29 U.S.C. § 1056 : US Code - Section 1056: Form and payment of benefits

Search 29 U.S.C. § 1056 : US Code - Section 1056: Form and payment of benefits

    (a) Commencement date for payment of benefits
      Each pension plan shall provide that unless the participant
    otherwise elects, the payment of benefits under the plan to the
    participant shall begin not later than the 60th day after the
    latest of the close of the plan year in which - 
        (1) occurs the date on which the participant attains the
      earlier of age 65 or the normal retirement age specified under
      the plan,
        (2) occurs the 10th anniversary of the year in which the
      participant commenced participation in the plan, or
        (3) the participant terminates his service with the employer.

    In the case of a plan which provides for the payment of an early
    retirement benefit, such plan shall provide that a participant who
    satisfied the service requirements for such early retirement
    benefit, but separated from the service (with any nonforfeitable
    right to an accrued benefit) before satisfying the age requirement
    for such early retirement benefit, is entitled upon satisfaction of
    such age requirement to receive a benefit not less than the benefit
    to which he would be entitled at the normal retirement age,
    actuarially reduced under regulations prescribed by the Secretary
    of the Treasury.
    (b) Decrease in plan benefits by reason of increases in benefit
      levels under Social Security Act or Railroad Retirement Act of
      1937
      If - 
        (1) a participant or beneficiary is receiving benefits under a
      pension plan, or
        (2) a participant is separated from the service and has non-
      forfeitable rights to benefits,

    a plan may not decrease benefits of such a participant by reason of
    any increase in the benefit levels payable under title II of the
    Social Security Act [42 U.S.C. 401 et seq.] or the Railroad
    Retirement Act of 1937 [45 U.S.C. 231 et seq.] or any increase in
    the wage base under such title II, if such increase takes place
    after September 2, 1974, or (if later) the earlier of the date of
    first entitlement of such benefits or the date of such separation.
    (c) Forfeiture of accrued benefits derived from employer
      contributions
      No pension plan may provide that any part of a participant's
    accrued benefit derived from employer contributions (whether or not
    otherwise nonforfeitable) is forfeitable solely because of
    withdrawal by such participant of any amount attributable to the
    benefit derived from contributions made by such participant. The
    preceding sentence shall not apply (1) to the accrued benefit of
    any participant unless, at the time of such withdrawal, such
    participant has a nonforfeitable right to at least 50 percent of
    such accrued benefit, or (2) to the extent that an accrued benefit
    is permitted to be forfeited in accordance with section
    1053(a)(3)(D)(iii) of this title.
    (d) Assignment or alienation of plan benefits
      (1) Each pension plan shall provide that benefits provided under
    the plan may not be assigned or alienated.
      (2) For the purposes of paragraph (1) of this subsection, there
    shall not be taken into account any voluntary and revocable
    assignment of not to exceed 10 percent of any benefit payment, or
    of any irrevocable assignment or alienation of benefits executed
    before September 2, 1974. The preceding sentence shall not apply to
    any assignment or alienation made for the purposes of defraying
    plan administration costs. For purposes of this paragraph a loan
    made to a participant or beneficiary shall not be treated as an
    assignment or alienation if such loan is secured by the
    participant's accrued non-forfeitable benefit and is exempt from
    the tax imposed by section 4975 of title 26 (relating to tax on
    prohibited transactions) by reason of section 4975(d)(1) of title
    26.
      (3)(A) Paragraph (1) shall apply to the creation, assignment, or
    recognition of a right to any benefit payable with respect to a
    participant pursuant to a domestic relations order, except that
    paragraph (1) shall not apply if the order is determined to be a
    qualified domestic relations order. Each pension plan shall provide
    for the payment of benefits in accordance with the applicable
    requirements of any qualified domestic relations order.
      (B) For purposes of this paragraph - 
        (i) the term "qualified domestic relations order" means a
      domestic relations order - 
          (I) which creates or recognizes the existence of an alternate
        payee's right to, or assigns to an alternate payee the right
        to, receive all or a portion of the benefits payable with
        respect to a participant under a plan, and
          (II) with respect to which the requirements of subparagraphs
        (C) and (D) are met, and

        (ii) the term "domestic relations order" means any judgment,
      decree, or order (including approval of a property settlement
      agreement) which - 
          (I) relates to the provision of child support, alimony
        payments, or marital property rights to a spouse, former
        spouse, child, or other dependent of a participant, and
          (II) is made pursuant to a State domestic relations law
        (including a community property law).

      (C) A domestic relations order meets the requirements of this
    subparagraph only if such order clearly specifies - 
        (i) the name and the last known mailing address (if any) of the
      participant and the name and mailing address of each alternate
      payee covered by the order,
        (ii) the amount or percentage of the participant's benefits to
      be paid by the plan to each such alternate payee, or the manner
      in which such amount or percentage is to be determined,
        (iii) the number of payments or period to which such order
      applies, and
        (iv) each plan to which such order applies.

      (D) A domestic relations order meets the requirements of this
    subparagraph only if such order - 
        (i) does not require a plan to provide any type or form of
      benefit, or any option, not otherwise provided under the plan,
        (ii) does not require the plan to provide increased benefits
      (determined on the basis of actuarial value), and
        (iii) does not require the payment of benefits to an alternate
      payee which are required to be paid to another alternate payee
      under another order previously determined to be a qualified
      domestic relations order.

      (E)(i) A domestic relations order shall not be treated as failing
    to meet the requirements of clause (i) of subparagraph (D) solely
    because such order requires that payment of benefits be made to an
    alternate payee - 
        (I) in the case of any payment before a participant has
      separated from service, on or after the date on which the
      participant attains (or would have attained) the earliest
      retirement age,
        (II) as if the participant had retired on the date on which
      such payment is to begin under such order (but taking into
      account only the present value of benefits actually accrued and
      not taking into account the present value of any employer subsidy
      for early retirement), and
        (III) in any form in which such benefits may be paid under the
      plan to the participant (other than in the form of a joint and
      survivor annuity with respect to the alternate payee and his or
      her subsequent spouse).

    For purposes of subclause (II), the interest rate assumption used
    in determining the present value shall be the interest rate
    specified in the plan or, if no rate is specified, 5 percent.
      (ii) For purposes of this subparagraph, the term "earliest
    retirement age" means the earlier of - 
        (I) the date on which the participant is entitled to a
      distribution under the plan, or
        (II) the later of the date of the participant attains age 50 or
      the earliest date on which the participant could begin receiving
      benefits under the plan if the participant separated from
      service.

      (F) To the extent provided in any qualified domestic relations
    order - 
        (i) the former spouse of a participant shall be treated as a
      surviving spouse of such participant for purposes of section 1055
      of this title (and any spouse of the participant shall not be
      treated as a spouse of the participant for such purposes), and
        (ii) if married for at least 1 year, the surviving former
      spouse shall be treated as meeting the requirements of section
      1055(f) of this title.

      (G)(i) In the case of any domestic relations order received by a
    plan - 
        (I) the plan administrator shall promptly notify the
      participant and each alternate payee of the receipt of such order
      and the plan's procedures for determining the qualified status of
      domestic relations orders, and
        (II) within a reasonable period after receipt of such order,
      the plan administrator shall determine whether such order is a
      qualified domestic relations order and notify the participant and
      each alternate payee of such determination.

      (ii) Each plan shall establish reasonable procedures to determine
    the qualified status of domestic relations orders and to administer
    distributions under such qualified orders. Such procedures - 
        (I) shall be in writing,
        (II) shall provide for the notification of each person
      specified in a domestic relations order as entitled to payment of
      benefits under the plan (at the address included in the domestic
      relations order) of such procedures promptly upon receipt by the
      plan of the domestic relations order, and
        (III) shall permit an alternate payee to designate a
      representative for receipt of copies of notices that are sent to
      the alternate payee with respect to a domestic relations order.

      (H)(i) During any period in which the issue of whether a domestic
    relations order is a qualified domestic relations order is being
    determined (by the plan administrator, by a court of competent
    jurisdiction, or otherwise), the plan administrator shall
    separately account for the amounts (hereinafter in this
    subparagraph referred to as the "segregated amounts") which would
    have been payable to the alternate payee during such period if the
    order had been determined to be a qualified domestic relations
    order.
      (ii) If within the 18-month period described in clause (v) the
    order (or modification thereof) is determined to be a qualified
    domestic relations order, the plan administrator shall pay the
    segregated amounts (including any interest thereon) to the person
    or persons entitled thereto.
      (iii) If within the 18-month period described in clause (v) - 
        (I) it is determined that the order is not a qualified domestic
      relations order, or
        (II) the issue as to whether such order is a qualified domestic
      relations order is not resolved,

    then the plan administrator shall pay the segregated amounts
    (including any interest thereon) to the person or persons who would
    have been entitled to such amounts if there had been no order.
      (iv) Any determination that an order is a qualified domestic
    relations order which is made after the close of the 18-month
    period described in clause (v) shall be applied prospectively only.
      (v) For purposes of this subparagraph, the 18-month period
    described in this clause is the 18-month period beginning with the
    date on which the first payment would be required to be made under
    the domestic relations order.
      (I) If a plan fiduciary acts in accordance with part 4 of this
    subtitle in - 
        (i) treating a domestic relations order as being (or not being)
      a qualified domestic relations order, or
        (ii) taking action under subparagraph (H),

    then the plan's obligation to the participant and each alternate
    payee shall be discharged to the extent of any payment made
    pursuant to such Act.
      (J) A person who is an alternate payee under a qualified domestic
    relations order shall be considered for purposes of any provision
    of this chapter a beneficiary under the plan. Nothing in the
    preceding sentence shall permit a requirement under section 1301 of
    this title of the payment of more than 1 premium with respect to a
    participant for any period.
      (K) The term "alternate payee" means any spouse, former spouse,
    child, or other dependent of a participant who is recognized by a
    domestic relations order as having a right to receive all, or a
    portion of, the benefits payable under a plan with respect to such
    participant.
      (L) This paragraph shall not apply to any plan to which paragraph
    (1) does not apply.
      (M) Payment of benefits by a pension plan in accordance with the
    applicable requirements of a qualified domestic relations order
    shall not be treated as garnishment for purposes of section 1673(a)
    of title 15.
      (N) In prescribing regulations under this paragraph, the
    Secretary shall consult with the Secretary of the Treasury.
      (4) Paragraph (1) shall not apply to any offset of a
    participant's benefits provided under an employee pension benefit
    plan against an amount that the participant is ordered or required
    to pay to the plan if - 
        (A) the order or requirement to pay arises - 
          (i) under a judgment of conviction for a crime involving such
        plan,
          (ii) under a civil judgment (including a consent order or
        decree) entered by a court in an action brought in connection
        with a violation (or alleged violation) of part 4 of this
        subtitle, or
          (iii) pursuant to a settlement agreement between the
        Secretary and the participant, or a settlement agreement
        between the Pension Benefit Guaranty Corporation and the
        participant, in connection with a violation (or alleged
        violation) of part 4 of this subtitle by a fiduciary or any
        other person,

        (B) the judgment, order, decree, or settlement agreement
      expressly provides for the offset of all or part of the amount
      ordered or required to be paid to the plan against the
      participant's benefits provided under the plan, and
        (C) in a case in which the survivor annuity requirements of
      section 1055 of this title apply with respect to distributions
      from the plan to the participant, if the participant has a spouse
      at the time at which the offset is to be made - 
          (i) either - 
            (I) such spouse has consented in writing to such offset and
          such consent is witnessed by a notary public or
          representative of the plan (or it is established to the
          satisfaction of a plan representative that such consent may
          not be obtained by reason of circumstances described in
          section 1055(c)(2)(B) of this title), or
            (II) an election to waive the right of the spouse to a
          qualified joint and survivor annuity or a qualified
          preretirement survivor annuity is in effect in accordance
          with the requirements of section 1055(c) of this title,

          (ii) such spouse is ordered or required in such judgment,
        order, decree, or settlement to pay an amount to the plan in
        connection with a violation of part 4 of this subtitle, or
          (iii) in such judgment, order, decree, or settlement, such
        spouse retains the right to receive the survivor annuity under
        a qualified joint and survivor annuity provided pursuant to
        section 1055(a)(1) of this title and under a qualified
        preretirement survivor annuity provided pursuant to section
        1055(a)(2) of this title, determined in accordance with
        paragraph (5).

    A plan shall not be treated as failing to meet the requirements of
    section 1055 of this title solely by reason of an offset under this
    paragraph.
      (5)(A) The survivor annuity described in paragraph (4)(C)(iii)
    shall be determined as if - 
        (i) the participant terminated employment on the date of the
      offset,
        (ii) there was no offset,
        (iii) the plan permitted commencement of benefits only on or
      after normal retirement age,
        (iv) the plan provided only the minimum-required qualified
      joint and survivor annuity, and
        (v) the amount of the qualified preretirement survivor annuity
      under the plan is equal to the amount of the survivor annuity
      payable under the minimum-required qualified joint and survivor
      annuity.

      (B) For purposes of this paragraph, the term "minimum-required
    qualified joint and survivor annuity" means the qualified joint and
    survivor annuity which is the actuarial equivalent of the
    participant's accrued benefit (within the meaning of section
    1002(23) of this title) and under which the survivor annuity is 50
    percent of the amount of the annuity which is payable during the
    joint lives of the participant and the spouse.
    (e) Limitation on distributions other than life annuities paid by
      plan
      (1) In general
        Notwithstanding any other provision of this part, the fiduciary
      of a pension plan that is subject to the additional funding
      requirements of section 1083(j)(4) of this title shall not permit
      a prohibited payment to be made from a plan during a period in
      which such plan has a liquidity shortfall (as defined in section
      1083(j)(4)(E)(i) of this title).
      (2) Prohibited payment
        For purposes of paragraph (1), the term "prohibited payment"
      means - 
          (A) any payment, in excess of the monthly amount paid under a
        single life annuity (plus any social security supplements
        described in the last sentence of section 1054(b)(1)(G) of this
        title), to a participant or beneficiary whose annuity starting
        date (as defined in section 1055(h)(2) of this title), that
        occurs during the period referred to in paragraph (1),
          (B) any payment for the purchase of an irrevocable commitment
        from an insurer to pay benefits, and
          (C) any other payment specified by the Secretary of the
        Treasury by regulations.
      (3) Period of shortfall
        For purposes of this subsection, a plan has a liquidity
      shortfall during the period that there is an underpayment of an
      installment under section 1083(j)(3) of this title by reason of
      section 1083(j)(4)(A) of this title.
      (4) Coordination with other provisions
        Compliance with this subsection shall not constitute a
      violation of any other provision of this chapter.
    (f) Missing participants in terminated plans
      In the case of a plan covered by section 1350 of this title, upon
    termination of the plan, benefits of missing participants shall be
    treated in accordance with section 1350 of this title.
    (g) Funding-based limits on benefits and benefit accruals under
      single-employer plans
      (1) Funding-based limitation on shutdown benefits and other
        unpredictable contingent event benefits under single-employer
        plans
        (A) In general
          If a participant of a defined benefit plan which is a single-
        employer plan is entitled to an unpredictable contingent event
        benefit payable with respect to any event occurring during any
        plan year, the plan shall provide that such benefit may not be
        provided if the adjusted funding target attainment percentage
        for such plan year - 
            (i) is less than 60 percent, or
            (ii) would be less than 60 percent taking into account such
          occurrence.
        (B) Exemption
          Subparagraph (A) shall cease to apply with respect to any
        plan year, effective as of the first day of the plan year, upon
        payment by the plan sponsor of a contribution (in addition to
        any minimum required contribution under section 1083 of this
        title) equal to - 
            (i) in the case of subparagraph (A)(i), the amount of the
          increase in the funding target of the plan (under section
          1083 of this title) for the plan year attributable to the
          occurrence referred to in subparagraph (A), and
            (ii) in the case of subparagraph (A)(ii), the amount
          sufficient to result in an adjusted funding target attainment
          percentage of 60 percent.
        (C) Unpredictable contingent event benefit
          For purposes of this paragraph, the term "unpredictable
        contingent event benefit" means any benefit payable solely by
        reason of - 
            (i) a plant shutdown (or similar event, as determined by
          the Secretary of the Treasury), or
            (ii) an event other than the attainment of any age,
          performance of any service, receipt or derivation of any
          compensation, or occurrence of death or disability.
      (2) Limitations on plan amendments increasing liability for
        benefits
        (A) In general
          No amendment to a defined benefit plan which is a single-
        employer plan which has the effect of increasing liabilities
        of the plan by reason of increases in benefits, establishment
        of new benefits, changing the rate of benefit accrual, or
        changing the rate at which benefits become nonforfeitable may
        take effect during any plan year if the adjusted funding target
        attainment percentage for such plan year is - 
            (i) less than 80 percent, or
            (ii) would be less than 80 percent taking into account such
          amendment.
        (B) Exemption
          Subparagraph (A) shall cease to apply with respect to any
        plan year, effective as of the first day of the plan year (or
        if later, the effective date of the amendment), upon payment by
        the plan sponsor of a contribution (in addition to any minimum
        required contribution under section 1083 of this title) equal
        to - 
            (i) in the case of subparagraph (A)(i), the amount of the
          increase in the funding target of the plan (under section
          1083 of this title) for the plan year attributable to the
          amendment, and
            (ii) in the case of subparagraph (A)(ii), the amount
          sufficient to result in an adjusted funding target attainment
          percentage of 80 percent.
        (C) Exception for certain benefit increases
          Subparagraph (A) shall not apply to any amendment which
        provides for an increase in benefits under a formula which is
        not based on a participant's compensation, but only if the rate
        of such increase is not in excess of the contemporaneous rate
        of increase in average wages of participants covered by the
        amendment.
      (3) Limitations on accelerated benefit distributions
        (A) Funding percentage less than 60 percent
          A defined benefit plan which is a single-employer plan shall
        provide that, in any case in which the plan's adjusted funding
        target attainment percentage for a plan year is less than 60
        percent, the plan may not pay any prohibited payment after the
        valuation date for the plan year.
        (B) Bankruptcy
          A defined benefit plan which is a single-employer plan shall
        provide that, during any period in which the plan sponsor is a
        debtor in a case under title 11 or similar Federal or State
        law, the plan may not pay any prohibited payment. The preceding
        sentence shall not apply on or after the date on which the
        enrolled actuary of the plan certifies that the adjusted
        funding target attainment percentage of such plan is not less
        than 100 percent.
        (C) Limited payment if percentage at least 60 percent but less
          than 80 percent
          (i) In general
            A defined benefit plan which is a single-employer plan
          shall provide that, in any case in which the plan's adjusted
          funding target attainment percentage for a plan year is 60
          percent or greater but less than 80 percent, the plan may not
          pay any prohibited payment after the valuation date for the
          plan year to the extent the amount of the payment exceeds the
          lesser of - 
              (I) 50 percent of the amount of the payment which could
            be made without regard to this subsection, or
              (II) the present value (determined under guidance
            prescribed by the Pension Benefit Guaranty Corporation,
            using the interest and mortality assumptions under section
            1055(g) of this title) of the maximum guarantee with
            respect to the participant under section 1322 of this
            title.
          (ii) One-time application
            (I) In general
              The plan shall also provide that only 1 prohibited
            payment meeting the requirements of clause (i) may be made
            with respect to any participant during any period of
            consecutive plan years to which the limitations under
            either subparagraph (A) or (B) or this subparagraph
            applies.
            (II) Treatment of beneficiaries
              For purposes of this clause, a participant and any
            beneficiary on his behalf (including an alternate payee, as
            defined in subsection (d)(3)(K)) shall be treated as 1
            participant. If the accrued benefit of a participant is
            allocated to such an alternate payee and 1 or more other
            persons, the amount under clause (i) shall be allocated
            among such persons in the same manner as the accrued
            benefit is allocated unless the qualified domestic
            relations order (as defined in subsection (d)(3)(B)(i))
            provides otherwise.
        (D) Exception
          This paragraph shall not apply to any plan for any plan year
        if the terms of such plan (as in effect for the period
        beginning on September 1, 2005, and ending with such plan year)
        provide for no benefit accruals with respect to any participant
        during such period.
        (E) Prohibited payment
          For purpose (!1) of this paragraph, the term "prohibited
        payment" means - 

            (i) any payment, in excess of the monthly amount paid under
          a single life annuity (plus any social security supplements
          described in the last sentence of section 1054(b)(1)(G) of
          this title), to a participant or beneficiary whose annuity
          starting date (as defined in section 1055(h)(2) of this
          title) occurs during any period a limitation under
          subparagraph (A) or (B) is in effect,
            (ii) any payment for the purchase of an irrevocable
          commitment from an insurer to pay benefits, and
            (iii) any other payment specified by the Secretary of the
          Treasury by regulations.

        Such term shall not include the payment of a benefit which
        under section 1053(e) of this title may be immediately
        distributed without the consent of the participant.
      (4) Limitation on benefit accruals for plans with severe funding
        shortfalls
        (A) In general
          A defined benefit plan which is a single-employer plan shall
        provide that, in any case in which the plan's adjusted funding
        target attainment percentage for a plan year is less than 60
        percent, benefit accruals under the plan shall cease as of the
        valuation date for the plan year.
        (B) Exemption
          Subparagraph (A) shall cease to apply with respect to any
        plan year, effective as of the first day of the plan year, upon
        payment by the plan sponsor of a contribution (in addition to
        any minimum required contribution under section 1083 of this
        title) equal to the amount sufficient to result in an adjusted
        funding target attainment percentage of 60 percent.
      (5) Rules relating to contributions required to avoid benefit
        limitations
        (A) Security may be provided
          (i) In general
            For purposes of this subsection, the adjusted funding
          target attainment percentage shall be determined by treating
          as an asset of the plan any security provided by a plan
          sponsor in a form meeting the requirements of clause (ii).
          (ii) Form of security
            The security required under clause (i) shall consist of - 
              (I) a bond issued by a corporate surety company that is
            an acceptable surety for purposes of section 1112 of this
            title,
              (II) cash, or United States obligations which mature in 3
            years or less, held in escrow by a bank or similar
            financial institution, or
              (III) such other form of security as is satisfactory to
            the Secretary of the Treasury and the parties involved.
          (iii) Enforcement
            Any security provided under clause (i) may be perfected and
          enforced at any time after the earlier of - 
              (I) the date on which the plan terminates,
              (II) if there is a failure to make a payment of the
            minimum required contribution for any plan year beginning
            after the security is provided, the due date for the
            payment under section 1083(j) of this title, or
              (III) if the adjusted funding target attainment
            percentage is less than 60 percent for a consecutive period
            of 7 years, the valuation date for the last year in the
            period.
          (iv) Release of security
            The security shall be released (and any amounts thereunder
          shall be refunded together with any interest accrued thereon)
          at such time as the Secretary of the Treasury may prescribe
          in regulations, including regulations for partial releases of
          the security by reason of increases in the adjusted funding
          target attainment percentage.
        (B) Prefunding balance or funding standard carryover balance
          may not be used
          No prefunding balance or funding standard carryover balance
        under section 1083(f) of this title may be used under paragraph
        (1), (2), or (4) to satisfy any payment an employer may make
        under any such paragraph to avoid or terminate the application
        of any limitation under such paragraph.
        (C) Deemed reduction of funding balances
          (i) In general
            Subject to clause (iii), in any case in which a benefit
          limitation under paragraph (1), (2), (3), or (4) would (but
          for this subparagraph and determined without regard to
          paragraph (1)(B), (2)(B), or (4)(B)) apply to such plan for
          the plan year, the plan sponsor of such plan shall be treated
          for purposes of this chapter as having made an election under
          section 1083(f) of this title to reduce the prefunding
          balance or funding standard carryover balance by such amount
          as is necessary for such benefit limitation to not apply to
          the plan for such plan year.
          (ii) Exception for insufficient funding balances
            Clause (i) shall not apply with respect to a benefit
          limitation for any plan year if the application of clause (i)
          would not result in the benefit limitation not applying for
          such plan year.
          (iii) Restrictions of certain rules to collectively bargained
            plans
            With respect to any benefit limitation under paragraph (1),
          (2), or (4), clause (i) shall only apply in the case of a
          plan maintained pursuant to 1 or more collective bargaining
          agreements between employee representatives and 1 or more
          employers.
      (6) New plans
        Paragraphs (1), (2), and (4) shall not apply to a plan for the
      first 5 plan years of the plan. For purposes of this paragraph,
      the reference in this paragraph to a plan shall include a
      reference to any predecessor plan.
      (7) Presumed underfunding for purposes of benefit limitations
        (A) Presumption of continued underfunding
          In any case in which a benefit limitation under paragraph
        (1), (2), (3), or (4) has been applied to a plan with respect
        to the plan year preceding the current plan year, the adjusted
        funding target attainment percentage of the plan for the
        current plan year shall be presumed to be equal to the adjusted
        funding target attainment percentage of the plan for the
        preceding plan year until the enrolled actuary of the plan
        certifies the actual adjusted funding target attainment
        percentage of the plan for the current plan year.
        (B) Presumption of underfunding after 10th month
          In any case in which no certification of the adjusted funding
        target attainment percentage for the current plan year is made
        with respect to the plan before the first day of the 10th month
        of such year, for purposes of paragraphs (1), (2), (3), and
        (4), such first day shall be deemed, for purposes of such
        paragraph, to be the valuation date of the plan for the current
        plan year and the plan's adjusted funding target attainment
        percentage shall be conclusively presumed to be less than 60
        percent as of such first day.
        (C) Presumption of underfunding after 4th month for nearly
          underfunded plans
          In any case in which - 
            (i) a benefit limitation under paragraph (1), (2), (3), or
          (4) did not apply to a plan with respect to the plan year
          preceding the current plan year, but the adjusted funding
          target attainment percentage of the plan for such preceding
          plan year was not more than 10 percentage points greater than
          the percentage which would have caused such paragraph to
          apply to the plan with respect to such preceding plan year,
          and
            (ii) as of the first day of the 4th month of the current
          plan year, the enrolled actuary of the plan has not certified
          the actual adjusted funding target attainment percentage of
          the plan for the current plan year,

        until the enrolled actuary so certifies, such first day shall
        be deemed, for purposes of such paragraph, to be the valuation
        date of the plan for the current plan year and the adjusted
        funding target attainment percentage of the plan as of such
        first day shall, for purposes of such paragraph, be presumed to
        be equal to 10 percentage points less than the adjusted funding
        target attainment percentage of the plan for such preceding
        plan year.
      (8) Treatment of plan as of close of prohibited or cessation
        period
        For purposes of applying this part - 
        (A) Operation of plan after period
          Unless the plan provides otherwise, payments and accruals
        will resume effective as of the day following the close of the
        period for which any limitation of payment or accrual of
        benefits under paragraph (3) or (4) applies.
        (B) Treatment of affected benefits
          Nothing in this paragraph shall be construed as affecting the
        plan's treatment of benefits which would have been paid or
        accrued but for this subsection.
      (9) Terms relating to funding target attainment percentage
        For purposes of this subsection - 
        (A) In general
          The term "funding target attainment percentage" has the same
        meaning given such term by section 1083(d)(2) of this title.
        (B) Adjusted funding target attainment percentage
          The term "adjusted funding target attainment percentage"
        means the funding target attainment percentage which is
        determined under subparagraph (A) by increasing each of the
        amounts under subparagraphs (A) and (B) of section 1083(d)(2)
        of this title by the aggregate amount of purchases of annuities
        for employees other than highly compensated employees (as
        defined in section 414(q) of title 26) which were made by the
        plan during the preceding 2 plan years.
        (C) Application to plans which are fully funded without regard
          to reductions for funding balances
          (i) In general
            In the case of a plan for any plan year, if the funding
          target attainment percentage is 100 percent or more
          (determined without regard to the reduction in the value of
          assets under section 1083(f)(4) of this title), the funding
          target attainment percentage for purposes of subparagraphs
          (A) and (B) shall be determined without regard to such
          reduction.
          (ii) Transition rule
            Clause (i) shall be applied to plan years beginning after
          2007 and before 2011 by substituting for "100 percent" the
          applicable percentage determined in accordance with the
          following table:

    In the case of a plan year                            The applicable
    beginning in calendar year:                            percentage is
      2008                                                     92     
      2009                                                     94     
      2010                                                      96.   

          (iii) Limitation
            Clause (ii) shall not apply with respect to any plan year
          beginning after 2008 unless the funding target attainment
          percentage (determined without regard to the reduction in the
          value of assets under section 1083(f)(4) of this title) of
          the plan for each preceding plan year beginning after 2007
          was not less than the applicable percentage with respect to
          such preceding plan year determined under clause (ii).
        (D) Special rule for certain years
          Solely for purposes of any applicable provision - 
          (i) In general
            For plan years beginning on or after October 1, 2008, and
          before October 1, 2010, the adjusted funding target
          attainment percentage of a plan shall be the greater of - 
              (I) such percentage, as determined without regard to this
            subparagraph, or
              (II) the adjusted funding target attainment percentage
            for such plan for the plan year beginning after October 1,
            2007, and before October 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 valuation date is not
          the first day of the plan year - 
              (I) clause (i) shall apply to plan years beginning after
            December 31, 2007, and before January 1, 2010, and
              (II) clause (i)(II) shall apply based on the last plan
            year beginning before November 1, 2007, as determined under
            rules prescribed by the Secretary of the Treasury.
          (iii) Applicable provision
            For purposes of this subparagraph, the term "applicable
          provision" means - 
              (I) paragraph (3), but only for purposes of applying such
            paragraph to a payment which, as determined under rules
            prescribed by the Secretary of the Treasury, is a payment
            under a social security leveling option which accelerates
            payments under the plan before, and reduces payments after,
            a participant starts receiving social security benefits in
            order to provide substantially similar aggregate payments
            both before and after such benefits are received, and
              (II) paragraph (4).
      (10) Secretarial authority for plans with alternate valuation
        date
        In the case of a plan which has designated a valuation date
      other than the first day of the plan year, the Secretary of the
      Treasury may prescribe rules for the application of this
      subsection which are necessary to reflect the alternate valuation
      date.
      (11) Special rule for 2008
        For purposes of this subsection, in the case of plan years
      beginning in 2008, the funding target attainment percentage for
      the preceding plan year may be determined using such methods of
      estimation as the Secretary of the Treasury may provide.