[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.412(c)(1)-1]

[Page 645]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.412(c)(1)-1  Determinations to be made under funding method--terms defined.

    (a) Actuarial cost method and funding method. Section 3 (31) of the 
Employee Retirement Income Security Act of 1974 (``ERISA'') provides 
certain acceptable (and unacceptable) actuarial cost methods which may 
(or may not) be used by employee plans. The term ``funding method'' when 
used in section 412 has the same meaning as the term ``actuarial cost 
method'' in section 3 (31) of ERISA. For shortfall method for certain 
collectively bargained plans, see Sec. 1.412(c)(1)-2; for principles 
applicable to funding methods in general, see regulations under section 
412(c)(3).
    (b) Computations included in funding method. The funding method of a 
plan includes not only the overall funding method used by the plan but 
also each specific method of computation used in applying the overall 
method. However, the choice of which actuarial assumptions are 
appropriate to the overall method or to the specific method of 
computation is not a part of the funding method. For example, the 
decision to use or not to use a mortality factor in the funding method 
of a plan is not a part of such funding method. Similarly, the specific 
mortality rate determined to be applicable to a particular plan year is 
not part of the funding method. See section 412(c)(5) for the 
requirement of approval to change the funding method used by a plan.

[T.D. 7733, 45 FR 75202, Nov. 14, 1980]