Page:United States Statutes at Large Volume 120.djvu/843

 120 STAT. 812

Regulations.

Effective date.

VerDate 14-DEC-2004

10:20 Jul 12, 2007

Jkt 059194

PUBLIC LAW 109–280—AUG. 17, 2006 ‘‘(E) PROHIBITED PAYMENT.—For purpose 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 204(b)(1)(G)), to a participant or beneficiary whose annuity starting date (as defined in section 205(h)(2)) 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. ‘‘(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 303) 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 412 of this Act, ‘‘(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 303(j), or

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