required annual payment
(3) Accelerated quarterly contribution schedule for underfunded plans (A) Failure to timely make required installment In any case in which the plan has a funding shortfall for the preceding plan year, the employer maintaining the plan shall make the required installments under this paragraph and if the employer fails to pay the full amount of a required installment for the plan year, then the amount of interest charged under paragraph (2) on the underpayment for the period of underpayment shall be determined by using a rate of interest equal to the rate otherwise used under paragraph (2) plus 5 percentage points. In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary of the Treasury may provide. (B) Amount of underpayment, period of underpayment For purposes of subparagraph (A)— (i) Amount The amount of the underpayment shall be the excess of— (I) the required installment, over (II) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment. (ii) Period of underpayment The period for which any interest is charged under this paragraph with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan. (iii) Order of crediting contributions For purposes of clause (i)(II), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid. (C) Number of required installments; due dates For purposes of this paragraph— (i) Payable in 4 installments There shall be 4 required installments for each plan year. (ii) Time for payment of installments The due dates for required installments are set forth in the following table: In the case of the following required installment: The due date is: 1st April 15 2nd July 15 3rd October 15 4th January 15 of the following year. (D) Amount of required installment For purposes of this paragraph— (i) In general The amount of any required installment shall be 25 percent of the required annual payment. (ii) Required annual payment For purposes of clause (i), the term “required annual payment” means the lesser of— (I) 90 percent of the minimum required contribution (determined without regard to this subsection) to the plan for the plan year under this section, or (II) 100 percent of the minimum required contribution (determined without regard to this subsection or to any waiver under section 1082(c) of this title ) to the plan for the preceding plan year. Subclause (II) shall not apply if the preceding plan year referred to in such clause was not a year of 12 months. (E) Fiscal years, short years, and years with alternate valuation date (i) Fiscal years In applying this paragraph to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this paragraph, the months which correspond thereto. (ii) Short plan year This subparagraph shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary of the Treasury. (iii) Plan with alternate valuation date The Secretary of the Treasury shall prescribe regulations for the application of this paragraph in the case of a plan which has a valuation date other than the first day of the plan year. (F) Quarterly contributions not to include certain increased contributions Subparagraph (D) shall be applied without regard to any increase under subsection (c)(7).