### Question
What does required annual payment mean?


### Answer
**Required annual payment** has the following meaning in *26 U.S.C. § 412*:

> the lesser of—


(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 (without regard to any waiver under subsection (d) thereof), or


(ii) 100 percent of the amount so required for the preceding plan year

#### Citation:
  - *26 U.S.C. § 412*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart B-Special Rules**

