88 STAT. ]
PUBLIC LAW 93-406-SEPT. 2, 1974
869
(b) For the purposes of paragraph (2) of subsection (a) a plan is tract"pi*an"" '^°"" an "insurance contract plan" if— (1) the plan is funded exclusively by the purchase of individual insurance contracts, (2) such contracts provide for level annual premium payments to be paid extending not later than the retirement age for each individual participating in the plan, and commencing with the date the individual became a participant in the plan (or, in the case of an increase in benefits, commencing at the time such increase becomes effective), (3) benefits provided by the plan are equal to the benefits provided under each contract at normal retirement age under the plan and are guaranteed by an insurance carrier (licensed under the laws of a State to do business with the plan) to the extent premiums have been paid, (4) premiums payable for the plan year, and all prior plan years under such contracts have been paid before lapse or there IS reinstatement of the policy, (5) no rights under such contracts have been subject to a security interest at any time during the plan year, and (6) no policy loans are outstanding at any time during the plan year. A plan funded exclusively by the purchase of group insurance contracts which is determined under regulations prescribed by the Secretary of the Treasury to have the same characteristics as contracts described in the preceding sentence shall be treated as a plan described in this subsection. MINIMUM
FUNDING
STANDARDS
SEC. 302. (a)(1) Every employee pension benefit plan subject to ^9 USC io82. this part shall satisfy the minimum funding standard (or the alternative minimum funding standard under section 305) for any plan year to which this part applies. A plan to which this part applies shall have satisfied the minimum funding standard for such plan for a plan year if as of the end of such plan year the plan does not have an accumulated funding deficiency. ,^ (2) For the purposes of this part, the term "accumulated funding fun<fingX"^^*^'^ deficiency" means for any plan the excess of the total charges to the ficiency." funding standard account for all plan years (beginning with the first plan year to which this part applies) over the total credits to such account for such years or, if less, the excess of the total charges to the alternative minimum funding standard account for such plan years over the total credits to such account for such years. (b)(1) Each plan to which this part applies shall establish and J""ding stand•
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maintain a funding standard account, huch account shall be credited and charged solely as provided in this section. (2) For a plan year, the funding standard account shall be charged with the sum of^ — (A) the normal cost of the plan for the plan year, (B) the amounts necessary to amortize in equal annual installments (until fully amortized) — (i) in the case of a plan in existence on January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this part applies, over a period of 40 plan years, (ii) in the case of a plan which comes into existence after January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this
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