Section 3. Application of the Minimum

Funding Standards Under § 412 and the Limitations on Deductions Under § 404 to Money Purchase Pension Plans

.01 Section 412 provides minimum funding standards applicable to pension plans that are or were qualified plans under § 401. The requirements of § 412 apply both to defined contribution pension plans (that is, money purchase pension plans, including target benefit plans) and defined benefit plans, but they do not apply to profit-sharing or stock bonus plans.

.02 Under § 412(b), a plan that is subject to § 412 is required to establish and maintain a funding standard account. The minimum required contribution for a plan under § 412 for a plan year is determined with reference to this account. For a plan year, the funding standard account must reflect charges for the normal cost of the plan for the plan year, credits for amounts considered contributed by the employer to or under the plan for the plan year, and charges and credits for certain amortization bases.

1998–28 I.R.B. 9 July 13, 1998

§ 412(c)(12) or as otherwise provided by the Commissioner, future amendments may not be anticipated in determining the minimum funding standards under § 412 or the limitations on deductions under § 404 for a defined benefit plan, even though the amendments are adopted before the end of the remedial amendment period.