tion 408(p)(7) (without regard to the last sen-
tence thereof) shall apply for purposes of this
subsection.
‘‘(C) TREATMENT
OF
MATCHING
CON-
TRIBUTIONS.—A rule similar to the rule of sec-
tion 408(p)(8) shall apply for purposes of this
subsection.
‘‘(c) SAFE TRUST.—
‘‘(1) IN GENERAL.—For purposes of this title,
the term ‘SAFE trust’ means a trust forming part
of a defined benefit plan if—
‘‘(A) such trust meets the requirements of
section 401(a) as modified by subsection (d),
‘‘(B) a participant’s benefits under the
plan are based solely on the balance of a sepa-
rate account in such plan of such participant,
‘‘(C) such plan meets the requirements of
paragraphs (2) through (8), and
‘‘(D) the only contributions to such trust
(other than rollover contributions) are employer
contributions.
‘‘(2) PARTICIPATION REQUIREMENTS.—A plan
meets the requirements of this paragraph for any
year only if the requirements of subsection (b)(2)
are met for such year.
‘‘(3) VESTING.—A plan meets the requirements
of this paragraph for any year only if the require-
ments of subsection (b)(3) are met for such year.
‘‘(4) BENEFIT FORM.—A plan meets the re-
quirements of this paragraph only if the require-
ments of subsection (b)(4) are met. For purposes of
this paragraph, a plan may satisfy the requirements
of subsection (b)(4) by purchasing an annuity con-
tract which meets the requirements of subsection
(b)(4).
‘‘(5) AMOUNT
OF
ANNUAL
ACCRUED
BEN-
EFIT.—A plan meets the requirements of this para-
graph for any year only if the requirements of sub-
section (b)(5) are met for such year.
‘‘(6) FUNDING.—
‘‘(A) IN GENERAL.—A plan meets the re-
quirements of this paragraph for any year only
if—
‘‘(i) the requirements of subsection
(b)(6) are met for such year, and
‘‘(ii) in the case of a plan which has
an unfunded prior year liability as of the
close of such plan year, the plan requires
that the employer make an additional con-
tribution to such plan for such year equal
to the amount of such unfunded prior year
liability.
‘‘(B) UNFUNDED
PRIOR
YEAR
LIABIL-
ITY.—For purposes of this paragraph, the term
‘unfunded prior year liability’ means, with re-
spect to any plan year, the excess (if any) of—
‘‘(i) the aggregate of the accrued li-
abilities under the plan as of the close of
the prior plan year, over
‘‘(ii) the value of the plan’s assets de-
termined under section 412(c)(2) as of the
close of the plan year (determined without
regard to any contributions for such plan
year).
Such accrued liabilities shall be determined
using the assumptions specified in subsection
(b)(6)(B).
‘‘(C) CHANGES IN MORTALITY TABLE.—If
the applicable mortality table under section
417(e)(3) for any plan year is not the same as
such table for the prior plan year, the Secretary
shall prescribe regulations which phase in the
effect of the changes over a reasonable period
of plan years determined by the Secretary.
‘‘(D) DISREGARD ASSUMPTIONS FOR EX-
PENSES.—For purposes of this paragraph, the
assumption specified in subsection (b)(6)(B)(iv)
shall be disregarded.
‘‘(7) 
SEPARATE
ACCOUNTS
FOR
PARTICI-
PANTS.—A plan meets the requirements of this
paragraph for any year only if the plan provides—
‘‘(A) for an individual account for each
participant, and
‘‘(B) for benefits based solely on—
‘‘(i) the amount contributed to the
participant’s account, and
‘‘(ii) any income, expenses, gains and
losses, and any forfeitures of accounts of
other participants which may be allocated
to such participant’s account.
‘‘(8) TRUST MAY NOT HOLD SECURITIES WHICH
ARE NOT READILY TRADABLE.—A plan meets the
requirements of this paragraph only if the plan pro-
hibits the trust from holding directly or indirectly se-
curities which are not readily tradable on an estab-
lished securities market or otherwise. Nothing in
this paragraph shall prohibit the trust from holding
insurance company products regulated by State law.