r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“social security retirement age” applies in that section

the term “social security retirement age” means the age used as the retirement age under section 216( l ) of the Social Security Act, except that such section shall be applied— (A) without regard to the age increase factor, and (B) as if the early retirement age under section 216( l )(2) of such Act were 62.

“1-percent owner” applies in that section

the term “1-percent owner” means any person who would be described in clause (i) if “1 percent” were substituted for “5 percent” each place it appears in clause (i). (iii) Constructive ownership rules For purposes of this subparagraph— (I) subparagraph (C) of section 318(a)(2) shall be applied by substituting “5 percent” for “50 percent”, and (II) in the case of any employer which is not a corporation, ownership in such employer shall be determined in accordance with regulations prescribed by the Secretary which shall be based on principles similar to the principles of section 318 (as modified by subclause (I)).

“5-percent owner” applies in that section

the term “5-percent owner” means— (I) if the employer is a corporation, any person who owns (or is considered as owning within the meaning of section 318) more than 5 percent of the outstanding stock of the corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the corporation, or (II) if the employer is not a corporation, any person who owns more than 5 percent of the capital or profits interest in the employer. (ii) 1-percent owner For purposes of this paragraph,

“aggregation group” applies in that section

The term “aggregation group” means— (I) each plan of the employer in which a key employee is a participant, and (II) each other plan of the employer which enables any plan described in subclause (I) to meet the requirements of section 401(a)(4) or 410. (ii) Permissive aggregation The employer may treat any plan not required to be included in an aggregation group under clause (i) as being part of such group if such group would continue to meet the requirements of sections 401(a)(4) and 410 with such plan being taken into account. (B) Top-heavy group

“annual retirement benefit” applies in that section

the term “annual retirement benefit” means a benefit payable annually in the form of a single life annuity (with no ancillary benefits) beginning at the normal retirement age under the plan. (2) Defined contribution plans (A) In general A defined contribution plan meets the requirements of the subsection if the employer contribution for the year for each participant who is a non-key employee is not less than 3 percent of such participant’s compensation (within the meaning of section 415).

“applicable percentage” applies in that section

the term “applicable percentage” means the lesser of— (i) 2 percent multiplied by the number of years of service with the employer, or (ii) 20 percent. (C) Years of service For purposes of this paragraph— (i) In general Except as provided in clause (ii) or (iii), years of service shall be determined under the rules of paragraphs (4), (5), and (6) of section 411(a).

“compensation” applies in that section

the term “compensation” has the meaning given such term by section 414(q)(4). (2) Non-key employee

“determination date” applies in that section

The term “determination date” means, with respect to any plan year— (i) the last day of the preceding plan year, or (ii) in the case of the first plan year of any plan, the last day of such plan year. (D) Years To the extent provided in regulations, this section shall be applied on the basis of any year specified in such regulations in lieu of plan years.

“employee” applies in that section

The terms “employee” and “key employee” include their beneficiaries. (6) Treatment of simplified employee pensions (A) Treatment as defined contribution plans A simplified employee pension shall be treated as a defined contribution plan. (B) Election to have determinations based on employer contributions In the case of a simplified employee pension, at the election of the employer, paragraphs (1)(A)(ii) and (2)(B) of subsection (g) shall be applied by taking into account aggregate employer contributions in lieu of the aggregate of the accounts of employees.

“key employee” applies in that section

The term “key employee” means an employee who, at any time during the plan year, is— (i) an officer of the employer having an annual compensation greater than $130,000, (ii) a 5-percent owner of the employer, or (iii) a 1-percent owner of the employer having an annual compensation from the employer of more than $150,000. For purposes of clause (i), no more than 50 employees (or, if lesser, the greater of 3 or 10 percent of the employees) shall be treated as officers.

“non-key employee” applies in that section

The term “non-key employee” means any employee who is not a key employee. (3) Self-employed individuals In the case of a self-employed individual described in section 401(c)(1)— (A) such individual shall be treated as an employee, and (B) such individual’s earned income (within the meaning of section 401(c)(2)) shall be treated as compensation.

“top-heavy group” applies in that section

The term “top-heavy group” means any aggregation group if— (i) the sum (as of the determination date) of— (I) the present value of the cumulative accrued benefits for key employees under all defined benefit plans included in such group, and (II) the aggregate of the accounts of key employees under all defined contribution plans included in such group, (ii) exceeds 60 percent of a similar sum determined for all employees.

“top-heavy plan” applies in that section

the term “top-heavy plan” means, with respect to any plan year— (i) any defined benefit plan if, as of the determination date, the present value of the cumulative accrued benefits under the plan for key employees exceeds 60 percent of the present value of the cumulative accrued benefits under the plan for all employees, and (ii) any defined contribution plan if, as of the determination date, the aggregate of the accounts of key employees under the plan exceeds 60 percent of the aggregate of the accounts of all employees under such plan.

“annuity starting date” applies in that section

The term “annuity starting date” means— (i) the first day of the first period for which an amount is payable as an annuity, or (ii) in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the participant to such benefit. (B) Special rule for disability benefits For purposes of subparagraph (A), the first day of the first period for which a benefit is to be received by reason of disability shall be treated as the annuity starting date only if such benefit is not an auxiliary benefit. (3) Earliest retirement age

“applicable election period” applies in that section

the term “applicable election period” means— (A) in the case of an election to waive the qualified joint and survivor annuity form of benefit, the 180-day period ending on the annuity starting date, or (B) in the case of an election to waive the qualified preretirement survivor annuity, the period which begins on the first day of the plan year in which the participant attains age 35 and ends on the date of the participant’s death. In the case of a participant who is separated from service, the applicable election period under subparagraph (B) with respect to benefits accrued before the date of such separation from service shall not begin later than such date.

“applicable interest rate” applies in that section

the term “applicable interest rate” means the adjusted first, second, and third segment rates applied under rules similar to the rules of section 430(h)(2)(C) (determined by not taking into account any adjustment under clause (iv) thereof) for the month before the date of the distribution or such other time as the Secretary may by regulations prescribe.

“applicable mortality table” applies in that section

the term “applicable mortality table” means a mortality table, modified as appropriate by the Secretary, based on the mortality table specified for the plan year under subparagraph (A) of section 430(h)(3) (without regard to subparagraph (C) or (D) of such section). (C) Applicable interest rate For purposes of subparagraph (A),

“applicable period” applies in that section

the term “applicable period” means, with respect to a participant, whichever of the following periods ends last: (I) The period beginning with the first day of the plan year in which the participant attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35. (II) A reasonable period after the individual becomes a participant. (III) A reasonable period ending after paragraph (5) ceases to apply to the participant. (IV) A reasonable period ending after section 401(a)(11) applies to the participant.

“earliest retirement age” applies in that section

The term “earliest retirement age” means the earliest date on which, under the plan, the participant could elect to receive retirement benefits. (4) Plan may take into account increased costs A plan may take into account in any equitable manner (as determined by the Secretary) any increased costs resulting from providing a qualified joint or survivor annuity or a qualified preretirement survivor annuity.

“qualified joint and survivor annuity” applies in that section

the term “qualified joint and survivor annuity” means an annuity— (1) for the life of the participant with a survivor annuity for the life of the spouse which is not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives of the participant and the spouse, and (2) which is the actuarial equivalent of a single annuity for the life of the participant. Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence.

“qualified optional survivor annuity” applies in that section

the term “qualified optional survivor annuity” means an annuity— (A) for the life of the participant with a survivor annuity for the life of the spouse which is equal to the applicable percentage of the amount of the annuity which is payable during the joint lives of the participant and the spouse, and (B) which is the actuarial equivalent of a single annuity for the life of the participant. Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence.

“qualified preretirement survivor annuity” applies in that section

the term “qualified preretirement survivor annuity” means a survivor annuity for the life of the surviving spouse of the participant if— (A) the payments to the surviving spouse under such annuity are not less than the amounts which would be payable as a survivor annuity under the qualified joint and survivor annuity under the plan (or the actuarial equivalent thereof) if— (i) in the case of a participant who dies after the date on which the participant attained the earliest retirement age, such participant had retired with an immediate qualified joint and survivor annuity on the day before the participant’s date of death, or (ii) in the case of a participant who dies on or before the date …

“survivor annuity percentage” applies in that section

the term “survivor annuity percentage” means the percentage which the survivor annuity under the plan’s qualified joint and survivor annuity bears to the annuity payable during the joint lives of the participant and the spouse.

“vested participant” applies in that section

The term “vested participant” means any participant who has a nonforfeitable right (within the meaning of section 411(a)) to any portion of such participant’s accrued benefit. (2) Annuity starting date (A) In general

“available resources” applies in that section

The term “available resources” means the plan’s cash, marketable assets, contributions, withdrawal liability payments, and earnings, less reasonable administrative expenses and amounts owed for such plan year to the Pension Benefit Guaranty Corporation under section 4261(b)(2) of the Employee Retirement Income Security Act of 1974. (4) Insolvency year

“excess resources” applies in that section

the term “excess resources” means available resources above the amount necessary to support the resource benefit level, but no greater than the amount necessary to pay benefits for the plan year at the benefit levels under the plan. (5) Unpaid benefits If, by the end of an insolvency year, any benefit has not been paid at the resource benefit level, amounts up to the resource benefit level which were unpaid shall be distributed to the participants and beneficiaries, in accordance with regulations prescribed by the Secretary, to the extent possible taking into account the plan’s total available resources in that insolvency year.

“insolvency year” applies in that section

The term “insolvency year” means a plan year in which a plan is insolvent. (c) Benefit payments under insolvent plans (1) Determination of resource benefit level The plan sponsor of a plan in critical status, as described in section 432(b)(2), shall determine in writing the plan’s resource benefit level for each insolvency year, based on the plan sponsor’s reasonable projection of the plan’s available resources and the benefits payable under the plan.

“person in pay status” applies in that section

the term “person in pay status” means— (I) a participant or beneficiary on the last day of the base plan year who, at any time during such year, was paid an early, late, normal, or disability retirement benefit (or a death benefit related to a retirement benefit), and (II) to the extent provided in regulations prescribed by the Secretary of the Treasury, any other person who is entitled to such a benefit under the plan.

“resource benefit level” applies in that section

The term “resource benefit level” means the level of monthly benefits determined under subsections (c)(1) and (3) and (d)(3) to be the highest level which can be paid out of the plan’s available resources. (3) Available resources

“after-tax income” applies in that section

The term “after-tax income” means, with respect to any taxable year, the gross income of the welfare benefit fund reduced by the sum of— (i) the deductions allowed by this chapter which are directly connected with the production of such gross income, and (ii) the tax imposed by this chapter on the fund for the taxable year. (B) Treatment of certain amounts In determining the gross income of any welfare benefit fund— (i) contributions and other amounts received from employees shall be taken into account, but (ii) contributions from the employer shall not be taken into account.

“child care facility” applies in that section

The term “child care facility” means any tangible property which qualifies under regulations prescribed by the Secretary as a child care center primarily for children of employees of the employer; except that such term shall not include any property— (I) not of a character subject to depreciation; or (II) located outside the United States. (4) After-tax income (A) In general

“fund” applies in that section

The term “fund” means— (A) any organization described in paragraph (7), (9), or (17) of section 501(c), (B) any trust, corporation, or other organization not exempt from the tax imposed by this chapter, and (C) to the extent provided in regulations, any account held for an employer by any person. (4) Treatment of amounts held pursuant to certain insurance contracts (A) In general Notwithstanding paragraph (3)(C), the term “fund” shall not include amounts held by an insurance company pursuant to an insurance contract if— (i) such contract is a life insurance contract described in section 264(a)(1), or (ii) such contract is a qualified nonguaranteed contract.

“qualified cost” applies in that section

the term “qualified cost” means, with respect to any taxable year, the sum of— (A) the qualified direct cost for such taxable year, and (B) subject to the limitation of section 419A(b), any addition to a qualified asset account for the taxable year. (2) Reduction for funds after-tax income In the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund’s after-tax income for such taxable year. (3) Qualified direct cost (A) In general

“qualified direct cost” applies in that section

The term “qualified direct cost” means, with respect to any taxable year, the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if— (i) such benefits were provided directly by the employer, and (ii) the employer used the cash receipts and disbursements method of accounting.

“qualified nonguaranteed contract” applies in that section

the term “qualified nonguaranteed contract” means any insurance contract (including a reasonable premium stabilization reserve held thereunder) if— (I) there is no guarantee of a renewal of such contract, and (II) other than insurance protection, the only payments to which the employer or employees are entitled are experience rated refunds or policy dividends which are not guaranteed and which are determined by factors other than the amount of welfare benefits paid to (or on behalf of) the employees of the employer or their beneficiaries.

“welfare benefit” applies in that section

The term “welfare benefit” means any benefit other than a benefit with respect to which— (A) section 83(h) applies, (B) section 404 applies (determined without regard to section 404(b)(2)), or (C) section 404A applies. (3) Fund

“welfare benefit fund” applies in that section

The term “welfare benefit fund” means any fund— (A) which is part of a plan of an employer, and (B) through which the employer provides welfare benefits to employees or their beneficiaries. (2) Welfare benefit

“10 or more employer plan” applies in that section

the term “10 or more employer plan” means a plan— (i) to which more than 1 employer contributes, and (ii) to which no employer normally contributes more than 10 percent of the total contributions contributed under the plan by all employers. (7) Adjustments for existing excess reserves (A) Increase in account limit The account limit for any of the first 4 taxable years to which this section applies shall be increased by the applicable percentage of any existing excess reserves.

“applicable account limit” applies in that section

the term “applicable account limit” means an account limit for a qualified asset account with respect to medical benefits provided through a plan maintained by a bona fide association (as defined in section 2791(d)(3) of the Public Health Service Act ( 42 U.S.C. 300gg–91(d)(3) )).

“existing excess reserve” applies in that section

the term “existing excess reserve” means the excess (if any) of— (i) the amount of assets set aside at the close of the first taxable year ending after July 18, 1984 , for purposes described in subsection (a), over (ii) the account limit determined under this section (without regard to this paragraph) for the taxable year for which such increase is being computed. (D) Funds to which paragraph applies This paragraph shall apply only to a welfare benefit fund which, as of July 18, 1984 , had assets set aside for purposes described in subsection (a).

“key employee” applies in that section

the term “key employee” means any employee who, at any time during the plan year or any preceding plan year, is or was a key employee as defined in section 416(i). (e) Special limitations on reserves for medical benefits or life insurance benefits provided to retired employees (1) Reserve must be nondiscriminatory No reserve may be taken into account under subsection (c)(2) for post-retirement medical benefits or life insurance benefits to be provided to covered employees unless the plan meets the requirements of section 505(b) with respect to such benefits (whether or not such requirements apply to such plan).

“life insurance benefit” applies in that section

The term “life insurance benefit” includes any other death benefit. (4) Valuation For purposes of this section, the amount of the qualified asset account shall be the value of the assets in such account (as determined under regulations).

“medical benefit” applies in that section

The term “medical benefit” means a benefit which consists of the providing (directly or through insurance) of medical care (as defined in section 213(d)). (3) Life insurance benefit

“qualified asset account” applies throughout its subpart

the term “qualified asset account” means any account consisting of assets set aside to provide for the payment of— (1) disability benefits, (2) medical benefits, (3) SUB or severance pay benefits, or (4) life insurance benefits. (b) Limitation on additions to account No addition to any qualified asset account may be taken into account under section 419(c)(1)(B) to the extent such addition results in the amount in such account exceeding the account limit.

“SUB or severance pay benefit” applies in that section

The term “SUB or severance pay benefit” means— (A) any supplemental unemployment compensation benefit (as defined in section 501(c)(17)(D)), and (B) any severance pay benefit. (2) Medical benefit

“applicable employer cost” applies in that section

the term “applicable employer cost” means, with respect to any taxable year, the amount determined by dividing— (i) the qualified current retiree liabilities of the employer for such taxable year determined— (I) separately with respect to applicable health benefits and applicable life insurance benefits, (II) without regard to any reduction under subsection (e)(1)(B), and (III) in the case of a taxable year in which there was no qualified transfer, in the same manner as if there had been such a transfer at the end of the taxable year, by (ii) the number of individuals to whom coverage was provided during such taxable year for the benefits with respect to which the determination under clause …

“applicable health benefits” applies in that section

The term “applicable health benefits” means health benefits or coverage which are provided to— (i) retired employees who, immediately before the qualified transfer, are entitled to receive such benefits by reason of retirement and who are entitled to pension benefits under the plan, and (ii) their spouses and dependents. (D) Applicable life insurance benefits

“applicable life insurance account” applies in that section

The term “applicable life insurance account” means a separate account established and maintained for amounts transferred under this section for qualified current retiree liabilities based on premiums for applicable life insurance benefits. (5) Coordination with sections 430 and 433 In the case of a qualified transfer, any assets so transferred shall not, for purposes of this section and sections 430 and 433, be treated as assets in the plan.

“applicable life insurance benefits” applies in that section

The term “applicable life insurance benefits” means group-term life insurance coverage provided to retired employees who, immediately before the qualified transfer, are entitled to receive such coverage by reason of retirement and who are entitled to pension benefits under the plan, but only to the extent that such coverage is provided under a policy for retired employees and the cost of such coverage is excludable from the retired employee’s gross income under section 79.

“collectively bargained cost maintenance period” applies in that section

The term “collectively bargained cost maintenance period” means, with respect to each covered retiree and his covered spouse and dependents, the shorter of— (i) the remaining lifetime of such covered retiree and, in the case of a transfer to a health benefits account, his covered spouse and dependents, or (ii) the period of coverage provided by the collectively bargained plan (determined as of the date of the collectively bargained transfer) with respect to such covered retiree and, in the case of a transfer to a health benefits account, his covered spouse and dependents. (B) Collectively bargained retiree liabilities (i) In general

“collectively bargained employer cost” applies in that section

the term “collectively bargained employer cost” means the average cost per covered individual of providing collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, as determined in accordance with the applicable collective bargaining agreement. Such agreement may provide for an appropriate reduction in the collectively bargained employer cost to take into account any portion of the collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, that is provided or financed by a government program or other source.

“collectively bargained health benefits” applies in that section

The term “collectively bargained health benefits” means health benefits or coverage— (i) which are provided to retired employees who, immediately before the collectively bargained transfer, are entitled to receive such benefits by reason of retirement and who are entitled to pension benefits under the plan, and their spouses and dependents, and (ii) if specified by the provisions of the collective bargaining agreement governing the collectively bargained transfer, which will be provided at retirement to employees who are not retired employees at the time of the transfer and who are entitled to receive such benefits and who are entitled to pension benefits under the plan, and their spouses …

“collectively bargained life insurance benefits” applies in that section

The term “collectively bargained life insurance benefits” means, with respect to any collectively bargained transfer— (i) applicable life insurance benefits which are provided to retired employees who, immediately before the transfer, are entitled to receive such benefits by reason of retirement, and (ii) if specified by the provisions of the collective bargaining agreement governing the transfer, applicable life insurance benefits which will be provided at retirement to employees who are not retired employees at the time of the transfer. (E) Collectively bargained plan

“collectively bargained plan” applies in that section

The term “collectively bargained plan” means a group health plan or arrangement for retired employees and their spouses and dependents, or a group-term life insurance plan or arrangement for retired employees, that is maintained pursuant to 1 or more collective bargaining agreements. (7) Election to end transfer period (A) In general In the case of an employer maintaining a plan which has made a qualified future transfer under this subsection, such employer may, not later than December 31, 2021 , elect to terminate the transfer period with respect to such transfer effective as of any taxable year specified by the taxpayer that begins after the date of such election.

“collectively bargained retiree liabilities” applies in that section

The term “collectively bargained retiree liabilities” means the present value, as of the beginning of a taxable year and determined in accordance with the applicable collective bargaining agreement, of all collectively bargained health benefits, and collectively bargained life insurance benefits, (including administrative expenses) for such taxable year and all subsequent taxable years during the collectively bargained cost maintenance period.

“collectively bargained transfer” applies in that section

The terms “qualified future transfer” and “collectively bargained transfer” mean a transfer which meets all of the requirements for a qualified transfer, except that— (i) the determination of excess pension assets shall be made under subparagraph (B), (ii) the limitation on the amount transferred shall be determined under subparagraph (C), (iii) the minimum cost requirements of subsection (c)(3) shall be modified as provided under subparagraph (D), and (iv) in the case of a collectively bargained transfer, the requirements of subparagraph (E) shall be met with respect to the transfer.

“cost maintenance period” applies in that section

the term “cost maintenance period” means the period of 5 taxable years (7 taxable years in the case of a transfer to which subsection (e)(7) applies) beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in two or more overlapping cost maintenance periods, this paragraph shall be applied by taking into account the highest applicable employer cost required to be provided under subparagraph (A) for such taxable year.

“excess pension assets” applies in that section

The term “excess pension assets” means the excess (if any) of— (A) the lesser of— (i) the fair market value of the plan’s assets (reduced by the prefunding balance and funding standard carryover balance determined under section 430(f)), or (ii) the value of plan assets as determined under section 430(g)(3) after reduction under section 430(f), over (B) 125 percent of the sum of the funding target and the target normal cost determined under section 430 for such plan year. (3) Health benefits account

“health benefits account” applies in that section

The term “health benefits account” means an account established and maintained under section 401(h). (4) Applicable life insurance account

“original transfer period” applies in that section

the term “original transfer period” means the transfer period under this subsection with respect to a qualified future transfer determined without regard to the election under subparagraph (A). (g) Segment rates determined without pension stabilization For purposes of this section, section 430 shall be applied without regard to subsection (h)(2)(C)(iv) thereof.

“qualified current retiree liabilities” applies in that section

The term “qualified current retiree liabilities” means, with respect to any taxable year, the aggregate amounts (including administrative expenses) which would have been allowable as a deduction to the employer for such taxable year with respect to applicable health benefits and applicable life insurance benefits provided during such taxable year if— (i) such benefits were provided directly by the employer, and (ii) the employer used the cash receipts and disbursements method of accounting. For purposes of the preceding sentence, the rule of section 419(c)(3)(B) shall apply.

“qualified future transfer” applies in that section

The terms “qualified future transfer” and “collectively bargained transfer” mean a transfer which meets all of the requirements for a qualified transfer, except that— (i) the determination of excess pension assets shall be made under subparagraph (B), (ii) the limitation on the amount transferred shall be determined under subparagraph (C), (iii) the minimum cost requirements of subsection (c)(3) shall be modified as provided under subparagraph (D), and (iv) in the case of a collectively bargained transfer, the requirements of subparagraph (E) shall be met with respect to the transfer.

“qualified transfer” applies in that section

The term “qualified transfer” means a transfer— (A) of excess pension assets of a defined benefit plan to a health benefits account, or an applicable life insurance account, which is part of such plan, (B) which does not contravene any other provision of law, and (C) with respect to which the following requirements are met in connection with the plan— (i) the use requirements of subsection (c)(1), (ii) the vesting requirements of subsection (c)(2), and (iii) the minimum cost requirements of subsection (c)(3). (2) Only 1 transfer per year No more than 1 transfer with respect to any plan during a taxable year may be treated as a qualified transfer for purposes of this section.

“transfer period” applies in that section

the term “transfer period” means, with respect to any transfer, a period of consecutive taxable years (not less than 2) specified in the election under paragraph (1) which begins and ends during the 10-taxable-year period beginning with the taxable year of the transfer. (6) Terms relating to collectively bargained transfers For purposes of this subsection— (A) Collectively bargained cost maintenance period

“incentive stock option” applies throughout its part

the term “incentive stock option” means an option granted to an individual for any reason connected with his employment by a corporation, if granted by the employer corporation or its parent or subsidiary corporation, to purchase stock of any of such corporations, but only if— (1) the option is granted pursuant to a plan which includes the aggregate number of shares which may be issued under options and the employees (or class of employees) eligible to receive options, and which is approved by the stockholders of the granting corporation within 12 months before or after the date such plan is adopted; (2) such option is granted within 10 years from the date such plan is adopted, or the date …

“employee stock purchase plan” applies throughout its part

the term “employee stock purchase plan” means a plan which meets the following requirements: (1) the plan provides that options are to be granted only to employees of the employer corporation or of its parent or subsidiary corporation to purchase stock in any such corporation; (2) such plan is approved by the stockholders of the granting corporation within 12 months before or after the date such plan is adopted; (3) under the terms of the plan, no employee can be granted an option if such employee, immediately after the option is granted, owns stock possessing 5 percent or more of the total combined voting power or value of all classes of stock of the employer corporation or of its parent …

“disposition” applies throughout its part

the term “disposition” includes a sale, exchange, gift, or a transfer of legal title, but does not include— (A) a transfer from a decedent to an estate or a transfer by bequest or inheritance; (B) an exchange to which section 354, 355, 356, or 1036 (or so much of section 1031 as relates to section 1036) applies; or (C) a mere pledge or hypothecation.

“modification” applies throughout its part

The term “modification” means any change in the terms of the option which gives the employee additional benefits under the option, but such term shall not include a change in the terms of the option— (A) attributable to the issuance or assumption of an option under subsection (a); (B) to permit the option to qualify under section 423(b)(9); or (C) in the case of an option not immediately exercisable in full, to accelerate the time at which the option may be exercised. (i) Stockholder approval For purposes of this part, if the grant of an option is subject to approval by stockholders, the date of grant of the option shall be determined as if the option had not been subject to such approval.

“parent corporation” applies throughout its part

the term “parent corporation” means any corporation (other than the employer corporation) in an unbroken chain of corporations ending with the employer corporation if, at the time of the granting of the option, each of the corporations other than the employer corporation owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (f) Subsidiary corporation For purposes of this part,

“statutory option stock” applies throughout its part

the term “statutory option stock” means any stock acquired through the exercise of an incentive stock option or an option granted under an employee stock purchase plan. (4) Transfers between spouses or incident to divorce In the case of any transfer described in subsection (a) of section 1041— (A) such transfer shall not be treated as a disposition for purposes of this part, and (B) the same tax treatment under this part with respect to the transferred property shall apply to the transferee as would have applied to the transferor.

“subsidiary corporation” applies throughout its part

the term “subsidiary corporation” means any corporation (other than the employer corporation) in an unbroken chain of corporations beginning with the employer corporation if, at the time of the granting of the option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

“adjusted disbursements” applies in that section

The term “adjusted disbursements” means disbursements from the plan reduced by the product of— (I) the plan’s funding target attainment percentage for the plan year, and (II) the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary shall provide in regulations. (v) Liquid assets

“applicable month” applies in that section

the term “applicable month” means, with respect to any plan for any plan year, the month which includes the valuation date of such plan for such plan year or, at the election of the plan sponsor, any of the 4 months which precede such month. Any election made under this subparagraph shall apply to the plan year for which the election is made and all succeeding plan years, unless the election is revoked with the consent of the Secretary.

“applicable preferred stock” applies in that section

the term “applicable preferred stock” means preferred stock which was issued before March 1, 2010 (or which was issued after such date and is held by an employee benefit plan subject to the provisions of title I of the Employee Retirement Income Security Act of 1974). (F) Other definitions and rules For purposes of this paragraph— (i) Plan sponsor

“base amount” applies in that section

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 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.

“community newspaper plan” applies in that section

The term “community newspaper plan” means any plan to which this section applies maintained as of December 31, 2018 , by an employer which— (i) maintains the plan on behalf of participants and beneficiaries with respect to employment in the trade or business of publishing 1 or more newspapers which were published by the employer at any time during the 11-year period ending on December 20, 2019 , (ii) (I) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company, or (II) is controlled, directly or indirectly, during the entire 30-year period ending on December 20, 2019 , by …

“compensation” applies in that section

the term “compensation” shall include earned income of such individual with respect to such self-employment. (vii) Indexing of amount In the case of any calendar year beginning after 2010, the dollar amount under clause (i)(II) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting “calendar year 2009” for “calendar year 2016” in subparagraph (A)(ii) thereof. If the amount of any increase under clause (i) is not a multiple of $1,000, such increase shall be rounded to the next lowest multiple of $1,000.

“contribution payment” applies in that section

The term “contribution payment” means, in connection with a plan, a contribution payment required to be made to the plan, including any required installment under paragraphs (3) and (4) of subsection (j). (B) Due date; required installment

“controlled group” applies in that section

The term “controlled group” means any group treated as a single employer under subsections (b), (c), (m), and ( o ) of section 414. (l) Qualified transfers to health benefit accounts In the case of a qualified transfer (as defined in section 420), any assets so transferred shall not, for purposes of this section, be treated as assets in the plan. (m) Special rules for community newspaper plans (1) In general An eligible newspaper plan sponsor of a plan under which no participant has had the participant’s accrued benefit increased (whether because of service or compensation) after April 2, 2019 , may elect to have the alternative standards described in paragraph (4) apply to such plan.

“corporate bond yield curve” applies in that section

The term “corporate bond yield curve” means, with respect to any month, a yield curve which is prescribed by the Secretary for such month and which reflects the average, for the 24-month period ending with the month preceding such month, of monthly yields on investment grade corporate bonds with varying maturities and that are in the top 3 quality levels available. (ii) Election to use yield curve Solely for purposes of determining the minimum required contribution under this section, the plan sponsor may, in lieu of the segment rates determined under subparagraph (C), elect to use interest rates under the corporate bond yield curve.

“disbursements from the plan” applies in that section

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

“due date” applies in that section

The terms “due date” and “required installment” have the meanings given such terms by subsection (j). (C) Controlled group

“effective interest rate” applies in that section

the term “effective interest rate” means, with respect to any plan for any plan year, the single rate of interest which, if used to determine the present value of the plan’s accrued or earned benefits referred to in subsection (d)(1), would result in an amount equal to the funding target of the plan for such plan year.

“eligible newspaper plan sponsor” applies in that section

The term “eligible newspaper plan sponsor” means the plan sponsor of— (A) any community newspaper plan, or (B) any other plan sponsored, as of April 2, 2019 , by a member of the same controlled group of a plan sponsor of a community newspaper plan if such member is in the trade or business of publishing 1 or more newspapers. (3) Election An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary.

“eligible plan year” applies in that section

the term “eligible plan year” means any plan year beginning in 2008, 2009, 2010, or 2011, except that a plan year shall only be treated as an eligible plan year if the due date under subsection (j)(1) for the payment of the minimum required contribution for such plan year occurs on or after the date of the enactment of this subparagraph. (vi) Reporting A plan sponsor of a plan who makes an election under clause (i) shall— (I) give notice of the election to participants and beneficiaries of the plan, and (II) inform the Pension Benefit Guaranty Corporation of such election in such form and manner as the Director of the Pension Benefit Guaranty Corporation may prescribe.

“employee” applies in that section

The term “employee” includes, with respect to a calendar year, a self-employed individual who is treated as an employee under section 401(c) for the taxable year ending during such calendar year, and

“excess employee compensation” applies in that section

The term “excess employee compensation” means, with respect to any employee for any plan year, the excess (if any) of— (I) the aggregate amount includible in income under this chapter for remuneration during the calendar year in which such plan year begins for services performed by the employee for the plan sponsor (whether or not performed during such calendar year), over (II) $1,000,000.

“first segment rate” applies in that section

The term “first segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 5-year period commencing with such month. (ii) Second segment rate

“installment acceleration amount” applies in that section

The term “installment acceleration amount” means, with respect to any plan year in a restriction period with respect to an election year, the sum of— (I) the aggregate amount of excess employee compensation determined under subparagraph (D) with respect to all employees for the plan year, plus (II) the aggregate amount of extraordinary dividends and redemptions determined under subparagraph (E) for the plan year.

“liquid assets” applies in that section

The term “liquid assets” means cash, marketable securities, and such other assets as specified by the Secretary in regulations. (vi) Quarter

“liquidity shortfall” applies in that section

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— (I) the base amount with respect to such quarter, over (II) the value (as of such last day) of the plan’s liquid assets. (ii) Base amount (I) In general

“minimum required contribution” applies in that section

the term “minimum required contribution” means, with respect to any plan year of a defined benefit plan which is not a multiemployer plan— (1) in any case in which the value of plan assets of the plan (as reduced under subsection (f)(4)(B)) is less than the funding target of the plan for the plan year, the sum of— (A) the target normal cost of the plan for the plan year, (B) the shortfall amortization charge (if any) for the plan for the plan year determined under subsection (c), and (C) the waiver amortization charge (if any) for the plan for the plan year as determined under subsection (e); (2) in any case in which the value of plan assets of the plan (as reduced under subsection …

“plan sponsor” applies in that section

The term “plan sponsor” includes any member of the plan sponsor’s controlled group (as defined in section 412(d)(3)). (ii) Restriction period

“quarter” applies in that section

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 may prescribe such regulations as are necessary to carry out this paragraph.

“required annual payment” applies in that section

the term “required annual payment” means the lesser of— (I) 90 percent of the minimum required contribution (determined without regard to this subsection) to the plan for the plan year under this section, or (II) 100 percent of the minimum required contribution (determined without regard to this subsection or to any waiver under section 412(c)) to the plan for the preceding plan year. Subclause (II) shall not apply if the preceding plan year referred to in such clause was not a year of 12 months.

“required installment” applies in that section

The terms “due date” and “required installment” have the meanings given such terms by subsection (j). (C) Controlled group

“restriction period” applies in that section

The term “restriction period” means, with respect to any election year— (I) except as provided in subclause (II), the 3-year period beginning with the election year (or, if later, the first plan year beginning after December 31, 2009 ), and (II) if the plan sponsor elects 15-year amortization for the shortfall amortization base for the election year, the 5-year period beginning with the election year (or, if later, the first plan year beginning after December 31, 2009 ).

“second segment rate” applies in that section

The term “second segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 15-year period beginning at the end of the period described in clause (i). (iii) Third segment rate

“specified automobile manufacturer” applies in that section

the term “specified automobile manufacturer” means— (I) any manufacturer of automobiles, and (II) any manufacturer of automobile parts which supplies such parts directly to a manufacturer of automobiles and which, after a transaction or series of transactions ending in 1999, ceased to be a member of a controlled group which included such manufacturer of automobiles.

“specified balance” applies in that section

the term “specified balance” means the prefunding balance or the funding standard carryover balance, as the case may be. (C) Availability of balances in plan year for crediting against minimum required contribution For purposes of paragraph (3)(C)(i) of this subsection, the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance. (5) Election to reduce balance prior to determinations of value of plan assets and crediting against minimum required contribution (A) In general The plan sponsor may elect to reduce by any amount the balance of the prefunding balance and the funding standard carryover balance for any plan year (but not below zero).

“target normal cost” applies in that section

the term “target normal cost” means, for any plan year, the excess of— (A) the sum of— (i) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, plus (ii) the amount of plan-related expenses expected to be paid from plan assets during the plan year, over (B) the amount of mandatory employee contributions expected to be made during the plan year.

“third segment rate” applies in that section

The term “third segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during periods beginning after the period described in clause (ii).

“United States Treasury obligation yield curve” applies in that section

the term “United States Treasury obligation yield curve” means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest-bearing obligations of the United States. (B) Shortfall amortization base (i) Previous shortfall amortization bases The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).

“current liability” applies in that section

The term “current liability” means all liabilities to employees and their beneficiaries under the plan. (ii) Treatment of unpredictable contingent event benefits For purposes of clause (i), 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), shall not be taken into account until the event on which the benefit is contingent occurs. (iii) Interest rate used The rate of interest used to determine current liability under this paragraph shall be the rate of interest determined under subparagraph (E).

“full-funding limitation” applies in that section

the term “full-funding limitation” means the excess (if any) of— (i) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over (ii) the lesser of— (I) the fair market value of the plan’s assets, or (II) the value of such assets determined under paragraph (2).

“permissible range” applies in that section

the term “permissible range” means a rate of interest which is not more than 5 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year. (II) Secretarial authority If the Secretary finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under such subclause.

“accumulated funding deficiency” applies in that section

The term “accumulated funding deficiency” has the meaning given such term in section 431(a). (4) Active participant

“active participant” applies in that section

The term “active participant” means, in connection with a multiemployer plan, a participant who is in covered service under the plan. (5) Inactive participant

“adjustable benefit” applies in that section

the term “adjustable benefit” means— (I) benefits, rights, and features under the plan, including post-retirement death benefits, 60-month guarantees, disability benefits not yet in pay status, and similar benefits, (II) any early retirement benefit or retirement-type subsidy (within the meaning of section 411(d)(6)(B)(i)) and any benefit payment option (other than the qualified joint and survivor annuity), and (III) benefit increases that would not be eligible for a guarantee under section 4022A of the Employee Retirement Income Security Act of 1974 on the first day of initial critical year because the increases were adopted (or, if later, took effect) less than 60 months before such first …

“applicable benchmarks” applies in that section

the term “applicable benchmarks” means the requirements applicable to the multiemployer plan under paragraph (3) (as modified by paragraph (5)). (2) Exception for years after process begins Paragraph (1) shall not apply to a plan year if such year is in a funding plan adoption period or funding improvement period by reason of the plan being in endangered status for a preceding plan year. For purposes of this section, such preceding plan year shall be the initial determination year with respect to the funding improvement plan to which it relates.

“bargaining party” applies in that section

The term “bargaining party” means— (A) (i) except as provided in clause (ii), an employer who has an obligation to contribute under the plan; or (ii) in the case of a plan described under section 404(c), or a continuation of such a plan, the association of employers that is the employer settlor of the plan; and (B) an employee organization which, for purposes of collective bargaining, represents plan participants employed by an employer who has an obligation to contribute under the plan. (2) Funded percentage

“benefit commencement date” applies in that section

The term “benefit commencement date” means the annuity starting date (or in the case of a retroactive annuity starting date, the date on which benefit payments begin). (k) Rules relating to eligible multiemployer plans (1) Plans applying for special financial assistance In the case of an eligible multiemployer plan which applies for special financial assistance under section 4262 of such Act— 1 (A) In general Such application shall be submitted in accordance with the requirements of such section, including any guidance issued thereunder by the Pension Benefit Guaranty Corporation.

“benefit improvement” applies in that section

the term “benefit improvement” means, with respect to a plan, a resumption of suspended benefits, an increase in benefits, an increase in the rate at which benefits accrue, or an increase in the rate at which benefits become nonforfeitable under the plan.

“funded percentage” applies in that section

The term “funded percentage” means the percentage equal to a fraction— (A) the numerator of which is the value of the plan’s assets, as determined under section 431(c)(2), and (B) the denominator of which is the accrued liability of the plan, determined using actuarial assumptions described in section 431(c)(3). (3) Accumulated funding deficiency

“funding plan adoption period” applies in that section

the term “funding plan adoption period” means the period beginning on the date of the certification under subsection (b)(3)(A) for the initial determination year and ending on the day before the first day of the funding improvement period. (d) Rules for operation of plan during adoption and improvement periods (1) Compliance with funding improvement plan (A) In general A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (c) so as to be inconsistent with the funding improvement plan.

“inactive participant” applies in that section

The term “inactive participant” means, in connection with a multiemployer plan, a participant, or the beneficiary or alternate payee of a participant, who— (A) is not in covered service under the plan, and (B) is in pay status under the plan or has a nonforfeitable right to benefits under the plan.

“modified funded percentage” applies in that section

the term “modified funded percentage” means the percentage equal to a fraction the numerator of which is current value of plan assets (as defined in section 3(26) of the Employee Retirement Income Security Act of 1974) and the denominator of which is current liabilities (as defined in section 431(c)(6)(D)).

“obligation to contribute” applies in that section

The term “obligation to contribute” has the meaning given such term under section 4212(a) of the Employee Retirement Income Security Act of 1974. (8) Actuarial method Notwithstanding any other provision of this section, the actuary’s determinations with respect to a plan’s normal cost, actuarial accrued liability, and improvements in a plan’s funded percentage under this section shall be based upon the unit credit funding method (whether or not that method is used for the plan’s actuarial valuation). (9) Plan sponsor For purposes of this section, section 431, and section 4971(g): (A) In general

“plan sponsor” applies in that section

The term “plan sponsor” means, with respect to any multiemployer plan, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. (B) Special rule for section 404(c) plans In the case of a plan described in section 404(c) (or a continuation of such plan), such term means the bargaining parties described in paragraph (1). (10) Benefit commencement date

“rehabilitation plan adoption period” applies in that section

the term “rehabilitation plan adoption period” means the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the day before the first day of the rehabilitation period.

“suspension of benefits” applies in that section

the term “suspension of benefits” means the temporary or permanent reduction of any current or future payment obligation of the plan to any participant or beneficiary under the plan, whether or not in pay status at the time of the suspension of benefits. (ii) Length of suspensions Any suspension of benefits made under subparagraph (A) shall remain in effect until the earlier of when the plan sponsor provides benefit improvements in accordance with subparagraph (E) or the suspension of benefits expires by its own terms. (iii) No liability The plan shall not be liable for any benefit payments not made as a result of a suspension of benefits under this paragraph.

“accumulated funding deficiency” applies in that section

the term “accumulated funding deficiency” means, for such plan year, the greater of— (i) the amount described in subsection (a), or (ii) the excess of the normal cost of the plan for the plan year over the amount actually contributed to or under the plan for the plan year. (B) Normal cost In the case of a CSEC plan that uses a spread gain funding method, for purposes of this subsection,

“adjusted disbursements” applies in that section

The term “adjusted disbursements” means disbursements from the plan reduced by the product of— (I) the plan’s funded current liability percentage for the plan year, and (II) the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary shall provide in regulations. (v) Liquid assets

“base amount” applies in that section

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 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.

“controlled group” applies in that section

The term “controlled group” means any group treated as a single employer under subsections (b), (c), (m), and ( o ) of section 414. (h) Current liability For purposes of this section— (1) In general

“current liability” applies in that section

The term “current liability” means all liabilities to employees and their beneficiaries under the plan. (2) Treatment of unpredictable contingent event benefits (A) In general For purposes of paragraph (1), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs. (B) Unpredictable contingent event benefit

“disbursements from the plan” applies in that section

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

“due date” applies in that section

The terms “due date” and “required installment” have the meanings given such terms by subsection (f), 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

“full-funding limitation” applies in that section

the term “full-funding limitation” means the excess (if any) of— (A) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over (B) the lesser of— (i) the fair market value of the plan’s assets, or (ii) the value of such assets determined under paragraph (2).

“funded current liability percentage” applies in that section

the term “funded current liability percentage” means, with respect to any plan year, the percentage which— (1) the value of the plan’s assets determined under subsection (c)(2), is of (2) the current liability under the plan. (j) Funding restoration status Notwithstanding any other provisions of this section— (1) Normal cost payment (A) In general In the case of a CSEC plan that is in funding restoration status for a plan year, for purposes of section 412,

“funded percentage” applies in that section

The term “funded percentage” means the ratio (expressed as a percentage) which— (i) the value of plan assets (as determined under subsection (c)(2)), bears to (ii) the plan’s funding liability. (C) Funding liability The term “funding liability” for a plan year means the present value of all benefits accrued or earned under the plan as of the beginning of the plan year, based on the assumptions used by the plan pursuant to this section, including the interest rate described in subsection (b)(5)(A) (without regard to subsection (b)(5)(B)). (D) Spread gain funding method

“liquid assets” applies in that section

The term “liquid assets” means cash, marketable securities and such other assets as specified by the Secretary in regulations. (vi) Quarter

“liquidity shortfall” applies in that section

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

“normal cost” applies in that section

the term “normal cost” means normal cost as determined under the entry age normal funding method. (2) Plan amendments In the case of a CSEC plan that is in funding restoration status for a plan year, no amendment to such plan may take effect during such plan year if such amendment has the effect of increasing liabilities of the plan by means of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable. This paragraph shall not apply to any plan amendment that is required to comply with any applicable law.

“plan sponsor” applies in that section

The term “plan sponsor” means, with respect to a CSEC plan, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.

“quarter” applies in that section

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 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 subsection shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.

“required annual payment” applies in that section

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 (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.

“required installment” applies in that section

The terms “due date” and “required installment” have the meanings given such terms by subsection (f), 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

“spread gain funding method” applies in that section

The term “spread gain funding method” has the meaning given such term under rules and forms issued by the Secretary. (E) Plan sponsor

“unpredictable contingent event benefit” applies in that section

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). (3) Interest rate and mortality assumptions used (A) Interest rate The rate of interest used to determine current liability under this section shall be the third segment rate determined under section 430(h)(2)(C). (B) Mortality tables (i) Secretarial authority The Secretary may by regulation prescribe mortality tables to be used in determining current liability under this subsection.

“adjusted funding target attainment percentage” applies in that section

The term “adjusted funding target attainment percentage” means the funding target attainment percentage which is determined under paragraph (1) by increasing each of the amounts under subparagraphs (A) and (B) of section 430(d)(2) by the aggregate amount of purchases of annuities for employees other than highly compensated employees (as defined in section 414(q)) which were made by the plan during the preceding 2 plan years.

“funding target attainment percentage” applies in that section

The term “funding target attainment percentage” has the same meaning given such term by section 430(d)(2). (2) Adjusted funding target attainment percentage

“prohibited payment” applies in that section

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 411(a)(9)), to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs during any period a limitation under paragraph (1) or (2) is in effect, (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 by regulations.

“single-employer plan” applies in that section

the term “single-employer plan” means a plan which is not a multiemployer plan.

“unpredictable contingent event benefit” applies in that section

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) 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.

“annual accounting period” applies in that section

the term “annual accounting period” means the annual period on the basis of which the taxpayer regularly computes his income in keeping his books. (d) Calendar year For purposes of this subtitle,

“calendar year” applies in that section

the term “calendar year” means a period of 12 months ending on December 31. (e) Fiscal year For purposes of this subtitle,

“fiscal year” applies in that section

the term “fiscal year” means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f) the term means the annual period (varying from 52 to 53 weeks) so elected.

“personal service corporation” applies in that section

the term “personal service corporation” has the meaning given such term by section 269A(b)(1), except that section 269A(b)(2) shall be applied— (A) by substituting “any” for “more than 10 percent”, and (B) by substituting “any” for “50 percent or more in value” in section 318(a)(2)(C). A corporation shall not be treated as a personal service corporation unless more than 10 percent of the stock (by value) in such corporation is held by employee-owners (within the meaning of section 269A(b)(2), as modified by the preceding sentence).

“taxable year” applies in that section

the term “taxable year” means— (1) the taxpayer’s annual accounting period, if it is a calendar year or a fiscal year; (2) the calendar year, if subsection (g) applies; (3) the period for which the return is made, if a return is made for a period of less than 12 months; or (4) in the case of a DISC filing a return for a period of at least 12 months, the period determined under subsection (h). (c) Annual accounting period For purposes of this subtitle,