§ 419A.
(a)
General rule
For purposes of this subpart and section 512, the term “qualified asset account” means any account consisting of assets set aside to provide for the payment of—
(3)
SUB or severance pay benefits, or
(4)
life insurance benefits.
(c)
Account limit
For purposes of this section—
(1)
In general
Except as otherwise provided in this subsection, the account limit for any qualified asset account for any taxable year is the amount reasonably and actuarially necessary to fund—
(A)
claims incurred but unpaid (as of the close of such taxable year) for benefits referred to in subsection (a), and
(B)
administrative costs with respect to such claims.
(2)
Additional reserve for post-retirement medical and life insurance benefits
The account limit for any taxable year may include a reserve funded over the working lives of the covered employees and actuarially determined on a level basis (using assumptions that are reasonable in the aggregate) as necessary for—
(A)
post-retirement medical benefits to be provided to covered employees (determined on the basis of current medical costs), or
(B)
post-retirement life insurance benefits to be provided to covered employees.
(3)
Amount taken into account for SUB or severance pay benefits
(B)
Special rule for certain new plans
(4)
Limitation on amounts to be taken into account
(A)
Disability benefits
For purposes of paragraph (1), disability benefits payable to any individual shall not be taken into account to the extent such benefits are payable at an annual rate in excess of the lower of—
(i)
75 percent of such individual’s average compensation for his high 3 years (within the meaning of section 415(b)(3)), or
(ii)
the limitation in effect under section 415(b)(1)(A).
(B)
Limitation on SUB or severance pay benefits
(5)
Special limitation where no actuarial certification
(B)
Safe harbor limits
(i)
Short-term disability benefits
(iii)
SUB or severance pay benefits
(iv)
Long-term disability or life insurance benefits
(6)
Additional reserve for medical benefits of bona fide association plans
(A)
In general
An applicable account limit for any taxable year may include a reserve in an amount not to exceed 35 percent of the sum of—
(i)
the qualified direct costs, and
(ii)
the change in claims incurred but unpaid,
for such taxable year with respect to medical benefits (other than post-retirement medical benefits).
(B)
Applicable account limit
(f)
Definitions and other special rules
For purposes of this section—
(1)
SUB or severance pay benefit
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.
(3)
Life insurance benefit
(5)
Special rule for collective bargained and employee pay-all plans
No account limits shall apply in the case of any qualified asset account under a separate welfare benefit fund—
(A)
under a collective bargaining agreement, or
(B)
an employee pay-all plan under section 501(c)(9) if—
(i)
such plan has at least 50 employees (determined without regard to subsection (h)(1)), and
(ii)
no employee is entitled to a refund with respect to amounts in the fund, other than a refund based on the experience of the entire fund.
(6)
Exception for 10-or-more employer plans
(B)
10 or more employer plan
For purposes of subparagraph (A), 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
(B)
Applicable percentage
(C)
Existing excess reserve
For purposes of computing the increase under subparagraph (A) for any taxable year, 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
(Added [Pub. L. 98–369, div. A, title V, § 511(a)], July 18, 1984, [98 Stat. 856]; amended [Pub. L. 99–514, title XVIII, § 1851(a)(2)], (3)(A), (4)–(7), (9), (13), Oct. 22, 1986, [100 Stat. 2858–2860], 2862; [Pub. L. 100–647, title I, § 1018(t)(1)(C)], (2)(A), (u)(12), Nov. 10, 1988, [102 Stat. 3587], 3590; [Pub. L. 104–188, title I, § 1704(t)(60)], Aug. 20, 1996, [110 Stat. 1890]; [Pub. L. 109–280, title VIII, § 843(a)], Aug. 17, 2006, [120 Stat. 1010]; [Pub. L. 115–141, div. U, title IV, § 401(a)(96)], (b)(21)(B), (C), Mar. 23, 2018, [132 Stat. 1188], 1202, 1203.)