101 STAT. 1330-370
29 USC 1086.
PUBLIC LAW 100-203—DEC. 22, 1987
liability percentage under the plan to 60 percent, including the amount of the unfunded current li' ability under the plan attributable to the plan amendment, or "(II) the amount of the increase in current liability under the plan attributable to the plan amendment, over i-' •" "(ii) $10,000,000. -'^ " 1 "(D) RELEASE OF SECURITY.—Thesecurity shall be released (and any amounts thereunder shall be refunded together ' •; with any interest accrued thereon) at the end of the first plan year which ends after the provision of the security and for which the funded current liability percentage under the plan is not less than 60 percent. The Secretary may prescribe regulations for partial releases of the security by ^; reason of increases in the funded current liability percentage. n "(E) DEFINITIONS.—For purposes of this paragraph, the terms 'current liability', 'funded current liability percentage', and 'unfunded current liability' shall have the meanings given such terms by section 412(1), except that in computing unfunded current liability there shall not be taken into account any unamortized portion of the unfunded old liability amount as of the close of the plan year." (b) AMENDMENTS TO ERISA.—Part 3 of subtitle B of title I of ERISA (29 U.S.C. 1081 et seq.) is amended— (1) by redesignating section 307 as section 308; and (2) by inserting after section 306 the following new section: "SECURITY REQUIRED UPON ADOPTION OF PLAN AMENDMENT RESULTING IN SIGNIFICANT UNDERFUNDING
29 USC 1085b.
"SEC. 307. (a) IN GENERAL.—If—
"(1) a defined benefit plan (other than a multiemployer plan) adopts an amendment an effect of which is to increase current liability under the plan for a plan year, and "(2) the funded current liability percentage of the plan for the plan year in which the amendment takes effect is less than 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, the contributing sponsor (or any member of the controlled group of the contributing sponsor) shall provide security to the plan. "(b) FORM OF SECURITY.—The security required under subsection
(a) shall consist of— "(1) a bond issued by a corporate surety company that is an acceptable surety for purposes of section 412, "(2) cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or "(3) such other form of security as is satisfactory to the Secretary of the Treasury and the parties involved. "(c) AMOUNT OF SECURITY.—The security shall be in an amount equal to the excess of— "(1) the lesser of— "(A) the amount of additional plan assets which would be necessary to increase the funded current liability percentage under the plan to 60 percent, including the amount of