Page:United States Statutes at Large Volume 94 Part 3.djvu/862

 94 STAT. 3506

26 USC 404.

PUBLIC LAW 96-603—DEC. 28, 1980 "(3) LIMITATIONS.—In the case of a qualified funded plan, the amount allowable as a deduction for the taxable year shall be subject to— "(A) in the case of— "(i) a plan under which the benefits are fixed or determinable, limitations similar to those contained in clauses (ii) and (iii) of subparagraph (A) of section 404(a)(1) (determined without regard to the last sentence of such subparagraph (A)), or "(ii) any other plan, limitations similar to the limitations contained in paragraph (3) of section 404(a), and "(B) limitations similar to those contained in paragraph (7) of section 404(a). "(4) CARRYOVER.—If—

"(A) the aggregate of the contributions paid during the taxable year reduced by any contributions not allowable as a deduction under paragraphs (1) and (2) of subsection (g), exceeds "(B) the amount allowable as a deduction under subsection (a) (determined without regard to subsection (d)), such excess shall be treated as an amount paid in the succeeding taxable year. "(5) AMOUNTS MUST BE PAID TO QUALIFIED TRUST, ETC.—In the

26 USC 401.

case of a qualified funded plan, a contribution shall be taken into account only if it is paid— "(A) to a trust (or the equivalent of a trust) which meets the requirements of section 401(a)(2), "(B) for a retirement annuity, or "(C) to a participant or beneficiary. "(c) RULES RELATING TO QUALIFIED RESERVE PLANS.—For purposes

of this section— "(1) IN GENERAL.—In the case of a qualified reserve plan, the amount properly taken into account for the taxable year is the reasonable addition for such year to a reserve for the taxpayer's liability under the plan. Unless otherwise required or permitted in regulations prescribed by the Secretary, the reserve for the taxpayer's liability shall be determined under the unit credit method modified to reflect the requirements of paragraphs (3) and (4). All benefits paid under the plan shall be charged to the reserve. "(2) INCOME ITEM.—In the case of a plan which is or has been a qualified reserve plan, an amount equal to that portion of any decrease for the taxable year in the reserve which is not attributable to the payment of benefits shall be included in gross income. "(3) RIGHTS MUST BE NONFORFEITABLE, ETC.—In the case of a qualified reserve plan, an item shall be taken into account for a taxable year only if— "(A) there is no substantial risk that the rights of the employee will be forfeited, and (B) such item meets such additional requirements as the Secretary may by regulations prescribe as necessary or appropriate to ensure that the liability will be satisfied. "(4)

SPREADING OF CERTAIN INCREASES AND DECREASES IN

RESERVES.—There shall be amortized over a 10-year period any increase or decrease to the reserve on account of— "(A) the adoption of the plan or a plan amendment, "(B) experience gains and losses, and "(C) any change in actuarial assumptions,

�