Under the Pension Protection Act of 2006, a plan is considered to be at risk of default on its obligations if it fails to meet at least one of two tests Under the first test, a plan is deemed to be at risk if it is less than 70% funded under the "worst case scenario" assumptions that (1) the sponsor is not permitted to use credit balances to reduce its cash contributions and (2) employees will retire at the earliest date they are eligible and will choose the form of benefit that is most expensive to the plan If a plan does not pass this test, it will be deemed at risk of default unless it is at least 80% funded under standard actuarial assumptions