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TITLE 26-INTERNAL REVENUE CODE (5) Change in funding method or in plan year re- quires approval If the funding method for a plan is changed, the new funding method shall become the funding method used to deter- mine costs and liabilities under the plan only if the change is approved by the Secretary. If the plan year for a plan is changed, the new plan year shall become the plan year for the plan only if the change is approved by the Secretary. (6) Full funding If, as of the close of a plan year, a plan would (without regard to this paragraph) have an accumulated funding deficiency (de- termined without regard to the alternative minimum funding standard account permit- ted under subsection (g)) in excess of the full funding limitation- (A) the funding standard account shall be credited with the amount of such excess, and (B) all amounts described in paragraphs (2)(B), (C), and (D) and (3)(B) of subsection (b) which are required to be amortized shall be considered fully amortized for purposes of such paragraphs. (7) Full funding limitation For purposes of paragraph (6), the term full funding limitation means the excess (if any) of- (A) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculat- ed under the funding method used for the plan), over (B) the lesser of the fair market value of the plan's assets or the value of such assets determined under paragraph (2). (8) Certain retroactive plan amendments For purposes of this section, any amend- ment applying to a plan year which- (A) is adopted after the close of such plan year but no later than 2 and one-half months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year), (B) does not reduce the accrued benefit of any participant determined as of the begin- ning of the first plan year to which the amendment applies, and (C) does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances, shall, at the election of the plan administra- tor, be deemed to have been made on the first day of such plan year. No amendment de- scribed in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary of Labor notifying him of such amendment and the Secretary of Labor has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary of Labor unless he determines that such amendment is necessary because of a substan- tial business hardship (as determined under subsection (d)(2)) and that a waiver under subsection (d)(1) is unavailable or inadequate. (9) 3-year valuation For purposes of this section. a determina- tion of experience gains and losses and a valu- ation of the plan's liability shall be made not less frequently than once every 3 years, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary. (10) Time when certain contributions deemed made For purposes of this section, any contribu- tions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this para- graph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary. (d) Variance from minimum funding standard (1) Waiver in case of substantial business hardship If an employer or in the case of a multiem- ployer plan, 10 percent or more of the number of employers contributing to or under the plan, are unable to satisfy the minimum funding standard for a plan year without substantial business hardship and if application of the standard would be adverse to the interests of plan participants in the ag- gregate, the Secretary may waive the require- ments of subsection (a) for such year with re- spect to all or any portion of the minimum funding standard other than the portion thereof determined under subsection (b)(2)(C). The Secretary shall not waive the minimum funding standard with respect to a plan for more than 5 of any 15 consecutive plan years. (2) Determination of substantial business hardship For purposes of this section, the factors taken into account in determining substantial business hardship shall include (but shall not be limited to) whether or not- (A) the employer is operating at an eco- nomic loss, (B) there is substantial unemployment or underemployment in the trade or business and in the industry concerned, (C) the sales and profits of the industry concerned are depressed or declining, and (D) it is reasonable to expect that the plan will be continued only if the waiver is granted. (3) Waived funding deficiency For purposes of this section, the term "waived funding deficiency" means the por- tion of the minimum funding standard (deter- mined without regard to subsection (b)(3)(C)) for a plan year waived by the Secretary and not satisfied by employer contributions. (e) Extension of amortization periods The period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of any plan may be ex- §412 Page 334