Each plan subject to minimum-funding requirements must maintain a minimum-funding standard account and meet a minimum-funding standard. A funding standard account consists of charges for normal costs, amortization costs and funding deficiencies, offset by credits for amounts contributed by the employer, amortization gains, waived funding deficiencies, and the excess of any debit balance in the funding standard account over any debit balance in the alternative minimum standard account, if any.

All costs, liabilities, rates of interest, and other factors under the plan must be determined on the basis of actuarial assumptions and methods that must be reasonable in the aggregate and in combination offer the actuary’s best estimate of anticipated experience under the plan. A plan meets the minimum-funding requirements only if, at the end of each plan year, the account does not have an accumulated funding deficiency.