412 - Minimum Required Contribution
Internal Revenue Code (IRC) section 412 establishes the Minimum Funding Standards that a Defined Benefit Plan must meet in order to maintain its Qualified status as a tax-advantaged retirement plan. It specifies the Actuarial methodology for developing plan contributions that Congress has deemed necessary in order for the plans to maintain a healthy funded position. It establishes a Funding Standard Account for the plan that tracks charges associated with the cost of plan benefits (such as the Normal Cost for the year) and credits that are to pay for such benefits (such as employer contributions to the plan).
Section 412 sets a minimum required contribution level for defined benefit plans, in contrast with section 404, which places a maximum deductible level on contributions.