredictable contingent event amount with respect to a plan for any plan year is an amount equal to the greatest of -
            (i) the applicable percentage of the product of -
              (I) 100 percent, reduced (but not below zero) by the funded current liability percentage for the plan year, multiplied by
              (II) the amount of unpredictable contingent event benefits paid during the plan year, including (except as provided by the Secretary of the Treasury) any payment for the purchase of an annuity contract for a participant or beneficiary with respect to such benefits,

            (ii) the amount which would be determined for the plan year if the unpredictable contingent event benefit liabilities were amortized in equal annual installments over 7 plan years
          (beginning with the plan year in which such event occurs), or
            (iii) the additional amount that would be determined under paragraph (4)(A) if the unpredictable contingent event benefit liabilities were included in unfunded new liability notwithstanding paragraph (4)(B)(ii).
        (B) Applicable percentage
In the case of plan years The applicable beginning in: percentage is: 1989 and 1990 5 1991 10 1992 15 1993 20 1994 30 1995 40 1996 50 1997 60 1998 70 1999 80 2000 90 2001 and thereafter 100.
        (C) Paragraph not to apply to existing benefits
This paragraph shall not apply to unpredictable contingent event benefits (and liabilities attributable thereto) for which the event occurred before the first plan year beginning after December 31, 1988.
        (D) Special rule for first year of amortization Unless the employer elects otherwise, the amount determined under subparagraph (A) for the plan year in which the event occurs shall be equal to 150 percent of the amount determined under subparagraph (A)(i). The amount under subparagraph (A)(ii) for subsequent plan years in the amortization period shall be adjusted in the manner provided by the Secretary of the Treasury to reflect the application of this subparagraph.
        (E) Limitation
The present value of the amounts described in subparagraph (A) with respect to any one event shall not exceed the unpredictable contingent event benefit liabilities attributable to that event.
      (6) Special rules for small plans
        (A) Plans with 100 or fewer participants
This subsection shall not apply to any plan for any plan year if on each day during the preceding plan year such plan had no more than 100 participants.
        (B) Plans with more than 100 but not more than 150 participants
In the case of a plan to which subparagraph (A) does not apply and which on each day during the preceding plan year had no more than 150 participants, the amount of the increase under paragraph (1) for such plan year shall be equal to the product of -
            (i) such increase determined without regard to this subparagraph, multiplied by
            (ii) 2 percent for the highest number of participants in excess of 100 on any such day.
        (C) Aggregation of plans
For purposes of this paragraph, all defined benefit plans maintained by the same employer (or any member of such employer's controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account.
      (7) Current liability
For purposes of this subsection -
        (A) In general
The term "current liability" means all liabilities to participants and their beneficiaries under the plan.
        (B) Treatment of unpredictable contingent event benefits
          (i) In general
For purposes of subparagraph (A), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs.
          (ii) Unpredictable contingent event benefit
The term "unpredictable contingent event benefit" means any benefit contingent on an event other than -
              (I) age, service, compensation, death, or disability, or
              (II) an event which is reasonably and reliably predictable (as determined by the Secretary of the Treasury).
        (C) Interest rate and mortality assumptions used Effective for plan years beginning after December 31, 1994 -
          (i) Interest rate
            (I) In general
The rate of interest used to determine current liability under this subsection shall be the rate of interest used under subsection (b)(5) of this section, except that the highest rate in the permissible range under subparagraph (B)(ii) thereof shall not exceed the specified percentage under subclause (II) of the weighted average referred to in such subparagraph.
            (II) Specified percentage
For purposes of subclause (I), the specified percentage shall be determined as follows:

In the case of
plan years beginning The specified
in calendar year: percentage is:
1995 109
1996 108
1997 107
1998 106
1999 and thereafter 105.
            (III) Special rule for 2002 and 2003
For a plan year beginning in 2002 or 2003, notwithstanding subclause (I), in the case that the rate of interest used under subsection (b)(5) of this section exceeds the highest rate permitted under subclause (I), the rate of interest used to determine current liability under this subsection may exceed the rate of interest otherwise permitted under subclause (I); except that such rate of interest shall not exceed 120 percent of the weighted average referred to in subsection (b)(5)(B)(ii) of this section.
          (ii) Mortality tables
            (I) Commissioners' standard table
In the case of plan years beginning before the first plan year to which the first tables prescribed under subclause
            (II) apply, the mortality table used in determining current liability under this subsection shall be the table prescribed by the Secretary of the Treasury which is based on the prevailing commissioners' standard table (described in section 807(d)(5)(A) of title 26) used to determine reserves for group annuity contracts issued on January 1, 1993.
            (II) Secretarial authority
The Secretary of the Treasury may by regulation prescribe for plan years beginning after December 31, 1999, mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary of the Treasury shall take into account results of available independent studies of mortality of individuals covered by pension plans.
            (III) Periodic review
The Secretary of the Treasury shall periodically (at least every 5 years) review any tables in effect under this subsection and shall, to the extent the Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.
          (iii) Separate mortality tables for the disabled Notwithstanding clause (ii) -
            (I) In general
In the case of plan years beginning after December 31, 1995, the Secretary of the Treasury shall establish mortality tables which may be used (in lieu of the tables under clause (ii)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. Such Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before January 1, 1995, and for individuals whose disabilities occur in plan years beginning on or after such date.
            (II) Special rule for disabilities occurring after 1994
In the case of disabilities occurring in plan years beginning after December 31, 1994, the tables under subclause (I) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act [42 U.S.C. 401 et seq.] and the regulations thereunder.
            (III) Plan years beginning in 1995
In the case of any plan year beginning in 1995, a plan may use its own mortality assumptions for individuals who are entitled to benefits under the plan on account of disability.
        (D) Certain service disregarded
          (i) In general
In the case of a participant to whom this subparagraph applies, only the applicable percentage of the years of service before such individual became a participant shall be taken into account in computing the current liability of the plan.
          (ii) Applicable percentage
For purposes of this subparagraph, the applicable percentage shall be determined as follows:

If the years of The applicable
participation are: percentage is:
1 20
2 40
3 60
4 80
5 or more 100.
          (iii) Participants to whom subparagraph applies
This subparagraph shall apply to any participant who, at the time of becoming a participant -
              (I) has not accrued any other benefit under any defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member,
              (II) who first becomes a participant under the plan in a plan year beginning after December 31, 1987, and
              (III) has years of service greater than the minimum years of service necessary for eligibility to participate in the plan.
          (iv) Election
An employer may elect not to have this subparagraph apply.
Such an election, once made, may be revoked only with the consent of the Secretary of the Treasury.
      (8) Other definitions
For purposes of this subsection -
        (A) Unfunded current liability
The term "unfunded current liability" means, with respect to any plan year, the excess (if any) of -
            (i) the current liability under the plan, over
            (ii) value of the plan's assets determined under subsection
          (c)(2) of this section.
        (B) Funded current liability percentage
The term "funded current liability percentage" means, with respect to any plan year, the percentage which -
            (i) the amount determined under subparagraph (A)(ii), is of
            (ii) the current liability under the plan.
        (C) Controlled group
The term "controlled group" means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of title 26.
        (D) Adjustments to prevent omissions and duplications
The Secretary of the Treasury shall provide such adjustments in the unfunded old liability amount, the unfunded new liability amount, the unpredictable contingent event amount, the current payment amount, and any other charges or credits under this section as are necessary to avoid duplication or omission of any factors in the determination of such amounts, charges, or credits.
        (E) Deduction for credit balances
For purposes of this subsection, the amount determined under subparagraph (A)(ii) shall be reduced by any credit balance in the funding standard account. The Secretary of the Treasury may provide for such reduction for purposes of any other provision which references this subsection.
      (9) Applicability of subsection
        (A) In general
Except as provided in paragraph (6)(A), this subsection shall apply to a plan for any plan year if its funded current liability percentage for such year is less than 90 percent.
        (B) Exception for certain plans at least 80 percent funded
Subparagraph (A) shall not apply to a plan for a plan year if -
            (i) the funded current liability percentage for the plan year is at least 80 percent, and
            (ii) such percentage for each of the 2 immediately preceding plan years (or each of the 2d and 3d immediately preceding plan years) is at least 90 percent.
        (C) Funded current liability percentage
For purposes of subparagraphs (A) and (B), the term "funded current liability percentage" has the meaning given such term by paragraph (8)(B), except that such percentage shall be determined for any plan year -
            (i) without regard to paragraph (8)(E), and
            (ii) by using the rate of interest which is the highest rate allowable for the plan year under paragraph (7)(C).
        (D) Transition rules
For purposes of this paragraph:
          (i) Funded percentage for years before 1995
The funded current liability percentage for any plan year beginning before January 1, 1995, shall be treated as not less than 90 percent only if for such plan year the plan met one of the following requirements (as in effect for such year):
              (I) The full-funding limitation under subsection (c)(7) of this section for the plan was zero.
              (II) The plan had no additional funding requirement under this subsection (or would have had no such requirement if its funded current liability percentage had been determined under subparagraph (C)).
              (III) The plan's additional funding requirement under this subsection did not exceed the lesser of 0.5 percent of current liability or $5,000,000.
          (ii) Special rule for 1995 and 1996
For purposes of determining whether subparagraph (B) applies to any plan year beginning in 1995 or 1996, a plan shall be treated as meeting the requirements of subparagraph (B)(ii) if the plan met the requirements of clause (i) of this subparagraph for any two of the plan years beginning in 1992, 1993, and 1994 (whether or not consecutive).
      (10) Unfunded mortality increase amount
        (A) In general
The unfunded mortality increase amount with respect to each unfunded mortality increase is the amount necessary to amortize such increase in equal annual installments over a period of 10 plan years (beginning with the first plan year for which a plan uses any new mortality table issued under paragraph
        (7)(C)(ii)(II) or (III)).
        (B) Unfunded mortality increase
For purposes of subparagraph (A), the term "unfunded mortality increase" means an amount equal to the excess of -
            (i) the current liability of the plan for the first plan year for which a plan uses any new mortality table issued under paragraph (7)(C)(ii)(II) or (III), over
            (ii) the current liability of the plan for such plan year which would have been determined if the mortality table in effect for the preceding plan year had been used.
      (11) Phase-in of increases in funding required by Retirement Protection Act of 1994
        (A) In general
For any applicable plan year, at the election of the employer, the increase under paragraph (1) shall not exceed the greater of -
            (i) the increase that would be required under paragraph (1) if the provisions of this subchapter as in effect for plan years beginning before January 1, 1995, had remained in effect, or
            (ii) the amount which, after taking into account charges (other than the additional charge under this subsection) and credits under subsection (b) of this section, is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) for the applicable plan year to a percentage equal to the sum of the initial funded current liability percentage of the plan plus the applicable number of percentage points for such applicable plan year.
        (B) Applicable number of percentage points
          (i) Initial funded current liability percentage of 75 percent or less
Except as provided in clause (ii), for plans with an initial funded current liability percentage of 75 percent or less, the applicable number of percentage points for the applicable plan year is:

In the case The applicable
of applicable number of
plan years percentage
beginning in: points is:
1995 3
1996 6
1997 9
1998 12
1999 15
2000 19
2001 24.
          (ii) Other cases
In the case of a plan to which this clause applies, the applicable number of percentage points for any such applicable plan year is the sum of -
              (I) 2 percentage points;
              (II) the applicable number of percentage points (if any) under this clause for the preceding applicable plan year;
              (III) the product of .10 multiplied by the excess (if any) of (a) 85 percentage points over (b) the sum of the initial funded current liability percentage and the number determined under subclause (II);
              (IV) for applicable plan years beginning in 2000, 1 percentage point; and
              (V) for applicable plan years beginning in 2001, 2 percentage points.
          (iii) Plans to which clause (ii) applies
            (I) In general
Clause (ii) shall apply to a plan for an applicable plan year if the initial funded current liability percentage of such plan is more than 75 percent.
            (II) Plans initially under clause (i)
In the case of a plan which (but for this subclause) has an initial funded current liability percentage of 75 percent or less, clause (ii) (and not clause (i)) shall apply to such plan with respect to applicable plan years beginning after the first applicable plan year for which the sum of the initial funded current liability percentage and the applicable number of percentage points (determined under clause (i)) exceeds 75 percent. For purposes of applying clause (ii) to such a plan, the initial funded current liability percentage of such plan shall be treated as being the sum referred to in the preceding sentence.
        (C) Definitions
For purposes of this paragraph -
            (i) The term "applicable plan year" means a plan year beginning after December 31, 1994, and before January 1, 2002.
            (ii) The term "initial funded current liability percentage" means the funded current liability percentage as of the first day of the first plan year beginning after December 31, 1994.
    (e) Quarterly contributions required
      (1) In general
If a defined benefit plan (other than a multiemployer plan) which has a funded current liability percentage (as defined in subsection (d)(8) of this section) for the preceding plan year of less than 100 percent fails to pay the full amount of a required installment for the plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) of this section with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of -
          (A) 175 percent of the Federal mid-term rate (as in effect under section 1274 of title 26 for the 1st month of such plan year), or
          (B) the rate of interest used under the plan in determining costs (including adjustments under subsection (b)(5)(B) of this section).
      (2) Amount of underpayment, period of underpayment
For purposes of paragraph (1) -
        (A) Amount
The amount of the underpayment shall be the excess of -
            (i) the required installment, over
            (ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment.
        (B) Period of underpayment
The period for which any interest is charged under this subsection 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 contributed to or under the plan
        (determined without regard to subsection (c)(10) of this section).
        (C) Order of crediting contributions
For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.
      (3) Number of required installments; due dates
For purposes of this subsection -
        (A) Payable in 4 installments
There shall be 4 required installments for each plan year.
        (B) Time for payment of installments

In the case of the following
required installments: The due date is:
1st April 15
2nd July 15
3rd October 15
4th January 15 of the following year.
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      (4) Amount of required installment
For purposes of this subsection -
        (A) In general
The amount of any required installment shall be the applicable percentage of the required annual payment.
        (B) Required annual payment
For purposes of subparagraph (A), the term "required annual payment" means the lesser of -
            (i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 of title 26 (without regard to any waiver under subsection (c) thereof), or
            (ii) 100 percent of the amount so required for the preceding plan year.
Clause (ii) shall not apply if the preceding plan year was not a year of 12 months.
        (C) Applicable percentage
For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:

For plan years The applicable
beginning in: percentage is:
1989 6.25
1990 12.5
1991 18.75
1992 and thereafter 25.
        (D) Special rules for unpredictable contingent event benefits
In the case of a plan to which subsection (d) of this section applies for any calendar year and which has any unpredictable contingent event benefit liabilities -
          (i) Liabilities not taken into account
Such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B).
          (ii) Increase in installments
Each required installment shall be increased by the greatest of -
              (I) the unfunded percentage of the amount of benefits described in subsection (d)(5)(A)(i) of this section paid during the 3-month period preceding the month in which the due date for such installment occurs,
              (II) 25 percent of the amount determined under subsection
            (d)(5)(A)(ii) of this section for the plan year, or
              (III) 25 percent of the amount determined under subsection (d)(5)(A)(iii) of this section for the plan year.
          (iii) Unfunded percentage
For purposes of clause (ii)(I), the term "unfunded percentage" means the percentage determined under subsection (d)(5)(A)(i)(I) of this section for the plan year.
          (iv) Limitation on increase
In no event shall the increases under clause (ii) exceed the amount necessary to increase the funded current liability percentage (within the meaning of subsection (d)(8)(B) of this section) for the plan year to 100 percent.
      (5) Liquidity requirement
        (A) In general
A plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).
        (B) Plans to which paragraph applies
This paragraph shall apply to a defined benefit plan (other than a multiemployer plan or a plan described in subsection
        (d)(6)(A) of this section) which -
            (i) is required to pay installments under this subsection for a plan year, and
            (ii) has a liquidity shortfall for any quarter during such plan year.
        (C) Period of underpayment
For purposes of paragraph (1), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.
        (D) Limitation on increase
If the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) to 100 percent.
        (E) Definitions
For purposes of this paragraph -
          (i) Liquidity shortfall
The term "liquidity shortfall" means, with respect to any required installment, an amount equal to the excess (as of the last day of the quarter for which such installment is made) of the base amount with respect to such quarter over the value (as of such last day) of the plan's liquid assets.
          (ii) Base amount
            (I) In general
The term "base amount" means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter.
            (II) Special rule
If the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary of the Treasury that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.
          (iii) Disbursements from the plan
The term "disbursements from the plan" means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.
          (iv) Adjusted disbursements
The term "adjusted disbursements" means disbursements from the plan reduced by the product of -
              (I) the plan's funded current liability percentage (as defined in subsection (d)(8) of this section) for the plan year, and
              (II) the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary of the Treasury shall provide in regulations.
          (v) Liquid assets
The term "liquid assets" means cash, marketable securities and such other assets 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 prescribe such regulations as are necessary to carry out this paragraph.
      (6) Fiscal years and short years
        (A) Fiscal years
In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto.
        (B) Short plan year
This section shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the
Secretary of the Treasury.
      (7) Special rules for 2002 and 2004
In any case in which the interest rate used to determine current liability is determined under subsection
      (d)(7)(C)(i)(III) of this section -
        (A) 2002
For purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2002, the current liability for the preceding plan year shall be redetermined using 120 percent as the specified percentage determined under subsection
        (d)(7)(C)(i)(II) of this section.
        (B) 2004
For purposes of applying paragraphs (1) and (4)(B)(ii) for plan years beginning in 2004, the current liability for the preceding plan year shall be redetermined using 105 percent as the specified percentage determined under subsection
        (d)(7)(C)(i)(II) of this section.
    (f) Imposition of lien where failure to make required contributions
      (1) In general
In the case of a plan covered under section 1321 of this title, if -
          (A) any person fails to make a required installment under subsection (e) of this section or any other payment required under this section before the due date for such installment or other payment, and
          (B) the unpaid balance of such installment or other payment
        (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000, then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member.
      (2) Plans to which subsection applies
This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection
      (d)(8)(B) of this section) 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 required installments and other payments required under this section (including interest) -
          (A) for plan years beginning after 1987, and
          (B) for which payment has not been made before the due date.
      (4) Notice of failure; lien
        (A) Notice of failure
A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment.
        (B) Period of lien
The lien imposed by paragraph (1) shall arise on the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.
        (C) Certain rules to apply
Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections
        (c), (d), and (e) of section 1368 of this title shall apply with respect to a lien imposed by subsection (a) of this section and the amount with respect to such lien.
      (5) Enforcement
Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor).
      (6) Definitions
For purposes of this subsection -
        (A) Due date; required installment
The terms "due date" and "required installment" have the meanings given such terms by subsection (e) of this section, except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section.
        (B) Controlled group
The term "controlled group" means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of title 26.
    (g) Qualified transfers to health benefit accounts
For purposes of this section, in the case of a qualified transfer
    (as defined in section 420 of title 26) -
        (1) any assets transferred in a plan year on or before the valuation date for such year (and any income allocable thereto) shall, for purposes of subsection (c)(7) of this section, be treated as assets in the plan as of the valuation date for such year, and
        (2) the plan shall be treated as having a net experience loss under subsection (b)(2)(B)(iv) of this section in an amount equal to the amount of such transfer (reduced by any amounts transferred back to the plan under section 420(c)(1)(B) of title 26) and for which amortization charges begin for the first plan year after the plan year in which such transfer occurs, except that such subsection shall be applied to such amount by substituting "10 plan years" for "5 plan years".
    (h) Cross reference
For alternative amortization method for certain multiemployer plans see section 1013(d) of this Act.

    (!1) So in original.

Sec. 1083. Variance from minimum funding standard

    (a) Waiver of requirements in event of business hardship
If an employer, or in the case of a multi-employer plan, 10 percent or more of the number of employers contributing to or under the plan are unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship
    (substantial business hardship in the case of a multiemployer plan) and if application of the standard would be adverse to the interests of plan participants in the aggregate, the Secretary of the Treasury may waive the requirements of section 1082(a) of this title for such year with respect to all or any portion of the minimum funding standard other than the portion thereof determined under section 1082(b)(2)(C) of this title. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years. The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) of this section for any plan year shall be -
        (1) in the case of a plan other than a multiemployer plan, the greater of (A) 150 percent of the Federal mid-term rate (as in effect under section 1274 of title 26 for the 1st month of such plan year), or (B) the rate of interest used under the plan in determining costs (including adjustments under section 1082(b)(5)(B) of this title), and
        (2) in the case of a multiemployer plan, the rate determined under section 6621(b) of title 26.
    (b) Matters considered in determining business hardship
For purposes of this part, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether -
        (1) the employer is operating at an economic loss,
        (2) there is substantial unemployment or underemployment in the trade or business and in the industry concerned,
        (3) the sales and profits of the industry concerned are depressed or declining, and
        (4) it is reasonable to expect that the plan will be continued only if the waiver is granted.
    (c) "Waived funding deficiency" defined
For purposes of this part, the term "waived funding deficiency" means the portion of the minimum funding standard (determined without regard to subsection (b)(3)(C) of section 1082 of this title) for a plan year waived by the Secretary of the Treasury and not satisfied by employer contributions.
    (d) Special rules
      (1) Application must be submitted before date 2 1/2 months after close of year
In the case of a plan other than a multiemployer plan, no waiver may be granted under this section with respect to any plan for any plan year unless an application therefor is submitted to the Secretary of the Treasury not later than the 15th day of the 3rd month beginning after the close of such plan year.
      (2) Special rule if employer is member of controlled group
        (A) In general
In the case of a plan other than a multiemployer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of subsection (a) of this section shall be treated as met only if such requirements are met -
            (i) with respect to such employer, and
            (ii) with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).

The Secretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary of the Treasury determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this subsection.
        (B) Controlled group
For purposes of subparagraph (A), the term "controlled group" means any group treated as a single employer under subsection
        (b), (c), (m), or (o) of section 414 of title 26.
    (e) Notice of filing of application for waiver
      (1) The Secretary of the Treasury shall, before granting a waiver under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such waiver to each employee organization representing employees covered by the affected plan, and each affected party (as defined in section 1301(a)(21) of this title) other than the Pension Benefit Guaranty Corporation. Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under subchapter III of this chapter and for benefit liabilities.
      (2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).
    (f) Cross reference
For corresponding duties of the Secretary of the Treasury with regard to implementation of the Internal Revenue Code of 1986, see section 412(d) of title 26.

Sec. 1084. Extension of amortization periods

    (a) Determinations by Secretary in granting extension
The period of years required to amortize any unfunded liability
    (described in any clause of subsection (b)(2)(B) of section 1082 of this title) of any plan may be extended by the Secretary for a period of time (not in excess of 10 years) if he determines that such extension would carry out the purposes of this chapter and would provide adequate protection for participants under the plan and their beneficiaries and if he determines that the failure to permit such extension would -
        (1) result in -
          (A) a substantial risk to the voluntary continuation of the plan, or
          (B) a substantial curtailment of pension benefit levels or employee compensation, and

        (2) be adverse to the interests of plan participants in the aggregate.

In the case of a plan other than a multiemployer plan, the interest rate applicable for any plan year under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the greater of (A) 150 percent of the Federal mid-term rate (as in effect under section 1274 of title 26 for the 1st month of such plan year), or (B) the rate of interest used under the plan in determining costs. In the case of a multiemployer plan, such rate shall be the rate determined under section 6621(b) of title 26.
    (b) Amendment of plan
      (1) No amendment of the plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under section 1083(a) of this title or an extension of time under subsection (a) of this section is in effect with respect to the plan, or if a plan amendment described in section 1082(c)(8) of this title has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.
      (2) Paragraph (1) shall not apply to any plan amendment which -
        (A) the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,
        (B) only repeals an amendment described in section 1082(c)(8) of this title, or
        (C) is required as a condition of qualification under part I of subchapter D, of chapter 1, of title 26.
    (c) Notice of filing of application for extension
      (1) The Secretary of the Treasury shall, before granting an extension under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such extension to each employee organization representing employees covered by the affected plan.
      (2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).

Sec. 1085. Alternative minimum funding standard

    (a) Maintenance of account
A plan which uses a funding method that requires contributions in all years not less than those required under the entry age normal funding method may maintain an alternative minimum funding standard account for any plan year. Such account shall be credited and charged solely as provided in this section.
    (b) Operation of account
For a plan year the alternative minimum funding standard accounts shall be -
        (1) charged with the sum of -
          (A) the lesser of normal cost under the funding method used under the plan or normal cost determined under the unit credit method,
          (B) the excess, if any, of the present value of accrued benefits under the plan over the fair market value of the assets, and
          (C) an amount equal to the excess, if any, of credits to the alternative minimum funding standard account for all prior plan years over charges to such account for all such years, and

        (2) credited with the amount considered contributed by the employer to or under the plan (within the meaning of section 1082(c)(10) of this title) for the plan year.
    (c) Interest
The alternative minimum funding standard account (and items therein) shall be charged or credited with interest in the manner provided under section 1082(b)(5) of this title with respect to the funding standard account.

Sec. 1085a. Security for waivers of minimum funding standard and extensions of amortization period

    (a) Security may be required
      (1) In general
Except as provided in subsection (c) of this section, the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 1301(a)(15) of this title) to provide security to such plan as a condition for granting or modifying a waiver under section 1083 of this title or an extension under section 1084 of this title.
      (2) Special rules
Any security provided under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation or, at the direction of the Corporation, by a contributing sponsor (within the meaning of section 1301(a)(13) of this title) or a member of such sponsor's controlled group (within the meaning of section 1301(a)(14) of this title).
    (b) Consultation with the Pension Benefit Guaranty Corporation
Except as provided in subsection (c) of this section, the Secretary of the Treasury shall, before granting or modifying a waiver under section 1083 of this title or an extension under section 1084 of this title with respect to a plan described in subsection (a)(1) of this section -
        (1) provide the Pension Benefit Guaranty Corporation with -
          (A) notice of the completed application for any waiver, extension, or modification, and
          (B) an opportunity to comment on such application within 30 days after receipt of such notice, and

        (2) consider -
          (A) any comments of the Corporation under paragraph (1)(B), and
          (B) any views of any employee organization representing participants in the plan which are submitted in writing to the
Secretary of the Treasury in connection with such application.

Information provided to the corporation under this subsection shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103(p) of title 26.
    (c) Exception for certain waivers and extensions
      (1) In general
The preceding provisions of this section shall not apply to any plan with respect to which the sum of -
          (A) the outstanding balance of the accumulated funding deficiencies (within the meaning of section 1082(a)(2) of this title and section 412(a) of title 26) of the plan,
          (B) the outstanding balance of the amount of waived funding deficiencies of the plan waived under section 1083 of this title or section 412(d) of title 26, and
          (C) the outstanding balance of the amount of decreases in the minimum funding standard allowed under section 1084 of this title or section 412(e) of title 26, is less than $1,000,000.
      (2) Accumulated funding deficiencies
For purposes of paragraph (1)(A), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under section 1083 of this title or section 412(d) of title 26 and for extensions of the amortization period under section 1084 of this title or section 412(e) of title 26 which are pending with respect to such plan were denied.

Sec. 1085b. Security required upon adoption of plan amendment resulting in significant underfunding

    (a) In general
If -
        (1) a defined benefit plan (other than a multiemployer plan) to which the requirements of section 1082 of this title apply adopts an amendment an effect of which is to increase current liability under the plan for a plan year, and
        (2) the funded current liability percentage of the plan for the plan year in which the amendment takes effect is less than 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, the contributing sponsor (or any member of the controlled group of the contributing sponsor) shall provide security to the plan.
    (b) Form of security
The security required under subsection (a) of this section shall consist of -
        (1) a bond issued by a corporate surety company that is an acceptable surety for purposes of section 1112 of this title,
        (2) cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or
        (3) such other form of security as is satisfactory to the Secretary of the Treasury and the parties involved.
    (c) Amount of security
The security shall be in an amount equal to the excess of -
        (1) the lesser of -
          (A) the amount of additional plan assets which would be necessary to increase the funded current liability percentage under the plan to 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, or
          (B) the amount of the increase in current liability under the plan attributable to the plan amendment and any other plan amendments adopted after December 22, 1987, and before such plan amendment, over

        (2) $10,000,000.
    (d) Release of security
The security shall be released (and any amounts thereunder shall be refunded together with any interest accrued thereon) at the end of the first plan year which ends after the provision of the security and for which the funded current liability percentage under the plan is not less than 60 percent. The Secretary of the Treasury may prescribe regulations for partial releases of the security by reason of increases in the funded current liability percentage.
    (e) Notice
A contributing sponsor which is required to provide security under subsection (a) of this section shall notify the Pension Benefit Guaranty Corporation within 30 days after the amendment requiring such security takes effect. Such notice shall contain such information as the Corporation may require.
    (f) Definitions
For purposes of this section, the terms "current liability", "funded current liability percentage", and "unfunded current liability" shall have the meanings given such terms by section 1082(d) of this title, except that in computing unfunded current liability there shall not be taken into account any unamortized portion of the unfunded old liability amount as of the close of the plan year.

Sec. 1086. Effective dates

      (a) Except as otherwise provided in this section, this part shall apply in the case of plan years beginning after September 2, 1974.
      (b) Except as otherwise provided in subsections (c) and (d) of this section, in the case of a plan in existence on January 1, 1974, this part shall apply in the case of plan years beginning after December 31, 1975.
      (c)(1) In the case of a plan maintained on January 1, 1974, pursuant to one or more agreements which the Secretary finds to be collective bargaining agreements between employee representatives and one or more employers, this part shall apply only with respect to plan years beginning after the earlier of the date specified in subparagraph (A) or (B) of section 1061(c)(1) of this title.
      (2) This subsection shall apply with respect to a plan if (and only if) the application of this subsection results in a later effective date for this part than the effective date required by subsection (b) of this section.
      (d) In the case of a plan the administrator of which elects under section 1017(d) of this Act to have the provisions of the Internal Revenue Code of 1954 relating to participation, vesting, funding, and form of benefit to apply to a plan year and to all subsequent plan years, this part shall apply to plan years beginning on the earlier of the first plan year to which such election applies or the first plan year determined under subsections (a), (b), and (c) of this section.
      (e) In the case of a plan maintained by a labor organization which is exempt from tax under section 501(c)(5) of title 26 exclusively for the benefit of its employees and their beneficiaries, this part shall be applied by substituting for the term "December 31, 1975" in subsection (b) of this section, the earlier of -
        (1) the date on which the second convention of such labor organization held after September 2, 1974, ends or
        (2) December 31, 1980, but in no event shall a date earlier than the later of December 31, 1975, or the date determined under subsection (c) of this section be substituted.
      (f) The preceding provisions of this section shall not apply with respect to amendments made to this part in provisions enacted after September 2, 1974.

PART 4 - FIDUCIARY RESPONSIBILITY