PUBLIC LAW 109–280—AUG. 17, 2006
120 STAT. 847
‘‘Subpart B—Benefit Limitations Under SingleEmployer Plans ‘‘Sec. 436. Funding-based limitation on shutdown benefits and other unpredictable contingent event benefits under single-employer plans. ‘‘SEC. 436. FUNDING-BASED LIMITS ON BENEFITS AND BENEFIT ACCRUALS UNDER SINGLE-EMPLOYER PLANS.
‘‘(a) GENERAL RULE.—For purposes of section 401(a)(29), a defined benefit plan which is a single-employer plan shall be treated as meeting the requirements of this section if the plan meets the requirements of subsections (b), (c), (d), and (e). ‘‘(b) FUNDING-BASED LIMITATION ON SHUTDOWN BENEFITS AND OTHER UNPREDICTABLE CONTINGENT EVENT BENEFITS UNDER SINGLE-EMPLOYER PLANS.— ‘‘(1) 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— ‘‘(A) is less than 60 percent, or ‘‘(B) would be less than 60 percent taking into account such occurrence. ‘‘(2) EXEMPTION.—Paragraph (1) 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 303) equal to— ‘‘(A) in the case of paragraph (1)(A), the amount of the increase in the funding target of the plan (under section 430) for the plan year attributable to the occurrence referred to in paragraph (1), and ‘‘(B) in the case of paragraph (1)(B), the amount sufficient to result in a funding target attainment percentage of 60 percent. ‘‘(3) UNPREDICTABLE CONTINGENT EVENT.—For purposes of this subsection, the term ‘unpredictable contingent event benefit’ means any benefit payable solely by reason of— ‘‘(A) a plant shutdown (or similar event, as determined by the Secretary), or ‘‘(B) any event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability. ‘‘(c) LIMITATIONS ON PLAN AMENDMENTS INCREASING LIABILITY FOR BENEFITS.— ‘‘(1) 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— ‘‘(A) less than 80 percent, or ‘‘(B) would be less than 80 percent taking into account such amendment.
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26 USC 436.
Effective date.
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