109 HR 2830 IH: Pension Protection Act of 2005
U.S. House of Representatives
2005-06-09
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title and table of contents
(a)This Act may be cited as the Pension Protection Act of 2005
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents
Title I—Reform of funding rules for single-employer defined benefit pension plans
Subtitle A—Amendments to Employee Retirement Income Security Act of 1974
Sec. 101. Minimum funding standards
Sec. 102. Funding rules for single-employer defined benefit pension plans
Sec. 103. Limitations on distributions and benefit accruals under single-employer plans
Sec. 104. Technical and conforming amendments
Subtitle B—Amendments to Internal Revenue Code of 1986
Sec. 111. Minimum funding standards
Sec. 112. Funding rules for single-employer defined benefit pension plans
Sec. 113. Limitations on distributions and benefit accruals under single-employer plans
Sec. 114. Technical and conforming amendments
Subtitle C—Other provisions
Sec. 121. Modification of transition rule to pension funding requirements
Sec. 122. Treatment of nonqualified deferred compensation plans when employer defined benefit plan in at-risk status
Title II—Funding rules for multiemployer defined benefit plans
Subtitle A—Amendments to Employee Retirement Income Security Act of 1974
Sec. 201. Funding rules for multiemployer defined benefit plans
Sec. 202. Additional funding rules for multiemployer plans in endangered or critical status
Sec. 203. Measures to forestall insolvency of multiemployer plans
Sec. 204. Withdrawal liability reforms
Sec. 205. Removal of restrictions with respect to procedures applicable to disputes involving withdrawal liability
Subtitle B—Amendments to Internal Revenue Code of 1986
Sec. 211. Funding rules for multiemployer defined benefit plans
Sec. 212. Additional funding rules for multiemployer plans in endangered or critical status
Title III—Other interest-related funding provisions
Sec. 301. Interest rate assumption for determination of lump sum distributions
Sec. 302. Interest rate assumption for applying benefit limitations to lump sum distributions
Title IV—Improvements in PBGC guarantee provisions
Sec. 401. Increases in PBGC premiums
Title V—Disclosure
Sec. 501. Defined benefit plan funding notices
Sec. 502. Additional disclosure requirements
Sec. 503. Notice to participants and beneficiaries of section 4010 filings with the PBGC
Title VI—Investment advice
Sec. 601. Amendments to Employee Retirement Income Security Act of 1974 providing prohibited transaction exemption for provision of investment advice
Sec. 602. Amendments to Internal Revenue Code of 1986 providing prohibited transaction exemption for provision of investment advice
Title VII—Deduction limitations
Sec. 701. Increase in deduction limits
Sec. 702. Updating deduction rules for combination of plans
<enum>I</enum><header>Reform of funding rules for single-employer defined benefit pension plans</header>
<subtitle id="H3041B429EABC4D37A53CD521E0002729"><enum>A</enum><header>Amendments to Employee Retirement Income Security Act of 1974</header>
<section id="H8C4CA556EC6A424E9B3482B832C61810"><enum>101.</enum><header>Minimum funding standards</header>
<subsection id="HAFCF7E52E82B4646A7192C0204F59931"><enum>(a)</enum><header>Repeal of existing funding rules</header><text>Sections 302 through 306 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082 through 1085a) are repealed.</text></subsection>
<subsection id="H1404CD981A364884BF7150D3C8C4643"><enum>(b)</enum><header>New minimum funding standards</header><text display-inline="yes-display-inline">Part 3 of subtitle B of title I of such Act (as amended by subsection (a)) is amended further by inserting after section 301 the following new section:</text>
<quoted-block style="traditional" id="H41F9788B93D14B1DA5BCC5B48DD9A9BC" display-inline="no-display-inline">
<section id="H9BAFBA3F374448829DAEC251D8EDFE00"><enum>302.</enum><header>Minimum funding standards</header>
<subsection id="HEBD014B4E2634F21BBCB9E6002C24F87" display-inline="yes-display-inline"><enum>(a)</enum><header>Requirement to meet minimum funding standard</header>
<paragraph id="HDA4521EA6FBD4D588701A7D04EA0899B"><enum>(1)</enum><header>In general</header><text>A plan to which this part applies shall satisfy the minimum funding standard applicable to the plan for any plan year.</text></paragraph>
<paragraph id="HA69721327E334B4EB33C7D2F18DDC"><enum>(2)</enum><header>Minimum funding standard</header><text>For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—</text>
<subparagraph id="H28B810D1DBBC4621896EEB810000D75D"><enum>(A)</enum><text>in the case of a defined benefit plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under section 303 for the plan for the plan year,</text></subparagraph>
<subparagraph id="H6D56B1D0156943DCBED0F9E1DF14B2C8"><enum>(B)</enum><text>in the case of a money purchase plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan, and</text></subparagraph>
<subparagraph id="HB6D06B8E24CB45D0A65D5970E950CC2C"><enum>(C)</enum><text>in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 304 as of the end of the plan year.</text></subparagraph></paragraph></subsection>
<subsection id="H9D625A7A5AB54386B2E315CB43E31ECC" display-inline="no-display-inline"><enum>(b)</enum><header>Liability for contributions</header>
<paragraph id="H7429ECDD3A4948168CB8EB65A0A2C2C"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 303(i)) shall be paid by any employer responsible for making contributions to or under the plan.</text></paragraph>
<paragraph id="HC8E40927DFA742D1AD4F008344916750"><enum>(2)</enum><header>Joint and several liability where employer member of controlled group</header><text>In the case of a single-employer plan, if the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.</text> </paragraph></subsection>
<subsection id="HC4398855F1904074A3EA94F85BB7D047" display-inline="no-display-inline"><enum>(c)</enum><header>Variance from minimum funding standards</header>
<paragraph id="H3B1ABE6A41694281A7C97857F9E6D07E"><enum>(1)</enum><header>Waiver in case of business hardship</header>
<subparagraph id="HAED3DDB3F1564B2DAD41748B5F3DB9DD" display-inline="no-display-inline"><enum>(A)</enum><header>In general</header><text>If—</text>
<clause id="H5B62F852600544149DF15707B6A41C25"><enum>(i)</enum><text>an employer is (or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan is) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer), and</text></clause>
<clause id="H881FAD3FE4C5400FBDB1357897C01102"><enum>(ii)</enum><text>application of the standard would be adverse to the interests of plan participants in the aggregate, </text></clause><continuation-text continuation-text-level="subparagraph">the Secretary of the Treasury may, subject to subparagraphs (B) and (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary of the Treasury shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.</continuation-text></subparagraph>
<subparagraph id="HE27C51C45A3A4B5BA26E00A04C97D428"><enum>(B)</enum><header>Effects of waiver</header><text display-inline="yes-display-inline">If a waiver is granted under subparagraph (A) for any plan year—</text>
<clause id="HB64117B3141C48E797B3FECE7FE38D5F"><enum>(i)</enum><text>in the case of a single-employer plan, the minimum required contribution under section 303 for the plan year shall be reduced by the amount of the waived funding deficiency and such amount shall be amortized as required under section 303(j), and</text></clause>
<clause id="H2D15DCCEB78A49959F40E7C741353FD1"><enum>(ii)</enum><text>in the case of a multiemployer plan, the funding standard account shall be credited under section 304(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 304(b)(2)(C).</text></clause></subparagraph>
<subparagraph id="HDE4D1CAEAF75427F81D16704D4343879" commented="no"><enum>(C)</enum><header>Waiver of amortized portion not allowed</header><text>The Secretary of the Treasury may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any amortization payment required to be made for such plan year with respect to any amortization described in subparagraph (B) of any waived portion of the minimum funding standard for any preceding plan year.</text></subparagraph></paragraph>
<paragraph id="H65B9D60F21154AEF873D57676087ADAF"><enum>(2)</enum><header>Determination of business hardship</header><text>For purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether or not—</text>
<subparagraph id="H2F93BDFDF55C4C63B6B57674A241657E"><enum>(A)</enum><text>the employer is operating at an economic loss,</text></subparagraph>
<subparagraph id="HB8F16E9681644976AFDE46C7DB19874D"><enum>(B)</enum><text>there is substantial unemployment or underemployment in the trade or business and in the industry concerned,</text></subparagraph>
<subparagraph id="H5186C19EB09E468FA5ABDBB7101444A9"><enum>(C)</enum><text>the sales and profits of the industry concerned are depressed or declining, and</text></subparagraph>
<subparagraph id="H4AA82A5F960645F4B0B11EBBB7FB2F45"><enum>(D)</enum><text>it is reasonable to expect that the plan will be continued only if the waiver is granted.</text></subparagraph></paragraph>
<paragraph id="H1B67BCC56EB9404B9CD86BC485B1C1B7"><enum>(3)</enum><header>Waived funding deficiency</header><text>For purposes of this part, the term <term>waived funding deficiency</term> means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary of the Treasury and not satisfied by employer contributions.</text></paragraph>
<paragraph id="HDEF7048EDE354301A5CB8D1EA07DF400"><enum>(4)</enum><header>Security for waivers for single-employer plans, consultations</header>
<subparagraph id="H3FA2983F9F7043DC9825B21060DA5F01"><enum>(A)</enum><header>Security may be required</header>
<clause id="H33286BBAC36744F6B94169EFF87E917C"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subparagraph (C), the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15)) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1).</text></clause>
<clause id="H67E1896C42464E3EB827B213AF2287C5"><enum>(ii)</enum><header> Special rules</header><text display-inline="yes-display-inline">Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13)), or a member of such sponsor's controlled group (within the meaning of section 4001(a)(14)).</text></clause></subparagraph>
<subparagraph id="HF83021D2862B49AB89D7BC89004202DF"><enum>(B)</enum><header>Consultation with the pension benefit guaranty corporation</header><text display-inline="yes-display-inline">Except as provided in subparagraph (C), the Secretary of the Treasury shall, before granting or modifying a waiver under this subsection with respect to a plan described in subparagraph (A)(i)—</text>
<clause id="H456AD026B6464F698609D0CA8B8D1C12"><enum>(i)</enum><text display-inline="yes-display-inline"> provide the Pension Benefit Guaranty Corporation with—</text>
<subclause id="HD61FAD5465E147D2BD41E41667C967E8"><enum>(I)</enum><text>notice of the completed application for any waiver or modification, and</text></subclause>
<subclause id="H933C3D6A6B2142F0A9732EFF47158E60"><enum>(II)</enum><text>an opportunity to comment on such application within 30 days after receipt of such notice, and</text></subclause></clause>
<clause id="H657C331FBD714C4C917BD1E2BD7EB3CF"><enum>(ii)</enum><text>consider—</text>
<subclause id="H1D842E51ACBF483889216E9FEAC8B34B"><enum>(I)</enum><text>any comments of the Corporation under clause (i)(II), and</text></subclause>
<subclause id="HBB7D2051530341279858A21DCDC4006C"><enum>(II)</enum><text>any views of any employee organization (within the meaning of section 3(4)) representing participants in the plan which are submitted in writing to the Secretary of the Treasury in connection with such application.</text></subclause><continuation-text continuation-text-level="clause">Information provided to the Corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements of <external-xref legal-doc="usc" parsable-cite="usc/26/6103">section 6103(p)</external-xref> of the Internal Revenue Code of 1986.</continuation-text></clause></subparagraph>
<subparagraph id="H41619CFBEF624F1DB619E6F35DFB51"><enum>(C)</enum><header>Exception for certain waivers</header>
<clause id="H03CDDB179D3F44749325B843335B373B"><enum>(i)</enum><header>In general</header><text>The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—</text>
<subclause id="H339BD642AE994C4FAFA165D4E2E1B461"><enum>(I)</enum><text>the shortfall amortization charge (within the meaning of section 303(c)(1)) for the plan year, and</text></subclause>
<subclause id="HF2D496302FA14A59AF57F544C9534CCB"><enum>(II)</enum><text>the aggregate total of shortfall amortization installments determined for succeeding plan years under section 303(c)(2),</text> </subclause><continuation-text continuation-text-level="clause">is less than $1,000,000.</continuation-text></clause>
<clause id="HD6B2AB1121B64E64876B98635DC64521"><enum>(ii)</enum><header>Treatment of waivers for which applications are pending</header><text>The amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under this subsection which are pending with respect to such plan were denied.</text></clause> </subparagraph></paragraph>
<paragraph id="HE2081D4CA26A41E9BC8E531F435D5826"><enum>(5)</enum><header>Special rules for single-employer plans</header>
<subparagraph id="H0A9D76C26FF14F63BF2800AE00CB45FE"><enum>(A)</enum><header>Application must be submitted before date 2<fraction>1/2</fraction> months after close of year</header><text>In the case of a single-employer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary of the Treasury not later than the 15th day of the 3rd month beginning after the close of such plan year.</text></subparagraph>
<subparagraph id="H54D3B06B940C4ED5AEE6771350827F72"><enum>(B)</enum><header>Special rule if employer is member of controlled group</header><text>In the case of a single-employer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met—</text>
<clause id="HEF4A62AC69AD43DF00007C728BBC1D1"><enum>(i)</enum><text>with respect to such employer, and</text></clause>
<clause id="HE21A817462A041D1AEFC20111059CF9"><enum>(ii)</enum><text>with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).</text></clause><continuation-text continuation-text-level="subparagraph">The Secretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary of the Treasury determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this paragraph.</continuation-text></subparagraph></paragraph>
<paragraph id="H385540EF28914CF6BB1DA34EECFE2D2F"><enum>(6)</enum><header>Notice to employee organizations</header>
<subparagraph id="H308F7DFB5D9F40F4BF89F1477CAA0023"><enum>(A)</enum><header>In general</header><text>The Secretary of the Treasury shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such waiver to each employee organization representing employees covered by the affected plan, and each affected party (as defined in section 4001(a)(21)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV and for benefit liabilities.</text></subparagraph>
<subparagraph id="HAB01B15CD05F423C916E40CE27CF9662"><enum>(B)</enum><header>Consideration of relevant information</header><text>The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).</text></subparagraph></paragraph>
<paragraph id="HE12FBD1267C24C5B0059DD4463D2A633"><enum>(7)</enum><header>Cross reference</header><text>For corresponding duties of the Secretary of the Treasury with regard to implementation of the Internal Revenue Code of 1986, see section 412(c) of such Code.</text></paragraph></subsection>
<subsection id="H1D55778EC45B4A758D23ED15A30BB5"><enum>(d)</enum><header>Miscellaneous rules</header>
<paragraph id="HE7D34AF7D90E48AAAE5EB5CB8E169FD" commented="no" display-inline="no-display-inline"><enum>(1)</enum><header>Change in method or year</header><text>If the funding method, the valuation date, or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary of the Treasury.</text></paragraph>
<paragraph id="HD9B24C33002144FA9630E949D960027"><enum>(2)</enum><header>Certain retroactive plan amendments</header><text>For purposes of this section, any amendment applying to a plan year which—</text>
<subparagraph id="HB9972559341747198050004CAB6A49F"><enum>(A)</enum><text>is adopted after the close of such plan year but no later than 2<fraction>1/2</fraction> months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),</text></subparagraph>
<subparagraph id="H533FFC54E724465C9EEA39DB7D23A49C"><enum>(B)</enum><text>does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and</text></subparagraph>
<subparagraph id="H3C489F8835AA4820842157DD5FB633C"><enum>(C)</enum><text>does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,</text></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">shall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary of the Treasury notifying him of such amendment and such Secretary has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary of the Treasury unless such Secretary determines that such amendment is necessary because of a substantial business hardship (as determined under subsection (c)(2)) and that a waiver under subsection (c) (or, in the case of a multiemployer plan, any extension of the amortization period under section 304(d)) is unavailable or inadequate.</continuation-text></paragraph>
<paragraph id="HB0796CE43EED44C98439F9BEE8CD7E00"><enum>(3)</enum><header>Controlled group</header><text>For purposes of this section, the term <term>controlled group</term> means any group treated as a single employer under subsection (b), (c), (m), or (o) of <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414</external-xref> of the Internal Revenue Code of 1986.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H027345E6CE1746C1A8AF55A3204200F7"><enum>(c)</enum><header>Clerical amendment</header><text>The table of contents in section 1 of such Act is amended by striking the items relating to sections 302 through 306 and inserting the following new item:</text>
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<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="H41F9788B93D14B1DA5BCC5B48DD9A9BC" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H9BAFBA3F374448829DAEC251D8EDFE00" level="section">Sec. 302. Minimum funding standards</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD7A4ACEC3E664E44B478AA4C4FD6476D"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text></subsection></section>
<section id="H8355121C78A04EEFB14876A5779E81CD"><enum>102.</enum><header>Funding rules for single-employer defined benefit pension plans</header>
<subsection id="H535E329A41564C4D8E576900DA2F26CC"><enum>(a)</enum><header>In general</header><text>Part 3 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as amended by section 101 of this Act) is amended further by inserting after section 302 the following new section.</text>
<quoted-block style="traditional" id="HFEE340E95EE6460BBC31005833ED3CDD" display-inline="no-display-inline">
<section id="H36F829B59FA04B7B84FE029078DFBA9"><enum>303.</enum><header>Minimum funding standards for single-employer defined benefit pension plans</header>
<subsection id="H5E6C8DFCD4B148DD8B469BAD7BB71570" display-inline="yes-display-inline"><enum>(a)</enum><header>Minimum required contribution</header>
<paragraph id="H77DE24A1FA2244FDB323CCD6CE10061"><enum>(1)</enum><header>In general</header><text>For purposes of section 302(a)(2)(A), except as otherwise provided in this subsection, the minimum required contribution with respect to a plan for a plan year is the target normal cost of the plan for the plan year.</text></paragraph>
<paragraph id="HF678994A2D5F453EB519FE2DC198EB62" display-inline="no-display-inline"><enum>(2)</enum><header>Shortfall amortization charge</header><text display-inline="yes-display-inline">In any case in which the value of plan assets (determined without regard to subsection (e)(1)) of the plan for the plan year which are held by the plan immediately before the valuation date is less than the funding target of the plan for the plan year, the minimum required contribution with respect to the plan for the plan year is the sum of the amount determined under paragraph (1) plus a shortfall amortization charge for such plan year determined under subsection (c).</text></paragraph>
<paragraph id="H1325C8F80D06475600194EDCBA321BD0"><enum>(3)</enum><header>Credit for excess assets</header><text display-inline="yes-display-inline">In any case in which the value of plan assets of the plan for the plan year which are held by the plan immediately before the valuation date exceed the funding target of the plan for the plan year, the minimum required contribution with respect to the plan for the plan year is the amount determined under paragraph (1), reduced by such excess.</text></paragraph>
<paragraph id="HC3004299EB97462A988BA6EB7F8EEF39"><enum>(4)</enum><header>Pre-funding balance</header><text>In the case of any plan year in which—</text>
<subparagraph id="H7DF12FFAEBB943A0B6B6E080582F44AC"><enum>(A)</enum><text> the ratio (expressed as a percentage) which—</text>
<clause id="H9C165426D36D47F58B9E260404389065"><enum>(i)</enum><text>the value of plan assets (determined without regard to subsection (e)(1)(B)) for the preceding plan year, bears to</text></clause>
<clause id="H31BCFEE663F544189839B4E096151016"><enum>(ii)</enum><text>the funding target of the plan for the preceding plan year (determined without regard to subsection (g)(1)),</text></clause><continuation-text continuation-text-level="subparagraph">is at least 80 percent, and</continuation-text></subparagraph>
<subparagraph id="HAAE14313F6AC4E8D89EF8F15D0E0C07F"><enum>(B)</enum><text>the plan sponsor elects (in such form and manner as shall be prescribed in regulations of the Secretary of the Treasury) to credit against the minimum required contribution for the current plan year all or a portion of the funding standard carryover balance and the pre-funding balance (to the extent provided in subsection (h)) for the preceding plan year (not in excess of such minimum required contribution),</text></subparagraph><continuation-text continuation-text-level="paragraph">the minimum required contribution for the plan year shall be reduced by the amount so credited by the plan sponsor.</continuation-text></paragraph> </subsection>
<subsection id="H7748BD8A57D54DF4B989297600CEE988"><enum>(b)</enum><header>Target normal cost</header><text>For purposes of this section, subject to subsection (g)(2), the term <term>target normal cost</term> means, for any plan year, the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year. If any benefit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase shall be treated as having accrued during the current plan year.</text></subsection>
<subsection id="HCF467AE1F292474794DF79862B152936"><enum>(c)</enum><header>Shortfall amortization charge</header>
<paragraph id="H9B80C00A8697402FB61371001E3D5BF8" display-inline="no-display-inline"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The shortfall amortization charge for a plan for any plan year is the aggregate total of the shortfall amortization installments for such plan year with respect to the shortfall amortization bases for such plan year and each of the 6 preceding plan years. </text></paragraph>
<paragraph id="H31790509E9F94763AA12375B73B6A638"><enum>(2)</enum><header>Shortfall amortization installment</header>
<subparagraph id="H304293FF7BC34B2EB9B69CDDC3C8D8D"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (1), the plan sponsor shall determine, with respect to the shortfall amortization base of the plan for any plan year, the amounts necessary to amortize such shortfall amortization base, in level annual installments over a period of 7 plan years beginning with such plan year. The annual installment of such amortization for each plan year in such 7-plan-year period is the shortfall amortization installment for such plan year with respect to such shortfall amortization base.</text></subparagraph>
<subparagraph id="H34A4E0C61BE84BE8B015B27E4EBCE2C3"><enum>(B)</enum><header>Computation assumptions</header><text display-inline="yes-display-inline">The determination of any annual installment under subparagraph (A) for any plan year shall be made as of the valuation date for such plan year, using the effective rate of interest for the plan for such plan year.</text></subparagraph></paragraph>
<paragraph id="H47DCBA84088B4FC18308DED91F367D93"><enum>(3)</enum><header>Shortfall amortization base</header><text>The shortfall amortization base of a plan for a plan year is the excess (if any) of—</text>
<subparagraph id="H5CEB5AD3CCAC46BFA132865F000026C1"><enum>(A)</enum><text>the funding shortfall of such plan for such plan year, over</text></subparagraph>
<subparagraph id="HD069638911BF451E8E1CA812C88B26AD"><enum>(B)</enum><text>the present value (determined using the effective interest rate of the plan for the plan year) of the aggregate total of the shortfall amortization installments, for such plan year and the 5 succeeding plan years, which have been determined with respect to the shortfall amortization bases of the plan for each of the 6 plan years preceding such plan year.</text></subparagraph></paragraph>
<paragraph id="H08CD19571B124B54B140DCDA97A17256"><enum>(4)</enum><header>Funding shortfall</header><text display-inline="yes-display-inline">For purposes of this section, the funding shortfall of a plan for any plan year is the excess (if any) of—</text>
<subparagraph id="HE9DDB10E872F452796DA300F72525D7"><enum>(A)</enum><text>the funding target of the plan for the plan year, over</text></subparagraph>
<subparagraph id="H98517BD5A4524C5782D31087A49B1F96"><enum>(B)</enum><text display-inline="yes-display-inline">the value of plan assets of the plan for the plan year which are held by the plan immediately before the valuation date.</text> </subparagraph></paragraph>
<paragraph id="H008FF94F9F114CF796CF334F5DA5004B"><enum>(5)</enum><header>Early deemed amortization upon attainment of funding target</header><text display-inline="yes-display-inline">In any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the shortfall amortization charge for such plan year and succeeding plan years, the shortfall amortization base for all preceding plan years shall be reduced to zero.</text></paragraph></subsection>
<subsection id="HF2964098A71346A69703E3EF116737E9"><enum>(d)</enum><header>Rules relating to funding target</header><text>For purposes of this section—</text>
<paragraph id="H2DF0D6758E4E43CBBDBDB3E03CEAFCB2"><enum>(1)</enum><header>Funding target</header><text>Except as provided in subsection (g)(1), the funding target of a plan for a plan year is the present value of all liabilities to participants and their beneficiaries under the plan for the plan year.</text></paragraph>
<paragraph id="H5E32D114E1334E8E9D2C30AEE3625026"><enum>(2)</enum><header>Funding target attainment percentage</header><text>The <quote>funding target attainment percentage</quote> of a plan for a plan year is the ratio (expressed as a percentage) which—</text>
<subparagraph id="HE869EDBCD80B457E006B159423755145"><enum>(A)</enum><text>the value of plan assets for the plan year, bears to</text></subparagraph>
<subparagraph id="H048400431E6642FBA372BD2ED3D68DF4"><enum>(B)</enum><text>the funding target of the plan for the plan year (determined without regard to subsection (g)(1)).</text></subparagraph></paragraph></subsection>
<subsection id="H665D358C83E14B7B9F0097EBCA89A9F1" display-inline="no-display-inline"><enum>(e)</enum><header>Valuation of plan assets and liabilities</header>
<paragraph id="H3756F8D3C0FE4220AD9CD3B72B6C8525"><enum>(1)</enum><header>Value of plan assets</header><text>For purposes of this section (other than paragraph (4) and subsections (a)(2) and (h)(3)), the term <term>value of plan assets</term> means the excess of the value of plan assets (determined without regard to this paragraph) over the sum of—</text>
<subparagraph id="H2A4BD62AFA5146FE98D61870E883AB20"><enum>(A)</enum><text>the pre-funding balance of the plan maintained under subsection (h)(1), and</text></subparagraph>
<subparagraph id="H042F77592B5C4D55850050DC7D3C7B6F"><enum>(B)</enum><text>the funding standard carryover balance of the plan maintained under subsection (h)(2).</text></subparagraph></paragraph>
<paragraph id="H6F27254F84AF452C87E7DA22B145B87"><enum>(2)</enum><header>Timing of determinations</header><text display-inline="yes-display-inline">Except as otherwise provided under this subsection, all determinations under this section for a plan year shall be made as of the valuation date of the plan for such plan year. </text></paragraph>
<paragraph id="H7A780DC596F7444F858EBF2149075C65"><enum>(3)</enum><header>Valuation date</header><text>For purposes of this section—</text>
<subparagraph id="H55FE4D1DC5164C0B8B79FB2F2B21E7A3"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the valuation date of a plan for any plan year shall be the first day of the plan year.</text></subparagraph>
<subparagraph id="HAAEB1D6243D24C81B23007139D982FDE"><enum>(B)</enum><header>Exception for small plans</header><text>If, on each day during the preceding plan year, a plan had 500 or fewer participants, the plan may designate any day during the plan year as its valuation date for such plan year. For purposes of this subparagraph, all defined benefit plans (other than multiemployer plans) maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account.</text></subparagraph>
<subparagraph id="HED1A29433026461D996D29A872B2608E"><enum>(C)</enum><header>Application of certain rules in determination of plan size</header><text>For purposes of this paragraph—</text>
<clause id="H8A530C3A40134A6ABB09C25F32DB72AB"><enum>(i)</enum><header>Plans not in existence in preceding year</header><text>In the case of the first plan year of any plan, subparagraph (B) shall apply to such plan by taking into account the number of participants that the plan is reasonably expected to have on days during such first plan year. </text></clause>
<clause id="HFF5F9D0DD6DB4EDC933BBEEE736907E8"><enum>(ii)</enum><header>Predecessors</header><text>Any reference in subparagraph (B) to an employer shall include a reference to any predecessor of such employer.</text></clause></subparagraph></paragraph>
<paragraph id="HE3A88D93BBC048ADB566AE345CBC8DA"><enum>(4)</enum><header>Authorization of use of actuarial value</header><text>For purposes of this section, the value of plan assets (determined without regard to paragraph (1)) shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary of the Treasury, except that—</text>
<subparagraph id="H9B219F4DC88C49E99F954322F3E9E422"><enum>(A)</enum><text>any such method providing for averaging of fair market values may not provide for averaging of such values over more than the current plan year and the 2 preceding plan years, and</text></subparagraph>
<subparagraph id="HDFC5A347CB25470E9F001187D2C074E"><enum>(B)</enum><text>any such method may not result in a determination of the value of plan assets which, at any time, is lower than 90 percent or greater than 110 percent of the fair market value of such assets at such time.</text></subparagraph></paragraph>
<paragraph id="HAC1B67813A8A4BE987BBB9F17F1BBC1D"><enum>(5)</enum><header>Accounting for contribution receipts</header><text>For purposes of this section—</text>
<subparagraph id="HC2C1F46337D04BCDAE5202A84D6959DB"><enum>(A)</enum><header>Contributions for prior plan years taken into account</header><text>For purposes of determining the value of plan assets for any current plan year, in any case in which a contribution properly allocable to amounts owed for a preceding plan year is made on or after the valuation date of the plan for such current plan year, such contribution shall be taken into account, except that any such contribution made during any such current plan year beginning after 2006 shall be taken into account only in an amount equal to its present value (determined using the effective rate of interest for the plan for the preceding plan year) as of the valuation date of the plan for such current plan year.</text></subparagraph>
<subparagraph id="H8F650B87407B4FE18C8E3E78216E8524"><enum>(B)</enum><header>Contributions for current plan year disregarded</header><text>For purposes of determining the value of plan assets for any current plan year, contributions which are properly allocable to amounts owed for such plan year shall not be taken into account, and, in the case of any such contribution made before the valuation date of the plan for such plan year, such value of plan assets shall be reduced for interest on such amount determined using the effective rate of interest of the plan for the preceding plan year for the period beginning when such payment was made and ending on the valuation date of the plan.</text></subparagraph></paragraph>
<paragraph id="HBAC4FE7815A246628B647D559EC8C68F"><enum>(6)</enum><header>Accounting for plan liabilities</header><text>For purposes of this section—</text>
<subparagraph id="H3EEF9CC748DD4858A6B0006689C99C31"><enum>(A)</enum><header>Liabilities taken into account for current plan year</header><text>In determining the value of liabilities under a plan for a plan year, liabilities shall be taken into account to the extent attributable to benefits (including any early retirement or similar benefit) accrued as of the beginning of the plan year.</text></subparagraph>
<subparagraph id="H9C6D3FD5DD6B4065B5313D66E3002B22"><enum>(B)</enum><header>Accruals during current plan year disregarded</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), benefits accrued during such plan year (after those taken into account under subparagraph (A)) shall not be taken into account, irrespective of whether the valuation date of the plan for such plan year is later than the first day of such plan year.</text></subparagraph> </paragraph></subsection>
<subsection id="H896437F6A49A49E28497C48DF29D5282"><enum>(f)</enum><header>Actuarial assumptions and methods</header>
<paragraph id="H0380AE65BE7A4BDC80DEA800EFA984FD"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subject to this subsection, the determination of any present value or other computation under this section shall be made on the basis of actuarial assumptions and methods—</text>
<subparagraph id="HF478F027F5DD47B5BDCFE5C383F400D6"><enum>(A)</enum><text>each of which is reasonable (taking into account the experience of the plan and reasonable expectations), and</text></subparagraph>
<subparagraph id="H1E287AD162F240D2A145A1D3E7029003"><enum>(B)</enum><text>which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.</text></subparagraph></paragraph>
<paragraph id="H7C3ECE2D7913489AB59109E6DF3219A1" display-inline="no-display-inline"><enum>(2)</enum><header>Interest rates</header>
<subparagraph id="HC84C931139C74659A5ECA886A500BF54"><enum>(A)</enum><header>Effective interest rate</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>effective interest rate</term> means, with respect to any plan for any plan year, the single rate of interest which, if used to determine the present value of the plan’s liabilities referred to in subsection (d)(1) would result in an amount equal to the funding target of the plan for such plan year.</text></subparagraph>
<subparagraph id="H763057B9719E49C597CF7048003E22FB"><enum>(B)</enum><header>Application to funding target</header><text>For purposes of determining the funding target of a plan for any plan year, the interest rate used in determining the present value of the liabilities of the plan shall be—</text>
<clause id="H5E20E2C980B44CE08918DB585BDEDB2"><enum>(i)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable during the 5-year period beginning on the first day of the plan year, the first segment rate with respect to the applicable month,</text></clause>
<clause id="HE797F834BF8741D48396844C888900ED"><enum>(ii)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable during the 15-year period beginning at the end of the period described in clause (i), the second segment rate with respect to the applicable month, and</text></clause>
<clause id="HA6DB4B74EFBE4AC799218CD7FF684F6"><enum>(iii)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable after the period described in clause (ii), the third segment rate with respect to the applicable month.</text></clause></subparagraph>
<subparagraph id="H0D6BFD68C8B44CE99D62300055BBA5F1"><enum>(C)</enum><header>Segment rates</header><text>For purposes of this paragraph—</text>
<clause id="HDCC744FBA06F45FC829D661E717C1E37"><enum>(i)</enum><header>First segment rate</header><text>The term <term>first segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 5-year period commencing with such month.</text></clause>
<clause id="H7A80DC9500CC4450B205257FB808DC82"><enum>(ii)</enum><header>Second segment rate</header><text display-inline="yes-display-inline">The term <term>second segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 15-year period beginning at the end of the period described in clause (i).</text></clause>
<clause id="H9ABB741EB1F64C4AACA312D1AB54AE3D"><enum>(iii)</enum><header>Third segment rate</header><text display-inline="yes-display-inline">The term <term>third segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary of the Treasury for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during periods beginning after the period described in clause (ii).</text></clause></subparagraph>
<subparagraph id="H1B80BD1680964992B55858FD87DDAB3"><enum>(D)</enum><header>Corporate bond yield curve</header><text>For purposes of this paragraph—</text>
<clause id="H3C5B31453EEB440CBFE5322919BCE895"><enum>(i)</enum><header>In general</header><text>The term <term>corporate bond yield curve</term> means, with respect to any month, a yield curve which is prescribed by the Secretary of the Treasury for such month and which reflects a 3-year weighted average of yields on investment grade corporate bonds with varying maturities.</text></clause>
<clause id="H8CBFD85FA93048F8B19800BD9F385B31"><enum>(ii)</enum><header>3-year weighted average</header><text>The term <term>3-year weighted average</term> means an averaging methodology under which the most recent year is weighted 50 percent, the year preceding such year is weighted 35 percent, and the second year preceding such year is weighted 15 percent.</text></clause></subparagraph>
<subparagraph id="HBB8120E32D2F4105BB6BAA29E34FB003"><enum>(E)</enum><header>Applicable month</header><text>For purposes of this paragraph, the term <term>applicable month</term> means, with respect to any plan for any plan year, the month which includes the valuation date of such plan for such plan year or, at the election of the plan administrator, any of the 4 months which precede such month. Any election made under this subparagraph shall apply to the plan year for which made and all succeeding plan years unless revoked with the consent of the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="HE7E2671A280946A6BEF098448BCD7F64"><enum>(F)</enum><header>Publication requirements</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall publish for each month the corporate bond yield curve (and the corporate bond yield curve reflecting the modification described in section 205(g)(3)(B)(iii)(I)) for such month and each of the rates determined under subparagraph (B) for such month. The Secretary of the Treasury shall also publish a description of the methodology used to determine such yield curve and such rates which is sufficiently detailed to enable plans to make reasonable projections regarding the yield curve and such rates for future months based on the plan’s projection of future interest rates.</text></subparagraph>
<subparagraph id="HFD1521B52D7344CFBF055442F9F651BF"><enum>(G)</enum><header>Transition rule</header>
<clause id="H6E91131FEE1A4FEB8C00E835CE9526D7"><enum>(i)</enum><header>In general</header><text>Notwithstanding the preceding provisions of this paragraph, for plan years beginning in 2006 or 2007, the first, second, and third segment rates for a plan with respect to any month shall be equal to the sum of—</text>
<subclause id="H3DB204D7912C403F972BA7A963F22900"><enum>(I)</enum><text>the product of such rate for such month determined without regard to this subparagraph, multiplied by the applicable percentage, and</text></subclause>
<subclause id="H174827CCE33C405E80FE7346A4C8CB04"><enum>(II)</enum><text>the product of the rate determined under the rules of section 302(b)(5)(B)(ii)(II) (as in effect for plan years beginning in 2005), multiplied by a percentage equal to 100 percent minus the applicable percentage.</text></subclause></clause>
<clause id="HED0C3057662445CAA4B353A379B5483E"><enum>(ii)</enum><header>Applicable percentage</header><text>For purposes of clause (i), the applicable percentage is 33<fraction>1/3</fraction> percent for plan years beginning in 2006 and 66<fraction>2/3</fraction> percent for plan years beginning in 2007.</text></clause></subparagraph></paragraph>
<paragraph id="H69F40674F8B046D396F8198EE404A4AA"><enum>(3)</enum><header>Mortality table</header>
<subparagraph id="H479490341CBC41BFAE159900D3E00166"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The mortality tables used in determining any present value or making any computation under this section shall be the RP–2000 Combined Mortality Table, as published by the Society of American Actuaries, as in effect on the date of the enactment of the <short-title>Pension Protection Act of 2005</short-title> and as revised from time to time under subparagraph (B). </text></subparagraph>
<subparagraph id="HB5C928A03FCD473B8D2F681BF1F4D7CE"><enum>(B)</enum><header>Periodic revision</header><text>The Secretary of the Treasury shall (at least every 10 years) make revisions in any tables in effect under this paragraph to reflect the actual experience of pension plans and projected trends in such experience. </text></subparagraph>
<subparagraph id="HC8F88FC154FC467BB59F6929CB3736B"><enum>(C)</enum><header>Transition rule</header><text>Under regulations of the Secretary of the Treasury, any difference in assumptions as set forth in the mortality table specified in subparagraph (A) and assumptions as set forth in the mortality table described in section 302(d)(7)(C)(ii) (as in effect for plan years beginning in 2005) shall be phased in ratably over the first period of 5 plan years beginning in or after 2006 so as to be fully effective for the fifth plan year.</text></subparagraph></paragraph>
<paragraph id="H9779FE9E377545D589345F345D80FE37"><enum>(4)</enum><header>Probability of benefit payments in the form of lump sums or other optional forms</header><text display-inline="yes-display-inline">For purposes of determining any present value or making any computation under this section, there shall be taken into account—</text>
<subparagraph id="H32F309960CBB41AEBBD424B526B0275"><enum>(A)</enum><text>the probability that future benefit payments under the plan will be made in the form of optional forms of benefits provided under the plan (including lump sum distributions, determined on the basis of the plan’s experience and other related assumptions), and</text></subparagraph>
<subparagraph id="H58C162587D8D43A78EA0FAF568F4CA51"><enum>(B)</enum><text>any difference in the present value of such future benefit payments resulting from the use of actuarial assumptions, in determining benefit payments in any such optional form of benefits, which are different from those specified in this subsection.</text></subparagraph></paragraph>
<paragraph id="HC7A53D82481E49BF924BCEDEB8FA057D"><enum>(5)</enum><header>Approval of large changes in actuarial assumptions</header>
<subparagraph id="H6904CCB42FBA453C89D75CBE62BB00F7"><enum>(A)</enum><header>In general</header><text>No actuarial assumption used to determine the funding target for a single-employer plan to which this paragraph applies may be changed without the approval of the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="HF430450F40D148BFA266C9718D4FFB7C"><enum>(B)</enum><header>Plans to which paragraph applies</header><text display-inline="yes-display-inline">This paragraph shall apply to a plan only if—</text>
<clause id="H5BC4002BF3B64E47A75965E8706228BD"><enum>(i)</enum><text> the aggregate unfunded vested benefits as of the close of the preceding plan year (as determined under section 4006(a)(3)(E)(iii)) of such plan and all other plans maintained by the contributing sponsors (as defined in section 4001(a)(13)) and members of such sponsors' controlled groups (as defined in section 4001(a)(14)) which are covered by title IV (disregarding plans with no unfunded vested benefits) exceed $50,000,000; and </text></clause>
<clause id="H9BAE7370EC2245B08B04C33D34AA700"><enum>(ii)</enum><text>the change in assumptions (determined after taking into account any changes in interest rate and mortality table) results in a decrease in the funding shortfall of the plan for the current plan year that exceeds $50,000,000, or that exceeds $5,000,000 and that is 5 percent or more of the funding target of the plan before such change.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HF1A7D3045ADD416F9C91863FCD8F1660"><enum>(g)</enum><header>Special rules for at-risk plans</header>
<paragraph id="HFD435B13BC3E4AC496E346D16B12D2E"><enum>(1)</enum><header>Funding target for plans in at-risk status</header><text></text>
<subparagraph id="H4FC83B902FCB452FA51574947E68EFA6"><enum>(A)</enum><header>In general</header><text>In any case in which a plan is in at-risk status for a plan year, the funding target of the plan for the plan year is the sum of—</text>
<clause id="HE6251574E91A48A18FACD9CC9C8888CA"><enum>(i)</enum><text>the present value of all liabilities to participants and their beneficiaries under the plan for the plan year, as determined by using, in addition to the actuarial assumptions described in subsection (f), the supplemental actuarial assumptions described in subparagraph (B), plus</text></clause>
<clause id="HB283BC0AF40A49439B4FDD4BD01C6C13"><enum>(ii)</enum><text>a loading factor determined under subparagraph (C).</text></clause></subparagraph>
<subparagraph id="H14BDC8BC18284D71A661002907A5C25"><enum>(B)</enum><header>Supplemental actuarial assumptions</header><text display-inline="yes-display-inline">The actuarial assumptions used in determining the valuation of the funding target shall include, in addition to the actuarial assumptions described in subsection (f), an assumption that all participants will elect benefits at such times and in such forms as will result in the highest present value of liabilities under subparagraph (A)(i).</text> </subparagraph>
<subparagraph id="H2640761518E3495A90A669022710981F"><enum>(C)</enum><header>Loading factor</header><text>The loading factor applied with respect to a plan under this paragraph for any plan year is the sum of—</text>
<clause id="H0C8502096BAC4140AC4332A699D219CA"><enum>(i)</enum><text>$700, times the number of participants in the plan, plus</text></clause>
<clause id="H6EB82E9D648A4015A8B467D3EB14EB5"><enum>(ii)</enum><text>4 percent of the funding target (determined without regard to this paragraph) of the plan for the plan year.</text></clause></subparagraph> </paragraph>
<paragraph id="H9998B96F25F44326BE4833CDD99881D2"><enum>(2)</enum><header>Target normal cost of at-risk plans</header>
<subparagraph id="H104B877FD1E1445CBF68132E50E22688"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In any case in which a plan is in at-risk status for a plan year, the target normal cost of the plan for such plan year shall be the sum of—</text>
<clause id="HE2F482A09F8842569E2813B5B046C002"><enum>(i)</enum><text>the present value of all benefits which are expected to accrue under the plan during the plan year, determined under the actuarial assumptions used under paragraph (1), plus</text></clause>
<clause id="H98598D78A00E4EEA987D463F99C36C1C"><enum>(ii)</enum><text>the loading factor under paragraph (1)(C), excluding the portion of the loading factor described in paragraph (1)(C)(i).</text></clause></subparagraph>
<subparagraph id="HF5760EF5CC134E4ABE2CDA56616972D7"><enum>(B)</enum><header>Minimum amount</header><text>In no event shall the target normal cost of a plan determined under this paragraph be less than the target normal cost of such plan as determined without regard to this paragraph.</text></subparagraph></paragraph>
<paragraph id="H8094FB84DD7D43FAB23EA5EDE6102200"><enum>(3)</enum><header>Determination of at-risk status</header><text>For purposes of this subsection, a plan is in <quote>at-risk status</quote> for a plan year if the funding target attainment percentage of the plan for the preceding plan year was less than 60 percent.</text></paragraph>
<paragraph id="HB288F6F12E794CAFBCB980FBB072902C"><enum>(4)</enum><header>Transition between applicable funding targets and between applicable target normal cost</header>
<subparagraph id="H3544975DA8D247AAA8281DD045C7C6E2"><enum>(A)</enum><header>In general</header><text>In any case in which a plan which is in at-risk status for a plan year has been in such status for a consecutive period of fewer than 5 plan years, the applicable amount of the funding target and of the target normal cost shall be, in lieu of the amount determined without regard to this paragraph, the sum of—</text>
<clause id="H3E781BD716214CED927DF600B8B7A141"><enum>(i)</enum><text>the amount determined under this section without regard to this subsection, plus</text></clause>
<clause id="HAEFE530FC4AA4490913369152B6F8826"><enum>(ii)</enum><text>the transition percentage for such plan year of the excess of the amount determined under this subsection (without regard to this paragraph) over the amount determined under this section without regard to this subsection.</text></clause></subparagraph>
<subparagraph id="H314DC40F98C342C9AF38A0438C4459DA"><enum>(B)</enum><header>Transition percentage</header><text>For purposes of this paragraph, the <quote>transition percentage</quote> for a plan year is the product derived by multiplying—</text>
<clause id="H8EFFA17DE7694F20B14B4B870570777F"><enum>(i)</enum><text>20 percent, by</text></clause>
<clause id="H92CC4CC84A7F40A38010E2C9647DCAD8"><enum>(ii)</enum><text>the number of plan years during the period described in subparagraph (A).</text></clause></subparagraph></paragraph></subsection>
<subsection id="HC6C731FC2CA34BEEA89FBEE491AED91D"><enum>(h)</enum><header>Pre-funding and funding standard carryover balances</header>
<paragraph id="H04414D5FD44F4305004690821BD833F1" display-inline="no-display-inline"><enum>(1)</enum><header>Pre-funding balance</header>
<subparagraph id="HE512FCD476654277B2F95C036FF18EB"><enum>(A)</enum><header>In general</header><text>The plan sponsor of a pension plan which is a single-employer plan shall maintain a pre-funding balance for purposes of this subsection. Such balance shall consist of a beginning balance of zero, increased and decreased to the extent provided in subparagraphs (B) and (C), and adjusted further as provided in paragraph (3).</text></subparagraph>
<subparagraph id="H3968207FB3EA484EA7E39E704DAC74A4"><enum>(B)</enum><header>Increases</header><text>As of the valuation date for each plan year beginning after 2006, the pre-funding balance of a plan shall be increased by the amount elected by the plan sponsor for the plan year. Such amount shall not exceed the excess (if any) of—</text>
<clause id="H57A52ECAC2E64EEEAA14AF651DCB251"><enum>(i)</enum><text>the aggregate total of employer contributions to the plan for the preceding plan year, over</text></clause>
<clause id="H76B464EB3C0449598255F26CAA01331F"><enum>(ii)</enum><text>the minimum required contribution for such preceding plan year (increased by interest on any portion of such minimum required contribution remaining unpaid, at the effective interest rate for the plan for the preceding plan year, for the period beginning with the first day of such preceding plan year and ending on the date that payment of such portion is made).</text></clause></subparagraph>
<subparagraph id="H9FAAF6C32F5F4303A85E182FFCE08B62"><enum>(C)</enum><header>Decreases</header><text>As of the valuation date for each plan year after 2006, the pre-funding balance of a plan shall be decreased (but not below zero) by the sum of—</text>
<clause id="HA36D55AC37E04EF2AC92BE70D321825E"><enum>(i)</enum><text>the amount credited under subsection (a)(4) (if any) in reducing the minimum required contribution of the plan for the preceding plan year, and</text></clause>
<clause id="H01D2058BD27A470098600065CE8C3672"><enum>(ii)</enum><text>the amount elected by the plan sponsor as a reduction in the pre-funding balance (for purposes of the determination under subsection (e)(1) and any other purpose under this section).</text></clause></subparagraph>
<subparagraph id="H7F58F898CB4E4782A12CA249007CF09B"><enum>(D)</enum><header>Coordination with funding standard carryover balance</header><text>To the extent that any plan has a funding standard carryover balance greater than zero—</text>
<clause id="HC179C9775C0E4488B499506200D657C8"><enum>(i)</enum><text>no amount of the pre-funding balance of such plan may be credited under subsection (a)(4) in reducing the minimum required contribution, and</text></clause>
<clause id="H361EEA94C9234EB0BE11BB710572F4B"><enum>(ii)</enum><text>no election may be made under subparagraph (C)(ii).</text></clause></subparagraph>
<subparagraph id="H73F7622CB94749C29DC7909745783BC3"><enum>(E)</enum><header>No use of balance to reduce minimum required contribution if used to avoid shortfall amortization</header><text>The amount of the pre-funding balance of such plan may be credited under subsection (a)(4) in reducing the minimum required contribution only if the plan sponsor has elected to apply subsection (a)(2) to the plan for such plan year by substituting <quote>subsection (e)(1)(B)</quote> for <quote>subsection (e)(1)</quote>.</text> </subparagraph> </paragraph>
<paragraph id="HA0EE7306240E4E968CC4F852CA0065FB"><enum>(2)</enum><header>Funding standard carryover balance</header>
<subparagraph id="HAF6276059EBD4B3D00237425CDB06350"><enum>(A)</enum><header>In general</header><text>The plan sponsor of a pension plan to which this paragraph applies shall maintain a funding standard carryover balance for purposes of this subsection. Such balance shall consist of a beginning balance determined under subparagraph (C), decreased to the extent provided in subparagraph (D), and adjusted further as provided in paragraph (3).</text></subparagraph>
<subparagraph id="HA405E2C9AC8244B7B8F4394219E24C9C"><enum>(B)</enum><header>Plans to which this paragraph applies</header><text display-inline="yes-display-inline">This paragraph applies to any plan which—</text>
<clause id="HA8840BC588D14B1F807094C3BC030200"><enum>(i)</enum><text>is a single-employer plan subject to this part,</text></clause>
<clause id="HDBC46EDAAB1E46EC98EF4F00C6BA07EB"><enum>(ii)</enum><text>was in effect for a plan year beginning in 2005, and</text></clause>
<clause id="H90F0EE35F26842A7B9D46127AD6FA16D"><enum>(iii)</enum><text display-inline="yes-display-inline">had a positive balance in the funding standard account under section 302(b) as in effect for such plan year and determined as of the end of such plan year.</text></clause></subparagraph>
<subparagraph id="H033BCD311D6E4ED5824C5EF6132EE97D"><enum>(C)</enum><header>Beginning balance</header><text display-inline="yes-display-inline">The beginning balance of the funding standard carryover balance shall be the positive balance described in subparagraph (B)(iii).</text></subparagraph>
<subparagraph id="H63154366C14949A50078F5D8A2D2130"><enum>(D)</enum><header>Decreases</header><text>As of the valuation date for each plan year after 2006, the funding standard carryover balance of a plan shall be decreased (but not below zero) by the sum of—</text>
<clause id="HE5667168B2DF4E1597DE20476EAC79A3"><enum>(i)</enum><text>the amount credited under subsection (a)(4) (if any) in reducing the minimum required contribution of the plan for the preceding plan year, and</text></clause>
<clause id="HF5196C90D6D74CAEA0E8FE0865DB3547"><enum>(ii)</enum><text>the amount elected by the plan sponsor as a reduction in the funding standard carryover balance (for purposes of the determination under subsection (e)(1) and any other purpose under this section).</text></clause></subparagraph></paragraph>
<paragraph id="HF2F8B36F1CD04C2B85BA12194C08ADAF"><enum>(3)</enum><header>Adjustments</header><text>In determining the pre-funding balance or the funding standard carryover balance of a plan as of the valuation date of the plan (before applying any increase or decrease under paragraph (1) or (2)), the plan sponsor shall, in accordance with regulations which shall be prescribed by the Secretary of the Treasury, adjust such balance of the plan so as to reflect the rate of net gain or loss (determined, notwithstanding subsection (e)(4), on the basis of fair market value) experienced by all plan assets for the period beginning with the valuation date for the preceding plan year and ending with the date preceding the valuation date for the current plan year, properly taking into account, in accordance with such regulations, all contributions, distributions, and other plan payments made during such period.</text></paragraph>
<paragraph id="HB5766B1915C2422EADA06920F86977B3"><enum>(4)</enum><header>Elections</header><text>Except as otherwise provided in this subsection, any election made under this subsection shall be made at such time and in such form and manner as the Secretary of the Treasury may provide.</text></paragraph>
<paragraph id="H4467889CFD274EA88E7D8D3805360759"><enum>(5)</enum><header>Coordination with waivers</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>minimum required contribution</term> means for any plan year the minimum required contribution for such plan year determined without regard to this subsection and by taking into account any waiver under section 302(c) and any waiver amortization charge under subsection (j) for such plan year.</text></paragraph></subsection>
<subsection id="H1AECD5DD1BB447C7AB08EF06CF3F8BDC"><enum>(i)</enum><header>Payment of minimum required contributions</header>
<paragraph id="HB9F593DDD829484600817DC618025BF"><enum>(1)</enum><header>In general</header><text>For purposes of this section, the due date for any payment of any minimum required contribution for any plan year shall be 8<fraction>1/2</fraction> months after the close of the plan year.</text></paragraph>
<paragraph id="HA4B4B7A64E8A4ADEBFD5DFE900C3E930"><enum>(2)</enum><header>Interest</header><text>Any payment required under paragraph (1) for a plan year made after the valuation date for such plan year shall be increased by interest, for the period from the valuation date to the payment date, at the effective rate of interest for the plan for such plan year.</text></paragraph>
<paragraph id="HADD981B461444414ACF3005E971B3ED8" display-inline="no-display-inline"><enum>(3)</enum><header>Accelerated quarterly contribution schedule for underfunded plans</header>
<subparagraph id="H7946149DDD2B49C49DE30079CD581B2D"><enum>(A)</enum><header>Interest penalty for failure to meet accelerated quarterly payment schedule</header><text>In any case in which the plan has a funding shortfall for the preceding plan year, if the required installment is not paid in full, then the minimum required contribution for the plan year (as increased under paragraph (2)) shall be further increased by an amount equal to the interest on the amount of the underpayment for the period of the underpayment, using an interest rate equal to the excess of—</text>
<clause id="HABD934E78A6948AE9C8112B81DA77EB6"><enum>(i)</enum><text>175 percent of the Federal mid-term rate (as in effect under <external-xref legal-doc="usc" parsable-cite="usc/26/1274">section 1274</external-xref> of the Internal Revenue Code of 1986 for the 1st month of such plan year), over</text></clause>
<clause id="H024D478535C2456F882CA67819B49EDD"><enum>(ii)</enum><text>the effective rate of interest for the plan for the plan year.</text></clause></subparagraph>
<subparagraph id="H36E2722EAB2642449CC5593500CCFF16"><enum>(B)</enum><header>Amount of underpayment, period of underpayment</header><text>For purposes of subparagraph (A)—</text>
<clause id="H1A96B83FCB664F2D8EED953E5F741908"><enum>(i)</enum><header>Amount</header><text>The amount of the underpayment shall be the excess of—</text>
<subclause id="HD110FC5CA0854521A4C81488005E839E"><enum>(I)</enum><text>the required installment, over</text></subclause>
<subclause id="H89D9E8011D734A72ABCF04F16B8453B5"><enum>(II)</enum><text>the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment.</text></subclause></clause>
<clause id="H2EDE49FFB1324EC694DBD91F66D603F7"><enum>(ii)</enum><header>Period of underpayment</header><text>The period for which any interest is charged under this paragraph with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan.</text></clause>
<clause id="H4A9A77E7ED2047700084E5008EA94C8E"><enum>(iii)</enum><header>Order of crediting contributions</header><text>For purposes of clause (i)(II), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.</text></clause></subparagraph>
<subparagraph id="HAF42099FC40A4F278DF34E009B84BA3C"><enum>(C)</enum><header>Number of required installments; due dates</header><text>For purposes of this paragraph—</text>
<clause id="HCBDF8B0F522945C4B371BD92263F00DD"><enum>(i)</enum><header>Payable in 4 installments</header><text>There shall be 4 required installments for each plan year.</text></clause>
<clause id="H98399A0B305B49CA8D8BECD1CAD77AA"><enum>(ii)</enum><header>Time for payment of installments</header><text>The due dates for required installments are set forth in the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" blank-lines-before="1" line-rules="no-gen" rule-weights="0.0.0.4.0.17" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" colwidth="155" colsep="0" coldef="txt" min-data-value="100"/><colspec colname="col2" colwidth="147" colsep="0" coldef="txt-no-ldr-no-spread" min-data-value="95"/>
<tbody>
<row><entry rowsep="0" stub-definition="txt-clr" stub-hierarchy="1"><bold>In the case of the following required installment:</bold></entry><entry rowsep="0"><bold>The due date is:</bold></entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">1st</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">April 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2nd</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">July 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">3rd</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">October 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">4th</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">January 15 of the following year</entry></row></tbody></tgroup></table></clause></subparagraph>
<subparagraph id="HAAFD9934A86F41B3BAD87D477DCF9895"><enum>(D)</enum><header>Amount of required installment</header><text>For purposes of this paragraph—</text>
<clause id="H16108C720C5643F1BFEA7BFAC25DAC8"><enum>(i)</enum><header>In general</header><text>The amount of any required installment shall be 25 percent of the required annual payment.</text></clause>
<clause id="HCFD15C2A41804450870673F3AC3E499B"><enum>(ii)</enum><header>Required annual payment</header><text>For purposes of clause (i), the term <term>required annual payment</term> means the lesser of—</text>
<subclause id="H9EB02A45CF6A4D87B3C8A4094BC8D579"><enum>(I)</enum><text>90 percent of the minimum required contribution (without regard to any waiver under section 302(c)) to the plan for the plan year under this section, or</text></subclause>
<subclause id="H538342292D6A4C20929D384CDF76FE17"><enum>(II)</enum><text display-inline="yes-display-inline">in the case of a plan year beginning after 2006, 100 percent of the minimum required contribution (without regard to any waiver under section 302(c)) to the plan for the preceding plan year.</text></subclause><continuation-text continuation-text-level="clause">Subclause (II) shall not apply if the preceding plan year referred to in such clause was not a year of 12 months.</continuation-text></clause></subparagraph>
<subparagraph id="HA0225959F2E44C588BDDF68B957BC8F"><enum>(E)</enum><header>Fiscal years and short years</header><text></text>
<clause id="HD7CBDAEEADB0488297C6E7B40394D21"><enum>(i)</enum><header>Fiscal years</header><text>In applying this paragraph to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this paragraph, the months which correspond thereto.</text></clause>
<clause id="HDA966AB5579F490DBF322634FC00E188"><enum>(ii)</enum><header>Short plan year</header><text>This subparagraph shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary of the Treasury.</text></clause></subparagraph></paragraph>
<paragraph id="HC97619915B6C4A5EBEF807C77DA3E60" commented="no" display-inline="no-display-inline"><enum>(4)</enum><header>Liquidity requirement in connection with quarterly contributions</header><text></text>
<subparagraph id="HA144859B8CC246730088DCF00D1C341" commented="no"><enum>(A)</enum><header>In general</header><text>A plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment under paragraph (3) to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).</text></subparagraph>
<subparagraph id="HF224AC87CCB0434084B16373D121DE90" commented="no"><enum>(B)</enum><header>Plans to which paragraph applies</header><text>This paragraph shall apply to a plan (other than a plan that would be described in subsection (e)(3)(B) if <quote>100</quote> were substituted for <quote>500</quote> therein) which—</text>
<clause id="H090533B832FD4595A483009877F2CFF5" commented="no"><enum>(i)</enum><text>is required to pay installments under paragraph (3) for a plan year, and</text></clause>
<clause id="H74B08836AD5B464CBB74FAC9E17D8F54" commented="no"><enum>(ii)</enum><text>has a liquidity shortfall for any quarter during such plan year.</text></clause></subparagraph>
<subparagraph id="HB6CADA5234814AE5843641AA6EF6D298" commented="no"><enum>(C)</enum><header>Period of underpayment</header><text>For purposes of paragraph (3)(A), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.</text></subparagraph>
<subparagraph id="H619BF9B424874FFBB728170027C64D99" commented="no"><enum>(D)</enum><header>Limitation on increase</header><text display-inline="yes-display-inline">If the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funding target attainment percentage of the plan for the plan year (taking into account the expected increase in funding target due to benefits accruing or earned during the plan year) to 100 percent.</text></subparagraph>
<subparagraph id="H067B3828C58B4639858CF955A3F300C3" commented="no"><enum>(E)</enum><header>Definitions</header><text>For purposes of this subparagraph:</text>
<clause id="HF9FF1BD6A47F466289D87E4702CFC26" commented="no"><enum>(i)</enum><header>Liquidity shortfall</header><text>The term <term>liquidity shortfall</term> means, with respect to any required installment, an amount equal to the excess (as of the last day of the quarter for which such installment is made) of—</text>
<subclause id="H3D7429E983544410AA8D46413301002F"><enum>(I)</enum><text>the base amount with respect to such quarter, over</text></subclause>
<subclause id="H7C4DC4CCC3124487A38E90B8FF534CD4"><enum>(II)</enum><text>the value (as of such last day) of the plan's liquid assets.</text></subclause></clause>
<clause id="H245F3C29875242319C0000E3CE1500BF" commented="no"><enum>(ii)</enum><header>Base amount</header>
<subclause id="H84C03AA81F1B4E72AB9715B8686D63C2" commented="no"><enum>(I)</enum><header>In general</header><text>The term <term>base amount</term> means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter. </text></subclause>
<subclause id="H1C595418610C48858B78BFBA1D3296B7" commented="no"><enum>(II)</enum><header>Special rule</header><text>If the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary of the Treasury that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.</text></subclause></clause>
<clause id="HC40B238000394971BBF0AFFA4568EF55" commented="no"><enum>(iii)</enum><header>Disbursements from the plan</header><text>The term <term>disbursements from the plan</term> means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.</text></clause>
<clause id="HF0473C8A72FB479AB934CFE912C9826B" commented="no"><enum>(iv)</enum><header>Adjusted disbursements</header><text>The term <term>adjusted disbursements</term> means disbursements from the plan reduced by the product of—</text>
<subclause id="H576B6D4EC0A34806B1464375AEADD9BE" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">the plan’s funding target attainment percentage for the plan year, and</text></subclause>
<subclause id="H0B9E039BC40D418CB98B36D507D71E60" commented="no"><enum>(II)</enum><text>the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary of the Treasury shall provide in regulations.</text></subclause></clause>
<clause id="HB0EC66070D484166AEE269191DC7B2E4" commented="no"><enum>(v)</enum><header>Liquid assets</header><text>The term <term>liquid assets</term> means cash, marketable securities, and such other assets as specified by the Secretary of the Treasury in regulations.</text></clause>
<clause id="HF9117B7EAD2F40179682C906BF538290" commented="no"><enum>(vi)</enum><header>Quarter</header><text>The term <term>quarter</term> means, with respect to any required installment, the 3-month period preceding the month in which the due date for such installment occurs.</text></clause></subparagraph>
<subparagraph id="H4B7963BDEDD24E2DAD8B84C099940A1" commented="no"><enum>(F)</enum><header>Regulations</header><text>The Secretary of the Treasury may prescribe such regulations as are necessary to carry out this paragraph.</text></subparagraph></paragraph></subsection>
<subsection id="H53D151A4F30E4E9282BEBBCE6DE360A1" display-inline="no-display-inline"><enum>(j)</enum><header>Waiver amortization charge</header>
<paragraph id="HE0A465871AF94E638023EECDDDBBF942"><enum>(1)</enum><header>In general</header><text>The minimum required contribution for any plan year under subsection (a) shall be increased by the amount of the waiver amortization charge (if any) for such plan year.</text></paragraph>
<paragraph id="HCCAD10FC48904E63BE7705F1FF2E0873"><enum>(2)</enum><header>Determination of waiver amortization charge</header><text>The waiver amortization charge for a plan for any plan year is the aggregate total of the waiver amortization installments for such plan year with respect to the waiver amortization bases for such plan year and each of the 4 preceding plan years.</text></paragraph>
<paragraph id="HC96499386F76400B9086D4AB66C94FF2"><enum>(3)</enum><header>Waiver amortization installment</header><text>For purposes of paragraph (2), the plan sponsor shall determine, with respect to the waiver amortization base of the plan for any plan year, the amounts necessary to amortize such waiver amortization base, in level annual installments over a period of 5 plan years beginning with such plan year. The annual installment of such amortization for each plan year in such 5-plan year period is the waiver amortization installment for such plan year with respect to such waiver amortization base.</text></paragraph>
<paragraph id="HFC23E8BEFD1C473A00E6B2E9BEE2F4C1"><enum>(4)</enum><header>Computation assumptions</header><text>The determination of any annual installment under paragraph (2) for any plan year shall be made as of the valuation date for such plan year, using the effective rate of interest for the plan for the preceding plan year.</text></paragraph>
<paragraph id="H5F772153FECA494489A781C682CBC5"><enum>(5)</enum><header>Waiver amortization base</header><text>The waiver amortization base of a plan for a plan year is the excess (if any) of—</text>
<subparagraph id="H193F21D4C2314EB48164F0B90756BEF1"><enum>(A)</enum><text display-inline="yes-display-inline">the portion of the minimum required contribution of such plan waived under section 302(c) for such plan year, over</text></subparagraph>
<subparagraph id="H957F6034CCF246D8B0FAF914AE1B86E9"><enum>(B)</enum><text>the aggregate total of the waiver amortization installments, for such plan year and the 3 succeeding plan years, which have been determined with respect to the waiver amortization bases of the plan for each of the 4 plan years preceding such plan year.</text></subparagraph></paragraph></subsection>
<subsection id="HF08F71E722F048B8977D31E7D27FB700" display-inline="no-display-inline"><enum>(k)</enum><header>Imposition of lien where failure to make required contributions</header>
<paragraph id="H808FA485D20949F59185373632F784DA"><enum>(1)</enum><header>In general</header><text>In the case of a plan covered under section 4021 of this Act and to which this subsection applies (as provided under paragraph (2)), if—</text>
<subparagraph id="H80BD713E0C8E46358F37EF4EAA50FFEC"><enum>(A)</enum><text>any person fails to make a contribution payment required by section 302 and this section before the due date for such payment, and</text></subparagraph>
<subparagraph id="HFFF84E9F8D134447A790A9C7807F7D48"><enum>(B)</enum><text>the unpaid balance of such payment (including interest), when added to the aggregate unpaid balance of all preceding such payments for which payment was not made before the due date (including interest), exceeds $1,000,000, </text></subparagraph><continuation-text continuation-text-level="paragraph">then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member.</continuation-text></paragraph>
<paragraph id="HA582CDDCDA4642AFB7759B0035CB1F11"><enum>(2)</enum><header>Plans to which subsection applies</header><text>This subsection shall apply to a defined benefit plan which is a single-employer plan for any plan year for which the funding target attainment percentage (as defined in subsection (d)(2)) of such plan is less than 100 percent.</text></paragraph>
<paragraph id="H2C077EA9574B42729C3FC3EB00C604D6"><enum>(3)</enum><header>Amount of lien</header><text>For purposes of paragraph (1), the amount of the lien shall be equal to the aggregate unpaid balance of contribution payments required under this section and section 302 for which payment has not been made before the due date.</text> </paragraph>
<paragraph id="HCD06D5FA42F64289B0404C1598053C1C"><enum>(4)</enum><header>Notice of failure; lien</header>
<subparagraph id="HD91612A658B94F10A49287475C2F98D"><enum>(A)</enum><header>Notice of failure</header><text>A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required contribution payment.</text></subparagraph>
<subparagraph id="H9AC84285A7AC4994998BFEF6778D5FA7"><enum>(B)</enum><header>Period of lien</header><text>The lien imposed by paragraph (1) shall arise on the due date for the required contribution payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.</text></subparagraph>
<subparagraph id="HC0842EDB0D8449B89C2696EA6C05C5D"><enum>(C)</enum><header>Certain rules to apply</header><text>Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien.</text></subparagraph></paragraph>
<paragraph id="HEAA8E6C2679049D689DCD4308CBBF8EF"><enum>(5)</enum><header>Enforcement</header><text>Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor).</text></paragraph>
<paragraph id="HA183EE09266F451690E5F8ECEE6BFD6C"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="H32EB0B59F1C24A358FA0C1BD0588F050" commented="no"><enum>(A)</enum><header>Contribution payment</header><text display-inline="yes-display-inline">The term <term>contribution payment</term> means, in connection with a plan, a contribution payment required to be made to the plan, including any required installment under paragraphs (3) and (4) of subsection (i). </text></subparagraph>
<subparagraph id="H434806D3F21D45D39E4D2FEA486B9C46"><enum>(B)</enum><header>Due date; required installment</header><text>The terms <term>due date</term> and <term>required installment</term> have the meanings given such terms by subsection (i), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under section 303.</text></subparagraph>
<subparagraph id="H85FDE9FD5AF541D9B8D745C750379977"><enum>(C)</enum><header>Controlled group</header><text>The term <term>controlled group</term> means any group treated as a single employer under subsections (b), (c), (m), and (o) of <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414</external-xref> of the Internal Revenue Code of 1986.</text></subparagraph></paragraph></subsection>
<subsection id="H56DCB153ADDB4FE6B2D5F3D2EEDD1F94" display-inline="no-display-inline" commented="no"><enum>(l)</enum><header>Qualified transfers to health benefit accounts</header><text>In the case of a qualified transfer (as defined in <external-xref legal-doc="usc" parsable-cite="usc/26/420">section 420</external-xref> of the Internal Revenue Code of 1986), any assets so transferred shall not, for purposes of this section, be treated as assets in the plan.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H475CDD6AB67547A4A19F9C2F0081EEFE"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections in section 1 of such Act (as amended by section 101) is amended by inserting after the item relating to section 302 the following new item:</text>
<quoted-block style="OLC" id="H8ECECB13C9C043D9BAC9CA2C3398823" display-inline="no-display-inline">
<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="HFEE340E95EE6460BBC31005833ED3CDD" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H36F829B59FA04B7B84FE029078DFBA9" level="section">Sec. 303. Minimum funding standards for single-employer defined benefit pension plans</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H0B1BDCDA29BF4B1894289D23A346608F"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to plan years beginning after 2005.</text></subsection></section>
<section id="H819A08575B70486A9BB1B43F328B49E5"><enum>103.</enum><header>Limitations on distributions and benefit accruals under single-employer plans</header>
<subsection id="HBEC6E554F245408C8695E2BA0B7802C"><enum>(a)</enum><header>Prohibition of shutdown benefits and other unpredictable contingent event benefits under single-employer plans</header><text>Section 206 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block style="OLC" id="HD1612B2CDD8B4C6AA761F646D8F88F27" display-inline="no-display-inline">
<subsection id="H569D33D495D847D48B97823DB16BC389"><enum>(g)</enum><header>Prohibition of shutdown benefits and other unpredictable contingent event benefits under single-employer plans</header>
<paragraph id="H4DFD8567638F46C5ABAEC2B228C323A6"><enum>(1)</enum><header>In general</header><text>No pension plan which is a single-employer plan may provide benefits which are payable upon the occurrence of—</text>
<subparagraph id="H4DB5666A28CE426CA204A2E9A6DA2141"><enum>(A)</enum><text>a plant shutdown, or</text></subparagraph>
<subparagraph id="H0847A132A1D144168300CA3C5DB4C4B1"><enum>(B)</enum><text>any other unpredictable contingent event.</text></subparagraph></paragraph>
<paragraph id="H553AA1E33E3E4FF08BC07C6572D28DD6"><enum>(2)</enum><header>Unpredictable contingent event</header><text>For purposes of this subsection, the term <term>unpredictable contingent event</term> means an event other than—</text>
<subparagraph id="HF54BE155AF1C4A50B300F1A430BCE83F"><enum>(A)</enum><text>attainment of any age, performance of any service, receipt or derivation of any compensation, or the occurrence of death or disability, or</text></subparagraph>
<subparagraph id="H927D7B6FE09C4A2BBB65D3BEBF8BEB5B"><enum>(B)</enum><text>an event which is reasonably and reliably predictable (as determined by the Secretary of the Treasury).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H283FFFA26D0147A8A3C36F40E57FDEEF"><enum>(b)</enum><header>Other limits on benefits and benefit accruals</header>
<paragraph id="H28A1F6D6FB144D31AF9C27A1162CD2A0"><enum>(1)</enum><header>In general</header><text>Section 206 of such Act (as amended by subsection (a)) is amended further by adding at the end the following new subsection:</text>
<quoted-block style="traditional" id="H957607DE6FEE4F2CAECC4FA08856B500" display-inline="no-display-inline">
<subsection id="HDC937E8D4029476FA8D790B1DC183926"><enum>(h)</enum><header>Funding-based limits on benefits and benefit accruals under single-employer plans</header><text></text>
<paragraph id="H8E4B19D952B0456282E591BD4C470088" commented="no" display-inline="no-display-inline"><enum>(1)</enum><header>Limitations on plan amendments increasing liability for benefits</header>
<subparagraph id="H3CF1A19FB6FD41CEADE9B77F3836138E"><enum>(A)</enum><header>In general</header><text>No amendment to a single-employer plan which has the effect of increasing liabilities of the plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable to the plan may take effect during any plan year if the funding target attainment percentage as of the valuation date of the plan for such plan year is—</text>
<clause id="H7E0AFEE1B64C4374A9DADD7A496A240"><enum>(i)</enum><text>less than 80 percent, or</text></clause>
<clause id="HDA91AECC112B45A09597A5FD9ED6669"><enum>(ii)</enum><text>would be less than 80 percent taking into account such amendment.</text></clause></subparagraph>
<subparagraph id="H348F950D7E5F4742AE6FAC79D5C49C5B"><enum>(B)</enum><header>Exemption</header><text display-inline="yes-display-inline">Subparagraph (A) shall cease to apply with respect to any plan year, effective as of the first date of the plan year (or if later, the effective date of the amendment), upon payment by the plan sponsor of a contribution equal to—</text>
<clause id="H40EECA264D42423192A3EAF6D75B932"><enum>(i)</enum><text>in the case of subparagraph (A)(i), the amount of the increase in the funding target of the plan (under section 303) for the plan year attributable to the amendment, and</text></clause>
<clause id="HAED1AC53286D49B6AC00641E056C2989"><enum>(ii)</enum><text>in the case of subparagraph (A)(ii), the amount sufficient to result in a funding target attainment percentage of 80 percent.</text> </clause> </subparagraph></paragraph>
<paragraph id="HE91291F64A3A4C2A92F2DEA79507BC1"><enum>(2)</enum><header>Funding-based limitation on certain forms of distribution</header><text>A single-employer plan shall provide that, in any case in which the plan’s funding target attainment percentage as of the valuation date of the plan for a plan year is less than 80 percent, the plan may not after such date pay any prohibited payment (as defined in section 206(e)). </text></paragraph>
<paragraph id="HCC461485F0744693A9008DD430704DCC"><enum>(3)</enum><header>Limitations on benefit accruals for plans with severe funding shortfalls</header><text>A single-employer plan shall provide that, in any case in which the plan’s funding target attainment percentage as of the valuation date of the plan for a plan year is less than 60 percent, all future benefit accruals under the plan shall cease as of such date.</text></paragraph>
<paragraph id="H2A187DE27AD4438EA15700360801DA86"><enum>(4)</enum><header>New plans</header><text display-inline="yes-display-inline">Paragraphs (1) and (3) shall not apply to a plan for the first 5 plan years of the plan. For purposes of this paragraph, the reference in this paragraph to a plan shall include a reference to any predecessor plan.</text></paragraph>
<paragraph id="H0B5F7C6FAB714C73BCBBF19336D1E4B"><enum>(5)</enum><header>Presumed underfunding for purposes of benefit limitations based on prior year’s funding status</header>
<subparagraph id="H8F7DB92036214909BE2D12A65FCD8825"><enum>(A)</enum><header>Presumption of continued underfunding</header><text>In any case in which a benefit limitation under paragraph (1), (2), or (3) has been applied to a plan with respect to the plan year preceding the current plan year, the funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year shall be presumed to be equal to the funding target attainment percentage of the plan as of the valuation date of the plan for the preceding plan year until the enrolled actuary of the plan certifies the actual funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year.</text></subparagraph>
<subparagraph id="HEFC665811EF343D19F77AD4F06495E1"><enum>(B)</enum><header>Presumption of underfunding after 10th month</header><text>In any case in which no such certification is made with respect to the plan before the first day of the 10th month of the current plan year, for purposes of paragraphs (1), (2), and (3), the plan’s funding target attainment percentage shall be conclusively presumed to be less than 60 percent as of the first day of such 10th month, and such day shall be deemed, for purposes of such paragraphs, to be the valuation date of the plan for the current plan year.</text></subparagraph>
<subparagraph id="HE48F84F5E8F149108FCAD9E70000787E"><enum>(C)</enum><header>Presumption of underfunding after 4th month for nearly underfunded plans</header><text>In any case in which—</text>
<clause id="H7DE46CA46E8C43629017662EF71900C8"><enum>(i)</enum><text>a benefit limitation under paragraph (1), (2), or (3) did not apply to a plan with respect to the plan year preceding the current plan year, but the funding target attainment percentage of the plan for such preceding plan year was not more than 10 percentage points greater than the percentage which would have caused such paragraph to apply to the plan with respect to such preceding plan year, and</text></clause>
<clause id="H1B6976AFB272419095E6141FDE2E75C5"><enum>(ii)</enum><text>as of the first day of the 4th month of the current plan year, the enrolled actuary of the plan has not certified the actual funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year,</text></clause><continuation-text continuation-text-level="subparagraph">until the enrolled actuary so certifies, such first day shall be deemed, for purposes of such paragraph, to be the valuation date of the plan for the current plan year and the funding target attainment percentage of the plan as of such first day shall, for purposes of such paragraph, be presumed to be equal to 10 percentage points less than the funding target attainment percentage of the plan as of the valuation date of the plan for such preceding plan year.</continuation-text></subparagraph></paragraph>
<paragraph id="HE932006F5BA44AE18B1F8277EE5D270"><enum>(6)</enum><header>Restoration by plan amendment of benefits or benefit accrual</header><text display-inline="yes-display-inline">In any case in which a prohibition under paragraph (2) of the payment of lump sum distributions or benefits in any other accelerated form or a cessation of benefit accruals under paragraph (3) is applied to a plan with respect to any plan year and such prohibition or cessation, as the case may be, ceases to apply to any subsequent plan year, the plan may provide for the resumption of such benefit payment or such benefit accrual only by means of the adoption of a plan amendment after the valuation date of the plan for such subsequent plan year. The preceding sentence shall not apply to a prohibition or cessation required by reason of paragraph (5).</text></paragraph>
<paragraph id="HB6A1802750B842748447A8F27128B09"><enum>(7)</enum><header>Funding target attainment percentage</header><text>For purposes of this subsection, the term <term>funding target attainment percentage</term> has the meaning provided such term under section 303(d)(2).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HFBF1AD9CD1C34FBBBDC500BD780229B3"><enum>(2)</enum><header>Notice requirement</header>
<subparagraph id="HA5B79106ACDF412E8C81E5E1EC9400CC"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Section 101 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021</external-xref>) is amended—</text>
<clause id="H52C2AC331DD94169A029218314009859"><enum>(i)</enum><text>by redesignating subsection (j) as subsection (k); and</text></clause>
<clause id="H021FF149961340EDB7B3443C5EB8C7BF"><enum>(ii)</enum><text>by inserting after subsection (i) the following new subsection:</text>
<quoted-block style="OLC" id="HE472F47B87C043018400BEF17CF22B80" display-inline="no-display-inline">
<subsection id="H6DB5079131A845FD9ED28CB06B44710"><enum>(j)</enum><header>Notice of funding-based limitation on certain forms of distribution</header><text>The plan administrator of a single-employer plan shall provide a written notice to plan participants and beneficiaries within 30 days after the plan has become subject to the restriction described in section 206(h)(2) or at such other time as may be deterimined by the Secretary.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph>
<subparagraph id="H7BFB380F4CBB46CCAF12A5A6063D54B7"><enum>(B)</enum><header>Penalty</header><text>Section 502(c)(1)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(c)(1)(A)</external-xref>) is amended by striking <quote>section 606</quote> and all that follows through <quote>101(f)</quote> and inserting <quote>section 606, 101(e)(1), 101(f), or 101(j)</quote>. </text></subparagraph></paragraph> </subsection>
<subsection id="HA271B01C8CB84F899488CDA91BAF35C2"><enum>(c)</enum><header>Special rule for plan amendments</header><text>A plan shall not fail to meet the requirements of section 204(g) of the Employee Retirement Income Security Act of 1974 or <external-xref legal-doc="usc" parsable-cite="usc/26/411">section 411(d)(6)</external-xref> of the Internal Revenue Code of 1986 solely by reason of the adoption by the plan of an amendment necessary to meet the requirements of the amendments made by this section.</text></subsection>
<subsection id="H3398B61162CA42C0813257B9D7736D2"><enum>(d)</enum><header>Effective date</header>
<paragraph id="H4E54B40AC4B2417CA01970ABC44F2131"><enum>(1)</enum><header>Shutdown benefits</header><text>Except as provided in paragraph (3), the amendments made by subsection (a) shall apply with respect to plant shutdowns, or other unpredictable contingent events, occurring after 2006.</text></paragraph>
<paragraph id="H450958BC98D944D1B04B67A71F504260"><enum>(2)</enum><header>Other benefits</header><text>Except as provided in paragraph (3), the amendments made by subsection (b) shall apply with respect to plan years beginning after 2006.</text></paragraph>
<paragraph id="H61B9B3CC5AD24076BDF01B1B9F85F5" display-inline="no-display-inline"><enum>(3)</enum><header>Collective bargaining exception</header><text>In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act, the amendments made by this subsection shall not apply to plan years beginning before the earlier of—</text>
<subparagraph id="H0FA31FB1F8FB415100EAF97EAA3FA77F"><enum>(A)</enum><text>the later of—</text>
<clause id="H1EFA12DE99E442EF8ECBE4D435870268"><enum>(i)</enum><text>the date on which the last collective bargaining agreement relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or</text></clause>
<clause id="HAE8B8FBDEA7744AEBA42CE707B580734"><enum>(ii)</enum><text>the first day of the first plan year to which the amendments made by this subsection would (but for this subparagraph) apply, or</text></clause></subparagraph>
<subparagraph id="HF6192B4C3FDD4526A829AA6EDACB884"><enum>(B)</enum><text>January 1, 2009.</text></subparagraph><continuation-text continuation-text-level="paragraph">For purposes of clause (i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this subsection shall not be treated as a termination of such collective bargaining agreement.</continuation-text></paragraph></subsection> </section>
<section id="H2205A52D71CE4A3AB1ADB2ECD02453C" section-type="subsequent-section" display-inline="no-display-inline"><enum>104.</enum><header>Technical and conforming amendments</header>
<subsection id="HB17281F7252545D3BE66428E8C355CE4"><enum>(a)</enum><header>Security required for plan amendment resulting in significant underfunding</header><text>Section 307 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1085b">29 U.S.C. 1085b</external-xref>) is amended—</text>
<paragraph id="HBEE3787B71E14E5BB000C129D160A638"><enum>(1)</enum><text>in subsection (a)(1), by striking <quote>current liability under the plan</quote> and inserting <quote>the funding target of the plan</quote>;</text></paragraph>
<paragraph id="HC3EEF039A2EA4D57AA7B61007EB184F5"><enum>(2)</enum><text>in subsection (a)(2), by striking <quote>funded current liability percentage</quote> and inserting <quote>funding target attainment percentage</quote>, and by striking <quote>unfunded current liability</quote> and inserting <quote>unfunded liabilities</quote>;</text></paragraph>
<paragraph id="H892BEE0AAA7A4344AA8F4717B8AD3782"><enum>(3)</enum><text>in subsection (c)(1)(A), by striking <quote>funded current liability percentage</quote> and inserting <quote>funding target attainment percentage</quote>, and by <quote>unfunded current liability</quote> and inserting <quote>unfunded liabilities</quote>;</text></paragraph>
<paragraph id="HECB2FBB5E09241A282EF7CAB471D755"><enum>(4)</enum><text>in subsection (c)(1)(B), by striking <quote>current liability</quote> and inserting <quote>funding target</quote>;</text></paragraph>
<paragraph id="HAA897484DCA342188789C9DEB7618FB0"><enum>(5)</enum><text>in subsection (d), by striking <quote>funded current liability percentage</quote> each place it appears and inserting <quote>funding target attainment percentage</quote>; and</text></paragraph>
<paragraph id="HE6D3A63D4E0843BF9E4C80E682E335E3"><enum>(6)</enum><text>in subsection (f), by striking <quote>the terms</quote> and all that follows and inserting the following: <quote>the terms <term>funding target</term> and <term>funding target attainment percentage</term> shall have the meanings given such terms by sections 303(d) and 303(g)(4), respectively, and the term <term>unfunded liabilities</term> means, with respect to any plan year, the excess (if any) of the funding target of the plan over the value of the plan’s assets determined under section 303(e)(4).</quote> </text> </paragraph></subsection>
<subsection id="H6D322CAC06904DBF91BF300050BDD141"><enum>(b)</enum><header>Miscellaneous amendments</header><text display-inline="yes-display-inline">Subtitle B of title I of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021 et seq.</external-xref>) is amended—</text>
<paragraph id="HBA26D95AA37F4F17B4AAF224E144BBC4"><enum>(1)</enum><text>in section 101(d)(3), by striking <quote>section 302(e)</quote> and inserting <quote>section 303(i)</quote>;</text></paragraph>
<paragraph id="HC7E7FA46F1844633A15DB3C88621C8C0"><enum>(2)</enum><text>in section 101(f)(2)(B), by striking clause (i) and inserting the following:</text>
<quoted-block style="OLC" id="HE43A83AE1102458194BE522296B0AE56" display-inline="no-display-inline">
<clause id="HB85ADF811C5D40478571356069F53626"><enum>(i)</enum><text>a statement as to whether—</text>
<subclause id="HC43FDFC12390406088C0AA2F812349A3"><enum>(I)</enum><text>in the case of a single-employer plan, the plan’s funding target attainment percentage (as defined in section 303(g)(4)), or</text></subclause>
<subclause id="HF598444107474CF69C39C6EEE867D139"><enum>(II)</enum><text>in the case of a multiemployer plan, the plan’s funded current liability percentage (as defined in section 305(e)(4)),</text></subclause><continuation-text continuation-text-level="clause">is at least 100 percent (and, if note, the actual percentage);</continuation-text></clause><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="HCECD52818AA14FA582AC8B94C184FD3F"><enum>(3)</enum><text>in section 103(d)(8)(B), by striking <quote>the requirements of section 302(c)(3)</quote> and inserting <quote>the applicable requirements of sections 303(f) and 304(c)(3)</quote>;</text></paragraph>
<paragraph id="H276766B32E9B481993C4C0F002511B94"><enum>(4)</enum><text>in section 103(d), by striking paragraph (11) and inserting the following:</text>
<quoted-block style="traditional" id="H37E57C935A1340CD9275A90039C7C7F9" display-inline="no-display-inline">
<paragraph id="H2A8455C851EE4F5D9BC55283B343E1E"><enum>(11)</enum><text>If the current value of the assets of the plan is less than 70 percent of—</text>
<subparagraph id="HE36109DD5AB14078B31EDEE7BE97512E"><enum>(A)</enum><text>in the case of a single-employer plan, the funding target (as defined in section 303(d)) of the plan, or</text></subparagraph>
<subparagraph id="H71C625CBDFCF45B0B7C454163E2DE317"><enum>(B)</enum><text>in the case of a multiemployer plan, the current liability (as defined in section 304(c)(6)(C)) under the plan,</text></subparagraph><continuation-text continuation-text-level="paragraph">the percentage which such value is of the amount described in subparagraph (A) or (B).</continuation-text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="HA5221235FD164873B8978F7905CF6CB4"><enum>(5)</enum><text>in section 203(a)(3)(C), by striking <quote>section 302(c)(8)</quote> and inserting <quote>section 302(d)(2)</quote>;</text></paragraph>
<paragraph id="HD215348A46EA4C58AC44764FE0E4B520"><enum>(6)</enum><text>in section 204(g)(1), by striking <quote>section 302(c)(8)</quote> and inserting <quote>section 302(d)(2)</quote>;</text></paragraph>
<paragraph id="H97B48CC3C773405A8CAB91AB00E93D75"><enum>(7)</enum><text>in section 204(i)(2)(B), by striking <quote>section 302(c)(8)</quote> and inserting <quote>section 302(d)(2)</quote>;</text></paragraph>
<paragraph id="HFDA86394A52A4A8287C729039C4EB282"><enum>(8)</enum><text>in section 204(i)(3), by striking <quote>funded current liability percentage (within the meaning of section 302(d)(8) of this Act)</quote> and inserting <quote>funding target attainment percentage (as defined in section 303(g)(4))</quote>;</text></paragraph>
<paragraph id="H10E503415CC04991AF403C7EC8E043D"><enum>(9)</enum><text>in section 204(i)(4), by striking <quote>section 302(c)(11)(A), without regard to section 302(c)(11)(B)</quote> and inserting <quote>section 302(b)(1), without regard to section 302(b)(2)</quote>;</text></paragraph>
<paragraph id="H345B2AC9C66346CCAE977E00AD00D100"><enum>(10)</enum><text>in section 206(e)(1), by striking <quote>subject to the additional funding requirements of section 302(d)</quote> and inserting <quote>in at-risk status under section 303(g)</quote>, and by striking <quote>section 302(e)(5)</quote> and inserting <quote>section 303(i)(4)(E)(i)</quote>; </text></paragraph>
<paragraph id="H914A704A35684C979C8F17E7C8CFC0E6"><enum>(11)</enum><text>in section 206(e)(3), by striking <quote>section 302(e) by reason of paragraph (5)(A) thereof</quote> and inserting <quote>section 303(i)(3) by reason of section 303(i)(4)(A)</quote>; and</text></paragraph>
<paragraph id="HD5E29A9970AC47C88B8528C6531BA3F"><enum>(12)</enum><text>in sections 101(e)(3), 403(c)(1), and 408(b)(13), by striking <quote>American Jobs Creation Act of 2004</quote> and inserting <quote><short-title>Pension Protection Act of 2005</short-title></quote>.</text></paragraph></subsection>
<subsection id="H18FC07F58C9F4EEF951179335757CCE9" commented="no"><enum>(c)</enum><header>Repeal of expired authority for temporary variances</header><text>Section 207 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1057">29 U.S.C. 1057</external-xref>) is repealed.</text></subsection>
<subsection id="H7F92C47F28B2455A986513DEA3D43567"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text> </subsection></section></subtitle>
<subtitle id="H9469CC0CDA3C4D93A9BEEC3F2E04D887"><enum>B</enum><header>Amendments to Internal Revenue Code of 1986</header>
<section id="H9768B39521054784B056B4499B008322" section-type="subsequent-section"><enum>111.</enum><header>Minimum funding standards</header>
<subsection id="H73652E52487E4B929B4C51E1696E6DB"><enum>(a)</enum><header>In general</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/412">Section 412</external-xref> of the Internal Revenue Code of 1986 (relating to minimum funding standards) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H638C31D4476642CCA92616930437FAF0" style="OLC">
<section id="H970D80C2A4E7467FBDAB0954E4CDCE1"><enum>412.</enum><header>Minimum funding standards</header>
<subsection id="HCA0DBA661E9A428F84DE377FD9D6CE4E" display-inline="no-display-inline"><enum>(a)</enum><header>Requirement to meet minimum funding standard</header>
<paragraph id="HF8FE79D2EE3C4C3CBDBB67E07759AFCB"><enum>(1)</enum><header>In general</header><text>A plan to which this part applies shall satisfy the minimum funding standard applicable to the plan for any plan year.</text></paragraph>
<paragraph id="H5D7A31D437CB4C719BE002A8A5E46341"><enum>(2)</enum><header>Minimum funding standard</header><text>For purposes of paragraph (1), a plan shall be treated as satisfying the minimum funding standard for a plan year if—</text>
<subparagraph id="HCFCD3C4C0C3B440E897EC2858457E7D"><enum>(A)</enum><text>in the case of a defined benefit plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which, in the aggregate, are not less than the minimum required contribution determined under section 430 for the plan for the plan year,</text></subparagraph>
<subparagraph id="HBF1F16E35C3E4E3E96DAA7C7A41D4424"><enum>(B)</enum><text>in the case of a money purchase plan which is a single-employer plan, the employer makes contributions to or under the plan for the plan year which are required under the terms of the plan, and</text></subparagraph>
<subparagraph id="H114F1447AAB84D5787DF385F5F94CEAD"><enum>(C)</enum><text>in the case of a multiemployer plan, the employers make contributions to or under the plan for any plan year which, in the aggregate, are sufficient to ensure that the plan does not have an accumulated funding deficiency under section 431 as of the end of the plan year.</text></subparagraph></paragraph></subsection>
<subsection id="H682CCB2BD9DC484D855D92661F82D81" display-inline="no-display-inline"><enum>(b)</enum><header>Liability for contributions</header>
<paragraph id="HF1061C226E294202ABE364082F00A713"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 430(i)) shall be paid by any employer responsible for making contributions to or under the plan.</text></paragraph>
<paragraph id="H94DDDA8A2C174618A49C4DB9FC00BF8D"><enum>(2)</enum><header>Joint and several liability where employer member of controlled group</header><text>In the case of a single-employer plan, if the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.</text> </paragraph></subsection>
<subsection id="H54BA79FF27534F67985D44E12100EDE4" display-inline="no-display-inline"><enum>(c)</enum><header>Variance from minimum funding standards</header>
<paragraph id="H7144553BFB9B4C1D8E5F1549F5149BBC"><enum>(1)</enum><header>Waiver in case of business hardship</header>
<subparagraph id="H7393BC891BD94659B1F919F0046C4F15" display-inline="no-display-inline"><enum>(A)</enum><header>In general</header><text>If—</text>
<clause id="H841CEE6A87C441C7B6CCC2A3F7D99567"><enum>(i)</enum><text>an employer is (or in the case of a multiemployer plan, 10 percent or more of the number of employers contributing to or under the plan is) unable to satisfy the minimum funding standard for a plan year without temporary substantial business hardship (substantial business hardship in the case of a multiemployer), and</text></clause>
<clause id="HB8CE2FCE2AD240909E4FC664ED2C0000"><enum>(ii)</enum><text>application of the standard would be adverse to the interests of plan participants in the aggregate, </text></clause><continuation-text continuation-text-level="subparagraph">the Secretary may, subject to subparagraphs (B) and (C), waive the requirements of subsection (a) for such year with respect to all or any portion of the minimum funding standard. The Secretary shall not waive the minimum funding standard with respect to a plan for more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan) consecutive plan years.</continuation-text></subparagraph>
<subparagraph id="H3BD0552F77F648B696BC14ECE63DC2B3"><enum>(B)</enum><header>Effects of waiver</header><text display-inline="yes-display-inline">If a waiver is granted under subparagraph (A) for any plan year—</text>
<clause id="H3C3A6BA4189C4CA2B4B1E14362F97222"><enum>(i)</enum><text>in the case of a single-employer plan, the minimum required contribution under section 430 for the plan year shall be reduced by the amount of the waived funding deficiency and such amount shall be amortized as required under section 430(j), and</text></clause>
<clause id="HBEF8F84FDD9A48FC87E90971B2E803D"><enum>(ii)</enum><text>in the case of a multiemployer plan, the funding standard account shall be credited under section 431(b)(3)(C) with the amount of the waived funding deficiency and such amount shall be amortized as required under section 431(b)(2)(C).</text></clause></subparagraph>
<subparagraph id="HA38D5C6042A046BE8E3B14ED108475E6" commented="no"><enum>(C)</enum><header>Waiver of amortized portion not allowed</header><text>The Secretary may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any amortization payment required to be made for such plan year with respect to any amortization described in subparagraph (B) of any waived portion of the minimum funding standard for any preceding plan year.</text></subparagraph></paragraph>
<paragraph id="H479E314F37B5476981C826ED303647B"><enum>(2)</enum><header>Determination of business hardship</header><text>For purposes of this subsection, the factors taken into account in determining temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan) shall include (but shall not be limited to) whether or not—</text>
<subparagraph id="HBB0B86D570A547998B300004B9A6912E"><enum>(A)</enum><text>the employer is operating at an economic loss,</text></subparagraph>
<subparagraph id="H88DDD60CAB9C4E14BAD20024BEAF3B"><enum>(B)</enum><text>there is substantial unemployment or underemployment in the trade or business and in the industry concerned,</text></subparagraph>
<subparagraph id="H246336E77BDC4286AF50A7D6D5035907"><enum>(C)</enum><text>the sales and profits of the industry concerned are depressed or declining, and</text></subparagraph>
<subparagraph id="HFFFF2B36FF0A4C8DB5ECA878FA9236"><enum>(D)</enum><text>it is reasonable to expect that the plan will be continued only if the waiver is granted.</text></subparagraph></paragraph>
<paragraph id="H93FCB5F3D13645CEB4984252E5238E26"><enum>(3)</enum><header>Waived funding deficiency</header><text>For purposes of this part, the term <term>waived funding deficiency</term> means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary and not satisfied by employer contributions.</text></paragraph>
<paragraph id="H82103128BCE44D93B1D7B305896B142"><enum>(4)</enum><header>Security for waivers for single-employer plans, consultations</header>
<subparagraph id="H42DCE71E42DB45939BA9F643A7AB0720"><enum>(A)</enum><header>Security may be required</header>
<clause id="HB3344F834E0A4545ADFC17D4C393437"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement and Income Security Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1).</text></clause>
<clause id="HA395AF0EE61649B9BBC400C364D6D77F"><enum>(ii)</enum><header> Special rules</header><text display-inline="yes-display-inline">Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13) of such Act), or a member of such sponsor's controlled group (within the meaning of section 4001(a)(14) of such Act).</text></clause></subparagraph>
<subparagraph id="H70264C84397C48C5BBD7DE90505DA523"><enum>(B)</enum><header>Consultation with the pension benefit guaranty corporation</header><text display-inline="yes-display-inline">Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under this subsection with respect to a plan described in subparagraph (A)(i)—</text>
<clause id="HCED4C21AF66A4CFF8E2628F6956133FD"><enum>(i)</enum><text display-inline="yes-display-inline"> provide the Pension Benefit Guaranty Corporation with—</text>
<subclause id="H6DA11CEBD4184B63885B06BA1A4A0A9"><enum>(I)</enum><text>notice of the completed application for any waiver or modification, and</text></subclause>
<subclause id="H12A9F1542BAF4DD6A56F2F866E5C9D96"><enum>(II)</enum><text>an opportunity to comment on such application within 30 days after receipt of such notice, and</text></subclause></clause>
<clause id="H1DEDFEA02B1A466FAE57425E63198977"><enum>(ii)</enum><text>consider—</text>
<subclause id="H623264E7A3924FD4009693963415B220"><enum>(I)</enum><text>any comments of the Corporation under clause (i)(II), and</text></subclause>
<subclause id="HAF91C76B81D84D2DBF076C4CC4D3BD2"><enum>(II)</enum><text display-inline="yes-display-inline">any views of any employee organization (within the meaning of section 3(4) of the Employee Retirement and Income Security Act of 1974) representing participants in the plan which are submitted in writing to the Secretary in connection with such application.</text></subclause><continuation-text continuation-text-level="clause">Information provided to the Corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103(p).</continuation-text></clause></subparagraph>
<subparagraph id="HE5CAB44934CA4A67A1981B8DB25D32BD"><enum>(C)</enum><header>Exception for certain waivers</header>
<clause id="H776E326E7AD04D7CB80138695E17CFD7"><enum>(i)</enum><header>In general</header><text>The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of—</text>
<subclause id="H615746EC9E554A33B1E7F18E9ED8C685"><enum>(I)</enum><text>the shortfall amortization charge (within the meaning of section 303(c)(1)) for the plan year, and</text></subclause>
<subclause id="H5C51B79A7A7C42BDAC4F95B15E5EBAE7"><enum>(II)</enum><text>the aggregate total of shortfall amortization installments determined for succeeding plan years under section 303(c)(2),</text> </subclause><continuation-text continuation-text-level="clause">is less than $1,000,000.</continuation-text></clause>
<clause id="HAE1F7B2B54F44009944983EA621E41E"><enum>(ii)</enum><header>Treatment of waivers for which applications are pending</header><text>The amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under this subsection which are pending with respect to such plan were denied.</text></clause></subparagraph></paragraph>
<paragraph id="HC7138820D30645FCAE2BA926DCCFA023"><enum>(5)</enum><header>Special rules for single-employer plans</header>
<subparagraph id="HC88FEEB4C88348358DA5296B64D2A2D3"><enum>(A)</enum><header>Application must be submitted before date 2<fraction>1/2</fraction> months after close of year</header><text>In the case of a single-employer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary not later than the 15th day of the 3rd month beginning after the close of such plan year.</text></subparagraph>
<subparagraph id="H209D7EA986894655A63519F034C8451"><enum>(B)</enum><header>Special rule if employer is member of controlled group</header><text>In the case of a single-employer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met—</text>
<clause id="H69BE4FC1CE4646E9A2BFB3455C8DCE4E"><enum>(i)</enum><text>with respect to such employer, and</text></clause>
<clause id="H66AC939C255444CD00F586BD37412B9B"><enum>(ii)</enum><text>with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer).</text></clause><continuation-text continuation-text-level="subparagraph">The Secretary may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this paragraph.</continuation-text></subparagraph></paragraph>
<paragraph id="H4C43FC397DA344B8A6DB18B5FE2FD94"><enum>(6)</enum><header>Notice to employee organizations</header>
<subparagraph id="HCFF819E67C5642578E95DCA6507D5687"><enum>(A)</enum><header>In general</header><text>The Secretary shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver to each employee organization representing employees covered by the affected plan, and participant, beneficiary, and alternate payee (within the meaning of section 414(p)(8)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV and for benefit liabilities.</text></subparagraph>
<subparagraph id="H322F8C64BEF34F2897B13D834A8CBE5"><enum>(B)</enum><header>Consideration of relevant information</header><text>The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).</text></subparagraph></paragraph> </subsection>
<subsection id="H23F05934E46843768870DE3896BA7E91"><enum>(d)</enum><header>Miscellaneous rules</header>
<paragraph id="H64FEB041514F4CF1B62035FD2E3C754B" commented="no" display-inline="no-display-inline"><enum>(1)</enum><header>Change in method or year</header><text>If the funding method, the valuation date, or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary.</text></paragraph>
<paragraph id="H94F6199FC09749CC8B07AB643C79D12C"><enum>(2)</enum><header>Certain retroactive plan amendments</header><text>For purposes of this section, any amendment applying to a plan year which—</text>
<subparagraph id="HC71E5F093386464C9C7FA27F73FADEA7"><enum>(A)</enum><text>is adopted after the close of such plan year but no later than 2<fraction>1/2</fraction> months after the close of the plan year (or, in the case of a multiemployer plan, no later than 2 years after the close of such plan year),</text></subparagraph>
<subparagraph id="H21E348490AAD4CCF8B170912D26196C0"><enum>(B)</enum><text>does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and</text></subparagraph>
<subparagraph id="H8200923982C84382B98F6EF4E5DCB1D6"><enum>(C)</enum><text>does not reduce the accrued benefit of any participant determined as of the time of adoption except to the extent required by the circumstances,</text></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">shall, at the election of the plan administrator, be deemed to have been made on the first day of such plan year. No amendment described in this paragraph which reduces the accrued benefits of any participant shall take effect unless the plan administrator files a notice with the Secretary notifying him of such amendment and the Secretary has approved such amendment, or within 90 days after the date on which such notice was filed, failed to disapprove such amendment. No amendment described in this subsection shall be approved by the Secretary unless the Secretary determines that such amendment is necessary because of a substantial business hardship (as determined under subsection (c)(2)) and that a waiver under subsection (c) (or, in the case of a multiemployer plan, any extension of the amortization period under section 431(d)) is unavailable or inadequate.</continuation-text></paragraph>
<paragraph id="HE4DF5C12316B445386154818BCCFD8EB"><enum>(3)</enum><header>Controlled group</header><text>For purposes of this section, the term <term>controlled group</term> means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.</text></paragraph>
<paragraph id="H77A49D8D71244FFDA3A239001702A065"><enum>(4)</enum><header>Certain insurance contract plans</header><text display-inline="yes-display-inline">A plan is described in this paragraph if—</text>
<subparagraph id="H6C28878310F347E29B00A0E6CA1563C5"><enum>(A)</enum><text>the plan is funded exclusively by the purchase of individual insurance contracts,</text></subparagraph>
<subparagraph id="H547AE5D2EACD4E708398A55D0426008C"><enum>(B)</enum><text>such contracts provide for level annual premium payments to be paid extending not later than the retirement age for each individual participating in the plan, and commencing with the date the individual became a participant in the plan (or, in the case of an increase in benefits, commencing at the time such increase becomes effective),</text></subparagraph>
<subparagraph id="HFCA5BA54FB0F4EA78FFDC9008882AB5D"><enum>(C)</enum><text>benefits provided by the plan are equal to the benefits provided under each contract at normal retirement age under the plan and are guaranteed by an insurance carrier (licensed under the laws of a State to do business with the plan) to the extent premiums have been paid,</text></subparagraph>
<subparagraph id="HFB3171AF57CD43FF972900284175B789"><enum>(D)</enum><text>premiums payable for the plan year, and all prior plan years, under such contracts have been paid before lapse or there is reinstatement of the policy,</text></subparagraph>
<subparagraph id="HDE80CFE509D64211ACE29E90C4363C8C"><enum>(E)</enum><text>no rights under such contracts have been subject to a security interest at any time during the plan year, and</text></subparagraph>
<subparagraph id="H32F019ABEEE34D00A5BF10A850275354"><enum>(F)</enum><text>no policy loans are outstanding at any time during the plan year. </text></subparagraph><continuation-text continuation-text-level="paragraph">A plan funded exclusively by the purchase of group insurance contracts which is determined under regulations prescribed by the Secretary to have the same characteristics as contracts described in the preceding sentence shall be treated as a plan described in this paragraph.</continuation-text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9BA2C4D71FFC43E1896900097323D801"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text></subsection> </section>
<section id="H8D7C9568B5B74B35A4A85C19573000F7" display-inline="no-display-inline" section-type="subsequent-section"><enum>112.</enum><header>Funding rules for single-employer defined benefit pension plans</header>
<subsection id="HC8E42A4F7F9F46D494A024BAE67965B9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subchapter D of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 (relating to deferred compensation, etc.) is amended by adding at the end the following new part:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HCF80C1221D174F27B192CDFD41C6DF11">
<part id="H89D20E76650043C3935FDE5D61C9DAE3"><enum>III</enum><header>Minimum funding standards for single-employer defined benefit pension plans</header>
<section id="HB6D4BE6818914DA6A7C5486179277011"><enum>430.</enum><header>Minimum funding standards for single-employer defined benefit pension plans</header>
<subsection id="H280105CE425A4A47A3517C3BB6F75785" display-inline="no-display-inline"><enum>(a)</enum><header>Minimum required contribution</header>
<paragraph id="H026FE4AF7802405484713D365C5366A4"><enum>(1)</enum><header>In general</header><text>For purposes of section 412(a)(2)(A), except as otherwise provided in this subsection, the minimum required contribution with respect to a plan for a plan year is the target normal cost of the plan for the plan year.</text></paragraph>
<paragraph id="H69FECC994F5D406C9CFB1F83D2C2E165" display-inline="no-display-inline"><enum>(2)</enum><header>Shortfall amortization charge</header><text display-inline="yes-display-inline">In any case in which the value of plan assets (determined without regard to subsection (e)(1)) of the plan for the plan year which are held by the plan immediately before the valuation date is less than the funding target of the plan for the plan year, the minimum required contribution with respect to the plan for the plan year is the sum of the amount determined under paragraph (1) plus a shortfall amortization charge for such plan year determined under subsection (c).</text></paragraph>
<paragraph id="H54D4029A18C541B4B1DF3D00827D6BDD"><enum>(3)</enum><header>Credit for excess assets</header><text display-inline="yes-display-inline">In any case in which the value of plan assets of the plan for the plan year which are held by the plan immediately before the valuation date exceed the funding target of the plan for the plan year, the minimum required contribution with respect to the plan for the plan year is the amount determined under paragraph (1), reduced by such excess.</text></paragraph>
<paragraph id="HDCE358A141C64D268000F674D786C59"><enum>(4)</enum><header>Pre-funding balance</header><text>In the case of any plan year in which—</text>
<subparagraph id="H65B43B6EA0594852945B4CF30052AC4C"><enum>(A)</enum><text> the ratio (expressed as a percentage) which—</text>
<clause id="H6824C3843C1A4898BADFE882E57CC93"><enum>(i)</enum><text>the value of plan assets (determined without regard to subsection (e)(1)(B)) for the preceding plan year, bears to</text></clause>
<clause id="H0B114500AFDF4441AAE2000046CD46C"><enum>(ii)</enum><text>the funding target of the plan for the preceding plan year (determined without regard to subsection (g)(1)),</text></clause><continuation-text continuation-text-level="subparagraph">is at least 80 percent, and</continuation-text></subparagraph>
<subparagraph id="H275F11DB035C43F3926728CA2F00F717"><enum>(B)</enum><text>the plan sponsor elects (in such form and manner as shall be prescribed in regulations of the Secretary) to credit against the minimum required contribution for the current plan year all or a portion of the funding standard carryover balance and the pre-funding balance (to the extent provided in subsection (h)) for the preceding plan year (not in excess of such minimum required contribution),</text></subparagraph><continuation-text continuation-text-level="paragraph">the minimum required contribution for the plan year shall be reduced by the amount so credited by the plan sponsor.</continuation-text></paragraph> </subsection>
<subsection id="H2BAD8BD924A44D78917B5118EED6495"><enum>(b)</enum><header>Target normal cost</header><text>For purposes of this section, subject to subsection (g)(2), the term <term>target normal cost</term> means, for any plan year, the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year. If any benefit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase shall be treated as having accrued during the current plan year.</text></subsection>
<subsection id="H025F8A614C7D42EBA5C420176B720740"><enum>(c)</enum><header>Shortfall amortization charge</header>
<paragraph id="H6C0BC093034B4C5FAA6200D65636B18E" display-inline="no-display-inline"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The shortfall amortization charge for a plan for any plan year is the aggregate total of the shortfall amortization installments for such plan year with respect to the shortfall amortization bases for such plan year and each of the 6 preceding plan years. </text></paragraph>
<paragraph id="H2D485F13382342DF86052322C023D21F"><enum>(2)</enum><header>Shortfall amortization installment</header>
<subparagraph id="H74E29916AAD244168B4B1BDA56F7F8EB"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (1), the plan sponsor shall determine, with respect to the shortfall amortization base of the plan for any plan year, the amounts necessary to amortize such shortfall amortization base, in level annual installments over a period of 7 plan years beginning with such plan year. The annual installment of such amortization for each plan year in such 7-plan-year period is the shortfall amortization installment for such plan year with respect to such shortfall amortization base.</text></subparagraph>
<subparagraph id="HD86A452DCF8748BFACB00944000F4CB"><enum>(B)</enum><header>Computation assumptions</header><text display-inline="yes-display-inline">The determination of any annual installment under subparagraph (A) for any plan year shall be made as of the valuation date for such plan year, using the effective rate of interest for the plan for such plan year.</text></subparagraph></paragraph>
<paragraph id="HEEC2BECA50444507ACF1446F1593BDD3"><enum>(3)</enum><header>Shortfall amortization base</header><text>The shortfall amortization base of a plan for a plan year is the excess (if any) of—</text>
<subparagraph id="H88059D5690094465A0C0CDF7A9797BBA"><enum>(A)</enum><text>the funding shortfall of such plan for such plan year, over</text></subparagraph>
<subparagraph id="H6474939F2D0743888909D1CAC4E50023"><enum>(B)</enum><text>the present value (determined using the effective interest rate of the plan for the plan year) of the aggregate total of the shortfall amortization installments, for such plan year and the 5 succeeding plan years, which have been determined with respect to the shortfall amortization bases of the plan for each of the 6 plan years preceding such plan year.</text></subparagraph></paragraph>
<paragraph id="H6E8AA0E1CF084CECA19707D2CF7B79BB"><enum>(4)</enum><header>Funding shortfall</header><text display-inline="yes-display-inline">For purposes of this section, the funding shortfall of a plan for any plan year is the excess (if any) of—</text>
<subparagraph id="H8321842EE678438AB500E07F87C3948F"><enum>(A)</enum><text>the funding target of the plan for the plan year, over</text></subparagraph>
<subparagraph id="H2A064ED9E394406E9F834DB4F60033AC"><enum>(B)</enum><text display-inline="yes-display-inline">the value of plan assets of the plan for the plan year which are held by the plan immediately before the valuation date.</text> </subparagraph></paragraph>
<paragraph id="HD0CA6A3F670F4D8688B6735686BAF4A4"><enum>(5)</enum><header>Early deemed amortization upon attainment of funding target</header><text display-inline="yes-display-inline">In any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the shortfall amortization charge for such plan year and succeeding plan years, the shortfall amortization base for all preceding plan years shall be reduced to zero.</text></paragraph></subsection>
<subsection id="H9DD4FB8EBA8543EEB4A334853EC7E39"><enum>(d)</enum><header>Rules relating to funding target</header><text>For purposes of this section—</text>
<paragraph id="H2C0AC98B926F424FA1F9D0EA02E7CAD6"><enum>(1)</enum><header>Funding target</header><text>Except as provided in subsection (g)(1), the funding target of a plan for a plan year is the present value of all liabilities to participants and their beneficiaries under the plan for the plan year.</text></paragraph>
<paragraph id="H11B036D2FD1D4D6AABE562208696C726"><enum>(2)</enum><header>Funding target attainment percentage</header><text>The <quote>funding target attainment percentage</quote> of a plan for a plan year is the ratio (expressed as a percentage) which—</text>
<subparagraph id="HEE0DC0AD6C22415694F40367C7F0013"><enum>(A)</enum><text>the value of plan assets for the plan year, bears to</text></subparagraph>
<subparagraph id="HA5ACD6709F4449F789E6BF1868A95F59"><enum>(B)</enum><text>the funding target of the plan for the plan year (determined without regard to subsection (g)(1)).</text></subparagraph></paragraph></subsection>
<subsection id="H25ECA39FCE934BFBA600FC94E4E316F6" display-inline="no-display-inline"><enum>(e)</enum><header>Valuation of plan assets and liabilities</header>
<paragraph id="H9A8C542A6744473699CEEB477EDC53A0"><enum>(1)</enum><header>Value of plan assets</header><text>For purposes of this section (other than paragraph (4) and subsections (a)(2) and (h)(3)), the term <term>value of plan assets</term> means the excess of the value of plan assets (determined without regard to this paragraph) over the sum of—</text>
<subparagraph id="H27E8B0057FE745ECBB94003C2D6070CA"><enum>(A)</enum><text>the pre-funding balance of the plan maintained under subsection (h)(1), and</text></subparagraph>
<subparagraph id="HB2C25B02008245A8BCABE727C13B10F7"><enum>(B)</enum><text>the funding standard carryover balance of the plan maintained under subsection (h)(2).</text></subparagraph></paragraph>
<paragraph id="H5CC83566F75F4418853BBA71693844A8"><enum>(2)</enum><header>Timing of determinations</header><text display-inline="yes-display-inline">Except as otherwise provided under this subsection, all determinations under this section for a plan year shall be made as of the valuation date of the plan for such plan year. </text></paragraph>
<paragraph id="H2813A276BDFC4F8292D5A8489E706BBC"><enum>(3)</enum><header>Valuation date</header><text>For purposes of this section—</text>
<subparagraph id="HAE47E4709F9B4CABA385287D79905FF8"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the valuation date of a plan for any plan year shall be the first day of the plan year.</text></subparagraph>
<subparagraph id="H1CCDAD35D76640FC8DA2ABF500550841"><enum>(B)</enum><header>Exception for small plans</header><text>If, on each day during the preceding plan year, a plan had 500 or fewer participants, the plan may designate any day during the plan year as its valuation date for such plan year. For purposes of this subparagraph, all defined benefit plans (other than multiemployer plans) maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account.</text></subparagraph>
<subparagraph id="H166A1F256FA34E57BFC9416D291F4E79"><enum>(C)</enum><header>Application of certain rules in determination of plan size</header><text>For purposes of this paragraph—</text>
<clause id="H221FB3232DF14B98A6B0B568FB4B8FF4"><enum>(i)</enum><header>Plans not in existence in preceding year</header><text>In the case of the first plan year of any plan, subparagraph (B) shall apply to such plan by taking into account the number of participants that the plan is reasonably expected to have on days during such first plan year. </text></clause>
<clause id="H32B3D2CB1D304230B0C46B341D949E39"><enum>(ii)</enum><header>Predecessors</header><text>Any reference in subparagraph (B) to an employer shall include a reference to any predecessor of such employer.</text></clause></subparagraph></paragraph>
<paragraph id="H744CE75981B9489694A0D69E70EFD300"><enum>(4)</enum><header>Authorization of use of actuarial value</header><text>For purposes of this section, the value of plan assets (determined without regard to paragraph (1)) shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary, except that—</text>
<subparagraph id="HF7526E6497BD46B9811883247FD9AEAB"><enum>(A)</enum><text>any such method providing for averaging of fair market values may not provide for averaging of such values over more than the current plan year and the 2 preceding plan years, and</text></subparagraph>
<subparagraph id="HAC0BA36AB423448F9D19F55E99F7CA00"><enum>(B)</enum><text>any such method may not result in a determination of the value of plan assets which, at any time, is lower than 90 percent or greater than 110 percent of the fair market value of such assets at such time.</text></subparagraph></paragraph>
<paragraph id="H7918620357034946881E6139D360447B"><enum>(5)</enum><header>Accounting for contribution receipts</header><text>For purposes of this section—</text>
<subparagraph id="HF9B507E6E5E14DB6997390F336F712B1"><enum>(A)</enum><header>Contributions for prior plan years taken into account</header><text>For purposes of determining the value of plan assets for any current plan year, in any case in which a contribution properly allocable to amounts owed for a preceding plan year is made on or after the valuation date of the plan for such current plan year, such contribution shall be taken into account, except that any such contribution made during any such current plan year beginning after 2006 shall be taken into account only in an amount equal to its present value (determined using the effective rate of interest for the plan for the preceding plan year) as of the valuation date of the plan for such current plan year.</text></subparagraph>
<subparagraph id="H5E78A663AF8C423DAEAD03290050ED6C"><enum>(B)</enum><header>Contributions for current plan year disregarded</header><text>For purposes of determining the value of plan assets for any current plan year, contributions which are properly allocable to amounts owed for such plan year shall not be taken into account, and, in the case of any such contribution made before the valuation date of the plan for such plan year, such value of plan assets shall be reduced for interest on such amount determined using the effective rate of interest of the plan for the preceding plan year for the period beginning when such payment was made and ending on the valuation date of the plan.</text></subparagraph></paragraph>
<paragraph id="HD8A69570F4914E42AE98A40482BE8C07"><enum>(6)</enum><header>Accounting for plan liabilities</header><text>For purposes of this section—</text>
<subparagraph id="H6BD6C34AAA004F44B9AB318DC3106823"><enum>(A)</enum><header>Liabilities taken into account for current plan year</header><text>In determining the value of liabilities under a plan for a plan year, liabilities shall be taken into account to the extent attributable to benefits (including any early retirement or similar benefit) accrued as of the beginning of the plan year.</text></subparagraph>
<subparagraph id="H70F6D7378C7A45059E3EDF2769735E16"><enum>(B)</enum><header>Accruals during current plan year disregarded</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), benefits accrued during such plan year (after those taken into account under subparagraph (A)) shall not be taken into account, irrespective of whether the valuation date of the plan for such plan year is later than the first day of such plan year.</text></subparagraph> </paragraph></subsection>
<subsection id="HAB2BCBA175DA482EADD8D2FD92FDF8C1"><enum>(f)</enum><header>Actuarial assumptions and methods</header>
<paragraph id="H910177B0C18D4F71ADE7F27C4B282CB"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subject to this subsection, the determination of any present value or other computation under this section shall be made on the basis of actuarial assumptions and methods—</text>
<subparagraph id="H7BD5ABBA40F84E7FAA929EE02B7393E"><enum>(A)</enum><text>each of which is reasonable (taking into account the experience of the plan and reasonable expectations), and</text></subparagraph>
<subparagraph id="H291D59915BE54F6BB37D79A9E53C14B"><enum>(B)</enum><text>which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.</text></subparagraph></paragraph>
<paragraph id="H120C9B22120C45C681FF98DC4357B812" display-inline="no-display-inline"><enum>(2)</enum><header>Interest rates</header>
<subparagraph id="H1BAD7D981A3E4B738773DC5F3F00CAD"><enum>(A)</enum><header>Effective interest rate</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>effective interest rate</term> means, with respect to any plan for any plan year, the single rate of interest which, if used to determine the present value of the plan’s liabilities referred to in subsection (d)(1) would result in an amount equal to the funding target of the plan for such plan year.</text></subparagraph>
<subparagraph id="HE624FA677DBD4FEFB66CABA4BF7053DB"><enum>(B)</enum><header>Application to funding target</header><text>For purposes of determining the funding target of a plan for any plan year, the interest rate used in determining the present value of the liabilities of the plan shall be—</text>
<clause id="HDFD0744A4D5E4FAB8D05BF7E596CA52D"><enum>(i)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable during the 5-year period beginning on the first day of the plan year, the first segment rate with respect to the applicable month,</text></clause>
<clause id="H9693FF81F57C4C1F90E4F352D1BA548"><enum>(ii)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable during the 15-year period beginning at the end of the period described in clause (i), the second segment rate with respect to the applicable month, and</text></clause>
<clause id="HDBFA3E89743649050076F9FE44813D7E"><enum>(iii)</enum><text display-inline="yes-display-inline">in the case of liabilities reasonably determined to be payable after the period described in clause (ii), the third segment rate with respect to the applicable month.</text></clause></subparagraph>
<subparagraph id="HA9D28A7144184D95A17312E1EA27D00"><enum>(C)</enum><header>Segment rates</header><text>For purposes of this paragraph—</text>
<clause id="H76C1DAE195C441A78008035CD00221F5"><enum>(i)</enum><header>First segment rate</header><text>The term <term>first segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 5-year period commencing with such month.</text></clause>
<clause id="HC6B2E0210C3D4F2EA9C63580F6C21D"><enum>(ii)</enum><header>Second segment rate</header><text display-inline="yes-display-inline">The term <term>second segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 15-year period beginning at the end of the period described in clause (i).</text></clause>
<clause id="H5896BB2A06C74FEFA7A352B3B139A94C"><enum>(iii)</enum><header>Third segment rate</header><text display-inline="yes-display-inline">The term <term>third segment rate</term> means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during periods beginning after the period described in clause (ii).</text></clause></subparagraph>
<subparagraph id="H935261DB901141D988A7FEB5942FD7D6"><enum>(D)</enum><header>Corporate bond yield curve</header><text>For purposes of this paragraph—</text>
<clause id="H745E14F68B594D419B40C9E498678F8E"><enum>(i)</enum><header>In general</header><text>The term <term>corporate bond yield curve</term> means, with respect to any month, a yield curve which is prescribed by the Secretary for such month and which reflects a 3-year weighted average of yields on investment grade corporate bonds with varying maturities.</text></clause>
<clause id="H9E0EB1B52FC7418FBECF56B45FED78F4"><enum>(ii)</enum><header>3-year weighted average</header><text>The term <term>3-year weighted average</term> means an averaging methodology under which the most recent year is weighted 50 percent, the year preceding such year is weighted 35 percent, and the second year preceding such year is weighted 15 percent.</text></clause></subparagraph>
<subparagraph id="HC2ABCF7F27524E519262E53FC85284F6"><enum>(E)</enum><header>Applicable month</header><text>For purposes of this paragraph, the term <term>applicable month</term> means, with respect to any plan for any plan year, the month which includes the valuation date of such plan for such plan year or, at the election of the plan administrator, any of the 4 months which precede such month. Any election made under this subparagraph shall apply to the plan year for which made and all succeeding plan years unless revoked with the consent of the Secretary.</text></subparagraph>
<subparagraph id="H3DE9093B7BAD4FC7942F7200C82F914E"><enum>(F)</enum><header>Publication requirements</header><text display-inline="yes-display-inline">The Secretary shall publish for each month the corporate bond yield curve (and the corporate bond yield curve reflecting the modification described in section 417(e)(3)(A)(iii)(I)) for such month and each of the rates determined under subparagraph (B) for such month. The Secretary shall also publish a description of the methodology used to determine such yield curve and such rates which is sufficiently detailed to enable plans to make reasonable projections regarding the yield curve and such rates for future months based on the plan’s projection of future interest rates.</text></subparagraph>
<subparagraph id="H93C3F806205D45D799BF553D03ED135E"><enum>(G)</enum><header>Transition rule</header>
<clause id="H5F43AA1CD9954550A340F76B7B21243F"><enum>(i)</enum><header>In general</header><text>Notwithstanding the preceding provisions of this paragraph, for plan years beginning in 2006 or 2007, the first, second, and third segment rates for a plan with respect to any month shall be equal to the sum of—</text>
<subclause id="HCD29C871824F426BAC0548995C8C6DB5"><enum>(I)</enum><text>the product of such rate for such month determined without regard to this subparagraph, multiplied by the applicable percentage, and</text></subclause>
<subclause id="HDF9BD72DC8924B6A80D0CCD2DE9D3232"><enum>(II)</enum><text>the product of the rate determined under the rules of section 412(b)(5)(B)(ii)(II) (as in effect for plan years beginning in 2005), multiplied by a percentage equal to 100 percent minus the applicable percentage.</text></subclause></clause>
<clause id="HF7D2106784714FA19EABEE46429C9E3C"><enum>(ii)</enum><header>Applicable percentage</header><text>For purposes of clause (i), the applicable percentage is 33<fraction>1/3</fraction> percent for plan years beginning in 2006 and 66<fraction>2/3</fraction> percent for plan years beginning in 2007.</text></clause></subparagraph></paragraph>
<paragraph id="H41CE6605EF0E4905A03CFD19415E7889"><enum>(3)</enum><header>Mortality table</header>
<subparagraph id="H525FAA6C65A14F29ADFF328A836DA3B"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The mortality tables used in determining any present value or making any computation under this section shall be the RP–2000 Combined Mortality Table, as published by the Society of American Actuaries, as in effect on the date of the enactment of the <short-title>Pension Protection Act of 2005</short-title> and as revised from time to time under subparagraph (B). </text></subparagraph>
<subparagraph id="H62D0C085262844D38FC3C13D77001B2C"><enum>(B)</enum><header>Periodic revision</header><text>The Secretary shall (at least every 10 years) make revisions in any tables in effect under this paragraph to reflect the actual experience of pension plans and projected trends in such experience. </text></subparagraph>
<subparagraph id="H95180F6470C14F38004F86A94B1C9298"><enum>(C)</enum><header>Transition rule</header><text>Under regulations of the Secretary, any difference in assumptions as set forth in the mortality table specified in subparagraph (A) and assumptions as set forth in the mortality table described in section 412(d)(7)(C)(ii) (as in effect for plan years beginning in 2005) shall be phased in ratably over the first period of 5 plan years beginning in or after 2006 so as to be fully effective for the fifth plan year.</text></subparagraph></paragraph>
<paragraph id="H0134308E1C5949449F6F14FE396D008D"><enum>(4)</enum><header>Probability of benefit payments in the form of lump sums or other optional forms</header><text display-inline="yes-display-inline">For purposes of determining any present value or making any computation under this section, there shall be taken into account—</text>
<subparagraph id="HC7E03771947142D791FA3EA91E009239"><enum>(A)</enum><text>the probability that future benefit payments under the plan will be made in the form of optional forms of benefits provided under the plan (including lump sum distributions, determined on the basis of the plan’s experience and other related assumptions), and</text></subparagraph>
<subparagraph id="HED9DEE5D74424C3A980053AE2B70154B"><enum>(B)</enum><text>any difference in the present value of such future benefit payments resulting from the use of actuarial assumptions, in determining benefit payments in any such optional form of benefits, which are different from those specified in this subsection.</text></subparagraph></paragraph>
<paragraph id="HCDCFF9110D8E47D5ACA196565929FFAB"><enum>(5)</enum><header>Approval of large changes in actuarial assumptions</header>
<subparagraph id="H222D0326DB614DA39D548EA41B8866C6"><enum>(A)</enum><header>In general</header><text>No actuarial assumption used to determine the funding target for a single-employer plan to which this paragraph applies may be changed without the approval of the Secretary.</text></subparagraph>
<subparagraph id="H07E9DDF3352B4DF7A399E0E0B53677B6"><enum>(B)</enum><header>Plans to which paragraph applies</header><text display-inline="yes-display-inline">This paragraph shall apply to a plan only if—</text>
<clause id="H4CC55D1F0D8A49DDAAD798A1CF579161"><enum>(i)</enum><text display-inline="yes-display-inline"> the aggregate unfunded vested benefits as of the close of the preceding plan year (as determined under section 4006(a)(3)(E)(iii) of the Employee Retirement and Income Security Act of 1974) of such plan and all other plans maintained by the contributing sponsors (as defined in section 4001(a)(13) of such Act) and members of such sponsors' controlled groups (as defined in section 4001(a)(14) of such Act) which are covered by title IV (disregarding plans with no unfunded vested benefits) exceed $50,000,000; and </text></clause>
<clause id="H29CEC4E89BBD4A83A5C28295FD9226AB"><enum>(ii)</enum><text>the change in assumptions (determined after taking into account any changes in interest rate and mortality table) results in a decrease in the funding shortfall of the plan for the current plan year that exceeds $50,000,000, or that exceeds $5,000,000 and that is 5 percent or more of the funding target of the plan before such change.</text></clause></subparagraph></paragraph></subsection>
<subsection id="H5C7809CE58E4410500AE71E3BFC0F345"><enum>(g)</enum><header>Special rules for at-risk plans</header>
<paragraph id="H3C523C7CBF9249919412A498245523C3"><enum>(1)</enum><header>Funding target for plans in at-risk status</header><text></text>
<subparagraph id="H4CA7FEA1EC0D4AA9B4794E0364FE0736"><enum>(A)</enum><header>In general</header><text>In any case in which a plan is in at-risk status for a plan year, the funding target of the plan for the plan year is the sum of—</text>
<clause id="H0FA5D2B8D9AE42319FCDE7A212F100A"><enum>(i)</enum><text>the present value of all liabilities to participants and their beneficiaries under the plan for the plan year, as determined by using, in addition to the actuarial assumptions described in subsection (f), the supplemental actuarial assumptions described in subparagraph (B), plus</text></clause>
<clause id="HA5F4949EB42049F4838392FD55F1BC8D"><enum>(ii)</enum><text>a loading factor determined under subparagraph (C).</text></clause></subparagraph>
<subparagraph id="H19B8F9FE8C8B45A300A297C95951CADF"><enum>(B)</enum><header>Supplemental actuarial assumptions</header><text display-inline="yes-display-inline">The actuarial assumptions used in determining the valuation of the funding target shall include, in addition to the actuarial assumptions described in subsection (f), an assumption that all participants will elect benefits at such times and in such forms as will result in the highest present value of liabilities under subparagraph (A)(i).</text> </subparagraph>
<subparagraph id="H9DB7DD8CD02F4F569D16685BFDD320D8"><enum>(C)</enum><header>Loading factor</header><text>The loading factor applied with respect to a plan under this paragraph for any plan year is the sum of—</text>
<clause id="H476B7F1696854923BA1920ADEEE1FCB"><enum>(i)</enum><text>$700, times the number of participants in the plan, plus</text></clause>
<clause id="HF4C6DAF060DC48A1A0DD1EE919F4454C"><enum>(ii)</enum><text>4 percent of the funding target (determined without regard to this paragraph) of the plan for the plan year.</text></clause></subparagraph> </paragraph>
<paragraph id="H68F6376BE15D433385A6C0042DCC56F"><enum>(2)</enum><header>Target normal cost of at-risk plans</header>
<subparagraph id="H29F9604838A844B0ADDE1787D0C3575D"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In any case in which a plan is in at-risk status for a plan year, the target normal cost of the plan for such plan year shall be the sum of—</text>
<clause id="H8D61DE6CFD524438A7100014DB27BF00"><enum>(i)</enum><text>the present value of all benefits which are expected to accrue under the plan during the plan year, determined under the actuarial assumptions used under paragraph (1), plus</text></clause>
<clause id="H388E13AE1AA74ACDBF5DFBC5B7C88BA9"><enum>(ii)</enum><text>the loading factor under paragraph (1)(C), excluding the portion of the loading factor described in paragraph (1)(C)(i).</text></clause></subparagraph>
<subparagraph id="HE236F43693F840D78EE67B676D3144CB"><enum>(B)</enum><header>Minimum amount</header><text>In no event shall the target normal cost of a plan determined under this paragraph be less than the target normal cost of such plan as determined without regard to this paragraph.</text></subparagraph></paragraph>
<paragraph id="HB962A11C54A545F8B1DA372531711E7D"><enum>(3)</enum><header>Determination of at-risk status</header><text>For purposes of this subsection, a plan is in <quote>at-risk status</quote> for a plan year if the funding target attainment percentage of the plan for the preceding plan year was less than 60 percent.</text></paragraph>
<paragraph id="H503AC70F012E4F8C8EB5B7FEA9017E48"><enum>(4)</enum><header>Transition between applicable funding targets and between applicable target normal cost</header>
<subparagraph id="HCA01202178254787B33C2820B913ECA"><enum>(A)</enum><header>In general</header><text>In any case in which a plan which is in at-risk status for a plan year has been in such status for a consecutive period of fewer than 5 plan years, the applicable amount of the funding target and of the target normal cost shall be, in lieu of the amount determined without regard to this paragraph, the sum of—</text>
<clause id="H6D5B7CCBDADB49F09597C549B214D41E"><enum>(i)</enum><text>the amount determined under this section without regard to this subsection, plus</text></clause>
<clause id="HC74ED3169A4341C6BB9706740489125D"><enum>(ii)</enum><text>the transition percentage for such plan year of the excess of the amount determined under this subsection (without regard to this paragraph) over the amount determined under this section without regard to this subsection.</text></clause></subparagraph>
<subparagraph id="H2FD62846722B460F8FED73357B95191C"><enum>(B)</enum><header>Transition percentage</header><text>For purposes of this paragraph, the <quote>transition percentage</quote> for a plan year is the product derived by multiplying—</text>
<clause id="H4A573AAAF7184B85A5ECE8485F8BC181"><enum>(i)</enum><text>20 percent, by</text></clause>
<clause id="HF835C23B153B45B28BBE85C0E5786E9"><enum>(ii)</enum><text>the number of plan years during the period described in subparagraph (A).</text></clause></subparagraph></paragraph></subsection>
<subsection id="HA87A0D5911E84731BB7C7616CD00919D"><enum>(h)</enum><header>Pre-funding and funding standard carryover balances</header>
<paragraph id="HEFBDE7D70E624294976B014DD9A79149" display-inline="no-display-inline"><enum>(1)</enum><header>Pre-funding balance</header>
<subparagraph id="H594F2E275D8F42AA9B6D6E21D061C5A9"><enum>(A)</enum><header>In general</header><text>The plan sponsor of a pension plan which is a single-employer plan shall maintain a pre-funding balance for purposes of this subsection. Such balance shall consist of a beginning balance of zero, increased and decreased to the extent provided in subparagraphs (B) and (C), and adjusted further as provided in paragraph (3).</text></subparagraph>
<subparagraph id="HE1B27BB92ED44B67BBDC1031E1050679"><enum>(B)</enum><header>Increases</header><text>As of the valuation date for each plan year beginning after 2006, the pre-funding balance of a plan shall be increased by the amount elected by the plan sponsor for the plan year. Such amount shall not exceed the excess (if any) of—</text>
<clause id="H26B820608AF04232B900CF28AFFCE605"><enum>(i)</enum><text>the aggregate total of employer contributions to the plan for the preceding plan year, over</text></clause>
<clause id="H7078921AFA264593964407D2E6E2CBD"><enum>(ii)</enum><text>the minimum required contribution for such preceding plan year (increased by interest on any portion of such minimum required contribution remaining unpaid, at the effective interest rate for the plan for the preceding plan year, for the period beginning with the first day of such preceding plan year and ending on the date that payment of such portion is made).</text></clause></subparagraph>
<subparagraph id="H3CCBCF84902A428DB6145C9420342BCD"><enum>(C)</enum><header>Decreases</header><text>As of the valuation date for each plan year after 2006, the pre-funding balance of a plan shall be decreased (but not below zero) by the sum of—</text>
<clause id="H09A457AA6E714771972F690567CBF364"><enum>(i)</enum><text>the amount credited under subsection (a)(4) (if any) in reducing the minimum required contribution of the plan for the preceding plan year, and</text></clause>
<clause id="HC6ADE4E5C35D48BE8F4C0023A77D2EC1"><enum>(ii)</enum><text>the amount elected by the plan sponsor as a reduction in the pre-funding balance (for purposes of the determination under subsection (e)(1) and any other purpose under this section).</text></clause></subparagraph>
<subparagraph id="HAFEA2AA4EFA54D2B9B1B3B659C4B9E14"><enum>(D)</enum><header>Coordination with funding standard carryover balance</header><text>To the extent that any plan has a funding standard carryover balance greater than zero—</text>
<clause id="H75141ABAD7D5430380A34FF5A1C02835"><enum>(i)</enum><text>no amount of the pre-funding balance of such plan may be credited under subsection (a)(4) in reducing the minimum required contribution, and</text></clause>
<clause id="H85DB781B2FEC48F79B31B4CC7D93F9BC"><enum>(ii)</enum><text>no election may be made under subparagraph (C)(ii).</text></clause></subparagraph>
<subparagraph id="HDE0E228234674299AD58F5AC2C533568"><enum>(E)</enum><header>No use of balance to reduce minimum required contribution if used to avoid shortfall amortization</header><text>The amount of the pre-funding balance of such plan may be credited under subsection (a)(4) in reducing the minimum required contribution only if the plan sponsor has elected to apply subsection (a)(2) to the plan for such plan year by substituting <quote>subsection (e)(1)(B)</quote> for <quote>subsection (e)(1)</quote>.</text> </subparagraph> </paragraph>
<paragraph id="H82A546954D6A4FFDB1EDD74B1D2F4055"><enum>(2)</enum><header>Funding standard carryover balance</header>
<subparagraph id="HEDFFA8BBC47F455393668007FE36797C"><enum>(A)</enum><header>In general</header><text>The plan sponsor of a pension plan to which this paragraph applies shall maintain a funding standard carryover balance for purposes of this subsection. Such balance shall consist of a beginning balance determined under subparagraph (C), decreased to the extent provided in subparagraph (D), and adjusted further as provided in paragraph (3).</text></subparagraph>
<subparagraph id="H1B4F2A37170941218BF54F2C417F43EF"><enum>(B)</enum><header>Plans to which this paragraph applies</header><text display-inline="yes-display-inline">This paragraph applies to any plan which—</text>
<clause id="H18DF466E6B1046B7A46DE6053943DEB1"><enum>(i)</enum><text>is a single-employer plan subject to this part,</text></clause>
<clause id="HFFC90E7C15AB449186D0525DCEFBF219"><enum>(ii)</enum><text>was in effect for a plan year beginning in 2005, and</text></clause>
<clause id="H55B5731C8BDD438C81232926BE84B8B6"><enum>(iii)</enum><text display-inline="yes-display-inline">had a positive balance in the funding standard account under section 412(b) as in effect for such plan year and determined as of the end of such plan year.</text></clause></subparagraph>
<subparagraph id="HCCA582274E544A149879E65CF737B5F"><enum>(C)</enum><header>Beginning balance</header><text display-inline="yes-display-inline">The beginning balance of the funding standard carryover balance shall be the positive balance described in subparagraph (B)(iii).</text></subparagraph>
<subparagraph id="H77E916DA61224A1CBFD69FEAB84E3FA"><enum>(D)</enum><header>Decreases</header><text>As of the valuation date for each plan year after 2006, the funding standard carryover balance of a plan shall be decreased (but not below zero) by the sum of—</text>
<clause id="H900551A43D3A486E87D8C84E55D83C69"><enum>(i)</enum><text>the amount credited under subsection (a)(4) (if any) in reducing the minimum required contribution of the plan for the preceding plan year, and</text></clause>
<clause id="H15A578320FCD4DA792E99796C858116D"><enum>(ii)</enum><text>the amount elected by the plan sponsor as a reduction in the funding standard carryover balance (for purposes of the determination under subsection (e)(1) and any other purpose under this section).</text></clause></subparagraph></paragraph>
<paragraph id="H003C6C2D61354D02B623FC96C3EC4BDC"><enum>(3)</enum><header>Adjustments</header><text>In determining the pre-funding balance or the funding standard carryover balance of a plan as of the valuation date of the plan (before applying any increase or decrease under paragraph (1) or (2)), the plan sponsor shall, in accordance with regulations which shall be prescribed by the Secretary, adjust such balance of the plan so as to reflect the rate of net gain or loss (determined, notwithstanding subsection (e)(4), on the basis of fair market value) experienced by all plan assets for the period beginning with the valuation date for the preceding plan year and ending with the date preceding the valuation date for the current plan year, properly taking into account, in accordance with such regulations, all contributions, distributions, and other plan payments made during such period.</text></paragraph>
<paragraph id="H063441828784410D88BF323E4F743C15"><enum>(4)</enum><header>Elections</header><text>Except as otherwise provided in this subsection, any election made under this subsection shall be made at such time and in such form and manner as the Secretary may provide.</text></paragraph>
<paragraph id="H89A163906E5B45EDB91295C172797800"><enum>(5)</enum><header>Coordination with waivers</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>minimum required contribution</term> means for any plan year the minimum required contribution for such plan year determined without regard to this subsection and by taking into account any waiver under section 412(c) and any waiver amortization charge under subsection (j) for such plan year.</text></paragraph></subsection>
<subsection id="H3EEAB35AA7F74C08B764A3A12125BE02"><enum>(i)</enum><header>Payment of minimum required contributions</header>
<paragraph id="H2E554C38DC0B41F0A3A5C37DFE32E9D6"><enum>(1)</enum><header>In general</header><text>For purposes of this section, the due date for any payment of any minimum required contribution for any plan year shall be 8<fraction>1/2</fraction> months after the close of the plan year.</text></paragraph>
<paragraph id="H0679A47A6D34491688D08662700685F7"><enum>(2)</enum><header>Interest</header><text>Any payment required under paragraph (1) for a plan year made after the valuation date for such plan year shall be increased by interest, for the period from the valuation date to the payment date, at the effective rate of interest for the plan for such plan year.</text></paragraph>
<paragraph id="HDC0B7B24FB7841CA8EC57C8DF8D28118" display-inline="no-display-inline"><enum>(3)</enum><header>Accelerated quarterly contribution schedule for underfunded plans</header>
<subparagraph id="HD564954382CC4CCCAFAB07E7D5321BC3"><enum>(A)</enum><header>Interest penalty for failure to meet accelerated quarterly payment schedule</header><text>In any case in which the plan has a funding shortfall for the preceding plan year, if the required installment is not paid in full, then the minimum required contribution for the plan year (as increased under paragraph (2)) shall be further increased by an amount equal to the interest on the amount of the underpayment for the period of the underpayment, using an interest rate equal to the excess of—</text>
<clause id="HE4432AC75DF44FF2B177387C2CC284DA"><enum>(i)</enum><text>175 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), over</text></clause>
<clause id="H23D6A4A323AC4A5D87ED533CB250186B"><enum>(ii)</enum><text>the effective rate of interest for the plan for the plan year.</text></clause></subparagraph>
<subparagraph id="HF6575550229F444BAD872C88DB062448"><enum>(B)</enum><header>Amount of underpayment, period of underpayment</header><text>For purposes of subparagraph (A)—</text>
<clause id="HAA2A58FC63C24DF98E29ECC3BC1EE629"><enum>(i)</enum><header>Amount</header><text>The amount of the underpayment shall be the excess of—</text>
<subclause id="H5BF4675FE8354354BAD1717618763775"><enum>(I)</enum><text>the required installment, over</text></subclause>
<subclause id="H77586B99F2194B259CFAA0617F006EF"><enum>(II)</enum><text>the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment.</text></subclause></clause>
<clause id="H9B27AA1F5DE84D7386A8863373866DF6"><enum>(ii)</enum><header>Period of underpayment</header><text>The period for which any interest is charged under this paragraph with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan.</text></clause>
<clause id="H0381DCF467BB4B41AAD8EA4EFBA0B8A3"><enum>(iii)</enum><header>Order of crediting contributions</header><text>For purposes of clause (i)(II), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.</text></clause></subparagraph>
<subparagraph id="HBF87BB7761354CD187FA001E828B53C1"><enum>(C)</enum><header>Number of required installments; due dates</header><text>For purposes of this paragraph—</text>
<clause id="H1292BF51FD434494A5F9B8891D71369"><enum>(i)</enum><header>Payable in 4 installments</header><text>There shall be 4 required installments for each plan year.</text></clause>
<clause id="HCA9F40086F804D3CBD17D301F437F238"><enum>(ii)</enum><header>Time for payment of installments</header><text>The due dates for required installments are set forth in the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" blank-lines-before="1" line-rules="no-gen" rule-weights="0.0.0.4.0.17" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" colwidth="155" colsep="0" coldef="txt" min-data-value="100"/><colspec colname="col2" colwidth="147" colsep="0" coldef="txt-no-ldr-no-spread" min-data-value="95"/>
<tbody>
<row><entry rowsep="0" stub-definition="txt-clr" stub-hierarchy="1"><bold>In the case of the following required installment:</bold></entry><entry rowsep="0"><bold>The due date is:</bold></entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">1st</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">April 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2nd</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">July 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">3rd</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">October 15</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">4th</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">January 15 of the following year</entry></row></tbody></tgroup></table></clause></subparagraph>
<subparagraph id="H1D8EBDD12763496FA5E100EBFAA0769B"><enum>(D)</enum><header>Amount of required installment</header><text>For purposes of this paragraph—</text>
<clause id="H395D219CE9224391B21C9FA4667FEC48"><enum>(i)</enum><header>In general</header><text>The amount of any required installment shall be 25 percent of the required annual payment.</text></clause>
<clause id="HA1811640DCF544B2ABA94FFC645E2092"><enum>(ii)</enum><header>Required annual payment</header><text>For purposes of clause (i), the term <term>required annual payment</term> means the lesser of—</text>
<subclause id="H785F7701FE984391851506E83B29DE66"><enum>(I)</enum><text>90 percent of the minimum required contribution (without regard to any waiver under section 412(c)) to the plan for the plan year under this section, or</text></subclause>
<subclause id="HD25BBE63AD5F410AAF891EF4A6402CB8"><enum>(II)</enum><text display-inline="yes-display-inline">in the case of a plan year beginning after 2006, 100 percent of the minimum required contribution (without regard to any waiver under section 412(c)) to the plan for the preceding plan year.</text></subclause><continuation-text continuation-text-level="clause">Subclause (II) shall not apply if the preceding plan year referred to in such clause was not a year of 12 months.</continuation-text></clause></subparagraph>
<subparagraph id="HCA53DF6D26CE4C6DA5BA008B4D536981"><enum>(E)</enum><header>Fiscal years and short years</header><text></text>
<clause id="H8DC8FE21C78D46B099485B19978CF400"><enum>(i)</enum><header>Fiscal years</header><text>In applying this paragraph to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this paragraph, the months which correspond thereto.</text></clause>
<clause id="H88C29446876847E09BE3261EF2AF97E7"><enum>(ii)</enum><header>Short plan year</header><text>This subparagraph shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.</text></clause></subparagraph></paragraph>
<paragraph id="H9D98C0675E81401AA93565B93B4DA5FD" commented="no" display-inline="no-display-inline"><enum>(4)</enum><header>Liquidity requirement in connection with quarterly contributions</header><text></text>
<subparagraph id="H2C357E0DF464458DA05674BE6F32F591" commented="no"><enum>(A)</enum><header>In general</header><text>A plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment under paragraph (3) to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).</text></subparagraph>
<subparagraph id="H624A4394C90B4D8B8E664BA99354E0AD" commented="no"><enum>(B)</enum><header>Plans to which paragraph applies</header><text>This paragraph shall apply to a plan (other than a plan that would be described in subsection (e)(3)(B) if <quote>100</quote> were substituted for <quote>500</quote> therein) which—</text>
<clause id="H788A58CA3CBA418B9867AC09E9B1D29F" commented="no"><enum>(i)</enum><text>is required to pay installments under paragraph (3) for a plan year, and</text></clause>
<clause id="H57C93E4FBAD44D02BA0454C907D3C085" commented="no"><enum>(ii)</enum><text>has a liquidity shortfall for any quarter during such plan year.</text></clause></subparagraph>
<subparagraph id="HB95AF1EA8A5C45E8A6EFAF71C522FF16" commented="no"><enum>(C)</enum><header>Period of underpayment</header><text>For purposes of paragraph (3)(A), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.</text></subparagraph>
<subparagraph id="H20037093A6E74564AD0020858E7DE776" commented="no"><enum>(D)</enum><header>Limitation on increase</header><text display-inline="yes-display-inline">If the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funding target attainment percentage of the plan for the plan year (taking into account the expected increase in funding target due to benefits accruing or earned during the plan year) to 100 percent.</text></subparagraph>
<subparagraph id="HE1A6480CE6D449439F9E5C56F31D5731" commented="no"><enum>(E)</enum><header>Definitions</header><text>For purposes of this subparagraph:</text>
<clause id="HFA946FB5CC1845D18DC148AFBB004BF6" commented="no"><enum>(i)</enum><header>Liquidity shortfall</header><text>The term <term>liquidity shortfall</term> means, with respect to any required installment, an amount equal to the excess (as of the last day of the quarter for which such installment is made) of—</text>
<subclause id="H83A4AE698DC249F39F4820DA13E1609E"><enum>(I)</enum><text>the base amount with respect to such quarter, over</text></subclause>
<subclause id="HFC329F4F5E6C4638AA434300C39DB487"><enum>(II)</enum><text>the value (as of such last day) of the plan's liquid assets.</text></subclause></clause>
<clause id="HD74EB9B619B0468587F6E898D75F31C9" commented="no"><enum>(ii)</enum><header>Base amount</header>
<subclause id="H740BE71706F04D40BA55D1E3004B5C44" commented="no"><enum>(I)</enum><header>In general</header><text>The term <term>base amount</term> means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter. </text></subclause>
<subclause id="H096B4B5D589E40F6A5D3911F45917133" commented="no"><enum>(II)</enum><header>Special rule</header><text>If the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.</text></subclause></clause>
<clause id="HC2A8CFF62132460DAAF5A26CCC5E8F12" commented="no"><enum>(iii)</enum><header>Disbursements from the plan</header><text>The term <term>disbursements from the plan</term> means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.</text></clause>
<clause id="H09CCAF2520E84F0495B2D79C6C53CB0" commented="no"><enum>(iv)</enum><header>Adjusted disbursements</header><text>The term <term>adjusted disbursements</term> means disbursements from the plan reduced by the product of—</text>
<subclause id="H5167F682F3E144F3A0AFFF7BC346FE52" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">the plan’s funding target attainment percentage for the plan year, and</text></subclause>
<subclause id="H7071BF6AFDEA410BBA00BC90248C79F6" commented="no"><enum>(II)</enum><text>the sum of the purchases of annuities, payments of single sums, and such other disbursements as the Secretary shall provide in regulations.</text></subclause></clause>
<clause id="H55D99F4034D044C280BADF060041D3E8" commented="no"><enum>(v)</enum><header>Liquid assets</header><text>The term <term>liquid assets</term> means cash, marketable securities, and such other assets as specified by the Secretary in regulations.</text></clause>
<clause id="HFDE6160ADDAA4E56B2F365C3B0651B97" commented="no"><enum>(vi)</enum><header>Quarter</header><text>The term <term>quarter</term> means, with respect to any required installment, the 3-month period preceding the month in which the due date for such installment occurs.</text></clause></subparagraph>
<subparagraph id="HCDB2E08C5EAE4D039D63FDDFC6C49D1" commented="no"><enum>(F)</enum><header>Regulations</header><text>The Secretary may prescribe such regulations as are necessary to carry out this paragraph.</text></subparagraph></paragraph></subsection>
<subsection id="HE039865052274358B7D89EC98D423D11" display-inline="no-display-inline"><enum>(j)</enum><header>Waiver amortization charge</header>
<paragraph id="HE3313B853C894C079DC425E000998AC"><enum>(1)</enum><header>In general</header><text>The minimum required contribution for any plan year under subsection (a) shall be increased by the amount of the waiver amortization charge (if any) for such plan year.</text></paragraph>
<paragraph id="H42DFEC8A5D164F7B91E57EB94E4432D6"><enum>(2)</enum><header>Determination of waiver amortization charge</header><text>The waiver amortization charge for a plan for any plan year is the aggregate total of the waiver amortization installments for such plan year with respect to the waiver amortization bases for such plan year and each of the 4 preceding plan years.</text></paragraph>
<paragraph id="H9DE077C4632F4421BAFCADF8644D72D5"><enum>(3)</enum><header>Waiver amortization installment</header><text>For purposes of paragraph (2), the plan sponsor shall determine, with respect to the waiver amortization base of the plan for any plan year, the amounts necessary to amortize such waiver amortization base, in level annual installments over a period of 5 plan years beginning with such plan year. The annual installment of such amortization for each plan year in such 5-plan year period is the waiver amortization installment for such plan year with respect to such waiver amortization base.</text></paragraph>
<paragraph id="H5CD8C6B3E6AE4831000500BA55769B81"><enum>(4)</enum><header>Computation assumptions</header><text>The determination of any annual installment under paragraph (2) for any plan year shall be made as of the valuation date for such plan year, using the effective rate of interest for the plan for the preceding plan year.</text></paragraph>
<paragraph id="H4CC4DE514DCD4E3C8823B3E626EAD85"><enum>(5)</enum><header>Waiver amortization base</header><text>The waiver amortization base of a plan for a plan year is the excess (if any) of—</text>
<subparagraph id="HA3EA4C21713847BDAE9FBC4682866912"><enum>(A)</enum><text display-inline="yes-display-inline">the portion of the minimum required contribution of such plan waived under section 412(c) for such plan year, over</text></subparagraph>
<subparagraph id="HC921DD7E605A479AB39EDEAD60DB77BC"><enum>(B)</enum><text>the aggregate total of the waiver amortization installments, for such plan year and the 3 succeeding plan years, which have been determined with respect to the waiver amortization bases of the plan for each of the 4 plan years preceding such plan year.</text></subparagraph></paragraph></subsection>
<subsection id="HB7415D3FDCBC47408226AE63E07F20CB" display-inline="no-display-inline"><enum>(k)</enum><header>Imposition of lien where failure to make required contributions</header>
<paragraph id="H90EA2D0785EE47288B12C92752624F53"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of a plan covered under section 4021 of the Employee Retirement and Income Security Act of 1974 and to which this subsection applies (as provided under paragraph (2)), if—</text>
<subparagraph id="H8E9B7A361C704F788B2BA48CEE3FABB"><enum>(A)</enum><text>any person fails to make a contribution payment required by section 412 and this section before the due date for such payment, and</text></subparagraph>
<subparagraph id="HAF4138464FF74A879DF47FC8E913A161"><enum>(B)</enum><text>the unpaid balance of such payment (including interest), when added to the aggregate unpaid balance of all preceding such payments for which payment was not made before the due date (including interest), exceeds $1,000,000, </text></subparagraph><continuation-text continuation-text-level="paragraph">then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member.</continuation-text></paragraph>
<paragraph id="HF3D21BB6996C45FD9CA14371316CDD8E"><enum>(2)</enum><header>Plans to which subsection applies</header><text>This subsection shall apply to a defined benefit plan which is a single-employer plan for any plan year for which the funding target attainment percentage (as defined in subsection (d)(2)) of such plan is less than 100 percent.</text></paragraph>
<paragraph id="HC49D4A4E39F6434BB035822576196CD8"><enum>(3)</enum><header>Amount of lien</header><text>For purposes of paragraph (1), the amount of the lien shall be equal to the aggregate unpaid balance of contribution payments required under this section and section 412 for which payment has not been made before the due date.</text> </paragraph>
<paragraph id="HBE2E85A66BF144638706D89522E0BF3E"><enum>(4)</enum><header>Notice of failure; lien</header>
<subparagraph id="H20CB19B21B0D48D9B93F1C9160BC3F01"><enum>(A)</enum><header>Notice of failure</header><text>A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required contribution payment.</text></subparagraph>
<subparagraph id="HC33E491C5DB24AC3A01005667EE6F753"><enum>(B)</enum><header>Period of lien</header><text>The lien imposed by paragraph (1) shall arise on the due date for the required contribution payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.</text></subparagraph>
<subparagraph id="H119947F086254E59B9F1FDBCC27DCEE"><enum>(C)</enum><header>Certain rules to apply</header><text display-inline="yes-display-inline">Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement and Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien.</text></subparagraph></paragraph>
<paragraph id="H06E015E7A03E4EEB82D2C9C2BEBE3EDC"><enum>(5)</enum><header>Enforcement</header><text>Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor).</text></paragraph>
<paragraph id="H3A987ADF54F247518D6C7200951422B8"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="HA6EC3B50F3484A8EBF7F52FDBAED4FA8" commented="no"><enum>(A)</enum><header>Contribution payment</header><text display-inline="yes-display-inline">The term <term>contribution payment</term> means, in connection with a plan, a contribution payment required to be made to the plan, including any required installment under paragraphs (3) and (4) of subsection (i). </text></subparagraph>
<subparagraph id="HAF9012CA89CF40738CA210AAAE7376D"><enum>(B)</enum><header>Due date; required installment</header><text>The terms <term>due date</term> and <term>required installment</term> have the meanings given such terms by subsection (i), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under section 430.</text></subparagraph>
<subparagraph id="H818F3DAD459C4417916C6CB51EABDA6B"><enum>(C)</enum><header>Controlled group</header><text>The term <term>controlled group</term> means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414.</text></subparagraph></paragraph></subsection>
<subsection id="HCAD9B1C4BBDB431EBA7100F1A158E486" display-inline="no-display-inline" commented="no"><enum>(l)</enum><header>Qualified transfers to health benefit accounts</header><text>In the case of a qualified transfer (as defined in section 420), any assets so transferred shall not, for purposes of this section, be treated as assets in the plan. </text></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H39B600CDDA5A4BB2BB421F291EE7D8ED"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to plan years beginning after 2005.</text></subsection></section>
<section id="H31C8701FE7EF49FD903C8C4CD39C4FC" display-inline="no-display-inline"><enum>113.</enum><header>Limitations on distributions and benefit accruals under single-employer plans</header>
<subsection id="HEA1C072F0F784E5385CB76BFF4C1AD5F"><enum>(a)</enum><header>Prohibition of shutdown benefits and other unpredictable contingent event benefits under single-employer plans</header><text display-inline="yes-display-inline">Part III of subchapter D of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 (relating to deferred compensation, etc.) is amended—</text>
<paragraph id="H60FC97532281443B9B1373CDE6190070"><enum>(1)</enum><text>by striking the heading and inserting the following:</text>
<quoted-block style="OLC" id="HF5050FC6E68440418299BDBB64DC0613" display-inline="no-display-inline">
<part id="H3BD801BE28B947A8A7A47ED1C0D5F19"><enum>III</enum><header>Rules relating to minimum funding standards and benefit limitations</header>
<toc>
<toc-entry level="section">Subpart A. Minimum funding standards for pension plans</toc-entry>
<toc-entry level="section">Subpart B. Benefit limitations under single-employer plans</toc-entry></toc>
<subpart id="H686BD4F62D0245E595D54E1DC2646D9E"><enum>A</enum><header>Minimum funding standards for pension plans</header>
<toc container-level="subpart-container" quoted-block="no-quoted-block" lowest-level="section" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded" idref="HF6C9A55963C8423FBE3639E8EDE9DE63">
<toc-entry level="section" idref="HF6C9A55963C8423FBE3639E8EDE9DE63">Sec. 430. Minimum funding standards for single-employer defined benefit pension plans</toc-entry> </toc></subpart></part><after-quoted-block>, and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H98D026846ED14525928FD3DB36E59691"><enum>(2)</enum><text>by adding at the end the following new subpart:</text>
<quoted-block style="OLC" id="HE74733948AB941F285115E361B7917CC" display-inline="no-display-inline">
<subpart id="H81C6D5C45BD341F780335FECCAB7FDAA"><enum>B</enum><header>Benefit limitations under single-employer plans</header>
<toc container-level="subpart-container" quoted-block="no-quoted-block" lowest-level="section" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded" idref="HF6C9A55963C8423FBE3639E8EDE9DE63">
<toc-entry level="section" idref="HF6C9A55963C8423FBE3639E8EDE9DE63">Sec. 436. Prohibition of shutdown benefits and other unpredictable contingent event benefits</toc-entry> </toc>
<section id="H74F9D178F2284B08B5D0052C72529BA1"><enum>436.</enum><header>Prohibition of shutdown benefits and other unpredictable contingent event benefits</header>
<subsection id="H1CEC4C7E458F44F58723E9C4412621E"><enum>(a)</enum><header>In general</header><text>No pension plan which is a single-employer plan may provide benefits which are payable upon the occurrence of—</text>
<paragraph id="HDF6E7CE93E924E2CADF600702E2D1946"><enum>(1)</enum><text>a plant shutdown, or</text></paragraph>
<paragraph id="HC44E5E12A7EF4F85BEBFFA8E59A689C0"><enum>(2)</enum><text>any other unpredictable contingent event.</text></paragraph></subsection>
<subsection id="H2521B44FBF544FFFA9B7C926B08450BF"><enum>(b)</enum><header>Unpredictable contingent event</header><text>For purposes of this subsection, the term <term>unpredictable contingent event</term> means an event other than—</text>
<paragraph id="HDDBF9631F26F4EDBAC581EA3D83EEB1D"><enum>(1)</enum><text>attainment of any age, performance of any service, receipt or derivation of any compensation, or the occurrence of death or disability, or</text></paragraph>
<paragraph id="H1F5769AFF6A44D07A6A8BA5D3CEA96"><enum>(2)</enum><text>an event which is reasonably and reliably predictable (as determined by the Secretary).</text></paragraph></subsection></section></subpart><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H26C89F25F23B423DAB415F257800C38D"><enum>(b)</enum><header>Other limits on benefits and benefit accruals</header>
<paragraph id="H0E7F92BD8EFE46429D3204BC6DA3F554"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subpart B of part III of subchapter D of chapter 1 of such Code is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="H19E9E31C8FE04ACAA0E9A680CE42042F" display-inline="no-display-inline">
<section id="H0804E14197A3438A844247371F1D081C"><enum>437.</enum><header>Benefit limiations on underfunded plans</header>
<subsection id="HE275CB0BBEFA4CBEBF5391F623B586FD" commented="no" display-inline="no-display-inline"><enum>(a)</enum><header>Limitations on plan amendments increasing liability for benefits</header>
<paragraph id="HCA03AA4556264A778C7E8CF8126B098C"><enum>(1)</enum><header>In general</header><text>No amendment to a defined benefit plan (other than a multiemployer plan) which has the effect of increasing liabilities of the plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable to the plan may take effect during any plan year if the funding target attainment percentage as of the valuation date of the plan for such plan year is—</text>
<subparagraph id="HA3C2237844D14C4B8EC49355185CE00"><enum>(A)</enum><text>less than 80 percent, or</text></subparagraph>
<subparagraph id="H5DA296C5820345B4BAFAB5EA9826E643"><enum>(B)</enum><text>would be less than 80 percent taking into account such amendment.</text></subparagraph></paragraph>
<paragraph id="H09EFCE1604BD41379018E1A3F530C7C"><enum>(2)</enum><header>Exemption</header><text display-inline="yes-display-inline">Paragraph (1) shall cease to apply with respect to any plan year, effective as of the first date of the plan year (or if later, the effective date of the amendment), upon payment by the plan sponsor of a contribution equal to—</text>
<subparagraph id="H159BA2664F074478A209D11E10351022"><enum>(A)</enum><text>in the case of paragraph (1)(A), the amount of the increase in the funding target of the plan (under section 430) for the plan year attributable to the amendment, and</text></subparagraph>
<subparagraph id="H396F737EEAE14F11B338E968BBBECEC5"><enum>(B)</enum><text>in the case of subparagraph (1)(B), the amount sufficient to result in a funding target attainment percentage of 80 percent.</text> </subparagraph> </paragraph></subsection>
<subsection id="HAE98499C958243F9BD5B94D83B99335"><enum>(b)</enum><header>Funding-based limitation on certain forms of distribution</header><text display-inline="yes-display-inline">A defined benefit plan (other than a multiemployer plan) shall provide that, in any case in which the plan’s funding target attainment percentage as of the valuation date of the plan for a plan year is less than 80 percent, the plan may not after such date pay any prohibited payment (as defined in section 206(e) of the Employee Retirement and Income Security Act of 1974). </text></subsection>
<subsection id="HA1CF87B5260F486E00C213C600B853B2"><enum>(c)</enum><header>Limitations on benefit accruals for plans with severe funding shortfalls</header><text>A defined benefit plan (other than a multiemployer plan) shall provide that, in any case in which the plan’s funding target attainment percentage as of the valuation date of the plan for a plan year is less than 60 percent, all future benefit accruals under the plan shall cease as of such date.</text></subsection>
<subsection id="H91A91653DF9F4B1A862ED21D6BD289BD"><enum>(d)</enum><header>New plans</header><text display-inline="yes-display-inline">Subsections (a) and (c) shall not apply to a plan for the first 5 plan years of the plan. For purposes of this subsection, the reference in this subsection to a plan shall include a reference to any predecessor plan.</text></subsection>
<subsection id="H5FF3BFE8F2874CBDA725726CB35215C2"><enum>(e)</enum><header>Presumed underfunding for purposes of benefit limitations based on prior year’s funding status</header>
<paragraph id="HFEF1C017956048DEBC65FDE2AAF96670"><enum>(1)</enum><header>Presumption of continued underfunding</header><text>In any case in which a benefit limitation under subsections (a), (b), or (c) has been applied to a plan with respect to the plan year preceding the current plan year, the funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year shall be presumed to be equal to the funding target attainment percentage of the plan as of the valuation date of the plan for the preceding plan year until the enrolled actuary of the plan certifies the actual funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year.</text></paragraph>
<paragraph id="H0DE04DFDA090455DA9144C00DAB19B13"><enum>(2)</enum><header>Presumption of underfunding after 10th month</header><text>In any case in which no such certification is made with respect to the plan before the first day of the 10th month of the current plan year, for purposes of subsections (a), (b), and (c), the plan’s funding target attainment percentage shall be conclusively presumed to be less than 60 percent as of the first day of such 10th month, and such day shall be deemed, for purposes of such paragraphs, to be the valuation date of the plan for the current plan year.</text></paragraph>
<paragraph id="HFC66DED128E04EC5AF63003FD6F51061"><enum>(3)</enum><header>Presumption of underfunding after 4th month for nearly underfunded plans</header><text>In any case in which—</text>
<subparagraph id="HC96203E6CEFB4DC2914400E97EAFAFC2"><enum>(A)</enum><text>a benefit limitation under subsections (a), (b), or (c) did not apply to a plan with respect to the plan year preceding the current plan year, but the funding target attainment percentage of the plan for such preceding plan year was not more than 10 percentage points greater than the percentage which would have caused such paragraph to apply to the plan with respect to such preceding plan year, and</text></subparagraph>
<subparagraph id="HF99E2D28994746149561A0C75F07A941"><enum>(B)</enum><text>as of the first day of the 4th month of the current plan year, the enrolled actuary of the plan has not certified the actual funding target attainment percentage of the plan as of the valuation date of the plan for the current plan year,</text></subparagraph><continuation-text continuation-text-level="paragraph">until the enrolled actuary so certifies, such first day shall be deemed, for purposes of such subsection, to be the valuation date of the plan for the current plan year and the funding target attainment percentage of the plan as of such first day shall, for purposes of such subsection, be presumed to be equal to 10 percentage points less than the funding target attainment percentage of the plan as of the valuation date of the plan for such preceding plan year.</continuation-text></paragraph></subsection>
<subsection id="HE78C9115542D4EDF91F31A9D4F1EFB0"><enum>(f)</enum><header>Restoration by plan amendment of benefits or benefit accrual</header><text display-inline="yes-display-inline">In any case in which a prohibition under subsection (b) of the payment of lump sum distributions or benefits in any other accelerated form or a cessation of benefit accruals under subsection (c) is applied to a plan with respect to any plan year and such prohibition or cessation, as the case may be, ceases to apply to any subsequent plan year, the plan may provide for the resumption of such benefit payment or such benefit accrual only by means of the adoption of a plan amendment after the valuation date of the plan for such subsequent plan year. The preceding sentence shall not apply to a prohibition or cessation required by reason of subsection (e).</text></subsection>
<subsection id="HBABE5A368E764DE9007182D01716CDD2"><enum>(g)</enum><header>Funding target attainment percentage</header><text>For purposes of this section, the term <term>funding target attainment percentage</term> has the meaning provided such term under section 430(d)(2).</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H73E0199E222346A39D9D8110A755E265"><enum>(2)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for such subpart is amended by adding at the end the following new item:</text>
<quoted-block style="OLC" id="HF70F31DD2DBB47FE85C363895051DFB" display-inline="no-display-inline">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 437. Benefit limitations on underfunded plans</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> </subsection>
<subsection id="HCE12484E407C4C2F8D0003FA001BCFFD" display-inline="no-display-inline"><enum>(c)</enum><header>Special rule for plan amendments</header><text>A plan shall not fail to meet the requirements of section 204(g) of the Employee Retirement Income Security Act of 1974 or <external-xref legal-doc="usc" parsable-cite="usc/26/411">section 411(d)(6)</external-xref> of the Internal Revenue Code of 1986 solely by reason of the adoption by the plan of an amendment necessary to meet the requirements of the amendments made by this section.</text></subsection>
<subsection id="H19C89A4315FE493E84C5F2B6B294BC2D"><enum>(d)</enum><header>Effective date</header>
<paragraph id="H71708A493DBA4BB992885FFC25DABFB"><enum>(1)</enum><header>Shutdown benefits</header><text>Except as provided in paragraph (3), the amendments made by subsection (a) shall apply with respect to plant shutdowns, or other unpredictable contingent events, occurring after 2006.</text></paragraph>
<paragraph id="H943CDD3A01A64BA2A8BAC4A04DE4575"><enum>(2)</enum><header>Other benefits</header><text>Except as provided in paragraph (3), the amendments made by subsection (b) shall apply with respect to plan years beginning after 2006.</text></paragraph>
<paragraph id="H0E001C72018B414FBF6C1C934FBE494C" display-inline="no-display-inline"><enum>(3)</enum><header>Collective bargaining exception</header><text>In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act, the amendments made by this subsection shall not apply to plan years beginning before the earlier of—</text>
<subparagraph id="H159444CFC27941EB86287F038D638FE5"><enum>(A)</enum><text>the later of—</text>
<clause id="H01926117EE9F4C92BCD9F9AFA9836677"><enum>(i)</enum><text>the date on which the last collective bargaining agreement relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or</text></clause>
<clause id="HA49D6FABDB194E548F5EFB00D126AC"><enum>(ii)</enum><text>the first day of the first plan year to which the amendments made by this subsection would (but for this subparagraph) apply, or</text></clause></subparagraph>
<subparagraph id="H0A0E15D21F8E416287EDB27FF152F08"><enum>(B)</enum><text>January 1, 2009.</text></subparagraph><continuation-text continuation-text-level="paragraph">For purposes of clause (i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this subsection shall not be treated as a termination of such collective bargaining agreement.</continuation-text></paragraph></subsection> </section>
<section id="H8E5D19E0D9574654A2FA2CD338375342"><enum>114.</enum><header>Technical and conforming amendments</header>
<subsection id="HD181A6E2AF294CF38BED5908B705C611"><enum>(a)</enum><header>Amendments related to qualification requirements</header>
<paragraph id="H57789A15B90446E2BEEBD620E5EB0154"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/401">Section 401(a)(29)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H3C4CFD2B79824493B664E3EB2BF626EB" style="OLC">
<paragraph id="HB1E6F9D5511A4CC09833C9AA7E02A03"><enum>(29)</enum><header>Benefit limitations on plans in at-risk status</header><text>In the case of a defined benefit plan (other than a multiemployer plan) to which the requirements of section 412 apply, the trust of which the plan is a part shall not constitute a qualified trust under this subsection unless the plan meets the requirements of sections 436 and 437.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HF1D097680DE541CBAB594E126B52EEE8"><enum>(2)</enum><text>Section 401(a)(32) of such Code is amended—</text>
<subparagraph id="HC8C569BE14984994B806085DCBB9201D"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>412(m)(5)</quote> each place it appears and inserting <quote>section 430(i)(4)</quote>, and</text></subparagraph>
<subparagraph id="H8E2BA893A4134B0588CC4B656D28B614"><enum>(B)</enum><text>in subparagraph (C), by striking <quote>section 412(m)</quote> and inserting <quote>section 430(i)</quote>.</text></subparagraph></paragraph>
<paragraph id="H9C907ED7CF9B4B3400FAE4D8DDC8FA50"><enum>(3)</enum><text>Section 401(a) is amended by striking paragraph (33) and by redesignating paragraph (34) as paragraph (33).</text></paragraph></subsection>
<subsection id="H833EBB4DF7214368BE27E56479330C1"><enum>(b)</enum><header>Vesting rules</header><text>Section 411 of such Code is amended—</text>
<paragraph id="H3CA7709F909A4764AAEAAB776ED3AAF5"><enum>(1)</enum><text>by striking <quote>section 412(c)(8)</quote> in subsection (a)(3)(C) and inserting <quote>section 412(d)(2)</quote>,</text></paragraph>
<paragraph id="H3CE69A93EC134593BFF5F06715FCE27F"><enum>(2)</enum><text>in subsection (b)(1)(F)—</text>
<subparagraph id="HBD206917C11A41C880F712E60658B6D"><enum>(A)</enum><text>by striking <quote>paragraphs (2) and (3) of section 412(i)</quote> in clause (ii) and inserting <quote>subparagraphs (B) and (C) of section 412(d)(4)</quote>, and</text></subparagraph>
<subparagraph id="H81B65907602B42E68957E332009844D4"><enum>(B)</enum><text>by striking <quote>paragraphs (4), (5), and (6) of section 412(i)</quote> and inserting <quote>subparagraphs (D), (E), and (F) of section 412(d)(4)</quote>, and</text></subparagraph></paragraph>
<paragraph id="HF274E3423BDE4501979057002F81621D"><enum>(3)</enum><text>by striking <quote>section 412(c)(8)</quote> in subsection (d)(6)(A) and inserting <quote>section 412(e)(3)</quote>.</text></paragraph></subsection>
<subsection id="H23B832E994B84276981B9D8F8FFC7662"><enum>(c)</enum><header>Mergers and consolidations of plans</header><text>Subclause (I) of section 414(l)(2)(B)(i) of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H10112796C7584BEEB900009C90C5B888" style="OLC">
<subclause id="HE3AB9E5BFDD646E9B7C52EEBD362999"><enum>(I)</enum><text>the amount determined under section 431(c)(6)(A)(i) in the case of a multiemployer plan (and the sum of the target liability amount and target normal cost determined under section 430 in the case of any other plan), over</text></subclause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBD07B3901B8E48369E74C000B19C48C6" commented="no"><enum>(d)</enum><header>Transfer of excess pension assets to retiree health accounts</header><text></text>
<paragraph id="H1155A3C520504D60A091A9489EC9A2F3" commented="no"><enum>(1)</enum><text>Section 420(e)(2) of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H694F9074CBF2437991D780412C3CEB3" style="OLC">
<paragraph id="H09ABA0EB78E94122B877316EEBA93266"><enum>(2)</enum><header>Excess pension assets</header><text>The term <term>excess pension assets</term> means the excess (if any) of—</text>
<subparagraph id="H363683D488844BBA88A800BC22DDEB9"><enum>(A)</enum><text>the lesser of—</text>
<clause id="HE25DD43E2BA34B2698D357B49CAF5D83"><enum>(i)</enum><text>the fair market value of the plan’s assets (reduced by the pre-funding balance and the funding standard carryover balance, as determined under section 430(e)(1)), or</text></clause>
<clause id="H77DBB9898251466EB7E4D0381D05C21E"><enum>(ii)</enum><text>the value of plan assets as determined under section 430(e)(4) after reduction under section 430(e)(1), over</text></clause></subparagraph>
<subparagraph commented="no" id="HDE89E40F159B44150098EB8FD7CD3F"><enum>(B)</enum><text>125 percent of the sum of the target liability amount and the target normal cost determined under section 430 for such plan year.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H66E1A61E33B147CD9EF253573468ABF8" commented="no"><enum>(2)</enum><text>Section 420(e)(4) of such Code is amended to read as follows: </text>
<quoted-block display-inline="no-display-inline" id="HECDD3376D1014CBB858FA3ED5D1DC6CD" style="OLC">
<paragraph id="HAE4F134A8FF8438488BC6DB924251424"><enum>(4)</enum><header>Coordination with section 430</header><text>In the case of a qualified transfer, any assets so transferred shall not, for purposes of this section, be treated as assets in the plan.</text></paragraph><after-quoted-block>. </after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HED91E43FAE4C4BFFAE82CEB257C85F5"><enum>(e)</enum><header>Excise taxes</header>
<paragraph id="H5654B76A6ED84E4E913F720014F98DEF"><enum>(1)</enum><header>In general</header><text>Subsections (a) and (b) of section 4971 of such Code are amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H38E56941C711411B869DA3D028BF7EB7" style="OLC">
<subsection id="H8B83D30BDBD3433883852B7B00854F8E"><enum>(a)</enum><header>Initial tax</header><text>If at any time during any taxable year an employer maintains a plan to which section 412 applies, there is hereby imposed for the taxable year a tax equal to—</text>
<paragraph id="H803B92BEC34247BAAD43C38833A317C1"><enum>(1)</enum><text>in the case of a single-employer plan, 10 percent of the aggregate unpaid minimum required contributions for all plan years remaining unpaid as of the end of any plan year ending with or within the taxable year, and</text></paragraph>
<paragraph id="H0257228281D04D9498B654705131BEC"><enum>(2)</enum><text>in the case of a multiemployer plan, 5 percent of the accumulated funding deficiency determined under section 431 as of the end of any plan year ending with or within the taxable year.</text></paragraph></subsection>
<subsection id="H83F065C0382E4A788EF7466A480B83B"><enum>(b)</enum><header>Additional tax</header><text>If—</text>
<paragraph id="H79E17E8054B54EDA90812469FC898F66"><enum>(1)</enum><text>a tax is imposed under subsection (a)(1) on any unpaid required minimum contribution and such amount remains unpaid as of the close of the taxable period, or</text></paragraph>
<paragraph id="H13826EF19BC143B99C2F3F8B87DEEFB4"><enum>(2)</enum><text>a tax is imposed under subsection (a)(2) on any accumulated funding deficiency and the accumulated funding deficiency is not corrected within the taxable period,</text></paragraph><continuation-text continuation-text-level="subsection">there is hereby imposed a tax equal to 100 percent of the unpaid minimum required contribution or accumulated funding deficiency, whichever is applicable, to the extent not so paid or corrected.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H473B769245824A6E8E0307C0004DBD17"><enum>(2)</enum><text>Section 4971(c) of such Code is amended—</text>
<subparagraph id="H29ABAF3582584314A61CF9AAB9C2E632"><enum>(A)</enum><text>by striking <quote>the last two sentences of section 412(a)</quote> in paragraph (1) and inserting <quote>section 431</quote>, and</text></subparagraph>
<subparagraph id="H30F1ADD868A44E6683B8E877D39536AD"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H2CE25299C10145A9A2921520F17F415" style="OLC">
<paragraph id="HB4D01625216F4E349E972F79DD002487"><enum>(4)</enum><header>Unpaid minimum required contribution</header>
<subparagraph id="H124FB460024249C90000CD3D1B801360"><enum>(A)</enum><header>In general</header><text>The term <term>unpaid minimum required contribution</term> means, with respect to any plan year, any minimum required contribution under section 430 for the plan year which is not paid on or before the due date (as determined under section 430(i)(1)) for the plan year.</text></subparagraph>
<subparagraph id="H7D6D88FD4CCE4387BAC74085D460765C"><enum>(B)</enum><header>Ordering rule</header><text>Any payment to or under a plan for any plan year shall be allocated first to unpaid minimum required contributions for all preceding plan years on a first-in, first-out basis and then to the minimum required contribution under section 430 for the plan year.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HDD54846A370747F9B9CF523F595B824E"><enum>(3)</enum><text>Section 4971(e)(1) of such Code is amended by striking <quote>section 412(b)(3)(A)</quote> and inserting <quote>section 412(a)(1)(A)</quote>.</text></paragraph>
<paragraph id="H6F00055A29FC430EA8D556FA48C218B"><enum>(4)</enum><text>Section 4971(f)(1) of such Code is amended—</text>
<subparagraph id="HBC93D2DB5F87497886EFEDC322EC0255"><enum>(A)</enum><text>by striking <quote>section 412(m)(5)</quote> and inserting <quote>section 430(i)(4)</quote>, and</text></subparagraph>
<subparagraph id="H6BF3BB889DA54F0388CDB58763880781"><enum>(B)</enum><text>by striking <quote>section 412(m)</quote> and inserting <quote>section 430(i)</quote>.</text></subparagraph> </paragraph>
<paragraph commented="no" id="H40D67C25F67B41909061C266FFB93F00"><enum>(5)</enum><text>Section 4972(c)(7) of such Code is amended by striking <quote>except to the extent that such contributions exceed the full-funding limitation (as defined in section 412(c)(7), determined without regard to subparagraph (A)(i)(I) thereof)</quote> and inserting <quote>except, in the case of a multiemployer plan, to the extent that such contributions exceed the full-funding limitation (as defined in section 431(c)(6))</quote>.</text></paragraph></subsection>
<subsection commented="no" id="H3D2E33FB40B4429A9D11CC3403153C3B"><enum>(f)</enum><header>Reporting requirements</header><text>Section 6059(b) of such Code is amended—</text>
<paragraph commented="no" id="HA3D07238F06941558FDB71F53FFD8429"><enum>(1)</enum><text>by striking <quote>the accumulated funding deficiency (as defined in section 412(a))</quote> in paragraph (2) and inserting <quote>the minimum required contribution determined under section 430, or the accumulated funding deficiency determined under section 431,</quote>, and</text></paragraph>
<paragraph commented="no" id="HC44A0AB3920A49EABCD426AFFC1BDC30"><enum>(2)</enum><text>by striking paragraph (3)(B) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="H9CB4E75F7C354C5684C190457EADC631" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="HB1E2CE3CC32B4CBEAF257FEF383DB21D"><enum>(B)</enum><text>the requirements for reasonable actuarial assumptions under section 430(f)(1) or 431(c)(3), whichever are applicable, have been complied with.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section></subtitle>
<subtitle id="H6194FBD358A04785A8C6B402A5C800C"><enum>C</enum><header>Other provisions</header>
<section id="HDBC1161F762744D5ACAD4E89F896FB4F" section-type="subsequent-section" display-inline="no-display-inline"><enum>121.</enum><header>Modification of transition rule to pension funding requirements</header>
<subsection id="HC7057122F2A74317961CC09B30AECB6E"><enum>(a)</enum><header>In general</header><text>In the case of a plan that—</text>
<paragraph id="H199A508FE94243DC98E1D6442B737DC3"><enum>(1)</enum><text>was not required to pay a variable rate premium for the plan year beginning in 1996,</text></paragraph>
<paragraph id="H7AE74A31A29D46B6B2C9C2D57B20D84C"><enum>(2)</enum><text>has not, in any plan year beginning after 1995, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor); and</text></paragraph>
<paragraph id="HE492190CF5AD4BE88628962FE7050200"><enum>(3)</enum><text>is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service,</text> </paragraph><continuation-text continuation-text-level="subsection">the rules described in subsection (b) shall apply for any plan year beginning after 2005.</continuation-text></subsection>
<subsection id="H1E76703613104656B0EA9D33C5A59757"><enum>(b)</enum><header>Modified rules</header><text>The rules described in this subsection are as follows:</text>
<paragraph id="HDD7DC56C2EAE49D092E3EA9EFA23E22D"><enum>(1)</enum><text display-inline="yes-display-inline">For purposes of <external-xref legal-doc="usc" parsable-cite="usc/26/430">section 430(i)(3)</external-xref> of the Internal Revenue Code of 1986 and section 303(i)(3) of the Employee Retirement Income Security Act of 1974, the plan shall be treated as not having a funding shortfall for any plan year.</text></paragraph>
<paragraph id="H2372A5DCB8B44AAE00FD830653101580"><enum>(2)</enum><text>For purposes of—</text>
<subparagraph id="HFFEFD4ED46574905B62020A527545E73"><enum>(A)</enum><text>determining unfunded vested benefits under section 4006(a)(3)(E)(iii) of such Act, and</text></subparagraph>
<subparagraph id="HDC4D84F8AE3345F287E148B9F87B00D2"><enum>(B)</enum><text display-inline="yes-display-inline">determining any present value or making any computation under section 412 of such Code or section 302 of such Act,</text></subparagraph> <continuation-text continuation-text-level="paragraph">the mortality table shall be the mortality table used by the plan.</continuation-text></paragraph></subsection>
<subsection id="H1D0A57701A47496E006D71D3F7CA85D"><enum>(c)</enum><header>Conforming amendment</header>
<paragraph id="H019B0A0698924260AA417C6B96E8D828"><enum>(1)</enum><text>Section 769 of the Retirement Protection Act of 1994 is amended by striking subsection (c).</text></paragraph>
<paragraph id="H6840B80FFB9E42B5987D7CB6B7937D23"><enum>(2)</enum><text>The amendment made this subsection shall apply to plan years beginning after 2005.</text></paragraph></subsection></section>
<section id="H1E66156E7A414165B5DD2ECBD6EE74"><enum>122.</enum><header>Treatment of nonqualified deferred compensation plans when employer defined benefit plan in at-risk status</header>
<subsection id="HB5C9C85532C9465C98A1007FAACF44C5"><enum>(a)</enum><header>In general</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/409A">section 409A</external-xref> of the Internal Revenue Code of 1986 (providing rules relating to funding) is amended by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively, and by inserting after paragraph (2) the following new paragraph:</text>
<quoted-block style="OLC" id="H7043992427384A778ED690B41FD5CC2D" display-inline="no-display-inline">
<paragraph id="H7945B4869DB34EDA9BA0A394FC383179"><enum>(3)</enum><header>Employer’s defined benefit plan in at-risk status</header><text display-inline="yes-display-inline">In the case of a plan to which section 412 applies, if—</text>
<subparagraph id="H64DAEAE86AF349D8A8C200D1056DEF11"><enum>(A)</enum><text display-inline="yes-display-inline">during any period in which any defined benefit plan of an employer is in an at-risk status (as defined in section 412(g)(3)), assets are set aside (directly or indirectly) in a trust (or other arrangement determined by the Secretary), or transferred to such a trust or other arrangement, for purposes of paying deferred compensation under a nonqualified deferred compensation plan of the employer, or </text></subparagraph>
<subparagraph id="H4040890844FE4C0192F73BC27B7F8B11"><enum>(B)</enum><text display-inline="yes-display-inline">a nonqualified deferred compensation plan of the employer provides that assets will become restricted to the provision of benefits under the plan in connection with such at-risk status (or other similar financial measure determined by the Secretary) of the defined benefit plan, or assets are so restricted,</text></subparagraph><continuation-text continuation-text-level="paragraph">such assets shall for purposes of section 83 be treated as property transferred in connection with the performance of services whether or not such assets are available to satisfy claims of general creditors.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9ED3745719AC417DAB269169DBA47700"><enum>(b)</enum><header>Conforming amendments</header><text>Paragraphs (4) and (5) of section 409A(b) of such Code, as redesignated by subsection (a) of this subsection, are each amended by striking <quote>paragraph (1) or (2)</quote> each place it appears and inserting <quote>paragraph (1), (2), or (3)</quote>.</text></subsection>
<subsection id="HCCF344036C7B4F66A2387E7B5D8EDEC3"><enum>(c)</enum><header> Effective date</header><text>The amendments made by this section shall take effect on January 1, 2006.</text></subsection></section> </subtitle>
<enum>II</enum><header>Funding rules for multiemployer defined benefit plans</header>
<subtitle id="H9B9CB50B4BA746FE8140CC6EAB727A7"><enum>A</enum><header>Amendments to Employee Retirement Income Security Act of 1974</header>
<section id="HB674556B26484F57B956EA03EC2B6685" display-inline="no-display-inline" section-type="subsequent-section"><enum>201.</enum><header>Funding rules for multiemployer defined benefit plans</header>
<subsection id="H47612345496C42019BEE6C91388E3227"><enum>(a)</enum><header>In general</header><text>Part 3 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as amended by section 102) is amended further by inserting after section 303 the following new section:</text>
<quoted-block style="traditional" id="HDBD0880A05DE449E95C7A0A59CA8D5BD" display-inline="no-display-inline">
<section id="H5DF34B28733C454FB36BFFCAA3974BF3"><enum>304.</enum><header>Minimum funding standards for multiemployer plans</header>
<subsection id="H642CD200CD8945B9A9BF5D821C07EFE2" display-inline="yes-display-inline"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of section 302, the accumulated funding deficiency of a multiemployer plan for any plan year is—</text>
<paragraph id="H47C358BD3B154C1F9D1F05246F07FCC8"><enum>(1)</enum><text>except as provided in paragraph (2), the amount, determined as of the end of the plan year, equal to the excess (if any) of the total charges to the funding standard account of the plan for all plan years (beginning with the first plan year for which this part applies to the plan) over the total credits to such account for such years, and</text></paragraph>
<paragraph id="H80112A9AF21641B5BF830700B4325245" commented="no"><enum>(2)</enum><text>if the multiemployer plan is in reorganization for any plan year, the accumulated funding deficiency of the plan determined under section 4243.</text></paragraph></subsection>
<subsection id="HB56647FF0DBA45C280B81EB5E5088CC3"><enum>(b)</enum><header>Funding standard account</header>
<paragraph id="H9A4BB7CFF4AD49378203DCD23C9084CF"><enum>(1)</enum><header>Account required</header><text>Each multiemployer plan to which this part applies shall establish and maintain a funding standard account. Such account shall be credited and charged solely as provided in this section.</text></paragraph>
<paragraph id="H00B9C1CEB7C64B328D052853D4B771DE"><enum>(2)</enum><header>Charges to account</header><text>For a plan year, the funding standard account shall be charged with the sum of—</text>
<subparagraph id="H44C5F3516F4B4CFDB7B083BDCCA36D69"><enum>(A)</enum><text>the normal cost of the plan for the plan year,</text></subparagraph>
<subparagraph id="H0C45CCD2FC8344EB851689C05353DE7B"><enum>(B)</enum><text>the amounts necessary to amortize in equal annual installments (until fully amortized)—</text>
<clause id="H9A673DC9CF574CF3987F4466AF32E9FB"><enum>(i)</enum><text>in the case of a plan in existence on January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 40 plan years,</text></clause>
<clause id="HE4F3008C91844178AA474BFDE4F13EBD"><enum>(ii)</enum><text>in the case of a plan which comes into existence after January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 15 plan years,</text></clause>
<clause id="HFD8DED12645447E78D34A24916A5EEC5"><enum>(iii)</enum><text>separately, with respect to each plan year, the net increase (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 15 plan years,</text></clause>
<clause id="H7E332886392443D4AD9CBD35B1C6ACE8"><enum>(iv)</enum><text>separately, with respect to each plan year, the net experience loss (if any) under the plan, over a period of 15 plan years, and</text></clause>
<clause id="H3EC02FB4FA514781A95E55B869AEA5D2"><enum>(v)</enum><text>separately, with respect to each plan year, the net loss (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 15 plan years,</text></clause></subparagraph>
<subparagraph id="H5315CEEEDD5E46B29B21AAEED01D80B3"><enum>(C)</enum><text>the amount necessary to amortize each waived funding deficiency (within the meaning of section 302(c)(3)) for each prior plan year in equal annual installments (until fully amortized) over a period of 15 plan years,</text></subparagraph>
<subparagraph id="H82CC934B482E48EF9EEB006691BDC6DD"><enum>(D)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 5 plan years any amount credited to the funding standard account under section 302(b)(3)(D) (as in effect on the day before the date of the enactment of this section), and</text></subparagraph>
<subparagraph id="H9B8788FABD1444AEB63597F700BE4D52" commented="no"><enum>(E)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 20 years the contributions which would be required to be made under the plan but for the provisions of section 302(c)(7)(A)(i)(I) (as in effect on the day before the date of the enactment of this section).</text></subparagraph></paragraph>
<paragraph id="HDA6C14BD07CD4C33B655EA58FD17CED"><enum>(3)</enum><header>Credits to account</header><text>For a plan year, the funding standard account shall be credited with the sum of—</text>
<subparagraph id="H598DAC8F14CB432DA759DEC85DAF028"><enum>(A)</enum><text>the amount considered contributed by the employer to or under the plan for the plan year,</text></subparagraph>
<subparagraph id="HD411B1BB24BE49C1B837EFEE94EB9600"><enum>(B)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized)—</text>
<clause id="HAD25F27982A6465A8319F754C1CE9206"><enum>(i)</enum><text>separately, with respect to each plan year, the net decrease (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 15 plan years,</text></clause>
<clause id="HBD4A75060409445FB962BE5BE0AAFD54"><enum>(ii)</enum><text>separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 15 plan years, and</text></clause>
<clause id="H71999888C2A1445D898F801663577C23"><enum>(iii)</enum><text>separately, with respect to each plan year, the net gain (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 15 plan years,</text></clause></subparagraph>
<subparagraph id="HC1C578E57DBB4C8399002C4E22FA2C43"><enum>(C)</enum><text>the amount of the waived funding deficiency (within the meaning of section 302(c)(3)) for the plan year, and</text></subparagraph>
<subparagraph id="H7AE87864D4AE478FB65D7FB83285D544"><enum>(D)</enum><text>in the case of a plan year for which the accumulated funding deficiency is determined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the alternative minimum funding standard under section 305 (as in effect on the day before the date of the enactment of this section), the excess (if any) of any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit balance in the alternative minimum funding standard account.</text></subparagraph></paragraph>
<paragraph id="HA12AEA9F8AF74B0CA823C19004002F9"><enum>(4)</enum><header>Special rule for amounts first amortized to plan years before 2006</header><text>In the case of any amount amortized under section 302(b) (as in effect before the date of the enactment of <short-title>Pension Protection Act of 2005</short-title>) over any period beginning with a plan year beginning before 2006, in lieu of the amortization described in paragraphs (2)(B) and (3)(B), such amount shall continue to be amortized under such section as so in effect.</text></paragraph>
<paragraph id="H9AB4B30127C24092B76060DE34857237"><enum>(5)</enum><header>Combining and offsetting amounts to be amortized</header><text>Under regulations prescribed by the Secretary of the Treasury, amounts required to be amortized under paragraph (2) or paragraph (3), as the case may be—</text>
<subparagraph id="H4E013D96638E47C79831C027FE7EE52"><enum>(A)</enum><text>may be combined into one amount under such paragraph to be amortized over a period determined on the basis of the remaining amortization period for all items entering into such combined amount, and</text></subparagraph>
<subparagraph id="H8CD6B52C097B4B4CB122CD68ED3C31B0"><enum>(B)</enum><text>may be offset against amounts required to be amortized under the other such paragraph, with the resulting amount to be amortized over a period determined on the basis of the remaining amortization periods for all items entering into whichever of the two amounts being offset is the greater.</text></subparagraph></paragraph>
<paragraph id="H18483EFDFE0649EAB42CE87092295570"><enum>(6)</enum><header>Interest</header><text>The funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary of the Treasury) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.</text></paragraph>
<paragraph id="H573455AB4F5D4CACB108A43493A05B04"><enum>(7)</enum><header>Certain amortization charges and credits</header><text>In the case of a plan which, immediately before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, was a multiemployer plan (within the meaning of section 3(37) as in effect immediately before such date)—</text>
<subparagraph id="H0FAB4B25CECA490ABD407B53695F2925"><enum>(A)</enum><text>any amount described in paragraph (2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the amount arose;</text></subparagraph>
<subparagraph id="HAD71DA105E264EFCAC1F327EDD793E9D"><enum>(B)</enum><text>any amount described in paragraph (2)(B)(iv) or (3)(B)(ii) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 20 plan years, beginning with the plan year in which the amount arose;</text></subparagraph>
<subparagraph id="H8B941332399F47CA0080BC4708D417F"><enum>(C)</enum><text>any change in past service liability which arises during the period of 3 plan years beginning on or after such date, and results from a plan amendment adopted before such date, shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises; and</text></subparagraph>
<subparagraph id="H7DCA2A82E5AF4720B5A1D212E67962AB"><enum>(D)</enum><text>any change in past service liability which arises during the period of 2 plan years beginning on or after such date, and results from the changing of a group of participants from one benefit level to another benefit level under a schedule of plan benefits which—</text>
<clause id="H6569B72B5F754BAEAF19B2AA1D30F67E"><enum>(i)</enum><text>was adopted before such date, and</text></clause>
<clause id="HDD6EF7A12A9146B000331FABECCD86C4"><enum>(ii)</enum><text>was effective for any plan participant before the beginning of the first plan year beginning on or after such date,</text></clause><continuation-text continuation-text-level="subparagraph">shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises.</continuation-text></subparagraph></paragraph>
<paragraph id="H39F10957ABD74FD99751FC032064D6D"><enum>(8)</enum><header>Special rules relating to charges and credits to funding standard account</header><text>For purposes of this part—</text>
<subparagraph id="HAB14A99E7A0149FB8D2FB2C697689164"><enum>(A)</enum><header>Withdrawal liability</header><text>Any amount received by a multiemployer plan in payment of all or part of an employer's withdrawal liability under part 1 of subtitle E of title IV shall be considered an amount contributed by the employer to or under the plan. The Secretary of the Treasury may prescribe by regulation additional charges and credits to a multiemployer plan's funding standard account to the extent necessary to prevent withdrawal liability payments from being unduly reflected as advance funding for plan liabilities.</text></subparagraph>
<subparagraph id="H7D00C718DFC1495C879D2F4400F63402"><enum>(B)</enum><header>Adjustments when a multiemployer plan leaves reorganization</header><text>If a multiemployer plan is not in reorganization in the plan year but was in reorganization in the immediately preceding plan year, any balance in the funding standard account at the close of such immediately preceding plan year—</text>
<clause id="HFE7FC3B4C6B84C3D90EF60DAA02265A2"><enum>(i)</enum><text>shall be eliminated by an offsetting credit or charge (as the case may be), but</text></clause>
<clause id="H7519BA5194D743F0A38B2CB09613E3A2"><enum>(ii)</enum><text>shall be taken into account in subsequent plan years by being amortized in equal annual installments (until fully amortized) over 30 plan years.</text></clause><continuation-text continuation-text-level="subparagraph">The preceding sentence shall not apply to the extent of any accumulated funding deficiency under section 4243(a) as of the end of the last plan year that the plan was in reorganization.</continuation-text></subparagraph>
<subparagraph id="H30D99A2A163544C4932260D13267EF24"><enum>(C)</enum><header>Plan payments to supplemental program or withdrawal liability payment fund</header><text>Any amount paid by a plan during a plan year to the Pension Benefit Guaranty Corporation pursuant to section 4222 of this Act or to a fund exempt under <external-xref legal-doc="usc" parsable-cite="usc/26/501">section 501(c)(22)</external-xref> of the Internal Revenue Code of 1986 pursuant to section 4223 of this Act shall reduce the amount of contributions considered received by the plan for the plan year.</text></subparagraph>
<subparagraph id="HF7F42769B15C430082C24BD635AC83EA"><enum>(D)</enum><header>Interim withdrawal liability payments</header><text>Any amount paid by an employer pending a final determination of the employer's withdrawal liability under part 1 of subtitle E of title IV and subsequently refunded to the employer by the plan shall be charged to the funding standard account in accordance with regulations prescribed by the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="H2FFA2906696B4F808733494CA6FE9055"><enum>(E)</enum><header>Election for deferral of charge for portion of net experience loss</header><text>If an election is in effect under section 302(b)(7)(F) (as in effect on the day before the date of the enactment of this section) for any plan year, the funding standard account shall be charged in the plan year to which the portion of the net experience loss deferred by such election was deferred with the amount so deferred (and paragraph (2)(B)(iv) shall not apply to the amount so charged). </text></subparagraph>
<subparagraph id="HB268129DC33D44A3B27DFA12582D00C2"><enum>(F)</enum><header>Financial assistance</header><text>Any amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this section and section 412 in such manner as is determined by the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="H40023042C9B741840075C48F3E179DD1"><enum>(G)</enum><header>Short-term benefits</header><text>To the extent that any plan amendment increases the unfunded past service liability under the plan by reason of an increase in benefits which are payable under the plan during a period that does not exceed 14 years, paragraph (2)(B)(iii) shall be applied separately with respect to such increase in unfunded past service liability by substituting the number of years of the period during which such benefits are payable for <quote>15</quote>. </text></subparagraph></paragraph></subsection>
<subsection id="H6D0B937B9CA64E3C88AB73EF04D50090"><enum>(c)</enum><header>Additional rules</header><text></text>
<paragraph id="HAA4990CDFF33424796F3A020F923C9FA"><enum>(1)</enum><header>Determinations to be made under funding method</header><text>For purposes of this part, normal costs, accrued liability, past service liabilities, and experience gains and losses shall be determined under the funding method used to determine costs under the plan.</text></paragraph>
<paragraph id="HBBBBFDC056E74F90A2E6435CB77969B6"><enum>(2)</enum><header>Valuation of assets</header>
<subparagraph id="H620EF648861C44D7AC34A82BE26012AA"><enum>(A)</enum><header>In general</header><text>For purposes of this part, the value of the plan's assets shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="H00A3003B37A14FA8A3F9932A41E0593"><enum>(B)</enum><header>Election with respect to bonds</header><text>The value of a bond or other evidence of indebtedness which is not in default as to principal or interest may, at the election of the plan administrator, be determined on an amortized basis running from initial cost at purchase to par value at maturity or earliest call date. Any election under this subparagraph shall be made at such time and in such manner as the Secretary of the Treasury shall by regulations provide, shall apply to all such evidences of indebtedness, and may be revoked only with the consent of such Secretary.</text></subparagraph></paragraph>
<paragraph id="H7B30DED36E7A47E98450FC26DD480A5"><enum>(3)</enum><header>Actuarial assumptions must be reasonable</header><text>For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods—</text>
<subparagraph id="HAEA9F2E456314D50A9193D58D0CE06D3"><enum>(A)</enum><text>which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations), and</text></subparagraph>
<subparagraph id="H6A6C0E3A51B846979BEA330992695826"><enum>(B)</enum><text>which, in combination, offer the actuary's best estimate of anticipated experience under the plan.</text></subparagraph></paragraph>
<paragraph id="H1B9F63E6C30E4F499E00E28026825463"><enum>(4)</enum><header>Treatment of certain changes as experience gain or loss</header><text>For purposes of this section, if—</text>
<subparagraph id="HB85D95C174824C4EA6D967ED685659F7"><enum>(A)</enum><text>a change in benefits under the Social Security Act or in other retirement benefits created under Federal or State law, or</text></subparagraph>
<subparagraph id="H0FE7709C6AD346CDAB391C7257E62099"><enum>(B)</enum><text>a change in the definition of the term <term>wages</term> under <external-xref legal-doc="usc" parsable-cite="usc/26/3121">section 3121</external-xref> of the Internal Revenue Code of 1986, or a change in the amount of such wages taken into account under regulations prescribed for purposes of section 401(a)(5) of such Code,</text></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">results in an increase or decrease in accrued liability under a plan, such increase or decrease shall be treated as an experience loss or gain. </continuation-text></paragraph>
<paragraph id="H56126CC6917C43A4AD7D00AB37005831"><enum>(5)</enum><header>Full funding</header><text>If, as of the close of a plan year, a plan would (without regard to this paragraph) have an accumulated funding deficiency in excess of the full funding limitation—</text>
<subparagraph id="HF0CAB45ED67E43A79F08C2FCE93941F9"><enum>(A)</enum><text>the funding standard account shall be credited with the amount of such excess, and</text></subparagraph>
<subparagraph id="HAF41136BA7584DA186C191F68F2000E"><enum>(B)</enum><text>all amounts described in subparagraphs (B), (C), and (D) of paragraph (2) and subparagraph (B) of subsection (b)(3) which are required to be amortized shall be considered fully amortized for purposes of such subparagraphs.</text></subparagraph></paragraph>
<paragraph id="H8DAB451D796143C9BE83A3BE473B469"><enum>(6)</enum><header>Full-funding limitation</header>
<subparagraph id="HE5129AFCCD8B460E96A983689554C5B9"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (5), the term <term>full-funding limitation</term> means the excess (if any) of—</text>
<clause id="H1EFBD8BE06914FAC00B547B74B78240"><enum>(i)</enum><text>the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over</text></clause>
<clause id="HF76D40F5F5BA4971ABE92F9E14CA2E1F"><enum>(ii)</enum><text>the lesser of—</text>
<subclause id="HA6651117E8EC4785A40863E88B164F35"><enum>(I)</enum><text>the fair market value of the plan's assets, or</text></subclause>
<subclause id="H334A9081F12D486C9D33BE4C9055AE82"><enum>(II)</enum><text>the value of such assets determined under paragraph (2).</text></subclause></clause></subparagraph>
<subparagraph id="HFACA3F10EE6845A0BF17395D386918B6"><enum>(B)</enum><header>Minimum amount</header>
<clause id="HDAA47473E0DB4FB59922E48642B8201"><enum>(i)</enum><header>In general</header><text>In no event shall the full-funding limitation determined under subparagraph (A) be less than the excess (if any) of—</text>
<subclause id="HC064B1DBA92A443E96C7F086DAB3FE39"><enum>(I)</enum><text>90 percent of the current liability of the plan (including the expected increase in current liability due to benefits accruing during the plan year), over</text></subclause>
<subclause id="H6DBEDABBBF3B4BB0A3B56052A51CC87E"><enum>(II)</enum><text>the value of the plan's assets determined under paragraph (2).</text></subclause></clause>
<clause id="H8252229F06754EADB4E84D605C792F6"><enum>(ii)</enum><header>Assets</header><text>For purposes of clause (i), assets shall not be reduced by any credit balance in the funding standard account.</text></clause></subparagraph>
<subparagraph id="H2B7FA79B7F8B49F8A5920846CB40DBB5"><enum>(C)</enum><header>Current liability</header><text>For purposes of this paragraph—</text>
<clause id="H9D109D0B60DF4AFA818100A020021553"><enum>(i)</enum><header>In general</header><text>The term <term>current liability</term> means all liabilities to employees and their beneficiaries under the plan.</text></clause>
<clause id="H4E3F5E4DBDFD42A9AF88EA6CA94EF318"><enum>(ii)</enum><header>Treatment of unpredictable contingent event benefits</header><text>For purposes of clause (i), any benefit contingent on an event other than—</text>
<subclause id="H7464E58213924EC1B651B229FB02CFE"><enum>(I)</enum><text>age, service, compensation, death, or disability, or</text></subclause>
<subclause id="H11AC21BC9E124F7D9EEC2E4E8859B03D"><enum>(II)</enum><text>an event which is reasonably and reliably predictable (as determined by the Secretary of the Treasury),</text></subclause><continuation-text continuation-text-level="clause">shall not be taken into account until the event on which the benefit is contingent occurs.</continuation-text></clause>
<clause id="H67374884DF7C497494F73600BA6FB3"><enum>(iii)</enum><header>Interest rate used</header><text>The rate of interest used to determine current liability under this paragraph shall be the rate of interest determined under subparagraph (D).</text></clause>
<clause id="HC50453A0D4B34210BAF68B99075B002E"><enum>(iv)</enum><header>Mortality tables</header>
<subclause id="H06ABD18243D548F7A0C8846604B41705"><enum>(I)</enum><header>Commissioners' standard table</header><text>In the case of plan years beginning before the first plan year to which the first tables prescribed under subclause (II) apply, the mortality table used in determining current liability under this paragraph shall be the table prescribed by the Secretary of the Treasury which is based on the prevailing commissioners' standard table (described in <external-xref legal-doc="usc" parsable-cite="usc/26/807">section 807(d)(5)(A)</external-xref> of the Internal Revenue Code of 1986) used to determine reserves for group annuity contracts issued on January 1, 1993.</text></subclause>
<subclause id="H0DB32A39E878408DB78DCC9014064762"><enum>(II)</enum><header>Secretarial authority</header><text>The Secretary of the Treasury may by regulation prescribe for plan years beginning after December 31, 1999, mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, such Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.</text></subclause></clause>
<clause id="H6E599CFCF2984A2B90A71937BDB700F6"><enum>(v)</enum><header>Separate mortality tables for the disabled</header><text>Notwithstanding clause (iv)—</text>
<subclause id="H5C8A52B73CC04E09A822E6239DC78548"><enum>(I)</enum><header>In general</header><text>In the case of plan years beginning after December 31, 1995, the Secretary of the Treasury shall establish mortality tables which may be used (in lieu of the tables under clause (ii)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. Such Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before January 1, 1995, and for individuals whose disabilities occur in plan years beginning on or after such date.</text></subclause>
<subclause id="HEA8D3CFE514840879C6E2347DCCA08C1"><enum>(II)</enum><header>Special rule for disabilities occurring after 1994</header><text>In the case of disabilities occurring in plan years beginning after December 31, 1994, the tables under subclause (I) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.</text></subclause></clause>
<clause id="H79A791C4BE3344538B40AE6002089097"><enum>(vi)</enum><header>Periodic review</header><text>The Secretary of the Treasury shall periodically (at least every 5 years) review any tables in effect under this subparagraph and shall, to the extent such Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.</text></clause></subparagraph>
<subparagraph id="H741BDF1EBB1A47DA001D742801009863"><enum>(D)</enum><header>Required change of interest rate</header><text>For purposes of determining a plan's current liability for purposes of this paragraph—</text>
<clause id="H1D55505BB6A344C888E499CC21D235A3"><enum>(i)</enum><header>In general</header><text>If any rate of interest used under the plan under subsection (b)(5) to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range.</text></clause>
<clause id="H0E5C594FD426493FA46B7900668ED935"><enum>(ii)</enum><header>Permissible range</header><text>For purposes of this subparagraph—</text>
<subclause id="HBD2B5874D91F40C497164D9D11B2408C"><enum>(I)</enum><header>In general</header><text>Except as provided in subclause (II), the term <term>permissible range</term> means a rate of interest which is not more than 5 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year.</text></subclause>
<subclause id="HA69756E5AC0442DBBF84DB8ED0EA7978"><enum>(II)</enum><header>Secretarial authority</header><text>If the Secretary of the Treasury finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, such Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under such subclause.</text></subclause></clause>
<clause id="H899B482FBE264B5B8FFFD6056B00615E"><enum>(iii)</enum><header>Assumptions</header><text>Notwithstanding paragraph (3)(A), the interest rate used under the plan shall be—</text>
<subclause id="H549AFCA294C24ECA86AE8DB612D2F41"><enum>(I)</enum><text>determined without taking into account the experience of the plan and reasonable expectations, but</text></subclause>
<subclause id="H4199A0D2CFCA4CDCB117FB4F3605CD2C" commented="no" display-inline="no-display-inline"><enum>(II)</enum><text>consistent with the assumptions which reflect the purchase rates which would be used by insurance companies to satisfy the liabilities under the plan.</text></subclause></clause></subparagraph>
<subparagraph id="H1413A5BA047445D5958448B653FAA21F"><enum>(E)</enum><header>Full funding limitation</header><text>For purposes of this paragraph, unless otherwise provided by the plan, the accrued liability under a multiemployer plan shall not include benefits which are not nonforfeitable under the plan after the termination of the plan (taking into consideration <external-xref legal-doc="usc" parsable-cite="usc/26/411">section 411(d)(3)</external-xref> of the Internal Revenue Code of 1986).</text></subparagraph></paragraph>
<paragraph id="HE8F374B517D54B229D088100401339B4"><enum>(7)</enum><header>Annual valuation</header>
<subparagraph id="H2F012BBE0CB649599F777FB7334E567D"><enum>(A)</enum><header>In general</header><text>For purposes of this section, a determination of experience gains and losses and a valuation of the plan's liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary of the Treasury.</text></subparagraph>
<subparagraph id="HA41217808E3D4C91AA1C1F7C195500D4"><enum>(B)</enum><header>Valuation date</header>
<clause id="HEA632B6102464E969BE965BEB099698B"><enum>(i)</enum><header>Current year</header><text>Except as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year.</text></clause>
<clause id="H01E18D9BB79D490E92D6B67FDEDC39D1"><enum>(ii)</enum><header>Use of prior year valuation</header><text>The valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 100 percent of the plan's current liability (as defined in paragraph (6)(C) without regard to clause (iv) thereof).</text></clause>
<clause id="HE64C339865714D76A5F2DDFAAC4C253"><enum>(iii)</enum><header>Adjustments</header><text>Information under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.</text></clause>
<clause id="HC9DBEF4B206343B5A8B774B12131956F"><enum>(iv)</enum><header>Limitation</header><text>A change in funding method to use a prior year valuation, as provided in clause (ii), may not be made unless as of the valuation date within the prior plan year, the value of the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (6)(C) without regard to clause (iv) thereof).</text></clause></subparagraph></paragraph>
<paragraph id="H14034DA63A98468399E5A6B8B8AFC597"><enum>(8)</enum><header>Time when certain contributions deemed made</header><text>For purposes of this section, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary of the Treasury.</text></paragraph></subsection>
<subsection id="H12AF2723BC444C390078C7D31DF51FBE" display-inline="no-display-inline"><enum>(d)</enum><header>Extension of amortization periods for multiemployer plans</header><text>In the case of a multiemployer plan—</text>
<paragraph id="H1248EF0FA48D4B37806DD38D7E3E14E0"><enum>(1)</enum><header>Automatic extension</header><text>The Secretary of the Treasury shall, upon application and subject to the requirements of paragraph (4), extend the period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of the plan for a period of time not in excess of 5 years. </text></paragraph>
<paragraph id="H0E4BD953BDDF4772B4C8503BAF1C6ED2"><enum>(2)</enum><header>Extension for cause</header><text>The period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of any multiemployer plan may be extended (in addition to any extension under paragraph (1)) by the Secretary of the Treasury for a period of time (not in excess of 5 years) if he determines that such extension would carry out the purposes of this Act and would provide adequate protection for participants under the plan and their beneficiaries and if he determines that the failure to permit such extension would—</text>
<subparagraph id="HC154239F07AD42AF80FCEF72D26961C"><enum>(A)</enum><text>result in—</text>
<clause id="HCDB827544E8C482CB26656818C5CAA77"><enum>(i)</enum><text>a substantial risk to the voluntary continuation of the plan, or</text></clause>
<clause id="H87F9807820144660A209F1F87989EEB6"><enum>(ii)</enum><text>a substantial curtailment of pension benefit levels or employee compensation, and</text></clause></subparagraph>
<subparagraph id="H5046DEDE3D2743F4A2D5433257C662F0"><enum>(B)</enum><text>be adverse to the interests of plan participants in the aggregate.</text></subparagraph></paragraph>
<paragraph id="HFFA6BA2BAFA243B1BB997285E814D611" display-inline="no-display-inline"><enum>(3)</enum><header>Interest rate</header><text display-inline="yes-display-inline">The interest rate applicable for any plan year under any arrangement entered into by the Secretary of the Treasury in connection with an extension granted under this subsection shall be the greater of—</text>
<subparagraph id="HC2136DC4F2CF4B5FAF99005EEBD86CCE"><enum>(A)</enum><text>150 percent of the Federal mid-term rate (as in effect under <external-xref legal-doc="usc" parsable-cite="usc/26/1274">section 1274</external-xref> of the Internal Revenue Code of 1986 for the 1st month of such plan year), or</text></subparagraph>
<subparagraph id="HBDA494CE81F04AEC964065AF5F5F6258"><enum>(B)</enum><text>the rate of interest used under the plan for determining costs.</text></subparagraph></paragraph>
<paragraph id="H3032AF3409F84F18868108EDB45C202B" commented="no"><enum>(4)</enum><header>Required notice</header>
<subparagraph id="HFF52D391D5DE4E14B31FAABAF4026300" commented="no"><enum>(A)</enum><header>In general</header><text>The Secretary of the Treasury shall, before granting an extension under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such extension to each employee organization representing employees covered by the affected plan and to the Pension Benefit Guaranty Corporation.</text></subparagraph>
<subparagraph id="H8D1862E8F5DB4883A0F550517993F232" commented="no"><enum>(B)</enum><header>Consideration of relevant information</header><text>The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).</text></subparagraph></paragraph></subsection>
<subsection id="H006F0BE4093741E7B13F70CF75F420E5"><enum>(e)</enum><header>Restriction on plan amendments</header>
<paragraph id="H8E70E26C162447AA003EBC00D4721F3D" display-inline="no-display-inline"><enum>(1)</enum><header>In general</header><text>No amendment of a multiemployer plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under section 302(c) or an extension of time under subsection (d) is in effect with respect to the plan, or if a plan amendment described in section 302(d)(2) has been made at any time in the preceding 24 months. If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.</text></paragraph>
<paragraph id="H6F209A092EE24E559EC2BF712EF9200"><enum>(2)</enum><header>Exception</header><text>Paragraph (1) shall not apply to any plan amendment which—</text>
<subparagraph id="H251F7000CB1F417DA8EE92B17D3BCBE7"><enum>(A)</enum><text>the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,</text></subparagraph>
<subparagraph id="H517F15F7BDE149C98F757506372C535D"><enum>(B)</enum><text>only repeals an amendment described in section 302(d)(2), or</text></subparagraph>
<subparagraph id="HF1627B276D4D4FE9B8B934DB122BAB46"><enum>(C)</enum><text>is required as a condition of qualification under part I of subchapter D, of chapter 1, of the Internal Revenue Code of 1986.</text></subparagraph></paragraph></subsection></section> <after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA7853463A4E44CDB90BD4BF7C7B1767F"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HE54F13E43D574CD187BE9515AA27E866" display-inline="no-display-inline"><enum>(1)</enum><text>Section 301 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1081">29 U.S.C. 1081</external-xref>) is amended by striking subsection (d).</text></paragraph>
<paragraph id="HFDED9B61DF13400798F8A6DB71E345B"><enum>(2)</enum><text>The table of contents in section 1 of such Act (as amended by section 102 of this Act) is amended further by inserting after the item relating to section 303 the following new item:</text>
<quoted-block style="traditional" id="HC8B04F369DF545F0BEC8EDDB970951D7" display-inline="no-display-inline">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 304. Minimum funding standards for multiemployer plans</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H694921B2DFE549DDBE81E98C8E77A0F8"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text> </subsection></section>
<section id="H6E36E9596EA64FE2BD8F74F8983D0768" section-type="subsequent-section"><enum>202.</enum><header>Additional funding rules for multiemployer plans in endangered or critical status</header>
<subsection id="HBC5A1D3B51324719A80097B556A7992F"><enum>(a)</enum><header>In general</header><text>Part 3 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as amended by the preceding provisions of this Act) is amended further by inserting after section 304 the following new section:</text>
<quoted-block style="traditional" id="H8277008066D04CE994288EFE8E877F11" display-inline="no-display-inline">
<section id="HDF257BC8E11C4DA7B1B8F4BBE0952BC"><enum>305.</enum><header>Additional funding rules for multiemployer plans in endangered status or critical status</header>
<subsection id="H6C5824F080F9466EAC4B4049E8D10071" display-inline="yes-display-inline"><enum>(a)</enum><header>Annual certification by plan actuary</header>
<paragraph id="HE52C7B3E5FBC42CFB906B034398B29DB"><enum>(1)</enum><header>In general</header><text>During the 90-day period beginning on first day of each plan year of a multiemployer plan, the plan actuary of shall certify to the Secretary of the Treasury whether or not the plan is in endangered status for such plan year and whether or not the plan is in critical status for such plan year.</text></paragraph>
<paragraph id="H21BDEC78BAB34A5E891485097EE1F503"><enum>(2)</enum><header>Actuarial projections of assets and liabilities</header>
<subparagraph id="HF946CA2255ED4363A84B79F30078ED99"><enum>(A)</enum><header>In general</header><text>In making the determinations under paragraph (1), the plan actuary shall make projections under subsections (b)(2) and (c)(2) for the current and succeeding plan years, using reasonable actuarial assumptions and methods, of the current value of the assets of the plan and the present value of all liabilities to participants and beneficiaries under the plan for the current plan year as of the beginning of such year, as set forth in the actuarial statement prepared for the preceding plan year under section 103(d).</text></subparagraph>
<subparagraph id="HBB8486F1AF654891B400D11C0049D581" display-inline="no-display-inline"><enum>(B)</enum><header>Determinations of future contributions</header><text>Any such actuarial projection of plan assets shall assume—</text>
<clause id="H1420EE6AA9414FBDBE3CC82F3E8840A3"><enum>(i)</enum><text>reasonably anticipated employer and employee contributions for the current and succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year continue in effect for succeeding plan years, or</text></clause>
<clause id="HF7E6DE06A38D4E318BAE1FC097F426B8"><enum>(ii)</enum><text>employer and employee contributions projected for the current and succeeding plan years under the terms of such collective bargaining agreements (assuming the continued application of such terms indefinitely to such plan years), but only if the plan actuary determines there have been no significant demographic changes that would make continued application of such terms unreasonable.</text></clause></subparagraph> </paragraph>
<paragraph id="H3B433C244A8340B59300450878884F16" commented="no"><enum>(3)</enum><header>Presumed status in absence of timely actuarial certification</header><text display-inline="yes-display-inline">If certification under this subsection is not made before the end of the 90-day period specified in paragraph (1), the plan shall be presumed to be in critical status for such plan year until such time as the actuary makes a contrary certification.</text></paragraph>
<paragraph id="H7AA323D120D44A3AAAD7CE1EAC4ED81D" display-inline="no-display-inline"><enum>(4)</enum><header>Notice</header><text>In any case in which a multiemployer plan is certified to be in endangered or critical status for a plan year under paragraph (1), is presumed to be in critical status under paragraph (3), or is deemed to be in critical status under subsection (b)(7), the plan sponsor shall, not later than 30 days after the date of the certification, presumption, or deeming, provide notification of the endangered or critical status to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, the Secretary of the Treasury, and the Secretary of Labor. </text></paragraph> </subsection>
<subsection id="HB3C426C292F146F08083A4B931BFF6C1"><enum>(b)</enum><header>Funding rules for multiemployer plans in endangered status</header>
<paragraph id="HC63A081501B44C440074E2FE50A265A1"><enum>(1)</enum><header>In general</header><text>In any case in which a multiemployer plan is in endangered status for a plan year, the plan sponsor shall, in accordance with this subsection, amend the plan to include a funding improvement plan upon approval thereof by the bargaining parties under this subsection. The amendment shall be adopted not later than 240 days after the date on which the plan is certified to be in endangered status under subsection (a)(1).</text></paragraph>
<paragraph id="H748A13A4BDD24DA4A31E5F487E59E1BC"><enum>(2)</enum><header>Endangered status</header><text>A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under subsection (c)—</text>
<subparagraph id="H46771D2913AF468586686C66C3CCE45B"><enum>(A)</enum><text>the plan’s funded percentage for such plan year is less than 80 percent, or</text></subparagraph>
<subparagraph id="H892D6EAF29D149F2B08DB6A677B0CE18"><enum>(B)</enum><text>the plan has an accumulated funding deficiency for such plan year under section 304 or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 304(d).</text></subparagraph></paragraph>
<paragraph id="H6300A8DF9B1F452BBF00004000E941E5"><enum>(3)</enum><header>Funding improvement plan</header>
<subparagraph id="H7D6CB3CF10614598B43C2041AF800644"><enum>(A)</enum><header>Benchmarks</header><text>A funding improvement plan shall consist of amendments to the plan formulated to provide, under reasonable actuarial assumptions, for the attainment, during the funding improvement period under the funding improvement plan, of the following benchmarks:</text>
<clause id="H35DD98C250984532A5008705D72BA9DE"><enum>(i)</enum><header>Reduction in unfunded current liability</header><text>A percentage decrease in the plan’s unfunded current liability from the amount for the first plan year of the funding improvement period to the amount for the last plan year of the funding improvement period, of at least 33<fraction>1/3</fraction> percent.</text></clause>
<clause id="H32675EC9EAC04EF699E05800DA3B54C3"><enum>(ii)</enum><header>Avoidance of accumulated funding deficiencies</header><text>No accumulated funding deficiency for any plan year during the funding improvement period (taking into account any extension of amortization periods under section 304(d)).</text></clause></subparagraph>
<subparagraph id="H84FEF518FD954A46BC1243053E289FFC"><enum>(B)</enum><header>Funding improvement period</header><text>The funding improvement period for any funding improvement plan adopted pursuant to this subsection is the 10-year period beginning on the earlier of—</text>
<clause id="HFA9FC9C422534F80888653BD5F06B3D0"><enum>(i)</enum><text>the second anniversary of the date of the adoption of the funding improvement plan, or</text></clause>
<clause id="HF145D382C9FB40E1AD7BDEF69541A0B4"><enum>(ii)</enum><text>the first day of the first plan year of the multiemployer plan following the plan year in which occurs the first date after the day of the certification as of which collective bargaining agreements covering on the day of such certification at least 75 percent of active participants in such multiemployer plan have expired.</text></clause></subparagraph>
<subparagraph id="H1315D01F8CCC42DB89B419D6B342FB1D"><enum>(C)</enum><header>Reporting</header><text>A summary of any funding improvement plan or modification thereto adopted during any plan year shall be included in the annual report for such plan year under section 104(a) and in the summary annual report described in section 104(b)(3).</text></subparagraph></paragraph>
<paragraph id="H5FB3432FE822484D85AD5210292BD0C7"><enum>(4)</enum><header>Development of funding improvement plan</header>
<subparagraph id="H7CF137F184F0446F83AEB62E8C54DBA3"><enum>(A)</enum><header>Actions by plan sponsor pending approval</header><text>Pending the approval of a funding improvement plan under this paragraph, the plan sponsor shall take all reasonable actions, consistent with the terms of the plan and applicable law, necessary to ensure—</text>
<clause id="H3F9AB76B4B6148589B9DD2BC2B9D4234"><enum>(i)</enum><text display-inline="yes-display-inline">an increase in the plan’s funded percentage, and</text></clause>
<clause id="H5B5D388BE1494FFBB51FAD185292ABA0"><enum>(ii)</enum><text>postponement of an accumulated funding deficiency for at least 1 additional plan year.</text></clause><continuation-text continuation-text-level="subparagraph">Such actions include applications for extensions of amortization periods under section 304(d), use of the shortfall funding method in making funding standard account computations, amendments to the plan’s benefit structure, reductions in future benefit accruals, and other reasonable actions consistent with the terms of the plan and applicable law.</continuation-text></subparagraph>
<subparagraph id="H9BD161A3600D4DF4BC0438EF51E3AED8"><enum>(B)</enum><header>Recommendations by plan sponsor</header>
<clause id="H7DECCACA8A7D42D988DAAA93792C392"><enum>(i)</enum><header>In general</header><text>During the period of 90 days following the date on which a multiemployer plan is certified to be in endangered status, the plan sponsor shall develop and provide to the bargaining parties alternative proposals for revised benefit structures, contribution structures, or both, which, if adopted as amendments to the plan, may be reasonably expected to meet the benchmarks described in paragraph (3)(A). Such proposals shall include—</text>
<subclause id="H9B2A05840B514C67B34EBD31DA0023B"><enum>(I)</enum><text>at least one proposal for reductions in the amount of future benefit accruals necessary to achieve the benchmarks, assuming no amendments increasing contributions under the plan (other than amendments increasing contributions necessary to achieve the benchmarks after amendments have reduced future benefit accruals to the maximum extent permitted by law), and</text></subclause>
<subclause id="HA7D7895DC4A74E4881831957DC1EBFD5"><enum>(II)</enum><text>at least one proposal for increases in contributions under the plan necessary to achieve the benchmarks, assuming no amendments reducing future benefit accruals under the plan.</text></subclause></clause>
<clause id="H94B3151EA3314720933DC8639B2D88A0"><enum>(ii)</enum><header>Requests by bargaining parties</header><text>Upon the request of any bargaining party who—</text>
<subclause id="H73623B36D83844979E9E993EDCE5C1F5"><enum>(I)</enum><text>employs at least 5 percent of the active participants, or</text></subclause>
<subclause id="HB8498A98478C477DAA505226B8E0BDC0"><enum>(II)</enum><text>represents as an employee organization, for purposes of collective bargaining, at least 5 percent of the active participants, </text></subclause><continuation-text continuation-text-level="clause">the plan sponsor shall provide all such parties information as to other combinations of increases in contributions and reductions in future benefit accruals which would result in achieving the benchmarks.</continuation-text></clause>
<clause id="HA1207B9920FD463997C01876A2197CAB"><enum>(iii)</enum><header>Other information</header><text>The plan sponsor may, as it deems appropriate, prepare and provide the bargaining parties with additional information relating to contribution structures or benefit structures or other information relevant to the funding improvement plan.</text></clause></subparagraph> </paragraph>
<paragraph id="HBDF2F7097CF74CB281EEE1C5006F3C40"><enum>(5)</enum><header>Maintenance of contributions pending approval of funding improvement plan</header><text>Pending approval of a funding improvement plan by the bargaining parties with respect to a multiemployer plan, the multiemployer plan may not be amended so as to provide—</text>
<subparagraph id="H274CE8498564417DA7CE00A5A6E570B2"><enum>(A)</enum><text>a reduction in the level of contributions for participants who are not in pay status,</text></subparagraph>
<subparagraph id="H81DEE9107BC0469182B93391073BBD59"><enum>(B)</enum><text>a suspension of contributions with respect to any period of service, or</text></subparagraph>
<subparagraph id="H5B9934BD4C5B4C15927C0834FC9E983"><enum>(C)</enum><text>any new direct or indirect exclusion of younger or newly hired employees from plan participation.</text></subparagraph></paragraph>
<paragraph id="H01BE2CFF2897411FB5DD1E88C7273C12" display-inline="no-display-inline"><enum>(6)</enum><header>Benefit restrictions pending approval of funding improvement plan</header><text display-inline="yes-display-inline">Pending approval of a funding improvement plan by the bargaining parties with respect to a multiemployer plan—</text>
<subparagraph id="H68F850B2F09A433FB6B4585E84D30210"><enum>(A)</enum><header>Restrictions on lump sum distributions and similar distributions</header><text display-inline="yes-display-inline">The multiemployer plan may not be amended so as to provide additional forms of benefits.</text></subparagraph>
<subparagraph id="H0B91E47F6E274DC89893126F7ED06266"><enum>(B)</enum><header>Prohibition on benefit increases</header>
<clause id="H56E919708CB3434EB5ED175530D7C19E"><enum>(i)</enum><header>In general</header><text>No amendment of the plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan may be adopted.</text></clause>
<clause id="HCB2AAE6CF0784D5B8880027BAFCDD336"><enum>(ii)</enum><header>Exception</header><text>Clause (i) shall not apply to any plan amendment which—</text>
<subclause id="H1982920A6D74476E96A7DD5CC9DA2070"><enum>(I)</enum><text>the Secretary of the Treasury determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,</text></subclause>
<subclause id="HC333A0CB173F4ACAB54429120096F82D"><enum>(II)</enum><text>only repeals an amendment described in section 302(d)(2), or</text></subclause>
<subclause id="H974DB7CA05D14776B452DBED1CB894E4"><enum>(III)</enum><text>is required as a condition of qualification under part I of subchapter D of chapter 1 of subtitle A of the Internal Revenue Code of 1986.</text></subclause></clause></subparagraph></paragraph>
<paragraph id="H3DE5180AFDC44750AE97F81DB9EEDB15"><enum>(7)</enum><header>Default critical status if no funding improvement plan adopted</header><text>If no plan amendment adopting a funding improvement plan has been adopted by the end of the 240-day period referred to in subsection (a)(1), the plan shall be in critical status as of the first day of the succeeding plan year.</text> </paragraph>
<paragraph id="H10A7325E80084469BF3683BEF74353D0"><enum>(8)</enum><header>Restrictions upon approval of funding improvement plan</header><text>Upon adoption of a funding improvement plan with respect to a multiemployer plan, the plan may not be amended—</text>
<subparagraph id="H9B4F699853644E3DB2B4B4D2332CB28"><enum>(A)</enum><text>so as to be inconsistent with the funding improvement plan, or</text></subparagraph>
<subparagraph id="H33AEE5C85FD7454E98772C23ECCB438"><enum>(B)</enum><text>so as to increase future benefit accruals, unless the plan actuary certifies in advance that, after taking into account the proposed increase, the plan is reasonably expected to meet the the benchmarks described in paragraph (3)(A).</text></subparagraph></paragraph></subsection>
<subsection id="HEB81B9135DC44CB286A635CAC8CFA5E0"><enum>(c)</enum><header>Funding rules for multiemployer plans in critical status</header>
<paragraph id="H4B75B5066C8041FE9C6F025289F93B18"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In any case in which a multiemployer plan is in critical status for a plan year, the plan sponsor shall, in accordance with this subsection, amend the plan to include a rehabilitation plan under this subsection. The amendment shall be adopted not later than 240 days after the date on which the plan is certified to be in critical status under subsection (a)(1) or is presumed to be in critical status under subsection (a)(3), or the first day of the plan year in the case of a plan that is deemed to be in critical status under subsection (b)(7).</text></paragraph>
<paragraph id="H067496FDF3C74A49A7BE134EE85BD9B3"><enum>(2)</enum><header>Critical status</header><text>A multiemployer plan is in critical status for a plan year if—</text>
<subparagraph id="H36F9F24293904ED1B10067EDFA7C8E69"><enum>(A)</enum><text>the plan is in endangered status for the plan year and the requirements of subsection (b)(1) are not met with respect to the plan for such plan year, or</text></subparagraph>
<subparagraph id="HCBED451C27484C31AB598300CA314E5E"><enum>(B)</enum><text>as determined by the plan actuary under subsection (a), the plan is described in paragraph (3).</text></subparagraph><continuation-text continuation-text-level="paragraph">Any multiemployer plan which is in critical status under subparagraph (A) or (B) for a plan year shall be treated as in critical status also for the succeeding plan year.</continuation-text></paragraph>
<paragraph id="HF83932E883394C33B8A837247B075803"><enum>(3)</enum><header>Criticality description</header><text>For purposes of paragraph (2)(B), a plan is described in this paragraph if the plan is described in at least one of the following subparagraphs:</text>
<subparagraph id="HE7BC81C2C19744828841299068BDB135"><enum>(A)</enum><text>A plan is described in this subparagraph if, as of the beginning of the current plan year—</text>
<clause id="H63FD5F4D98C7402B98A1F387C47CD25C"><enum>(i)</enum><text display-inline="yes-display-inline">the funded percentage of the plan is less than 65 percent, and</text></clause>
<clause id="H30C5A4C660FB48C994696B814CFC5B19"><enum>(ii)</enum><text>the sum of—</text>
<subclause id="H97A9B58263B740CEBF22BAB035214954"><enum>(I)</enum><text display-inline="yes-display-inline">the market value of plan assets, plus</text></subclause>
<subclause id="H42E83862544E4562B492D3439E404F89"><enum>(II)</enum><text display-inline="yes-display-inline">the present value of the reasonably anticipated employer and employee contributions for the current plan year and each of the 6 succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year continue in effect for succeeding plan years,</text></subclause><continuation-text continuation-text-level="clause">is less than the present value of all nonforfeitable benefits for all participants and beneficiaries projected to be payable under the plan during the current plan year and each of the 6 succeeding plan years (plus administrative expenses for such plan years).</continuation-text></clause></subparagraph>
<subparagraph id="HCC9D882C3E824DB8947692A6CADE9B14"><enum>(B)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if, as of the beginning of the current plan year, the sum of—</text>
<clause id="HB7EE7AF734034701BAB9DA67E95527FE"><enum>(i)</enum><text display-inline="yes-display-inline">the market value of plan assets, plus</text></clause>
<clause id="H8D692EE3FAE64567B031C684F03D15ED"><enum>(ii)</enum><text>the present value of the reasonably anticipated employer and employee contributions for the current plan year and each of the 4 succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year remain in effect for succeeding plan years,</text></clause><continuation-text continuation-text-level="subparagraph">is less than the present value of all nonforfeitable benefits for all participants and beneficiaries projected to be payable under the plan during the current plan year and each of the 4 succeeding plan years (plus administrative expenses for such plan years).</continuation-text></subparagraph>
<subparagraph id="HA3443BEB24564DF98142A5F8CCA6F5A9"><enum>(C)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="H04ED57B8DB5341C2A118F625F82091D0"><enum>(i)</enum><text>as of the beginning of the current plan year, the funded percentage of the plan is less than 65 percent, and</text></clause>
<clause id="H9CEFAEA6E1984CFB8115F4BA590672EF"><enum>(ii)</enum><text display-inline="yes-display-inline">the plan has an accumulated funding deficiency for the current plan year or is projected to have an accumulated funding deficiency for any of the 4 succeeding plan years, taking into account any extension of amortization periods under section 304(e).</text></clause></subparagraph>
<subparagraph id="HF7CB986D1B0E4179927416D3E604763D"><enum>(D)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="H1297B323AB76407A884196BAC60070D3"><enum>(i)</enum>
<subclause id="H587CCD46823B4EE08D00E5EF34BF7D00" display-inline="yes-display-inline"><enum>(I)</enum><text>the plan’s normal cost for the current plan year, plus interest (determined at the rate used for determining cost under the plan) for the current plan year on the amount of unfunded benefit liabilities under the plan as of the last date of the preceding plan year, exceeds</text></subclause>
<subclause id="HD2F441C96AD74451AECC03823B7669B8" indent="up1"><enum>(II)</enum><text>the present value, as of the beginning of the current plan year, of the reasonably anticipated employer and employee contributions for the current plan year,</text></subclause></clause>
<clause id="H2CAC8950E2BF4FF7B869932B00CF5EA7"><enum>(ii)</enum><text>the present value, as of the beginning of the current plan year, of nonforfeitable benefits of inactive participants is greater than the present value, as of the beginning of the current plan year, of nonforfeitable benefits of active participants, and</text></clause>
<clause id="H25DB56DF9C6B42FD876D8517641F03C4"><enum>(iii)</enum><text>the plan is projected to have an accumulated funding deficiency for the current plan year or any of the 4 succeeding plan years.</text></clause></subparagraph>
<subparagraph id="H57D22103060F46CABC09B02119B10DD"><enum>(E)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="HB8C630AD34334DB695157952B242289E"><enum>(i)</enum><text>the funded percentage of the plan is greater than 65 percent for the current plan year, and</text></clause>
<clause id="HC30F6EA1E85F4461A2A7643158A8FF33"><enum>(ii)</enum><text>the plan is projected to have an accumulated funding deficiency during either of the following 3 plan years.</text></clause></subparagraph></paragraph>
<paragraph id="HD162131086BC4E149BD27460D4210046" display-inline="no-display-inline"><enum>(4)</enum><header>Rehabilitation plan</header>
<subparagraph id="HABCE4213044D47C3A9DE782437118E8B"><enum>(A)</enum><header>In general</header><text>A rehabilitation plan shall consist of—</text>
<clause id="H29658B108BF44091B06CB4F92823F9D5"><enum>(i)</enum><text display-inline="yes-display-inline">amendments to the plan providing (under reasonable actuarial assumptions) for measures, agreed to by the bargaining parties, to increase contributions, reduce plan expenditures (including plan mergers and consolidations), or reduce future benefit accruals, or to take any combination of such actions, determined necessary to cause the plan to cease, during the rehabilitation period, to be in critical status,</text></clause>
<clause id="H3218DED7B0C14CA4A5BB0800CD2800"><enum>(ii)</enum><text display-inline="yes-display-inline">measures, agreed to by the bargaining parties, to provide funding relief, or</text></clause>
<clause id="HB42BFBEEF8CF450A96CC51E44399FF4B"><enum>(iii)</enum><text display-inline="yes-display-inline">reasonable measures to forestall possible insolvency (within the meaning of section 4245) if the plan sponsor determines that, upon exhaustion of all reasonable measures, the plan would not cease during the rehabilitation period to be in critical status.</text></clause></subparagraph>
<subparagraph id="H3D9989042C52468CBBE8207252D00011"><enum>(B)</enum><header>Rehabilitation period</header><text>The rehabilitation period for any rehabilitation plan adopted pursuant to this section is the 10-year period beginning on the earlier of—</text>
<clause id="HBC4BA8C01B7B4D968D1BA2C6326E4228"><enum>(i)</enum><text>the second anniversary of the date of the adoption of the rehabilitation plan, or</text></clause>
<clause id="H3E3C86DA44F341F2B93E8D007CE940ED" display-inline="no-display-inline"><enum>(ii)</enum><text>the first day of the first plan year of the multiemployer plan following the plan year in which occurs the first date after the day of the certification as of which collective bargaining agreements covering on the day of such certification at least 75 percent of active participants in such multiemployer plan have expired.</text></clause> </subparagraph>
<subparagraph id="HB2C71B21080A4775A50084B7FF738437" display-inline="no-display-inline"><enum>(C)</enum><header>Reporting</header><text display-inline="yes-display-inline">A summary of any rehabilitation plan or modification thereto adopted during any plan year, together with annual updates regarding the funding ratio of the plan, shall be included in the annual report for such plan year under section 104(a) and in the summary annual report described in section 104(b)(3).</text></subparagraph></paragraph>
<paragraph id="H3CED85E08A724EF0BD9E45008BA31F81"><enum>(5)</enum><header>Development of rehabilitation plan</header>
<subparagraph id="H76EDA44257FA4D7483D54155AC3DBF00"><enum>(A)</enum><header>Proposals by plan sponsor</header>
<clause id="H9C8BDC13E7814456BE6DF0FFC5075413"><enum>(i)</enum><header>In general</header><text>Within 90 days after the date of the certification under subsection (a) that the plan is in critical status (or the date as of which the requirements of subsection (b)(1) are not met with respect to the plan), the plan sponsor shall propose to all bargaining parties a range of alternative schedules of increases in contributions and reductions in future benefit accruals that would serve to carry out a rehabilitation plan under this subsection.</text></clause>
<clause id="H340337E007D34950A6D5EA283E854F14"><enum>(ii)</enum><header>Proposal assuming no contribution increases</header><text>Such proposals shall include, as one of the proposed schedules, a schedule of those reductions in future benefit accruals that would be necessary to cause the plan to cease to be in critical status if there were no further increases in rates of contribution to the plan.</text></clause>
<clause id="HF370423535BA4EA0BE2DEFA01CA85B03"><enum>(iii)</enum><header>Proposal where contributions are necessary</header><text>If the plan sponsor determines that the plan will not cease to be in critical status during the rehabilitation period unless the plan is amended to provide for an increase in contributions, the plan sponsor’s proposals shall include a schedule of those increases in contribution rates that would be necessary to cause the plan to cease to be in critical status if future benefit accruals were reduced to the maximum extent permitted by law and the rate of future benefit accruals did not exceed 1 percent per plan year.</text></clause></subparagraph>
<subparagraph id="H5ED24BA06C2046F1886901F58C899FF4"><enum>(B)</enum><header>Requests for additional schedules</header><text>Upon the joint request of all bargaining parties, each of whom—</text>
<clause id="HA78C7B46A69743E09390903245B5B5CF"><enum>(i)</enum><text>employs at least 5 percent of the active participants, or</text></clause>
<clause id="H1612C44A386F4545922795B2FBDA1BA"><enum>(ii)</enum><text>represents as an employee organization, for purposes of collective bargaining, at least 5 percent of the active participants, </text></clause><continuation-text continuation-text-level="subparagraph">the plan sponsor shall include among the proposed schedules such schedules of increases in contributions and reductions in future benefit accruals as may be specified by the bargaining parties.</continuation-text></subparagraph>
<subparagraph id="H370122CF98014F49811DEBAC5F1B778F"><enum>(C)</enum><header>Default schedule</header><text>In any case in which the bargaining parties, as of 240 days after the later of the date of the certification under subsection (a) or the first day the plan is in critical status under subsection (a)(3) or (b)(7), have not agreed to at least one of the proposed schedules, the plan sponsor shall amend the plan to implement the schedule required by subparagraph (A)(ii).</text></subparagraph>
<subparagraph id="HD70538515E3248E2974C8342530070FC"><enum>(D)</enum><header>Subsequent amendments</header><text>Upon the adoption of a schedule of increases in contributions or reductions in future benefit accruals as part of the rehabilitation plan, the plan sponsor may amend the plan thereafter to update the schedule to adjust for any experience of the plan contrary to past actuarial assumptions, except that such an amendment may be made not more than once in any 3-year period.</text></subparagraph>
<subparagraph id="HC5E18289186E4391997F4CC6CB39972B"><enum>(E)</enum><header>Allocation of reductions in future benefit accruals</header><text>Any schedule containing reductions in future benefit accruals forming a part of a rehabilitation plan shall be applicable with respect to any group of active participants who are employed by any bargaining party (as an employer obligated to contribute under the plan) in proportion to the extent to which increases in contributions under such schedule apply to such bargaining party.</text></subparagraph></paragraph>
<paragraph id="H714E078AB8CE40149899DB6C456DB4CF"><enum>(6)</enum><header>Maintenance of contributions and restrictions on benefits pending adoption of rehabilitation plan</header><text display-inline="yes-display-inline">The rules of paragraphs (5) and (6) of subsection (b) shall apply for purposes of this subsection by substituting the term <term>rehabilitation plan</term> for <quote>funding improvement plan</quote>.</text></paragraph>
<paragraph id="HD4699349777F4A63B8B56451451DC6C7"><enum>(7)</enum><header>Deemed withdrawal</header><text display-inline="yes-display-inline">Upon the failure of any employer who has an obligation to contribute under the plan to make contributions in compliance with the schedule adopted under paragraph (6) as part of the rehabilitation plan, the failure of the employer may, at the discretion of the plan sponsor, be treated as a withdrawal by the employer from the plan under section 4203 or a partial withdrawal by the employer under section 4205.</text></paragraph></subsection>
<subsection id="HAF7279AEF36143DDAFB0CBAC9998F300"><enum>(d)</enum><header>Definitions</header><text>For purposes of this section—</text>
<paragraph id="HC5C5196B2CCD404DAF79ECEDE2FB3822"><enum>(1)</enum><header>Bargaining party</header><text>The term <term>bargaining party</term> means, in connection with a multiemployer plan—</text>
<subparagraph id="H91A14510575D43FA91BC56C75EC0735E"><enum>(A)</enum><text>an employer who has an obligation to contribute under the plan, and</text></subparagraph>
<subparagraph id="HBF11A39265594E7F9B40A0C3C6F1C235"><enum>(B)</enum><text>an employee organization which, for purposes of collective bargaining, represents plan participants employed by such an employer.</text></subparagraph></paragraph>
<paragraph id="H537D672DFDDA468400512E27A6BA1FEB"><enum>(2)</enum><header>Current liability</header><text>The term <term>current liability</term> has the meaning provided such term in section 304(c)(6)(C).</text></paragraph>
<paragraph id="HDA653185AA4245C38811FB60B1B106E9"><enum>(3)</enum><header>Unfunded current liability</header><text>The term <term>unfunded current liability</term> means the excess (if any) of—</text>
<subparagraph id="H9E18A0F4E9154E1900CBAA7681844F01"><enum>(A)</enum><text>the current liability of the plan, over</text></subparagraph>
<subparagraph id="H182900D4A3FA47EAA687B72841952050"><enum>(B)</enum><text>the value of the plan's assets determined under section 304(c)(2).</text></subparagraph></paragraph>
<paragraph id="H34490D511ACA49D6BF45EB209BF6B48D"><enum>(4)</enum><header>Funded percentage</header><text>The term <term>funded percentage</term> means the percentage expressed as a ratio of which—</text>
<subparagraph id="H0EF780EFDF63469ABC089D9212797EE1"><enum>(A)</enum><text>the numerator of which is the value of the plan’s assets, as determined under section 304(c)(2), and</text></subparagraph>
<subparagraph id="H30BB6AE1B43E401FB232F3AD63FC40F1"><enum>(B)</enum><text>the denominator of which is the accrued liability of the plan.</text></subparagraph></paragraph>
<paragraph id="H58706CF6B8AE46C7B77F07F4D2809DE4"><enum>(5)</enum><header>Unfunded vested benefits</header><text>The term <term>unfunded vested benefits</term> has the meaning provided in section 4241(b)(9). </text></paragraph>
<paragraph id="H0422D35D5CA24A49B5964C6E7C75BED0"><enum>(6)</enum><header>Accumulated funding deficiency</header><text>The term <term>accumulated funding deficiency</term> has the meaning provided such term in section 304(a).</text></paragraph>
<paragraph id="HBF73A6B653FD43E7AEAC4DBFF4AF1300"><enum>(7)</enum><header>Active participant</header><text>The term <term>active participant</term> means, in connection with a multiemployer plan, a participant who is in covered service under the plan.</text></paragraph>
<paragraph id="HDDCA926EAAC645D000CBD97F3332C0C0"><enum>(8)</enum><header>Inactive participant</header><text>The term <term>inactive participant</term> means, in connection with a multiemployer plan, a participant who—</text>
<subparagraph id="HAA1670EA2CA44BABA34B23475D334BAE"><enum>(A)</enum><text>is not in covered service under the plan, and</text></subparagraph>
<subparagraph id="HCF3D92C1580743BB8F67B6F999913B46"><enum>(B)</enum><text>is in pay status under the plan or has a nonforfeitable right to benefits under the plan.</text></subparagraph></paragraph>
<paragraph id="H7775DD267CA44223899D4CAB39A76CB2"><enum>(9)</enum><header>Pay status</header><text>A person is in <quote>pay status</quote> under a multiemployer plan if—</text>
<subparagraph id="HD1A312876786401D00AD07C6283AF9C"><enum>(A)</enum><text>at any time during the current plan year, such person is a participant or beneficiary under the plan and is paid an early, late, normal, or disability retirement benefit under the plan (or a death benefit under the plan related to a retirement benefit), or</text></subparagraph>
<subparagraph id="H823815FD5B6541BB915EF364A2532806"><enum>(B)</enum><text>to the extent provided in regulations of the Secretary of the Treasury, such person is entitled to such a benefit under the plan.</text></subparagraph></paragraph>
<paragraph id="H6D8070CC93E1441985D87643551CF541"><enum>(10)</enum><header>Obligation to contribute</header><text>The term <term>obligation to contribute</term> has the meaning provided such term under section 4212(a).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H1197A04E18A54EBDBA77EAF26FF48500"><enum>(b)</enum><header>Conforming amendment</header><text>The table of contents in section 1 of such Act (as amended by the preceding provisions of this Act) is amended further by inserting after the item relating to section 304 the following new item:</text>
<quoted-block style="traditional" id="H47B1E8F12E214005B861005C933E4698" display-inline="no-display-inline">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 305. Additional funding rules for multiemployer plans in endangered status or critical status</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H005560E3BF8049EAA8F0D24651C9E444"><enum>(c)</enum><header>Effective date</header><text>The amendment made by this section shall apply with respect to plan years beginning after 2005.</text></subsection></section>
<section id="HDFE186A2907D4200BCF328D93C18AE1E" display-inline="no-display-inline" section-type="subsequent-section"><enum>203.</enum><header>Measures to forestall insolvency of multiemployer plans</header>
<subsection id="H7DF3FAA0C406410288C6CBCA054D88E7"><enum>(a)</enum><header>Advance determination of impending insolvency over 5 years</header><text>Section 4245(d)(1) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1426">29 U.S.C. 1426(d)(1)</external-xref>) is amended—</text>
<paragraph id="H1840938BD6B7453ABF6DB700B89E7804"><enum>(1)</enum><text>by striking <quote>3 plan years</quote> the second place it appears and inserting <quote>5 plan years</quote>; and</text></paragraph>
<paragraph id="H36FCABC248C64FBB98E41B00447B0046"><enum>(2)</enum><text>by adding at the end the following new sentence: <quote>If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years.</quote>.</text></paragraph></subsection>
<subsection id="HD8F28A7480744ED200379F7BEAA1F02D"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to determinations made in plan years beginning after 2005.</text></subsection></section>
<section id="HC177C2B34432478E8794D364C84DDBD6" display-inline="no-display-inline" section-type="subsequent-section"><enum>204.</enum><header>Withdrawal liability reforms</header>
<subsection id="H55B5EBC3D19E4AB1854F541612BA8598"><enum>(a)</enum><header>Repeal of limitation on withdrawal liability in the event of certain sales of employer assets to unrelated parties</header>
<paragraph id="H6EA1D44723BE4651B8F794BA507DC6E8"><enum>(1)</enum><header>In general</header><text>Section 4225 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1405">29 U.S.C. 1405</external-xref>) is repealed.</text></paragraph>
<paragraph id="H843F91D818E046E29454B6E65D681780"><enum>(2)</enum><header>Conforming amendment</header><text>The table of contents in section 1 of such Act is amended by striking the item relating to section 4225.</text></paragraph>
<paragraph id="H6B8B352D13BA4B1D8499C555A9E67428"><enum>(3)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to sales occurring on or after January 1, 2006.</text></paragraph></subsection>
<subsection id="H0C556790E5594670B3AB709F63AE0084"><enum>(b)</enum><header>Repeal of limitation to 20 annual payments</header>
<paragraph id="H4E94506E72A84DB68F1FD5C554550944"><enum>(1)</enum><header>In general</header><text>Section 4219(c)(1) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1399">29 U.S.C. 1399(c)(1)</external-xref>) is amended by striking subparagraph (B).</text></paragraph>
<paragraph id="H97FDD743CB1F4678853041FF23BD00C5"><enum>(2)</enum><header>Effective date</header><text>The amendment made by this section shall apply with respect to withdrawals occurring on or after January 1, 2006.</text></paragraph></subsection>
<subsection id="HBC1C0DBA949D476CB8216D59D17868F4" commented="no" display-inline="no-display-inline"><enum>(c)</enum><header>Partial withdrawals by means of outsourcing</header>
<paragraph id="HEA660C1D20D5483BB9F9891129F07E16" commented="no"><enum>(1)</enum><header>In general</header><text>Section 4205(b)(2)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1385">29 U.S.C. 1385(b)(2)(A)</external-xref>) is amended—</text>
<subparagraph id="HECA33AE7362D4103BEF1FB6C90CA50E0" commented="no"><enum>(A)</enum><text>by striking <quote>or</quote> at the end of clause (i);</text></subparagraph>
<subparagraph id="H74F5A1698C3B4A91BDB2CC008784E6B3" commented="no"><enum>(B)</enum><text>by striking <quote>ceased.</quote> at the end of clause (ii) and inserting <quote>ceased, or</quote>; and</text></subparagraph>
<subparagraph id="H9C7656D7DA764A4ABE6961DB89C920DB" commented="no"><enum>(C)</enum><text>by adding at the end the following new clause:</text>
<quoted-block style="traditional" id="H9664E4C8466642C196D588291314D24F" display-inline="no-display-inline">
<clause id="HE21D8CEF5C0A4092B98BB0005E1195D"><enum>(iii)</enum><text>an employer continues to perform work of the type for which contributions are made under the plan by means of services of individuals who are not employees of such employer covered by such plan.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H01E9A5316ECC48D09E1FCF50597E57A2" commented="no"><enum>(2)</enum><header>Effective date</header><text>The amendment made by this subsection shall apply with respect to work performed on or after January 1, 2006.</text></paragraph></subsection>
<subsection id="H396F72476F6B42CD99C08DF653679DFC"><enum>(d)</enum><header>Repeal of special rule for long and short haul trucking industry</header>
<paragraph id="H006E965C2117451C9F4DACC77B4E8E26"><enum>(1)</enum><header>In general</header><text>Subsection (d) of section 4203 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1383">29 U.S.C. 1383(d)</external-xref>) is repealed.</text></paragraph>
<paragraph id="H90B8CE080F6A4B7794BA61EC4D240FB"><enum>(2)</enum><header>Effective date</header><text>The repeal under this subsection shall apply with respect to cessations to have obligations to contribute to multiemployer plans and cessations of covered operations under such plans occurring on or after January 1, 2006.</text></paragraph></subsection>
<subsection id="H950807BD726E44F8BCFEDAD119D0618"><enum>(e)</enum><header>Application of forgiveness rule to plans primarily covering employees in the building and construction</header>
<paragraph id="HC3A2C721AF584931B757ACC71770DB76"><enum>(1)</enum><header>In general</header><text>Section 4210(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1390">29 U.S.C. 1390(b)</external-xref>) is amended—</text>
<subparagraph id="H9BDBFF9DC4B449F300237CEA1072B9EB"><enum>(A)</enum><text>by striking paragraph (1); and</text></subparagraph>
<subparagraph id="H1B9681A2FB5E4E8C0034076EBEC66453"><enum>(B)</enum><text>by redesignating paragraphs (2) through (4) as paragraphs (1) through (3), respectively.</text></subparagraph></paragraph>
<paragraph id="H3EF11AFBB96B4212839408E989277A1"><enum>(2)</enum><header>Effective date</header><text>The amendments made by this subsection shall apply with respect to plan withdrawals occurring on or after January 1, 2006.</text></paragraph></subsection></section>
<section id="H4E6FFBE3B2404865A788C2AFEF5B75A9" display-inline="no-display-inline" section-type="subsequent-section"><enum>205.</enum><header>Removal of restrictions with respect to procedures applicable to disputes involving withdrawal liability</header>
<subsection id="H383147D650BB4F5F008588075076BABB"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 4221(f)(1) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1401">29 U.S.C. 1401(f)(1)</external-xref>) is amended—</text>
<paragraph id="H3C8EB057F9D74521A1743F8CC65D6F21"><enum>(1)</enum><text>in subparagraph (A) by inserting <quote>and</quote> after <quote>plan,</quote>, and</text></paragraph>
<paragraph id="HD932972854FC4A41A3E455A53FFE277D"><enum>(2)</enum><text>by striking subparagraphs (B) and (C) and inserting the following new subparagraph:</text>
<quoted-block style="OLC" id="H500DBD5D93B74F578C3F2E7DDCAE3829" display-inline="no-display-inline">
<subparagraph id="HD9069539357A4050B49102CAA5B3D91F"><enum>(B)</enum><text>such determination is based in whole or in part on a finding by the plan sponsor under section 4212(c) that a principal purpose of any transaction which occurred at least 5 years (2 years in the case of a small employer) before the date of the complete or partial withdrawal was to evade or avoid withdrawal liability under this subtitle,</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HC23EE53517CD430DAC14F4C0412E4738"><enum>(b)</enum><header>Small employer</header><text>Paragraph (2) of section 4221(f) of such Act is amended by adding at the end the following new subparagraph:</text>
<quoted-block style="OLC" id="H6B32EEE0EDC24011871D3DC439CA3156" display-inline="no-display-inline">
<subparagraph id="HDE107D85C3654B14BA7256DCAB54BC61"><enum>(C)</enum><header>Small employer</header><text>For purposes of paragraph (1)(B)—</text>
<clause id="H19C73FF9A58F496AB0005598A34E2842"><enum>(i)</enum><header>In general</header><text>The term <term>small employer</term> means any employer who (as of immediately before the transaction referred to in paragraph (1)(B)) employs not more than 250 employees.</text></clause>
<clause id="HAD3EB3BC2FA744DE97236C7CB4668578"><enum>(ii)</enum><header>Controlled group</header><text>Any group treated as a single employer under subsection (b), (c), (m), or (o) of <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414</external-xref> of the Internal Revenue Code of 1986 shall be treated as a single employer for purposes of this subparagraph.</text></clause> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H7AF6CC43E5964BE48D3D7848B9E53300"><enum>(c)</enum><header>Conforming amendment</header><text>Subparagraph (A) of section 4221(f)(2) of such Act is amended by striking <quote>Notwithstanding</quote> and inserting <quote>In the case of a transaction occurring before January 1, 1999, and at least 5 years before the date of the complete or partial withdrawal, notwithstanding</quote>.</text></subsection>
<subsection id="H7140B9F4F2724F9AACE18622E88843E4" commented="no"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to any employer that receives a notification under section 4219(b)(1) of the Employee Retirement Income Security Act of 1974 on or after the date of the enactment of this Act.</text></subsection></section> </subtitle>
<subtitle id="HB8E251D894B6474AAA4FD94BED86757"><enum>B</enum><header>Amendments to Internal Revenue Code of 1986</header>
<section id="HF1BB56ABA42F4FA68D97143C77B02EF9"><enum>211.</enum><header>Funding rules for multiemployer defined benefit plans</header>
<subsection id="H1E894C8A0DA74359866762EBC1F5CD6" commented="no" display-inline="no-display-inline"><enum>(a)</enum><header>In general</header><text>Subpart A of part III of subchapter D of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 (added by section 112 of this Act) is amended by adding at the end the following new section:</text>
<quoted-block style="OLC" id="H74B6BE890AF64D78BA00539176390809" display-inline="no-display-inline">
<section id="HAB7CBC56E8EB493CB96B7491D27DB2C"><enum>431.</enum><header>Minimum funding standards for multiemployer plans</header>
<subsection id="H7DAD608E2C8345E0B7B84407D8355CE4" display-inline="no-display-inline"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of section 412, the accumulated funding deficiency of a multiemployer plan for any plan year is—</text>
<paragraph id="H111EF6AB7FB44A7190DCC1295EB981C8"><enum>(1)</enum><text>except as provided in paragraph (2), the amount, determined as of the end of the plan year, equal to the excess (if any) of the total charges to the funding standard account of the plan for all plan years (beginning with the first plan year for which this part applies to the plan) over the total credits to such account for such years, and</text></paragraph>
<paragraph id="H025329B932A3470F82D1A0CBAE39F669" commented="no"><enum>(2)</enum><text>if the multiemployer plan is in reorganization for any plan year, the accumulated funding deficiency of the plan determined under section 418B.</text></paragraph></subsection>
<subsection id="H5882AB0BC60E4E9EA73D497202391B23"><enum>(b)</enum><header>Funding standard account</header>
<paragraph id="H15AFD526E91E46439B14E6F2A7D8F7EE"><enum>(1)</enum><header>Account required</header><text>Each multiemployer plan to which this part applies shall establish and maintain a funding standard account. Such account shall be credited and charged solely as provided in this section.</text></paragraph>
<paragraph id="HFF63B528ECD34EECB8559E06074FAE9E"><enum>(2)</enum><header>Charges to account</header><text>For a plan year, the funding standard account shall be charged with the sum of—</text>
<subparagraph id="H780C73517C2F4BC0856BC5C82B4E4E6D"><enum>(A)</enum><text>the normal cost of the plan for the plan year,</text></subparagraph>
<subparagraph id="HEC27F07BDD6F46A799122CD464067C33"><enum>(B)</enum><text>the amounts necessary to amortize in equal annual installments (until fully amortized)—</text>
<clause id="HE9AD1D2340F642E7A6C360BC8601FF2"><enum>(i)</enum><text>in the case of a plan in existence on January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 40 plan years,</text></clause>
<clause id="H345E89DB0F5E497F99FE235CB61CA201"><enum>(ii)</enum><text>in the case of a plan which comes into existence after January 1, 1974, the unfunded past service liability under the plan on the first day of the first plan year to which this section applies, over a period of 15 plan years,</text></clause>
<clause id="HB6FBFDBA2D5B4232B100C0F9C28B5D40"><enum>(iii)</enum><text>separately, with respect to each plan year, the net increase (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 15 plan years,</text></clause>
<clause id="HD848908C2A194311978900FA24E7E85D"><enum>(iv)</enum><text>separately, with respect to each plan year, the net experience loss (if any) under the plan, over a period of 15 plan years, and</text></clause>
<clause id="H4979B25B25104149B1602D42D25CF8DC"><enum>(v)</enum><text>separately, with respect to each plan year, the net loss (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 15 plan years,</text></clause></subparagraph>
<subparagraph id="HDD72FEEDC208456A89A21C4D4881E507"><enum>(C)</enum><text>the amount necessary to amortize each waived funding deficiency (within the meaning of section 412(c)(3)) for each prior plan year in equal annual installments (until fully amortized) over a period of 15 plan years,</text></subparagraph>
<subparagraph id="H9BDF361F3A134C0DB9254609DB6E7073"><enum>(D)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 5 plan years any amount credited to the funding standard account under section 412(b)(3)(D) (as in effect on the day before the date of the enactment of this section), and</text></subparagraph>
<subparagraph id="HB37C9A6121154D49A11F1BB5EBBD24C" commented="no"><enum>(E)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized) over a period of 20 years the contributions which would be required to be made under the plan but for the provisions of section 412(c)(7)(A)(i)(I) (as in effect on the day before the date of the enactment of this section).</text></subparagraph></paragraph>
<paragraph id="HADE279D2BA9D41CEB8DB23C7CC0002F"><enum>(3)</enum><header>Credits to account</header><text>For a plan year, the funding standard account shall be credited with the sum of—</text>
<subparagraph id="H6157589941004545BD86E46CF77E597B"><enum>(A)</enum><text>the amount considered contributed by the employer to or under the plan for the plan year,</text></subparagraph>
<subparagraph id="HD6767D76F09B41C1BAF71B426BD371B5"><enum>(B)</enum><text>the amount necessary to amortize in equal annual installments (until fully amortized)—</text>
<clause id="HA1EBF1ABF50340DC868B2FA0BDA459D0"><enum>(i)</enum><text>separately, with respect to each plan year, the net decrease (if any) in unfunded past service liability under the plan arising from plan amendments adopted in such year, over a period of 15 plan years,</text></clause>
<clause id="H004AA1886665432CBDD84F33D8A1552"><enum>(ii)</enum><text>separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 15 plan years, and</text></clause>
<clause id="H725E3889B45A4C638E6D8DFD12FCB00"><enum>(iii)</enum><text>separately, with respect to each plan year, the net gain (if any) resulting from changes in actuarial assumptions used under the plan, over a period of 15 plan years,</text></clause></subparagraph>
<subparagraph id="H41BF73D3C58A40D58BC0FF4798D9DFAD"><enum>(C)</enum><text>the amount of the waived funding deficiency (within the meaning of section 412(c)(3)) for the plan year, and</text></subparagraph>
<subparagraph id="H1E28E322C3B94D25A78F48162B114F00"><enum>(D)</enum><text>in the case of a plan year for which the accumulated funding deficiency is determined under the funding standard account if such plan year follows a plan year for which such deficiency was determined under the alternative minimum funding standard under section 412(g) (as in effect on the day before the date of the enactment of this section), the excess (if any) of any debit balance in the funding standard account (determined without regard to this subparagraph) over any debit balance in the alternative minimum funding standard account.</text></subparagraph></paragraph>
<paragraph id="H9D576A82F7D14D3184BC00A90099A0CE"><enum>(4)</enum><header>Special rule for amounts first amortized to plan years before 2006</header><text>In the case of any amount amortized under section 412(b) (as in effect before the date of the enactment of <short-title>Pension Protection Act of 2005</short-title>) over any period beginning with a plan year beginning before 2006, in lieu of the amortization described in paragraphs (2)(B) and (3)(B), such amount shall continue to be amortized under such section as so in effect.</text></paragraph>
<paragraph id="H97F13AF04C6841C6B34F5B6D981B6770"><enum>(5)</enum><header>Combining and offsetting amounts to be amortized</header><text>Under regulations prescribed by the Secretary, amounts required to be amortized under paragraph (2) or paragraph (3), as the case may be—</text>
<subparagraph id="H6992523194064CA6982B71EF8478F8E5"><enum>(A)</enum><text>may be combined into one amount under such paragraph to be amortized over a period determined on the basis of the remaining amortization period for all items entering into such combined amount, and</text></subparagraph>
<subparagraph id="H4B47204320EA41308014C557A752E6C4"><enum>(B)</enum><text>may be offset against amounts required to be amortized under the other such paragraph, with the resulting amount to be amortized over a period determined on the basis of the remaining amortization periods for all items entering into whichever of the two amounts being offset is the greater.</text></subparagraph></paragraph>
<paragraph id="H6556666D7F37474B9734619D25E6FFC7"><enum>(6)</enum><header>Interest</header><text>The funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.</text></paragraph>
<paragraph id="H28567CCAA5FC4118B8F749BB193BA217"><enum>(7)</enum><header>Certain amortization charges and credits</header><text>In the case of a plan which, immediately before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, was a multiemployer plan (within the meaning of section 414(f) as in effect immediately before such date)—</text>
<subparagraph id="HC3F6A717832C44FB81BB741D167BE55"><enum>(A)</enum><text>any amount described in paragraph (2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the amount arose;</text></subparagraph>
<subparagraph id="HEC7646A79D38477DA1A4C6AB33ADCB67"><enum>(B)</enum><text>any amount described in paragraph (2)(B)(iv) or (3)(B)(ii) of this subsection which arose in a plan year beginning before such date shall be amortized in equal annual installments (until fully amortized) over 20 plan years, beginning with the plan year in which the amount arose;</text></subparagraph>
<subparagraph id="HF90DC9D0D56D49FB8B002EFD5409E777"><enum>(C)</enum><text>any change in past service liability which arises during the period of 3 plan years beginning on or after such date, and results from a plan amendment adopted before such date, shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises; and</text></subparagraph>
<subparagraph id="H49FA9A5474C14A65B8EAFE2B889841D7"><enum>(D)</enum><text>any change in past service liability which arises during the period of 2 plan years beginning on or after such date, and results from the changing of a group of participants from one benefit level to another benefit level under a schedule of plan benefits which—</text>
<clause id="HD328C46A5073467987547CB0B7921135"><enum>(i)</enum><text>was adopted before such date, and</text></clause>
<clause id="H47EBFF8AAB5441FEAB780144DE268104"><enum>(ii)</enum><text>was effective for any plan participant before the beginning of the first plan year beginning on or after such date,</text></clause><continuation-text continuation-text-level="subparagraph">shall be amortized in equal annual installments (until fully amortized) over 40 plan years, beginning with the plan year in which the change arises.</continuation-text></subparagraph></paragraph>
<paragraph id="H065D86D02C6848FF821E0393BD1BCDB9"><enum>(8)</enum><header>Special rules relating to charges and credits to funding standard account</header><text>For purposes of this part—</text>
<subparagraph id="H6ACD2103632E425DBCFEC97218ED6114"><enum>(A)</enum><header>Withdrawal liability</header><text>Any amount received by a multiemployer plan in payment of all or part of an employer's withdrawal liability under part 1 of subtitle E of title IV shall be considered an amount contributed by the employer to or under the plan. The Secretary may prescribe by regulation additional charges and credits to a multiemployer plan's funding standard account to the extent necessary to prevent withdrawal liability payments from being unduly reflected as advance funding for plan liabilities.</text></subparagraph>
<subparagraph id="H49195236C3F7492EAB97CBD243FD050"><enum>(B)</enum><header>Adjustments when a multiemployer plan leaves reorganization</header><text>If a multiemployer plan is not in reorganization in the plan year but was in reorganization in the immediately preceding plan year, any balance in the funding standard account at the close of such immediately preceding plan year—</text>
<clause id="H5A84E54CC7A74193A1F400554D9B2203"><enum>(i)</enum><text>shall be eliminated by an offsetting credit or charge (as the case may be), but</text></clause>
<clause id="H381269B00C5C45E1B46CE336B4504F12"><enum>(ii)</enum><text>shall be taken into account in subsequent plan years by being amortized in equal annual installments (until fully amortized) over 30 plan years.</text></clause><continuation-text continuation-text-level="subparagraph">The preceding sentence shall not apply to the extent of any accumulated funding deficiency under section 418B(a) as of the end of the last plan year that the plan was in reorganization.</continuation-text></subparagraph>
<subparagraph id="HF0DD9B04ADC741B69964063E8CB11EDA"><enum>(C)</enum><header>Plan payments to supplemental program or withdrawal liability payment fund</header><text>Any amount paid by a plan during a plan year to the Pension Benefit Guaranty Corporation pursuant to section 4222 of the Employee Retirement Income Security Act of 1974 or to a fund exempt under section 501(c)(22) pursuant to section 4223 of such Act shall reduce the amount of contributions considered received by the plan for the plan year.</text></subparagraph>
<subparagraph id="HF37C08B4546247EDAFD1E2C5C9E36E7F"><enum>(D)</enum><header>Interim withdrawal liability payments</header><text>Any amount paid by an employer pending a final determination of the employer's withdrawal liability under part 1 of subtitle E of title IV and subsequently refunded to the employer by the plan shall be charged to the funding standard account in accordance with regulations prescribed by the Secretary.</text></subparagraph>
<subparagraph id="H25CA90632FF343DEAF2CCC00A727C961"><enum>(E)</enum><header>Election for deferral of charge for portion of net experience loss</header><text>If an election is in effect under section 412(b)(7)(F) (as in effect on the day before the date of the enactment of this section) for any plan year, the funding standard account shall be charged in the plan year to which the portion of the net experience loss deferred by such election was deferred with the amount so deferred (and paragraph (2)(B)(iv) shall not apply to the amount so charged). </text></subparagraph>
<subparagraph id="HC165B14B4EFE48A5A5897C63A0D997A6"><enum>(F)</enum><header>Financial assistance</header><text>Any amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this section and section 412 in such manner as is determined by the Secretary.</text></subparagraph>
<subparagraph id="H2C129976CB704FABBE3965D9E927D2DF"><enum>(G)</enum><header>Short-term benefits</header><text>To the extent that any plan amendment increases the unfunded past service liability under the plan by reason of an increase in benefits which are payable under the plan during a period that does not exceed 14 years, paragraph (2)(B)(iii) shall be applied separately with respect to such increase in unfunded past service liability by substituting the number of years of the period during which such benefits are payable for <quote>15</quote>. </text></subparagraph></paragraph></subsection>
<subsection id="HC645C21C78544CEDB266ECE3DEDF0149"><enum>(c)</enum><header>Additional rules</header><text></text>
<paragraph id="HD2E25E299BF148D8BBFEDDFA87376FC2"><enum>(1)</enum><header>Determinations to be made under funding method</header><text>For purposes of this part, normal costs, accrued liability, past service liabilities, and experience gains and losses shall be determined under the funding method used to determine costs under the plan.</text></paragraph>
<paragraph id="H0C384B22C0D84300B64343026079D6D6"><enum>(2)</enum><header>Valuation of assets</header>
<subparagraph id="HEE3804C4B4FE4303A2D37E595F337F9C"><enum>(A)</enum><header>In general</header><text>For purposes of this part, the value of the plan's assets shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary.</text></subparagraph>
<subparagraph id="HFAB4BFB4812F447A826D4663BD07B5CE"><enum>(B)</enum><header>Election with respect to bonds</header><text>The value of a bond or other evidence of indebtedness which is not in default as to principal or interest may, at the election of the plan administrator, be determined on an amortized basis running from initial cost at purchase to par value at maturity or earliest call date. Any election under this subparagraph shall be made at such time and in such manner as the Secretary shall by regulations provide, shall apply to all such evidences of indebtedness, and may be revoked only with the consent of the Secretary.</text></subparagraph></paragraph>
<paragraph id="H774D38A5000D4ACBA49D853471091937"><enum>(3)</enum><header>Actuarial assumptions must be reasonable</header><text>For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods—</text>
<subparagraph id="HEF829DF9934B4B1A83B942D09FA941A5"><enum>(A)</enum><text>which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations), and</text></subparagraph>
<subparagraph id="HE63E57937BC74665AB5107AAD81EA583"><enum>(B)</enum><text>which, in combination, offer the actuary's best estimate of anticipated experience under the plan.</text></subparagraph></paragraph>
<paragraph id="HA3B2AE43277C4A88B488EDD537AE52A9"><enum>(4)</enum><header>Treatment of certain changes as experience gain or loss</header><text>For purposes of this section, if—</text>
<subparagraph id="H9C368A699E4849188E8D3657BEE0B9E1"><enum>(A)</enum><text>a change in benefits under the Social Security Act or in other retirement benefits created under Federal or State law, or</text></subparagraph>
<subparagraph id="H6AFD21B2654D41DDB31876E5AD56F4D0"><enum>(B)</enum><text>a change in the definition of the term <term>wages</term> under section 3121, or a change in the amount of such wages taken into account under regulations prescribed for purposes of section 401(a)(5),</text></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">results in an increase or decrease in accrued liability under a plan, such increase or decrease shall be treated as an experience loss or gain. </continuation-text></paragraph>
<paragraph id="H268FAC5869DE4BB59E2FD86D25270853"><enum>(5)</enum><header>Full funding</header><text>If, as of the close of a plan year, a plan would (without regard to this paragraph) have an accumulated funding deficiency in excess of the full funding limitation—</text>
<subparagraph id="H14BFD4288AA842FDA7FF68295772381E"><enum>(A)</enum><text>the funding standard account shall be credited with the amount of such excess, and</text></subparagraph>
<subparagraph id="HF62E0A80DCE24C64AD6EB35D1C2BE69"><enum>(B)</enum><text>all amounts described in subparagraphs (B), (C), and (D) of paragraph (2) and subparagraph (B) of subsection (b)(3) which are required to be amortized shall be considered fully amortized for purposes of such subparagraphs.</text></subparagraph></paragraph>
<paragraph id="H860A3CE620E042BC88A1138C938FCC33"><enum>(6)</enum><header>Full-funding limitation</header>
<subparagraph id="H0BF52982E81E4D93B8CF2449AFB2545B"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (5), the term <term>full-funding limitation</term> means the excess (if any) of—</text>
<clause id="H5F2D9836622E45E6A9AD14FA4D4952C3"><enum>(i)</enum><text>the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over</text></clause>
<clause id="H949C0425C8B747BAA9E3CF898990F9E3"><enum>(ii)</enum><text>the lesser of—</text>
<subclause id="H1B1FE53119814829931D26F3A019B24B"><enum>(I)</enum><text>the fair market value of the plan's assets, or</text></subclause>
<subclause id="HFE4125517F5149A1B17EECB7AB76FA7D"><enum>(II)</enum><text>the value of such assets determined under paragraph (2).</text></subclause></clause></subparagraph>
<subparagraph id="H32E217CBEB58489093F9C9FAA78DAF93"><enum>(B)</enum><header>Minimum amount</header>
<clause id="HDEA6F92C04574239ACFF7C24DB1E5595"><enum>(i)</enum><header>In general</header><text>In no event shall the full-funding limitation determined under subparagraph (A) be less than the excess (if any) of—</text>
<subclause id="HDDA3DCDE544A4269B08772B3E30500EE"><enum>(I)</enum><text>90 percent of the current liability of the plan (including the expected increase in current liability due to benefits accruing during the plan year), over</text></subclause>
<subclause id="H5BF58901B1BA46E8914E5EFCE493E7F"><enum>(II)</enum><text>the value of the plan's assets determined under paragraph (2).</text></subclause></clause>
<clause id="HB66B100642044F2F8D62F32495B03964"><enum>(ii)</enum><header>Assets</header><text>For purposes of clause (i), assets shall not be reduced by any credit balance in the funding standard account.</text></clause></subparagraph>
<subparagraph id="HAE1A118ABABA416DB4AC00C25535A09C"><enum>(C)</enum><header>Current liability</header><text>For purposes of this paragraph—</text>
<clause id="H508A42099737451D00CA09B0784713A3"><enum>(i)</enum><header>In general</header><text>The term <term>current liability</term> means all liabilities to employees and their beneficiaries under the plan.</text></clause>
<clause id="HFA56B87577E64CB39CE4A45459D98019"><enum>(ii)</enum><header>Treatment of unpredictable contingent event benefits</header><text>For purposes of clause (i), any benefit contingent on an event other than—</text>
<subclause id="H7CDA03463F254DAEAFDA00AC82BECDAB"><enum>(I)</enum><text>age, service, compensation, death, or disability, or</text></subclause>
<subclause id="HA951943E1BF740F8BD937F11ECEDB562"><enum>(II)</enum><text>an event which is reasonably and reliably predictable (as determined by the Secretary),</text></subclause><continuation-text continuation-text-level="clause">shall not be taken into account until the event on which the benefit is contingent occurs.</continuation-text></clause>
<clause id="HA465CD8AC20340A4AF87BB58411BB2C"><enum>(iii)</enum><header>Interest rate used</header><text>The rate of interest used to determine current liability under this paragraph shall be the rate of interest determined under subparagraph (D).</text></clause>
<clause id="H487518AB90AD4FB78BD1A7367D1064E3"><enum>(iv)</enum><header>Mortality tables</header>
<subclause id="H48908764F2774C29A61638022454EC27"><enum>(I)</enum><header>Commissioners' standard table</header><text>In the case of plan years beginning before the first plan year to which the first tables prescribed under subclause (II) apply, the mortality table used in determining current liability under this paragraph shall be the table prescribed by the Secretary which is based on the prevailing commissioners' standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on January 1, 1993.</text></subclause>
<subclause id="HDC7B183E53F44B6EBC10B392A6C983F1"><enum>(II)</enum><header>Secretarial authority</header><text>The Secretary may by regulation prescribe for plan years beginning after December 31, 1999, mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.</text></subclause></clause>
<clause id="HF566D0FBC0B4497E9135B930D86FE6D2"><enum>(v)</enum><header>Separate mortality tables for the disabled</header><text>Notwithstanding clause (iv)—</text>
<subclause id="H891228A7625C4FC7A1631EEEE7E7448C"><enum>(I)</enum><header>In general</header><text>In the case of plan years beginning after December 31, 1995, the Secretary shall establish mortality tables which may be used (in lieu of the tables under clause (ii)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. The Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before January 1, 1995, and for individuals whose disabilities occur in plan years beginning on or after such date.</text></subclause>
<subclause id="H77721C9B56094542B6C83DF64736F5F"><enum>(II)</enum><header>Special rule for disabilities occurring after 1994</header><text>In the case of disabilities occurring in plan years beginning after December 31, 1994, the tables under subclause (I) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.</text></subclause></clause>
<clause id="HB77EA66571C6464DB14DDE00D639B33E"><enum>(vi)</enum><header>Periodic review</header><text>The Secretary shall periodically (at least every 5 years) review any tables in effect under this subparagraph and shall, to the extent the Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.</text></clause></subparagraph>
<subparagraph id="HD35128F02CC64237BFA2E3AD8C19D565"><enum>(D)</enum><header>Required change of interest rate</header><text>For purposes of determining a plan's current liability for purposes of this paragraph—</text>
<clause id="H2EC84FADD6624E09A440E16EDFBAE1F"><enum>(i)</enum><header>In general</header><text>If any rate of interest used under the plan under subsection (b)(5) to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range.</text></clause>
<clause id="H24CB19AB532745EAA71B12E325F37096"><enum>(ii)</enum><header>Permissible range</header><text>For purposes of this subparagraph—</text>
<subclause id="H6C32B594131546D4B75B03A9C631D6BB"><enum>(I)</enum><header>In general</header><text>Except as provided in subclause (II), the term <term>permissible range</term> means a rate of interest which is not more than 5 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year.</text></subclause>
<subclause id="HCFDCD3A939ED4001B72B22C218D85D1D"><enum>(II)</enum><header>Secretarial authority</header><text>If the Secretary finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under such subclause.</text></subclause></clause>
<clause id="HFB3FE5BB85EE4147938261B7DFC3F36E"><enum>(iii)</enum><header>Assumptions</header><text>Notwithstanding paragraph (3)(A), the interest rate used under the plan shall be—</text>
<subclause id="HEB679CD2DE0A417E00767F64FD22BE5E"><enum>(I)</enum><text>determined without taking into account the experience of the plan and reasonable expectations, but</text></subclause>
<subclause id="H80CB791AFA92483F977D6948603DC4BC" commented="no" display-inline="no-display-inline"><enum>(II)</enum><text>consistent with the assumptions which reflect the purchase rates which would be used by insurance companies to satisfy the liabilities under the plan.</text></subclause></clause></subparagraph>
<subparagraph id="H885D4366E88A4FBF8FD2B600009940F4"><enum>(E)</enum><header>Full funding limitation</header><text>For purposes of this paragraph, unless otherwise provided by the plan, the accrued liability under a multiemployer plan shall not include benefits which are not nonforfeitable under the plan after the termination of the plan (taking into consideration section 411(d)(3)).</text></subparagraph></paragraph>
<paragraph id="H54FB7D891E5B449E9E47A955BE9B177B"><enum>(7)</enum><header>Annual valuation</header>
<subparagraph id="H7FFC7CE1835F4E67B5B5B6305FE9D01C"><enum>(A)</enum><header>In general</header><text>For purposes of this section, a determination of experience gains and losses and a valuation of the plan's liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.</text></subparagraph>
<subparagraph id="H04A39344ADD34607A9F9E28B6B001549"><enum>(B)</enum><header>Valuation date</header>
<clause id="H6B35221732884972962BA5614F5CCC28"><enum>(i)</enum><header>Current year</header><text>Except as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year.</text></clause>
<clause id="H2CA16736F46F488FA1ED022495E9858E"><enum>(ii)</enum><header>Use of prior year valuation</header><text>The valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 100 percent of the plan's current liability (as defined in paragraph (6)(C) without regard to clause (iv) thereof).</text></clause>
<clause id="HF80806BAEC8443B700F4DFEAA3B63C91"><enum>(iii)</enum><header>Adjustments</header><text>Information under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.</text></clause>
<clause id="HB36CCF9E41BC4339A2AC13AC00112BC0"><enum>(iv)</enum><header>Limitation</header><text>A change in funding method to use a prior year valuation, as provided in clause (ii), may not be made unless as of the valuation date within the prior plan year, the value of the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (6)(C) without regard to clause (iv) thereof).</text></clause></subparagraph></paragraph>
<paragraph id="H39807AF728624369AE75FCCBBE2C1978"><enum>(8)</enum><header>Time when certain contributions deemed made</header><text>For purposes of this section, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.</text></paragraph></subsection>
<subsection id="H0F2BD15D2D7E4ADEB4BF36F677E7FE7F" display-inline="no-display-inline"><enum>(d)</enum><header>Extension of amortization periods for multiemployer plans</header><text>In the case of a multiemployer plan—</text>
<paragraph id="HA663DA24AEEC46FBBBAF7E20591107A9"><enum>(1)</enum><header>Automatic extension</header><text>The Secretary shall, upon application and subject to the requirements of paragraph (4), extend the period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of the plan for a period of time not in excess of 5 years. </text></paragraph>
<paragraph id="H45D92CBF844E4E39B3A8D04627BEA512"><enum>(2)</enum><header>Extension for cause</header><text>The period of years required to amortize any unfunded liability (described in any clause of subsection (b)(2)(B)) of any multiemployer plan may be extended (in addition to any extension under paragraph (1)) by the Secretary for a period of time (not in excess of 5 years) if he determines that such extension would carry out the purposes of this Act and would provide adequate protection for participants under the plan and their beneficiaries and if he determines that the failure to permit such extension would—</text>
<subparagraph id="HA16B4CA2AD374927AE554B6E08FD14A1"><enum>(A)</enum><text>result in—</text>
<clause id="H5212C76B9400495A9751DEAD7C32D38"><enum>(i)</enum><text>a substantial risk to the voluntary continuation of the plan, or</text></clause>
<clause id="H34BD91971BA74064AF79E9B0196B7CCE"><enum>(ii)</enum><text>a substantial curtailment of pension benefit levels or employee compensation, and</text></clause></subparagraph>
<subparagraph id="H0D103196DF8D4117B0A2FBC37FF043F6"><enum>(B)</enum><text>be adverse to the interests of plan participants in the aggregate.</text></subparagraph></paragraph>
<paragraph id="H4C44308076C249DCB0F79E1357DF3792" display-inline="no-display-inline"><enum>(3)</enum><header>Interest rate</header><text display-inline="yes-display-inline">The interest rate applicable for any plan year under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the greater of—</text>
<subparagraph id="HCEFA4C87307E452A8F93FCE44B22C5A9"><enum>(A)</enum><text>150 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or</text></subparagraph>
<subparagraph id="HE81702671E8D462AA4F3898D6ECA2F4B"><enum>(B)</enum><text>the rate of interest used under the plan for determining costs.</text></subparagraph></paragraph>
<paragraph id="HF94EE3843E0B476BB0DBCB4C33C28518" commented="no"><enum>(4)</enum><header>Required notice</header>
<subparagraph id="H2996B6126DA14F3886808D6DEAF02FF6" commented="no"><enum>(A)</enum><header>In general</header><text>The Secretary shall, before granting an extension under this section, require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such extension to each employee organization representing employees covered by the affected plan and to the Pension Benefit Guaranty Corporation.</text></subparagraph>
<subparagraph id="H25695D1CF30843DBBB852871457E985B" commented="no"><enum>(B)</enum><header>Consideration of relevant information</header><text>The Secretary shall consider any relevant information provided by a person to whom notice was given under paragraph (1).</text></subparagraph></paragraph></subsection>
<subsection id="H75E9BDFE121546D182AD35DBE1B11869" display-inline="no-display-inline"><enum>(e)</enum><header>Restriction on plan amendments</header>
<paragraph id="HF2441B1FF1E04A4292923489B974F6F" display-inline="no-display-inline"><enum>(1)</enum><header>In general</header><text>No amendment of a multiemployer plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under section 412(c) or an extension of time under subsection (d) is in effect with respect to the plan, or if a plan amendment described in section 412(d)(2) has been made at any time in the preceding 24 months. If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.</text></paragraph>
<paragraph id="HB7D464CA51164530B800B6A1E109EDA1"><enum>(2)</enum><header>Exception</header><text>Paragraph (1) shall not apply to any plan amendment which—</text>
<subparagraph id="HB668ABAD60C045F8BF37ABC9C5294B01"><enum>(A)</enum><text>the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,</text></subparagraph>
<subparagraph id="H2F870D1174174EE8B98FB39700A4942F"><enum>(B)</enum><text>only repeals an amendment described in section 412(d)(2), or</text></subparagraph>
<subparagraph id="H4A929702F3944530AA5310114F808C5B"><enum>(C)</enum><text>is required as a condition of qualification under part I of subchapter D, of chapter 1.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H75E95A3028EC4D4FAB933930E4E865A4" display-inline="no-display-inline"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HC54900D323A84114A6CF1904EC54CE69"><enum>(1)</enum><text>Section 418(b)(2) of such Code is amended—</text>
<subparagraph id="H5F4A71A00A8040CEA07E2EC96B00D4F6"><enum>(A)</enum><text>by striking <quote>section 412(b)(2)</quote> in subparagraph (A) and inserting <quote>section 431(b)(2)</quote>, and</text></subparagraph>
<subparagraph id="H407C9ECDE4F74828A7E7956807D8CE31"><enum>(B)</enum><text>by striking <quote>section 412(b)(3)(B)</quote> in subparagraph (B) and inserting <quote>section 431(b)(3)(B)</quote>.</text></subparagraph></paragraph>
<paragraph id="H9C22370B271649A486DDC24364E5B1DF"><enum>(2)</enum><text>Section 418B of such Code is amended—</text>
<subparagraph id="H127D0396D93346CFA0DED277B679F304"><enum>(A)</enum><text>by striking <quote>section 412(b)(2)(A) or (B)</quote> in subsection (d)(1)(B) and inserting <quote>section 431(b)(2)(A) or (B)</quote>,</text></subparagraph>
<subparagraph id="H4C7DF0EEC89E4471BC2007E086C9E753"><enum>(B)</enum><text>by striking <quote>section 412(c)(8)</quote> in subsection (e) and inserting <quote>section 412(g)(2)</quote>, and</text></subparagraph>
<subparagraph id="HC357193030DB45B7A1A5CAFB4B52873B"><enum>(C)</enum><text>by striking <quote>section 412(c)(3)</quote> in subsection (g) and inserting <quote>section 431(c)(3)</quote>.</text></subparagraph></paragraph>
<paragraph id="H9BC94E9CAA48477083FE08E4002DAB95"><enum>(3)</enum><text>Section 418D(a)(2) of such Code is amended—</text>
<subparagraph id="H3932229A45B5434A008029BF15C3EF23"><enum>(A)</enum><text>by striking <quote>section 412(c)(8)</quote> and inserting <quote>section 412(g)(2)</quote>, and</text></subparagraph>
<subparagraph id="HE077791D06444F6697ABAED451D35E85"><enum>(B)</enum><text>by striking <quote>section 412(c)(10)</quote> and inserting <quote>section 431(c)(8)</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="H08AF9B5A01BF4FC1000000323C86C93D"><enum>(c)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for subpart A of part III of subchapter D of chapter 1 of such Code is amended by adding after the item relating to section 430 the following new item:</text>
<quoted-block style="OLC" id="HBED4745A12924F0E9FE811E98443ED52" display-inline="no-display-inline">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 431. Minimum funding standards for multiemployer plans</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H8CAEBBDC5D854AB780F063BFF23B075D"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text></subsection></section>
<section id="H6A5886753A9647F5AC48B2F98186096"><enum>212.</enum><header>Additional funding rules for multiemployer plans in endangered or critical status</header>
<subsection id="H5F766FC4F938402E9152C099DF9FA55B"><enum>(a)</enum><header>In general</header><text>Subpart A of part III of subchapter D of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended by inserting after section 431 the following new section:</text>
<quoted-block style="OLC" id="H478E9A4E629842959D045792F97B2794" display-inline="no-display-inline">
<section id="H9B5A5A475A1143ED8526483CF4CCBCA9"><enum>432.</enum><header>Additional funding rules for multiemployer plans in endangered status or critical status</header>
<subsection id="HBF3ED2FBFF314DF0979D07EC67F5D97" display-inline="no-display-inline"><enum>(a)</enum><header>Annual certification by plan actuary</header>
<paragraph id="H6ED0A2BE53E744D9BB1FCFCA74EF473F"><enum>(1)</enum><header>In general</header><text>During the 90-day period beginning on first day of each plan year of a multiemployer plan, the plan actuary of shall certify to the Secretary whether or not the plan is in endangered status for such plan year and whether or not the plan is in critical status for such plan year.</text></paragraph>
<paragraph id="H110751C704014001B9D05961B6E6F6D9"><enum>(2)</enum><header>Actuarial projections of assets and liabilities</header>
<subparagraph id="H17831C8C64524DE6BD70F5BBA505BE66"><enum>(A)</enum><header>In general</header><text>In making the determinations under paragraph (1), the plan actuary shall make projections under subsections (b)(2) and (c)(2) for the current and succeeding plan years, using reasonable actuarial assumptions and methods, of the current value of the assets of the plan and the present value of all liabilities to participants and beneficiaries under the plan for the current plan year as of the beginning of such year, as set forth in the actuarial statement prepared for the preceding plan year under section 6058.</text></subparagraph>
<subparagraph id="H0A38EB4AC18849C1A982B68C004B755F" display-inline="no-display-inline"><enum>(B)</enum><header>Determinations of future contributions</header><text>Any such actuarial projection of plan assets shall assume—</text>
<clause id="HDA8D471DCD754DAAA7B68B7D63E025B0"><enum>(i)</enum><text>reasonably anticipated employer and employee contributions for the current and succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year continue in effect for succeeding plan years, or</text></clause>
<clause id="H846E6D1345954311B46008A036E3217D"><enum>(ii)</enum><text>employer and employee contributions projected for the current and succeeding plan years under the terms of such collective bargaining agreements (assuming the continued application of such terms indefinitely to such plan years), but only if the plan actuary determines there have been no significant demographic changes that would make continued application of such terms unreasonable.</text></clause></subparagraph> </paragraph>
<paragraph id="H9CD23D7990D54541822B1FC0C26CAED2" commented="no"><enum>(3)</enum><header>Presumed status in absence of timely actuarial certification</header><text display-inline="yes-display-inline">If certification under this subsection is not made before the end of the 90-day period specified in paragraph (1), the plan shall be presumed to be in critical status for such plan year until such time as the actuary makes a contrary certification.</text></paragraph>
<paragraph id="H38466645068042458FCF4BA8EC7B6113" display-inline="no-display-inline"><enum>(4)</enum><header>Notice</header><text>In any case in which a multiemployer plan is certified to be in endangered or critical status for a plan year under paragraph (1), is presumed to be in critical status under paragraph (3), or is deemed to be in critical status under subsection (b)(7), the plan sponsor shall, not later than 30 days after the date of the certification, presumption, or deeming, provide notification of the endangered or critical status to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, the Secretary of the Treasury, and the Secretary of Labor. </text></paragraph> </subsection>
<subsection id="HDD82AC2970F54480A9BBFDF0DFE13C9"><enum>(b)</enum><header>Funding rules for multiemployer plans in endangered status</header>
<paragraph id="HE0423FD089C2412CA226C99B882FA4C0"><enum>(1)</enum><header>In general</header><text>In any case in which a multiemployer plan is in endangered status for a plan year, the plan sponsor shall, in accordance with this subsection, amend the plan to include a funding improvement plan upon approval thereof by the bargaining parties under this subsection. The amendment shall be adopted not later than 240 days after the date on which the plan is certified to be in endangered status under subsection (a)(1).</text></paragraph>
<paragraph id="H97A503D1CD1248C28EC704CB271671FB"><enum>(2)</enum><header>Endangered status</header><text>A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under subsection (c)—</text>
<subparagraph id="H9FA6BBDFA6A6401EBCF2C01544A4002F"><enum>(A)</enum><text>the plan’s funded percentage for such plan year is less than 80 percent, or</text></subparagraph>
<subparagraph id="H70313525B66A4E5FA20081F004C0AD50"><enum>(B)</enum><text>the plan has an accumulated funding deficiency for such plan year under section 431 or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 431(d).</text></subparagraph></paragraph>
<paragraph id="H4BA63EC57145481082A5CAD64326DE2"><enum>(3)</enum><header>Funding improvement plan</header>
<subparagraph id="H9C5AE274219540C300A5FDFE4B9F13D"><enum>(A)</enum><header>Benchmarks</header><text>A funding improvement plan shall consist of amendments to the plan formulated to provide, under reasonable actuarial assumptions, for the attainment, during the funding improvement period under the funding improvement plan, of the following benchmarks:</text>
<clause id="HF80E753A4A944BABAE2CA97B2C71B00"><enum>(i)</enum><header>Reduction in unfunded current liability</header><text>A percentage decrease in the plan’s unfunded current liability from the amount for the first plan year of the funding improvement period to the amount for the last plan year of the funding improvement period, of at least 33<fraction>1/3</fraction> percent.</text></clause>
<clause id="H551EAED604264A6EAE30447934B8B524"><enum>(ii)</enum><header>Avoidance of accumulated funding deficiencies</header><text>No accumulated funding deficiency for any plan year during the funding improvement period (taking into account any extension of amortization periods under section 431(d)).</text></clause></subparagraph>
<subparagraph id="H51FB171D8B2642398EEBBCFB6D000482"><enum>(B)</enum><header>Funding improvement period</header><text>The funding improvement period for any funding improvement plan adopted pursuant to this subsection is the 10-year period beginning on the earlier of—</text>
<clause id="H74373CC3967947EE98ACA9D3168B8EA"><enum>(i)</enum><text>the second anniversary of the date of the adoption of the funding improvement plan, or</text></clause>
<clause id="H9167554E4C3A49A894458432C92F369B"><enum>(ii)</enum><text>the first day of the first plan year of the multiemployer plan following the plan year in which occurs the first date after the day of the certification as of which collective bargaining agreements covering on the day of such certification at least 75 percent of active participants in such multiemployer plan have expired.</text></clause></subparagraph>
<subparagraph id="H187BD5EE23424C6ABE7FFE4E99047F4E"><enum>(C)</enum><header>Reporting</header><text display-inline="yes-display-inline">A summary of any funding improvement plan or modification thereto adopted during any plan year shall be included in the annual report for such plan year under section 104(a) of the Employee Retirement and Income Security Act of 1974 and in the summary annual report described in section 104(b)(3) of such Act.</text></subparagraph></paragraph>
<paragraph id="H83F78CC478504B41B5F66B2E83D860BD"><enum>(4)</enum><header>Development of funding improvement plan</header>
<subparagraph id="HD98CE19FF43B419DA5352400A452848C"><enum>(A)</enum><header>Actions by plan sponsor pending approval</header><text>Pending the approval of a funding improvement plan under this paragraph, the plan sponsor shall take all reasonable actions, consistent with the terms of the plan and applicable law, necessary to ensure—</text>
<clause id="H59FA4015C79040508E35F91226E247CA"><enum>(i)</enum><text display-inline="yes-display-inline">an increase in the plan’s funded percentage, and</text></clause>
<clause id="H505B2D1123FA4AFFBFCD63685EDB9431"><enum>(ii)</enum><text>postponement of an accumulated funding deficiency for at least 1 additional plan year.</text></clause><continuation-text continuation-text-level="subparagraph">Such actions include applications for extensions of amortization periods under section 431(d), use of the shortfall funding method in making funding standard account computations, amendments to the plan’s benefit structure, reductions in future benefit accruals, and other reasonable actions consistent with the terms of the plan and applicable law.</continuation-text></subparagraph>
<subparagraph id="HBA69A788826942ED877700AC12783139"><enum>(B)</enum><header>Recommendations by plan sponsor</header>
<clause id="HE4BBE4FA0FF84CE4005296009DD5BD26"><enum>(i)</enum><header>In general</header><text>During the period of 90 days following the date on which a multiemployer plan is certified to be in endangered status, the plan sponsor shall develop and provide to the bargaining parties alternative proposals for revised benefit structures, contribution structures, or both, which, if adopted as amendments to the plan, may be reasonably expected to meet the benchmarks described in paragraph (3)(A). Such proposals shall include—</text>
<subclause id="H96702B00B9274CF4AB18BE8E1E7EECE0"><enum>(I)</enum><text>at least one proposal for reductions in the amount of future benefit accruals necessary to achieve the benchmarks, assuming no amendments increasing contributions under the plan (other than amendments increasing contributions necessary to achieve the benchmarks after amendments have reduced future benefit accruals to the maximum extent permitted by law), and</text></subclause>
<subclause id="H86CDF6CDDA864A2C99A3B16F14C74008"><enum>(II)</enum><text>at least one proposal for increases in contributions under the plan necessary to achieve the benchmarks, assuming no amendments reducing future benefit accruals under the plan.</text></subclause></clause>
<clause id="H92286E68C46A4579A2A2ADD229BCE614"><enum>(ii)</enum><header>Requests by bargaining parties</header><text>Upon the request of any bargaining party who—</text>
<subclause id="H95B39D7F4F44476F9D3941E881CC1884"><enum>(I)</enum><text>employs at least 5 percent of the active participants, or</text></subclause>
<subclause id="HB911321917134E5580131B006B114570"><enum>(II)</enum><text>represents as an employee organization, for purposes of collective bargaining, at least 5 percent of the active participants, </text></subclause><continuation-text continuation-text-level="clause">the plan sponsor shall provide all such parties information as to other combinations of increases in contributions and reductions in future benefit accruals which would result in achieving the benchmarks.</continuation-text></clause>
<clause id="H6B1D03FD2C054C13A55F7601B99FE271"><enum>(iii)</enum><header>Other information</header><text>The plan sponsor may, as it deems appropriate, prepare and provide the bargaining parties with additional information relating to contribution structures or benefit structures or other information relevant to the funding improvement plan.</text></clause></subparagraph> </paragraph>
<paragraph id="HCDB0C94071B3461DA9B4DC39B6CA78F4"><enum>(5)</enum><header>Maintenance of contributions pending approval of funding improvement plan</header><text>Pending approval of a funding improvement plan by the bargaining parties with respect to a multiemployer plan, the multiemployer plan may not be amended so as to provide—</text>
<subparagraph id="H2F0C7919E6AF488E98CCE88800FC4709"><enum>(A)</enum><text>a reduction in the level of contributions for participants who are not in pay status,</text></subparagraph>
<subparagraph id="H9A1D5ACB7E5646BAAA40DDCBA80C899"><enum>(B)</enum><text>a suspension of contributions with respect to any period of service, or</text></subparagraph>
<subparagraph id="H1EF23B01F53A44069433C739E995E18"><enum>(C)</enum><text>any new direct or indirect exclusion of younger or newly hired employees from plan participation.</text></subparagraph></paragraph>
<paragraph id="HB1DF73B2F0F44701B090054FE02C79CF" display-inline="no-display-inline"><enum>(6)</enum><header>Benefit restrictions pending approval of funding improvement plan</header><text display-inline="yes-display-inline">Pending approval of a funding improvement plan by the bargaining parties with respect to a multiemployer plan—</text>
<subparagraph id="H0670852217A245DBA36D73D1158353E0"><enum>(A)</enum><header>Restrictions on lump sum distributions and similar distributions</header><text display-inline="yes-display-inline">The multiemployer plan may not be amended so as to provide additional forms of benefits.</text></subparagraph>
<subparagraph id="HCEA426C856694EC69B2FBF13F677407F"><enum>(B)</enum><header>Prohibition on benefit increases</header>
<clause id="H65774058F0C94B4AAA36ECA64900C782"><enum>(i)</enum><header>In general</header><text>No amendment of the plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan may be adopted.</text></clause>
<clause id="H1DB6188851A84783A97800021957FC00"><enum>(ii)</enum><header>Exception</header><text>Clause (i) shall not apply to any plan amendment which—</text>
<subclause id="HF8E7AEA832CD484D87CE86B5B0F4464D"><enum>(I)</enum><text>the Secretary determines to be reasonable and which provides for only de minimis increases in the liabilities of the plan,</text></subclause>
<subclause id="H9F68F3F96FD2456A9EBCA4E5993CCE6"><enum>(II)</enum><text>only repeals an amendment described in section 430(d)(2), or</text></subclause>
<subclause id="H5188D2D8D93C44F7805F960000EDD746"><enum>(III)</enum><text>is required as a condition of qualification under part I of subchapter D of chapter 1 of subtitle A.</text></subclause></clause></subparagraph></paragraph>
<paragraph id="H4A84C6768314405E884EFA83A6F64ED"><enum>(7)</enum><header>Default critical status if no funding improvement plan adopted</header><text>If no plan amendment adopting a funding improvement plan has been adopted by the end of the 240-day period referred to in subsection (a)(1), the plan shall be in critical status as of the first day of the succeeding plan year.</text> </paragraph>
<paragraph id="H6F5E555FD48A4BB090EDD429135CEFDE"><enum>(8)</enum><header>Restrictions upon approval of funding improvement plan</header><text>Upon adoption of a funding improvement plan with respect to a multiemployer plan, the plan may not be amended—</text>
<subparagraph id="H9D03D65A69D6453DB9D5BE48253E3B5B"><enum>(A)</enum><text>so as to be inconsistent with the funding improvement plan, or</text></subparagraph>
<subparagraph id="H4DB622D888A9474CAAEFE993138D8B71"><enum>(B)</enum><text>so as to increase future benefit accruals, unless the plan actuary certifies in advance that, after taking into account the proposed increase, the plan is reasonably expected to meet the the benchmarks described in paragraph (3)(A).</text></subparagraph></paragraph></subsection>
<subsection id="H305BF7AD2F8B45CB81A7E9DEA1B7AAA7"><enum>(c)</enum><header>Funding rules for multiemployer plans in critical status</header>
<paragraph id="H8744D089A20F4A7D9CD0B41CBCA04CDB"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In any case in which a multiemployer plan is in critical status for a plan year, the plan sponsor shall, in accordance with this subsection, amend the plan to include a rehabilitation plan under this subsection. The amendment shall be adopted not later than 240 days after the date on which the plan is certified to be in critical status under subsection (a)(1) or is presumed to be in critical status under subsection (a)(3), or the first day of the plan year in the case of a plan that is deemed to be in critical status under subsection (b)(7).</text></paragraph>
<paragraph id="H3C11DA677A904147A85FD43F8F2F92C2"><enum>(2)</enum><header>Critical status</header><text>A multiemployer plan is in critical status for a plan year if—</text>
<subparagraph id="H91DF529BB49B445287ECA1E65BECDB4B"><enum>(A)</enum><text>the plan is in endangered status for the plan year and the requirements of subsection (b)(1) are not met with respect to the plan for such plan year, or</text></subparagraph>
<subparagraph id="HADF7F7CF23B84A7B80A7A69E19C351F7"><enum>(B)</enum><text>as determined by the plan actuary under subsection (a), the plan is described in paragraph (3).</text></subparagraph><continuation-text continuation-text-level="paragraph">Any multiemployer plan which is in critical status under subparagraph (A) or (B) for a plan year shall be treated as in critical status also for the succeeding plan year.</continuation-text></paragraph>
<paragraph id="H6DB35993CE4447A3AF38C436E18F1B42"><enum>(3)</enum><header>Criticality description</header><text>For purposes of paragraph (2)(B), a plan is described in this paragraph if the plan is described in at least one of the following subparagraphs:</text>
<subparagraph id="H6A5A65DEDBFD4F0681A777FB8902D27E"><enum>(A)</enum><text>A plan is described in this subparagraph if, as of the beginning of the current plan year—</text>
<clause id="H4B1AE4A291FB473CA1F74931D88BC85"><enum>(i)</enum><text display-inline="yes-display-inline">the funded percentage of the plan is less than 65 percent, and</text></clause>
<clause id="HFE35EF32F6934611B66CA057A726253C"><enum>(ii)</enum><text>the sum of—</text>
<subclause id="HB94AF877F2E543989BA325CB80E9C8DD"><enum>(I)</enum><text display-inline="yes-display-inline">the market value of plan assets, plus</text></subclause>
<subclause id="H4DBEE8B7F06745DF00059939B4F45748"><enum>(II)</enum><text display-inline="yes-display-inline">the present value of the reasonably anticipated employer and employee contributions for the current plan year and each of the 6 succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year continue in effect for succeeding plan years,</text></subclause><continuation-text continuation-text-level="clause">is less than the present value of all nonforfeitable benefits for all participants and beneficiaries projected to be payable under the plan during the current plan year and each of the 6 succeeding plan years (plus administrative expenses for such plan years).</continuation-text></clause></subparagraph>
<subparagraph id="H46DA9C48B3AA4292A7051DA56FD716F2"><enum>(B)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if, as of the beginning of the current plan year, the sum of—</text>
<clause id="H492AE82D61EC4306AA01EAFD4B6E152B"><enum>(i)</enum><text display-inline="yes-display-inline">the market value of plan assets, plus</text></clause>
<clause id="H69941FEEE5FC4A70825E2344DCEA2402"><enum>(ii)</enum><text>the present value of the reasonably anticipated employer and employee contributions for the current plan year and each of the 4 succeeding plan years, assuming that the terms of the one or more collective bargaining agreements pursuant to which the plan is maintained for the current plan year remain in effect for succeeding plan years,</text></clause><continuation-text continuation-text-level="subparagraph">is less than the present value of all nonforfeitable benefits for all participants and beneficiaries projected to be payable under the plan during the current plan year and each of the 4 succeeding plan years (plus administrative expenses for such plan years).</continuation-text></subparagraph>
<subparagraph id="HF6CC1F0D626D4B29A17826CDD52DC110"><enum>(C)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="HBE4219EEBA2D486583E3FC9F2943958E"><enum>(i)</enum><text>as of the beginning of the current plan year, the funded percentage of the plan is less than 65 percent, and</text></clause>
<clause id="H262DAEEDFE4D4A16ADC19CC3736CC3CE"><enum>(ii)</enum><text display-inline="yes-display-inline">the plan has an accumulated funding deficiency for the current plan year or is projected to have an accumulated funding deficiency for any of the 4 succeeding plan years, taking into account any extension of amortization periods under section 431(d).</text></clause></subparagraph>
<subparagraph id="H95BF5DA1AB054A3A898862DE3C6ED049"><enum>(D)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="H8A1964F16E784DA692892096AA008054"><enum>(i)</enum>
<subclause id="HB69F0E3CFCE0411495EBC0DC32C05EE4" display-inline="yes-display-inline"><enum>(I)</enum><text>the plan’s normal cost for the current plan year, plus interest (determined at the rate used for determining cost under the plan) for the current plan year on the amount of unfunded benefit liabilities under the plan as of the last date of the preceding plan year, exceeds</text></subclause>
<subclause id="H54D6B6E3F5BD490E93FF8F1E997C53A6" indent="up1"><enum>(II)</enum><text>the present value, as of the beginning of the current plan year, of the reasonably anticipated employer and employee contributions for the current plan year,</text></subclause></clause>
<clause id="H322D256E021444CBAD97B6E5F589BF1E"><enum>(ii)</enum><text>the present value, as of the beginning of the current plan year, of nonforfeitable benefits of inactive participants is greater than the present value, as of the beginning of the current plan year, of nonforfeitable benefits of active participants, and</text></clause>
<clause id="HB2ACAF80C08647B6B21502CEFDCE8702"><enum>(iii)</enum><text>the plan is projected to have an accumulated funding deficiency for the current plan year or any of the 4 succeeding plan years.</text></clause></subparagraph>
<subparagraph id="H2754AA7CF9AA4E6CAF86C6649B53E245"><enum>(E)</enum><text display-inline="yes-display-inline">A plan is described in this subparagraph if—</text>
<clause id="H7E259430BD8E4EC88FB083AD85C3EA6C"><enum>(i)</enum><text>the funded percentage of the plan is greater than 65 percent for the current plan year, and</text></clause>
<clause id="HE0523B4821DB4DF1A3660007510190E3"><enum>(ii)</enum><text>the plan is projected to have an accumulated funding deficiency during either of the following 3 plan years.</text></clause></subparagraph></paragraph>
<paragraph id="H3950A0880B1A4005A303BDFED158CEB" display-inline="no-display-inline"><enum>(4)</enum><header>Rehabilitation plan</header>
<subparagraph id="H040886DF6E8F4C088245923029466703"><enum>(A)</enum><header>In general</header><text>A rehabilitation plan shall consist of—</text>
<clause id="H0ADFB2BF03CB4B5A82197D93EBDD6337"><enum>(i)</enum><text display-inline="yes-display-inline">amendments to the plan providing (under reasonable actuarial assumptions) for measures, agreed to by the bargaining parties, to increase contributions, reduce plan expenditures (including plan mergers and consolidations), or reduce future benefit accruals, or to take any combination of such actions, determined necessary to cause the plan to cease, during the rehabilitation period, to be in critical status,</text></clause>
<clause id="H91BB587B18604587B3AC295CAFF2A5FD"><enum>(ii)</enum><text display-inline="yes-display-inline">measures, agreed to by the bargaining parties, to provide funding relief, or</text></clause>
<clause id="H74CE727EA4164D8CA0B6031CCE2B6F3"><enum>(iii)</enum><text display-inline="yes-display-inline">reasonable measures to forestall possible insolvency (within the meaning of section 418E) if the plan sponsor determines that, upon exhaustion of all reasonable measures, the plan would not cease during the rehabilitation period to be in critical status.</text></clause></subparagraph>
<subparagraph id="H13894FB1C7E642B6978EF4C26382A66F"><enum>(B)</enum><header>Rehabilitation period</header><text>The rehabilitation period for any rehabilitation plan adopted pursuant to this section is the 10-year period beginning on the earlier of—</text>
<clause id="HD14497993EF0479AA4D17953E8CAC3B7"><enum>(i)</enum><text>the second anniversary of the date of the adoption of the rehabilitation plan, or</text></clause>
<clause id="HA39037097052407DB33F61DF8220D973" display-inline="no-display-inline"><enum>(ii)</enum><text>the first day of the first plan year of the multiemployer plan following the plan year in which occurs the first date after the day of the certification as of which collective bargaining agreements covering on the day of such certification at least 75 percent of active participants in such multiemployer plan have expired.</text></clause> </subparagraph>
<subparagraph id="HBA428400556D42FFB63CBD7D516B669E" display-inline="no-display-inline"><enum>(C)</enum><header>Reporting</header><text display-inline="yes-display-inline">A summary of any rehabilitation plan or modification thereto adopted during any plan year, together with annual updates regarding the funding ratio of the plan, shall be included in the annual report for such plan year under section 104(a) and in the summary annual report described in section 104(b)(3) of the Employee Retirement and Income Security Act of 1974.</text></subparagraph></paragraph>
<paragraph id="H4C9206FD770344668691B8E369F47193"><enum>(5)</enum><header>Development of rehabilitation plan</header>
<subparagraph id="HEC5CAAE146BD49B1BC1BF4ADF759E7CB"><enum>(A)</enum><header>Proposals by plan sponsor</header>
<clause id="H6496D15FB5404752AD275337650000B0"><enum>(i)</enum><header>In general</header><text>Within 90 days after the date of the certification under subsection (a) that the plan is in critical status (or the date as of which the requirements of subsection (b)(1) are not met with respect to the plan), the plan sponsor shall propose to all bargaining parties a range of alternative schedules of increases in contributions and reductions in future benefit accruals that would serve to carry out a rehabilitation plan under this subsection.</text></clause>
<clause id="H4C4B2B59853B4BC2AAC97619090099F0"><enum>(ii)</enum><header>Proposal assuming no contribution increases</header><text>Such proposals shall include, as one of the proposed schedules, a schedule of those reductions in future benefit accruals that would be necessary to cause the plan to cease to be in critical status if there were no further increases in rates of contribution to the plan.</text></clause>
<clause id="H4F405E2FA41B4CB8925BFFB652DD71CA"><enum>(iii)</enum><header>Proposal where contributions are necessary</header><text>If the plan sponsor determines that the plan will not cease to be in critical status during the rehabilitation period unless the plan is amended to provide for an increase in contributions, the plan sponsor’s proposals shall include a schedule of those increases in contribution rates that would be necessary to cause the plan to cease to be in critical status if future benefit accruals were reduced to the maximum extent permitted by law and the rate of future benefit accruals did not exceed 1 percent per plan year.</text></clause></subparagraph>
<subparagraph id="H6BCD153A2F614FF5972025B7FEF003F"><enum>(B)</enum><header>Requests for additional schedules</header><text>Upon the joint request of all bargaining parties, each of whom—</text>
<clause id="HA81C984107E947F5AD0471439D4DAEC0"><enum>(i)</enum><text>employs at least 5 percent of the active participants, or</text></clause>
<clause id="H3E257319754942BA8DBC10AAB4923DE1"><enum>(ii)</enum><text>represents as an employee organization, for purposes of collective bargaining, at least 5 percent of the active participants, </text></clause><continuation-text continuation-text-level="subparagraph">the plan sponsor shall include among the proposed schedules such schedules of increases in contributions and reductions in future benefit accruals as may be specified by the bargaining parties.</continuation-text></subparagraph>
<subparagraph id="HDBD8463485924B4685EE6D83119D08B8"><enum>(C)</enum><header>Default schedule</header><text>In any case in which the bargaining parties, as of 240 days after the later of the date of the certification under subsection (a) or the first day the plan is in critical status under subsection (a)(3) or (b)(7), have not agreed to at least one of the proposed schedules, the plan sponsor shall amend the plan to implement the schedule required by subparagraph (A)(ii).</text></subparagraph>
<subparagraph id="HD5EFC0BA7ED64193A201797C2D30DAEF"><enum>(D)</enum><header>Subsequent amendments</header><text>Upon the adoption of a schedule of increases in contributions or reductions in future benefit accruals as part of the rehabilitation plan, the plan sponsor may amend the plan thereafter to update the schedule to adjust for any experience of the plan contrary to past actuarial assumptions, except that such an amendment may be made not more than once in any 3-year period.</text></subparagraph>
<subparagraph id="H5FC75B4423674414A7EA3C7FE1DF48"><enum>(E)</enum><header>Allocation of reductions in future benefit accruals</header><text>Any schedule containing reductions in future benefit accruals forming a part of a rehabilitation plan shall be applicable with respect to any group of active participants who are employed by any bargaining party (as an employer obligated to contribute under the plan) in proportion to the extent to which increases in contributions under such schedule apply to such bargaining party.</text></subparagraph></paragraph>
<paragraph id="HF5246BCB69BE44C0B684BD59A0D93CE6"><enum>(6)</enum><header>Maintenance of contributions and restrictions on benefits pending adoption of rehabilitation plan</header><text display-inline="yes-display-inline">The rules of paragraphs (5) and (6) of subsection (b) shall apply for purposes of this subsection by substituting the term <term>rehabilitation plan</term> for <quote>funding improvement plan</quote>.</text></paragraph>
<paragraph id="H0AC4D74C3D584C76ACA4ACA47C00C2EE"><enum>(7)</enum><header>Deemed withdrawal</header><text display-inline="yes-display-inline">Upon the failure of any employer who has an obligation to contribute under the plan to make contributions in compliance with the schedule adopted under paragraph (6) as part of the rehabilitation plan, the failure of the employer may, at the discretion of the plan sponsor, be treated as a withdrawal by the employer from the plan under section 4203 of the Employee Retirement and Income Security Act of 1974 or a partial withdrawal by the employer under section 4205 of such Act.</text></paragraph></subsection>
<subsection id="HB5ADFAE91F544446BA76AB54D6DB55A0"><enum>(d)</enum><header>Definitions</header><text>For purposes of this section—</text>
<paragraph id="HD2ED3750AC4B4463A75900A350987490"><enum>(1)</enum><header>Bargaining party</header><text>The term <term>bargaining party</term> means, in connection with a multiemployer plan—</text>
<subparagraph id="HED4579F255EC4CAEB439A371E354E879"><enum>(A)</enum><text>an employer who has an obligation to contribute under the plan, and</text></subparagraph>
<subparagraph id="HB744BFECFF2648078EFEEA3F4F6E037"><enum>(B)</enum><text>an employee organization which, for purposes of collective bargaining, represents plan participants employed by such an employer.</text></subparagraph></paragraph>
<paragraph id="H7D29742D5D924F3ABCDF685DF1FD5324"><enum>(2)</enum><header>Current liability</header><text>The term <term>current liability</term> has the meaning provided such term in section 431(c)(6)(C).</text></paragraph>
<paragraph id="H5D486A9426F3441B81022395BFA6669B"><enum>(3)</enum><header>Unfunded current liability</header><text>The term <term>unfunded current liability</term> means the excess (if any) of—</text>
<subparagraph id="H19948BB094E04625A013A16F122CB1E8"><enum>(A)</enum><text>the current liability of the plan, over</text></subparagraph>
<subparagraph id="HB21C93542EF74E0694F1C1DCC1006501"><enum>(B)</enum><text>the value of the plan's assets determined under section 431(c)(2).</text></subparagraph></paragraph>
<paragraph id="HA35178A1963449F79FBFB1F8C53CAB47"><enum>(4)</enum><header>Funded percentage</header><text>The term <term>funded percentage</term> means the percentage expressed as a ratio of which—</text>
<subparagraph id="HBD76B8DAC0714DF1A6B44CE87E6DD1C2"><enum>(A)</enum><text>the numerator of which is the value of the plan’s assets, as determined under section 431(c)(2), and</text></subparagraph>
<subparagraph id="HBDE8F019509F4AF1A8314D79DDD63FC"><enum>(B)</enum><text>the denominator of which is the accrued liability of the plan.</text></subparagraph></paragraph>
<paragraph id="H533755CFA7F140119409135383096727"><enum>(5)</enum><header>Unfunded vested benefits</header><text>The term <term>unfunded vested benefits</term> has the meaning provided in section 418(b)(7).</text></paragraph>
<paragraph id="H5B3B9B3EADFD43F8A7AD5F8936F0853D"><enum>(6)</enum><header>Accumulated funding deficiency</header><text>The term <term>accumulated funding deficiency</term> has the meaning provided such term in section 431(a).</text></paragraph>
<paragraph id="HACD9200D84424F05B94498728DE529B"><enum>(7)</enum><header>Active participant</header><text>The term <term>active participant</term> means, in connection with a multiemployer plan, a participant who is in covered service under the plan.</text></paragraph>
<paragraph id="HFA2EFBCDEA554EAE9BDAF3D1605E7462"><enum>(8)</enum><header>Inactive participant</header><text>The term <term>inactive participant</term> means, in connection with a multiemployer plan, a participant who—</text>
<subparagraph id="HA2AB283F54AC45389241544710496048"><enum>(A)</enum><text>is not in covered service under the plan, and</text></subparagraph>
<subparagraph id="H9C6088F26EC64D2791C367AF4C89ABF7"><enum>(B)</enum><text>is in pay status under the plan or has a nonforfeitable right to benefits under the plan.</text></subparagraph></paragraph>
<paragraph id="HEACCD46C90604BB2BCAFC37DE55545F1"><enum>(9)</enum><header>Pay status</header><text>A person is in <quote>pay status</quote> under a multiemployer plan if—</text>
<subparagraph id="HF8CA6EFC70714A5CB6946DD3EEA22C16"><enum>(A)</enum><text>at any time during the current plan year, such person is a participant or beneficiary under the plan and is paid an early, late, normal, or disability retirement benefit under the plan (or a death benefit under the plan related to a retirement benefit), or</text></subparagraph>
<subparagraph id="HFFEBE012CCDC4197A148A81453600069"><enum>(B)</enum><text>to the extent provided in regulations of the Secretary, such person is entitled to such a benefit under the plan.</text></subparagraph></paragraph>
<paragraph id="H8B74EDB70268426B8FA76C00BBB91C3F"><enum>(10)</enum><header>Obligation to contribute</header><text>The term <term>obligation to contribute</term> has the meaning provided such term under section 4212(a).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H3A1E4B835C8242B9B607E3AFF900FACA"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections for subpart A of part III of subchapter D of chapter 1 of such Code is amended by adding at the end the following new item:</text>
<quoted-block style="OLC" id="HEBFF4CADBD8F4F42AFB7A0F1454B7AD" display-inline="no-display-inline">
<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="H478E9A4E629842959D045792F97B2794" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H9B5A5A475A1143ED8526483CF4CCBCA9" level="section">Sec. 432. Additional funding rules for multiemployer plans in endangered status or critical status</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC78BB4AE24F547599C0021A376E66C5C"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after 2005.</text></subsection></section> </subtitle>
<enum>III</enum><header>Other interest-related funding provisions</header>
<section id="H48217F576867471F893C841E253296B9" section-type="subsequent-section" display-inline="no-display-inline"><enum>301.</enum><header>Interest rate assumption for determination of lump sum distributions</header>
<subsection id="H57BAC66CA80D4CA9ABFFEFF39FC45345"><enum>(a)</enum><header>Amendments to Employee Retirement Income Security Act of 1974</header><text>Subparagraph (B) of section 205(g)(3) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(g)(3)</external-xref>) is amended to read as follows:</text>
<quoted-block style="traditional" id="HDF4B860FF783424BA0B0E56B998DDE29" display-inline="no-display-inline">
<subparagraph id="H9EB1486D50AC4FBEA7A8D3BBA199FB7E" indent="up2"><enum>(B)</enum><text>For purposes of subparagraph (A)—</text>
<clause id="HBD908454829B4EFBA4833BA8D845A726"><enum>(i)</enum><text>The term <term>applicable mortality table</term> means the mortality table specified for the plan year under section 303(f)(3).</text></clause>
<clause id="H7C0C7FBF11314ABEAA829BA6D303DB52"><enum>(ii)</enum><text>The term <term>applicable interest rate</term> means the adjusted first, second, and third segment rates applied under rules similar to the rules of section 303(f)(2)(B).</text></clause>
<clause id="HB6E90F0F392C4737AEBD3D08342D5EFE"><enum>(iii)</enum><text>For purposes of clause (ii), the adjusted first, second, and third segment rates are the first, second, and third segment rates which would be determined under section 303(f)(2)(C) if—</text>
<subclause id="H7B417CB4A508493A94772570E17DE760"><enum>(I)</enum><text>section 303(f)(2)(D)(i) were applied by substituting <quote>the yields</quote> for <quote>a 3-year weighted average of yields</quote>, and</text></subclause>
<subclause id="HE3AAECA3476443A8B4FAE797BD31D507"><enum>(II)</enum><text>the applicable percentage under section 303(f)(2)(G) were determined in accordance with the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" line-rules="no-gen" rule-weights="0.0.0.4.0.17" blank-lines-before="1" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" coldef="txt" min-data-value="100" colsep="0" colwidth="155"/><colspec colname="col2" coldef="txt-no-ldr-no-spread" min-data-value="95" colsep="0" colwidth="147"/>
<tbody>
<row><entry stub-hierarchy="1" stub-definition="txt-clr" rowsep="0"><bold>In the case of plan years beginning in:</bold></entry><entry rowsep="0"><bold>The applicable percentage is:</bold></entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2006</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">20 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2007</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">40 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2008</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">60 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2009</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">80 percent.</entry></row></tbody></tgroup></table></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HFCEE8527DE354D3D88D82DB3E2A3E98B"><enum>(b)</enum><header>Amendments to Internal Revenue Code of 1986</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/417">Section 417(e)(3)(A)</external-xref> of the Internal Revenue Code of 1986 is amended by striking clause (ii) and inserting the following:</text>
<quoted-block style="OLC" id="H1C1DEBCDE6434618A4EBB81659A95134" display-inline="no-display-inline">
<clause id="HBB812DD1A6E447A09B8C66BF6100D5C9"><enum>(ii)</enum><header>Applicable mortality table</header><text>For purposes of clause (i), the term <term>applicable mortality table</term> means the mortality table specified for the plan under section 430(f)(3).</text></clause>
<clause id="H4ACB2DACB0FD4CC4A546B40020090176"><enum>(iii)</enum><header>Applicable interest rate</header><text>For purposes of clause (i), the term <term>applicable interest rate</term> means the adjusted first, second, and third segment rates applied under rules similar to the rules of section 430(f)(2)(B).</text></clause>
<clause id="H1861535DAF2D4C8588D5C7DCA3E48799" display-inline="no-display-inline"><enum>(iv)</enum><header>Adjusted first, second, and third segment rates</header><text>For purposes of clause (iii), the adjusted first, second, and third segment rates are the first, second, and third segment rates which would be determined under section 430(f)(2)(C) if—</text>
<subclause id="H8B0C6073AC604A2298CFF7D3DB579BD7"><enum>(I)</enum><text>section 430(f)(2)(D)(i) were applied by substituting <quote>the yields</quote> for <quote>a 3-year weighted average of yields</quote>, and</text></subclause>
<subclause id="H8CD803906B304A729EDC7FEA5341EECA"><enum>(II)</enum><text>the applicable percentage under section 430(f)(2)(G) were determined in accordance with the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" line-rules="no-gen" rule-weights="0.0.0.4.0.17" blank-lines-before="1" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" coldef="txt" min-data-value="100" colsep="0" colwidth="155"/><colspec colname="col2" coldef="txt-no-ldr-no-spread" min-data-value="95" colsep="0" colwidth="147"/>
<tbody>
<row><entry stub-hierarchy="1" stub-definition="txt-clr" rowsep="0"><bold>In the case of plan years beginning in:</bold></entry><entry rowsep="0"><bold>The applicable percentage is:</bold></entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2006</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">20 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2007</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">40 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2008</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">60 percent</entry></row>
<row><entry colname="col1" align="left" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="2">2009</entry><entry colname="col2" align="left" rowsep="0" leader-modify="clr-ldr">80 percent.</entry></row></tbody></tgroup></table></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HAAC42372188F477E93437ECFB8334294"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to plan years beginning after 2005.</text> </subsection></section>
<section id="HF1440FE3CEB44FA9BD6D49CEEBC84812" section-type="subsequent-section" display-inline="no-display-inline"><enum>302.</enum><header>Interest rate assumption for applying benefit limitations to lump sum distributions</header>
<subsection id="HBBD01E04EECC4D5E9E15823198C29176"><enum>(a)</enum><header>In general</header><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/415">section 415(b)(2)(E)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block style="OLC" id="HCEE82874717E4E1E88F11B44CA303F9B" display-inline="no-display-inline">
<clause id="H02FEEA1B1F13433FABC46C180488329"><enum>(ii)</enum><text display-inline="yes-display-inline">For purposes of adjusting any benefit under subparagraph (B) for any form of benefit subject to section 417(e)(3), the interest rate assumption shall not be less than the greater of—</text>
<subclause id="H155F4F11118F477A97F2CA0014A45200"><enum>(I)</enum><text>5.5 percent,</text></subclause>
<subclause id="HB1D5C9B8B5A44DAAB24189B80004CBB4"><enum>(II)</enum><text>the rate that provides a benefit of not more than 105 percent of the benefit that would be provided if the applicable interest rate (as defined in section 417(e)(3)) were the interest rate assumption, or</text></subclause>
<subclause id="H6F370568DBD64190ACC344012DAAFA3"><enum>(III)</enum><text>the rate specified under the plan.</text> </subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H57E55BF00F9442EAB1FE2359B8F3ADBD"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall apply to distributions made in years beginning after 2005.</text></subsection></section>
<enum>IV</enum><header>Improvements in PBGC guarantee provisions </header>
<section id="H904C7C7E4161404285E18D545809990" commented="no" section-type="subsequent-section" display-inline="no-display-inline"><enum>401.</enum><header>Increases in PBGC premiums</header>
<subsection id="H4A96B72B843B48E0A6DF6F4519922EC"><enum>(a)</enum><header>Flat-rate premiums</header><text display-inline="no-display-inline">Section 4006(a)(3) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1306">29 U.S.C. 1306(a)(3)</external-xref>) is amended—</text>
<paragraph id="HFFA242B065F849CAB77D881BC7B15596" commented="no"><enum>(1)</enum><text>by striking clause (i) of subparagraph (A) and inserting the following:</text>
<quoted-block style="traditional" display-inline="no-display-inline" id="H60791AECF11C42EAA5548BEC4D2BC94B">
<clause id="H037A64FA34E44DF1AC1F77C9C0EACF66" indent="up2"><enum>(i)</enum><text>in the case of a single-employer plan—</text>
<subclause id="H65A4FAECACE74E6B95954FC1AA6F7868"><enum>(I)</enum><text>for plan years beginning after December 31, 1990, and before January 1, 2008, an amount equal to the sum of $19, and</text></subclause>
<subclause id="HC807DCA3742F483298BE8696F25E5101"><enum>(II)</enum><text>for plan years beginning after December 31, 2007, an amount determined under subparagraph (F),</text></subclause><continuation-text continuation-text-level="clause">plus the additional premium (if any) determined under subparagraph (E) for each individual who is a participant in such plan during the plan year;</continuation-text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H4E10A7980A464D1ABB4205DF6EA43094" commented="no"><enum>(2)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block style="traditional" display-inline="no-display-inline" id="H10437EB393FE43419465ACA420B4EE04">
<subparagraph id="HF9AD313DA4EE4E07BD6C5D4BCFCAE68" indent="up2"><enum>(F)</enum>
<clause id="H22525F40DB17472DA6973500E524E321" display-inline="yes-display-inline"><enum>(i)</enum><text display-inline="yes-display-inline">Except as otherwise provided in this subparagraph, for purposes of determining the annual premium rate payable to the corporation by a single-employer plan for basic benefits guaranteed under this title, the amount determined under this subparagraph is the greater of $30 or the adjusted amount determined under clause (ii).</text></clause>
<clause id="H04044E72C71B478998F5F9F969EF133" indent="up1"><enum>(ii)</enum><text>The adjusted amount determined under this clause is the product derived by multiplying $30 by the ratio of—</text>
<subclause id="H85465F4A32314D3F98599C05E1E2E577"><enum>(I)</enum><text>the national average wage index (as defined in section 209(k)(1) of the Social Security Act) for the first of the 2 calendar years preceding the calendar year before the calendar year in which the plan year begins, to</text></subclause>
<subclause id="HD8EBA3699F274A38A761B5EFABD9DBBF"><enum>(II)</enum><text>the national average wage index (as so defined) for 2006,</text></subclause><continuation-text continuation-text-level="clause">with such product, if not a multiple of $1, being rounded to the next higher multiple of $1 where such product is a multiple of $0.50 but not of $1, and to the nearest multiple of $1 in any other case.</continuation-text></clause>
<clause id="H119B3AB0E2144F52AB41F97D81BDE3F6" indent="up1" display-inline="no-display-inline"><enum>(iii)</enum><text>For purposes of determining the annual premium rate payable to the corporation by a single-employer plan for basic benefits guaranteed under this title for any plan year beginning after 2007 and before 2012—</text>
<subclause id="H7A1431A3A3594B26B8FC43F018981452"><enum>(I)</enum><text>except as provided in subclause (II), the premium amount referred to in subparagraph (A)(i)(II) for any such plan year is the amount set forth in connection with such plan year in the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" blank-lines-before="1" line-rules="no-gen" rule-weights="0.0.0.4.0.17" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" colwidth="155" colsep="0" coldef="txt" min-data-value="100"/><colspec colname="col2" colwidth="147" colsep="0" coldef="txt-no-ldr-no-spread" min-data-value="95"/>
<tbody>
<row><entry rowsep="0" stub-definition="txt-clr" stub-hierarchy="1"><bold>If the plan year begins in:</bold></entry><entry rowsep="0"><bold>The amount is:</bold></entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2008</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$21.20</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2009</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$23.40</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2010</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$25.60</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2011</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$27.80; or</entry></row></tbody></tgroup></table></subclause>
<subclause id="H86512CD90BFE431F891B8108EAF02300"><enum>(II)</enum><text>if the plan’s funding target attainment percentage for the plan year preceding the current plan year was less than 80 percent, the premium amount referred to in subparagraph (A)(i)(II) for such current plan year is the amount set forth in connection with such current plan year in the following table:</text>
<table table-type="2-Entry" align-to-level="section" frame="none" blank-lines-before="1" line-rules="no-gen" rule-weights="0.0.0.4.0.17" subformat="S6211">
<tgroup cols="2" ttitle-size="0" thead-tbody-ldg-size="10.10.12" grid-typeface="1.1"><colspec colname="col1" colwidth="155" colsep="0" coldef="txt" min-data-value="100"/><colspec colname="col2" colwidth="147" colsep="0" coldef="txt-no-ldr-no-spread" min-data-value="95"/>
<tbody>
<row><entry rowsep="0" stub-definition="txt-clr" stub-hierarchy="1"><bold>If the plan year begins in:</bold></entry><entry rowsep="0"><bold>The amount is:</bold></entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2008</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$22.67</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2009</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">$26.33</entry></row>
<row><entry colname="col1" rowsep="0" align="left" stub-definition="txt-ldr" stub-hierarchy="2">2010 or 2011</entry><entry colname="col2" rowsep="0" align="left" leader-modify="clr-ldr">the amount provided under clause (i)</entry></row></tbody></tgroup></table></subclause></clause>
<clause id="HEB38F528CDBE402A8205EF000999018F" indent="up1"><enum>(iv)</enum><text>For purposes of this subparagraph, the term <term>funding target attainment percentage</term> has the meaning provided such term in section 303(d)(2).</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H8D914315816C4C169E6430E255842491"><enum>(b)</enum><header>Risk-based premiums</header>
<paragraph id="H85E72150BABB48F6007E7F87A30500DC"><enum>(1)</enum><header>In general</header><text>Section 4006(a)(3)(E) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1306">29 U.S.C. 1306(a)(3)(E)</external-xref>) is amended—</text>
<subparagraph id="H08A365521203463D95BA6245449FC294"><enum>(A)</enum><text>in clause (ii), by striking <quote>$9.00</quote> and inserting <quote>the greater of $9.00 or the adjusted amount determined under clause (iii)</quote>;</text></subparagraph>
<subparagraph id="H654BA4A74AE04DF5BDDC3B1E6CFEDE9E"><enum>(B)</enum><text>by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; and</text></subparagraph>
<subparagraph id="HDA72E58540D5483CB7DF843740AE0041"><enum>(C)</enum><text>by inserting after clause (ii) the following new clause:</text>
<quoted-block style="traditional" display-inline="no-display-inline" id="H4B302CB21A3D4E0B87E5003163FB4EEA">
<clause id="H18AE68D380A148E8B1BAE198052CDB" indent="up3"><enum>(iii)</enum><text>The adjusted amount determined under this clause is the product derived by multiplying $9.00 by the ratio of—</text>
<subclause id="HD18DE7E8A5CC45DBA307E5AA75DC0097"><enum>(I)</enum><text>the national average wage index (as defined in section 209(k)(1) of the Social Security Act) for the first of the 2 calendar years preceding the calendar year before the calendar year in which the plan year begins, to</text></subclause>
<subclause id="H972BAE523FA741D7824500434FFB4C14"><enum>(II)</enum><text>the national average wage index (as so defined) for 2006,</text></subclause><continuation-text continuation-text-level="clause">with such product, if not a multiple of $1.00, being rounded to the next higher multiple of $1.00 where such product is a multiple of $0.50 but not of $1.00, and to the nearest multiple of $1.00 in any other case.</continuation-text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HD2C846ECA51C4C7D8C02E2CB51DDC5BD"><enum>(2)</enum><header>Conforming amendments related to funding rules for single-employer plans</header><text>Section 4006(a)(3)(E) of such Act (as amended by paragraph (1)) is amended further—</text>
<subparagraph id="H880F93A567F64BAAAACA5456EFE742C2"><enum>(A)</enum><text>by striking clause (iv) and inserting the following:</text>
<quoted-block style="traditional" id="HF151DA7F3F78441E8E44487CFA7D5915" display-inline="no-display-inline">
<clause id="H6966885EC503438694C5B161BF4E12F9" indent="up3" commented="no"><enum>(iv)</enum>
<subclause id="H8508CD650E534AA500FD0000009856DC" display-inline="yes-display-inline" commented="no"><enum>(I)</enum><text>For purposes of clause (ii), except as provided in subclause (II) or (III), the term <term>unfunded benefits</term> means, for a plan year, the amount which would be the plan’s funding shortfall (as defined in section 303(c)(4)), if the value of plan assets of the plan were equal to the fair market value of such assets and determined without regard to section 303(e)(1), and only vested benefits were taken into account.</text></subclause>
<subclause id="H434932CC2BA14939893F55AE47A74C3E" indent="up1" commented="no"><enum>(II)</enum><text>The interest rate used in valuing vested benefits for purposes of subclause (I) shall be equal to the first, second, or third segment rate which would be determined under section 303(f)(2)(C) if section 303(f)(2)(D)(i) were applied by substituting <quote>the yields</quote> for <quote>the 3-year weighted average of yields</quote>, as applicable under rules similar to the rules under section 303(f)(2)(B).</text></subclause></clause><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HB79C958E8B374C1E80548E8D7D51B97"><enum>(B)</enum><text>by striking clause (iv).</text></subparagraph></paragraph>
<paragraph id="HB8FE67D2E44D481DBA03F237A8DB36B5"><enum>(3)</enum><header>Effective dates</header>
<subparagraph id="HAE43943EC0C542DEB988FC9CA35DE982"><enum>(A)</enum><text>The amendments made by paragraph (1) shall apply with respect to premiums for plan years after 2007.</text></subparagraph>
<subparagraph id="H4EA812FBA9B84CC19B5504A8CD4274FF"><enum>(B)</enum><text>The amendments made by paragraph (2) shall apply with respect to plan years beginning after 2005.</text></subparagraph></paragraph></subsection></section>
<enum>V</enum><header>Disclosure</header>
<section id="HAE4DAA5B0D354796B58846BF407D7D55" section-type="subsequent-section" display-inline="no-display-inline"><enum>501.</enum><header>Defined benefit plan funding notices</header>
<subsection id="H8DFE53236447456C8812D67BE340E7BB"><enum>(a)</enum><header>Application of plan funding notice requirements to all defined benefit plans</header><text>Section 101(f) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(f)</external-xref>) is amended—</text>
<paragraph id="HFC0C5AE2F5F648F39E6442C8FC44E332"><enum>(1)</enum><text>in the heading, by striking <quote><header-in-text level="subsection">Multiemployer</header-in-text></quote>;</text></paragraph>
<paragraph id="HCFE6E15F6ECD44778BA76D1FC8D3402"><enum>(2)</enum><text>in paragraph (1), by striking <quote>which is a multiemployer plan</quote>; and</text></paragraph>
<paragraph id="H3509FEFA7BF24CB788BE0254005B8B0"><enum>(3)</enum><text>in paragraph (2)(B)(iii), by inserting after <quote>plan</quote> the following: <quote>, and a summary of the rules governing termination of single-employer plans under subtitle C of title IV</quote>.</text> </paragraph></subsection>
<subsection id="HC9386A961EC24566B400E0DAEB8D08DF"><enum>(b)</enum><header>Inclusion of statement of the ratio of inactive participants to active participants</header><text>Section 101(f)(2)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(f)(2)(B)</external-xref>) is amended—</text>
<paragraph id="HE29CAB296E6946BCA674602E90442FA7"><enum>(1)</enum><text>in clause (iii)(II) (added by subsection (a)(3) of this section), by striking <quote>and</quote> at the end;</text></paragraph>
<paragraph id="H4FF356233A6B4828AD9D17EFB9F1ED"><enum>(2)</enum><text>in clause (iv), by striking <quote>apply.</quote> and inserting <quote>apply; and</quote>; and</text></paragraph>
<paragraph id="H4D36352961B24A9A9445369800EDDDBD"><enum>(3)</enum><text>by adding at the end the following new clause:</text>
<quoted-block style="OLC" id="HAD1A1E364B59480A87ACEEB0A7ADFB2B" display-inline="no-display-inline">
<clause id="H6EDAC726EC9A4A45B519514C2FD5BF22"><enum>(v)</enum><text display-inline="yes-display-inline">a statement of the ratio, as of the end of the plan year to which the notice relates, of—</text>
<subclause id="HC407CFAD707349F49E60A992C2E74F30"><enum>(I)</enum><text>the number of participants who are not in covered service under the plan and are in pay status under the plan or have a nonforfeitable right to benefits under the plan, to</text></subclause>
<subclause id="H78EE2C61A39445669F037FD5187F366"><enum>(II)</enum><text>the number of participants who are in covered service under the plan.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H2C35C26EBCED4DE086FA4DAD4213A4F7"><enum>(c)</enum><header>Comparison of monthly average of value of plan assets to projected current liabilities</header><text display-inline="yes-display-inline">Section 101(f)(2)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(f)(2)(B)</external-xref>) (as amended by the preceding provisions of this section) is amended further—</text>
<paragraph id="HF3B44A40052042E3A5459DE479251CB4"><enum>(1)</enum><text>by striking clause (ii) and inserting the following:</text>
<quoted-block style="traditional" id="H5E00F1373D68425589AF77F5DFCBA25B" display-inline="no-display-inline">
<clause id="HA64C2923D424448EA717074F04A9A4E"><enum>(ii)</enum><text>a statement of a reasonable estimate of—</text>
<subclause id="HFC37FE5A833A4CF4BE010793C4DA875"><enum>(I)</enum><text>the value of the plan’s assets for the plan year to which the notice relates,</text></subclause>
<subclause id="H89133CB69DB04F85BB5F3607A91E9E34"><enum>(II)</enum><text>projected liabilities of the plan for the plan year to which the notice relates, and</text></subclause>
<subclause id="H97A6BD83CFA34BDC985D3C60261B04D"><enum>(III)</enum><text>the ratio of the estimated amount determined under subclause (I) to the estimated amount determined under subclause (II);</text></subclause></clause><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H963C0E1322ED43F8AA65A2B70091B78C"><enum>(2)</enum><text>by adding at the end (after and below clause (v)) the following:</text>
<quoted-block style="OLC" id="H1AF4F38B461E4992A4106F212470EAEB" display-inline="no-display-inline"><quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">For purposes of determining a plan’s projected liabilities for a plan year under clause (ii)(II), such projected liabilities shall be determined by projecting forward in a reasonable manner to the end of the plan year the liabilities of the plan to participants and beneficiaries as of the first day of the plan year, taking into account any significant events that occur during the plan year and that have a material effect on such liabilities, including any plan amendments in effect for the plan year.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H469D681E4AB642C5BDEAFEA144790135"><enum>(d)</enum><header>Statement of plan’s funding policy and method of asset allocation</header><text>Section 101(f)(2)(B) of such Act (as amended by the preceding provisions of this section) is amended further—</text>
<paragraph id="HBABEB95C2CFC4ED78BE4B07087ED517D"><enum>(1)</enum><text>in clause (iv), by striking <quote>and</quote> at the end;</text></paragraph>
<paragraph id="H64E68768D02240F2A0E853552D35B8D2"><enum>(2)</enum><text>in clause (v), by striking the period and inserting <quote>; and</quote>; and</text></paragraph>
<paragraph id="H3F9B9E13A5AA4E42855346F1DE3D2C43"><enum>(3)</enum><text>by inserting after clause (v) the following new clause:</text>
<quoted-block style="traditional" id="H28348EC220BD4FF7B69F442519BA691F" display-inline="no-display-inline">
<clause id="H177DCC74EFA3481E804DDFFEE8E9C19C"><enum>(vi)</enum><text>a statement setting forth the funding policy of the plan and the asset allocation of investments under the plan (expressed as percentages of total assets) as of the end of the plan year to which the notice relates.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HC9E0263EA7B54E679920606F70F38236"><enum>(e)</enum><header>Notice of funding improvement plan or rehabilitation plan adopted by multiemployer plan</header><text>Section 101(f)(2)(B) of such Act (as amended by the preceding provisions of this section) is amended further—</text>
<paragraph id="H08DF8F83FE8C48248F00FF7579B904B0"><enum>(1)</enum><text>in clause (v), by striking <quote>and</quote> at the end;</text></paragraph>
<paragraph id="HF2149F06C1C945969ED9829901F6DD3"><enum>(2)</enum><text>in clause (vi), by striking the period and inserting <quote>; and</quote>; and</text></paragraph>
<paragraph id="HEBA8F83CF6B94524A3682E477DDBB912"><enum>(3)</enum><text>by inserting after clause (vi) the following new clause:</text>
<quoted-block style="OLC" id="H77676C2C2A964C82B3002CB1CC31A312" display-inline="no-display-inline">
<clause id="H1AD8D13C81E94F45B98C582D3D57E491"><enum>(vii)</enum><text>a summary of any funding improvement plan, rehabilitation plan, or modification thereof adopted under section 305 during the plan year to which the notice relates.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H3980358E6BF045E785E39C8FA24C06BB"><enum>(f)</enum><header>Notice provided to alternate payees</header><text>Section 101(f)(1) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(f)(1)</external-xref>) is amended by adding at the end the following new sentence: <quote>For purposes of this paragraph, the term <term>beneficiary</term> includes an alternate payee (within the meaning of section 206(d)(3)(K)) under an applicable qualified domestic relations order (within the meaning of section 206(d)(3)(B)(i)) receiving benefits under the plan.</quote>.</text></subsection>
<subsection id="HA20221856B124899B142BC79D8EEB24D"><enum>(g)</enum><header>Notice due 90 days after plan’s valuation date</header><text>Section 101(f)(3) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(f)(3)</external-xref>) is amended by striking <quote>two months after the deadline (including extensions) for filing the annual report for the plan year</quote> and inserting <quote>90 days after the end of the plan year</quote>. </text></subsection>
<subsection id="HCD5581101199487BAB7D316F3EBB48D"><enum>(h)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after December 31, 2005.</text></subsection></section>
<section id="H7D270C0D80B94ECF8E903CB7BB5961C2" section-type="subsequent-section"><enum>502.</enum><header>Additional disclosure requirements</header>
<subsection id="HE6440F8AC633452E82A09FC7F7C6ECAB"><enum>(a)</enum><header>Additional annual reporting requirements</header><text>Section 103 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1023">29 U.S.C. 1023</external-xref>) is amended—</text>
<paragraph id="H391ABCCE2FD64129BA14B43FDA84B11E"><enum>(1)</enum><text>in subsection (a)(1)(B), by striking <quote>subsections (d) and (e)</quote> and inserting <quote>subsections (d), (e), and (f)</quote>; and</text></paragraph>
<paragraph id="HD90B466D7C61465BB94F391381334780"><enum>(2)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block style="traditional" id="HCB138241BCD74A98B63D63B923969186" display-inline="no-display-inline">
<subsection id="HB696A018699A487F8F5344ABAF47A9A"><enum>(f)</enum>
<paragraph id="H42B469247CB14F6A98C5273533D457FF" display-inline="yes-display-inline"><enum>(1)</enum><text>With respect to any defined benefit plan, an annual report under this section for a plan year shall include the following:</text>
<subparagraph id="H4012BAD2B05C419FA6148867F4D28915" indent="up1"><enum>(A)</enum>
<clause id="H71B6A7AECADB4FE1B2D2AEF5EA036C1D" display-inline="yes-display-inline"><enum>(i)</enum><text>The ratio of the number of inactive participants under the plan as of the end of such plan year to the number of active participants as of the end of such plan year.</text></clause>
<clause id="H27E2DDCA09E7431500710148416355CA" indent="up1"><enum>(ii)</enum><text>For purposes of clause (i)—</text>
<subclause id="HBEC33B43638A494680F92C59EF7092F7"><enum>(I)</enum><text>the term <term>active participant</term> means an individual who is in covered service under the plan, and</text></subclause>
<subclause id="HB0FBEA3CE77C402E912FC79041B45718"><enum>(II)</enum><text>the term <term>inactive participant</term> means an individual who is not in covered service under the plan who is in pay status under the plan or has a nonforfeitable right to benefits under the plan.</text></subclause></clause></subparagraph>
<subparagraph id="H00B1194E988F4AB58524E4EC2FC212E6" indent="up1"><enum>(B)</enum><text>In any case in which any liabilities to participants or their beneficiaries under such plan as of the end of such plan year consist (in whole or in part) of liabilities to such participants and beneficiaries borne by 2 or more pension plans as of immediately before such plan year, the funded ratio of each of such 2 or more pension plans as of immediately before such plan year and the funded ratio of the plan with respect to which the annual report is filed as of the end of such plan year.</text></subparagraph>
<subparagraph id="H66AE059B3D9D4ED99978AD63F9E13E80" indent="up1" commented="no"><enum>(C)</enum><text>For purposes of this paragraph, the term <term>funded ratio</term> means, in connection with a plan, the percentage which—</text>
<clause id="H4173CF5EE6F44D33BBD2C6970092D5A0" commented="no"><enum>(i)</enum><text>the value of the plan’s assets is of</text></clause>
<clause id="H9DA897A841FC45C6A26B59A6AAA3767D" commented="no"><enum>(ii)</enum><text>the liabilities to participants and beneficiaries under the plan.</text></clause></subparagraph></paragraph>
<paragraph id="H5AE26AADB1534678A375678CFE28FDE4" display-inline="no-display-inline" indent="up1"><enum>(2)</enum><text>With respect to any defined benefit plan which is a multiemployer plan, an annual report under this section for a plan year shall include the following:</text>
<subparagraph id="HE999EF69CB3B451F00C806BDAFCE8267" display-inline="no-display-inline"><enum>(A)</enum><text>The number of employers obligated to contribute to the plan as of the end of such plan year.</text></subparagraph>
<subparagraph id="HA71809393E5B4125949758528F5E59CB"><enum>(B)</enum><text>The number of participants under the plan on whose behalf no employer contributions have been made to the plan for such plan year. For purposes of this subparagraph, the term <term>employer contribution</term> means, in connection with a participant, a contribution made by an employer as an employer of such participant.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HF022259AF21A43448987F500DF5B8595"><enum>(b)</enum><header>Additional information in annual actuarial statement regarding plan retirement projections</header><text>Section 103(d) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1023">29 U.S.C. 1023(d)</external-xref>) is amended—</text>
<paragraph id="H7DD9D5F6BB6244308BABFC885EA610CB"><enum>(1)</enum><text>by redesignating paragraphs (12) and (13) as paragraphs (13) and (14), respectively; and</text></paragraph>
<paragraph id="HA79500E0199240819EDD729EB575BC30"><enum>(2)</enum><text>by inserting after paragraph (11) the following new paragraph:</text>
<quoted-block style="traditional" id="HCD7D1A2AE052432800B2B56EC6CD2604" display-inline="no-display-inline">
<paragraph id="H0EB7A2E737214BF7AD24C902A82EC463"><enum>(12)</enum><text>A statement explaining the actuarial assumptions and methods used in projecting future retirements and asset distributions under the plan.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HFE36C1FBD91D4688AEC1D8DFDF751C92"><enum>(c)</enum><header>Summary annual report filed within 15 days after deadline for filing of annual report</header><text>Section 104(b)(3) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024(b)(3)</external-xref>) is amended—</text>
<paragraph id="H0F7EB183C40A4C1BB8C0C6797E340757"><enum>(1)</enum><text>by striking <quote>Within 210 days after the close of the fiscal year,</quote> and inserting <quote>Within 15 business days after the due date under subsection (a)(1) for the filing of the annual report for the fiscal year of the plan</quote>; and</text></paragraph>
<paragraph id="HE5C8497C8429468399C52FDED8143730"><enum>(2)</enum><text>by striking <quote>the latest</quote> and inserting <quote>such</quote>.</text></paragraph></subsection>
<subsection id="HF95C15D87DD94CA2B039799EFBFDCE73"><enum>(d)</enum><header>Information made available to participants, beneficiaries, and employers with respect to multiemployer plans</header>
<paragraph id="H155F791EAD274DFA90F33B70FC5CEA56"><enum>(1)</enum><header>In general</header><text>Section 101 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021</external-xref>) is amended—</text>
<subparagraph id="HA1DB2175E6444259A87B5600CD36A2FD"><enum>(A)</enum><text>by redesignating subsection (j) as subsection (k); and</text></subparagraph>
<subparagraph id="H76EB2B293B004903AE9F97F8C0293094"><enum>(B)</enum><text>by inserting after subsection (i) the following new subsection:</text>
<quoted-block style="OLC" id="H44FEA2038B2C40DFAC47372470D20029" display-inline="no-display-inline">
<subsection id="HA99CB4905F4F4AFFB6EF745BCE2D13A8"><enum>(j)</enum><header>Multiemployer plan information made available on request</header><text></text>
<paragraph id="HCBB135C718774AE5870178BDC840A996"><enum>(1)</enum><header>In general</header><text>Each administrator of a multiemployer plan shall furnish to any plan participant or beneficiary or any employer having an obligation to contribute to the plan, who so requests in writing—</text>
<subparagraph id="HF5BDB2B5201B48C7AB3C21A65C6948B8"><enum>(A)</enum><text>a copy of any actuary report received by the plan for any plan year which has been in receipt by the plan for at least 30 days, and</text></subparagraph>
<subparagraph id="HC039FCD032B34882B5C146E0452CEACE"><enum>(B)</enum><text>a copy of any financial report prepared for the plan by any plan investment manager or advisor or other person who is a plan fiduciary which has been in receipt by the plan for at least 30 days.</text></subparagraph></paragraph>
<paragraph id="H2C57EE667D514D3489CE233BDE3ADB7"><enum>(2)</enum><header>Compliance</header><text>Information required to be provided under paragraph (1) —</text>
<subparagraph id="HF63E84F9B5D949DFB22E94A03BFC3DB5"><enum>(A)</enum><text>shall be provided to the requesting participant, beneficiary, or employer within 30 days after the request in a form and manner prescribed in regulations of the Secretary, and</text></subparagraph>
<subparagraph id="H0A5EC983D4AD479FBCB357D2B2D28E06"><enum>(B)</enum><text>may be provided in written, electronic, or other appropriate form to the extent such form is reasonably accessible to persons to whom the information is required to be provided.</text></subparagraph></paragraph>
<paragraph id="HF882577563BB4AF5851660A3ACA3A456"><enum>(3)</enum><header>Limitations</header><text>In no case shall a participant, beneficiary, or employer be entitled under this subsection to receive more than one copy of any report described in paragraph (1) during any one 12-month period. The administrator may make a reasonable charge to cover copying, mailing, and other costs of furnishing copies of information pursuant to paragraph (1). The Secretary may by regulations prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HB750B58D5BFB43B098FB1B46A218A809"><enum>(2)</enum><header>Enforcement</header><text>Section 502(c)(4) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(c)(4)</external-xref>) is amended by inserting <quote>or 101(j)</quote> after <quote>101(f)(1)</quote>.</text> </paragraph>
<paragraph id="HC80E6A1BFF734982B9B1961BAE41341B"><enum>(3)</enum><header>Regulations</header><text>The Secretary shall prescribe regulations under section 101(j)(2) of the Employee Retirement Income Security Act of 1974 (added by paragraph (1) of this subsection) not later than 90 days after the date of the enactment of this Act.</text></paragraph></subsection>
<subsection id="HAA354C1D2ACF4A699715E621335C1686"><enum>(e)</enum><header>Notice of potential withdrawal liability to multiemployer plans</header>
<paragraph id="H4F744D951EE4460E96475090C5875EE"><enum>(1)</enum><header>In general</header><text>Section 101 of such Act (as amended by subsection (e) of this section) is amended further—</text>
<subparagraph id="H7FF8521E2CB248129DEF00A3840037C1"><enum>(A)</enum><text>by redesignating subsection (k) as subsection (l); and</text></subparagraph>
<subparagraph id="H58400C8E371148F6B5051E78F6F89C5C"><enum>(B)</enum><text>by inserting after subsection (j) the following new subsection:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H4BDAB6BA4F674F819457B800EC4C9467">
<subsection id="H961F005CF97A42E1BF40FB3F08061735"><enum>(k)</enum><header>Notice of potential withdrawal liability</header><text></text>
<paragraph id="HFCE7349409F7463DB885F90DD2537CE"><enum>(1)</enum><header>In general</header><text>The plan sponsor or administrator shall furnish to any employer who has an obligation to contribute under the plan and who so requests in writing notice of—</text>
<subparagraph id="H56E644C2E50E495FBB2C6261CD1D6C34"><enum>(A)</enum><text>the amount which would be the amount of such employer’s withdrawal liability under part 1 of subtitle E of title IV if such employer withdrew on the last day of the plan year preceding the date of the request, and</text></subparagraph>
<subparagraph id="H225FF60491F94A179CB037C3A63E5549"><enum>(B)</enum><text display-inline="yes-display-inline">the average increase, per participant under the plan, in accrued liabilities under the plan as of the end of such plan year to participants under such plan on whose behalf no employer contributions are payable (or their beneficiaries), which would be attributable to such a withdrawal by such employer.</text></subparagraph><continuation-text continuation-text-level="paragraph">For purposes of subparagraph (B), the term <term>employer contribution</term> means, in connection with a participant, a contribution made by an employer as an employer of such participant.</continuation-text></paragraph>
<paragraph id="H5D5418A74D1149EE9420281BC514E6A1"><enum>(2)</enum><header>Compliance</header><text>Any notice required to be provided under paragraph (1)—</text>
<subparagraph id="HA639D02FA88D4DF2B210D6A044457E51"><enum>(A)</enum><text>shall be provided to the requesting employer within 180 days after the request in a form and manner prescribed in regulations of the Secretary, and</text></subparagraph>
<subparagraph id="H373C10FE9E7A4B2DA16F3B315FB6AEAF"><enum>(B)</enum><text>may be provided in written, electronic, or other appropriate form to the extent such form is reasonably accessible to employers to whom the information is required to be provided.</text></subparagraph></paragraph>
<paragraph id="H4D14FB1269FA4E3BAE71A6DD2BE36455"><enum>(3)</enum><header>Limitations</header><text>In no case shall an employer be entitled under this subsection to receive more than one notice described in paragraph (1) during any one 12-month period. The person required to provide such notice may make a reasonable charge to cover copying, mailing, and other costs of furnishing such notice pursuant to paragraph (1). The Secretary may by regulations prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="H42F11F720A66426AB3C375F3B1C5503F" display-inline="no-display-inline"><enum>(f)</enum><header>Effective date</header><text>The amendments made by this section shall apply to plan years beginning after December 31, 2005.</text></subsection></section>
<section id="HA162A6723A374DBC9545320137055936"><enum>503.</enum><header>Notice to participants and beneficiaries of section 4010 filings with the PBGC</header>
<subsection id="H1A4BDDEDF5864DD18DF012E3426443D7"><enum>(a)</enum><header>In general</header><text>Section 4010 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1310">29 U.S.C. 1310</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block style="OLC" id="H67D3B4E4163548C9A8C4E8E373BFDB1" display-inline="no-display-inline">
<subsection id="H2D04C0F28694442B8768845B186B8B10"><enum>(d)</enum><header>Notice to participants and beneficiaries</header>
<paragraph id="H0DE7F25ED79E4B3F86BD0936E5FE1888"><enum>(1)</enum><header>In general</header><text>Not later than 90 days after the submission by any person to the corporation of information or documentary material with respect to any plan pursuant to subsection (a), such person shall provide notice of such submission to each participant and beneficiary under the plan (and under all plans maintained by members of the controlled group of each contributing sponsor of the plan). Such notice shall also set forth—</text>
<subparagraph id="H28238E89098A48FCBB016E771215C7B3"><enum>(A)</enum><text>the number of single-employer plans covered by this title which are in at-risk status and are maintained by contributing sponsors of such plan (and by members of their controlled groups) with respect to which the funding target attainment percentage for the preceding plan year of each plan is less than 60 percent;</text></subparagraph>
<subparagraph id="H9DFC87D2D18846D4BC1C67A13D9CF12E"><enum>(B)</enum><text>the value of the assets of each of the plans described in subparagraph (A) for the plan year, the funding target for each of such plans for the plan year, and the funding target attainment percentage of each of such plans for the plan year; and</text></subparagraph>
<subparagraph id="HCFD8B00B8C494C2A96369CF2C3905376"><enum>(C)</enum><text display-inline="yes-display-inline">taking into account all single-employer plans maintained by the contributing sponsor and the members of its controlled group as of the end of such plan year—</text>
<clause id="HC449B8820BAB4415A2DF7990EAE28A0"><enum>(i)</enum><text>the aggregate total of the values of plan assets of such plans as of the end of such plan year, </text></clause>
<clause id="H14ECE11D8E2D4D65AB4286BCA5687D6"><enum>(ii)</enum><text>the aggregate total of the funding targets of such plans, as of the end of such plan year, taking into account only benefits to which participants and beneficiaries have a nonforfeitable right, and</text></clause>
<clause id="H0897CDEB021A407FB6BBBC10BC9005D"><enum>(iii)</enum><text>the aggregate funding targets attainment percentage with respect to the contributing sponsor for the preceding plan year.</text></clause></subparagraph></paragraph>
<paragraph id="H8379D857298C4011A72F985CDFC357C4"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="HF1D2791F8B064B8EA797010845F47BA5" commented="no"><enum>(A)</enum><header>Value of plan assets</header><text>The term <term>value of plan assets</term> means the value of plan assets, as determined under section 303(a)(2).</text></subparagraph>
<subparagraph id="H305AF7728D074212990094B7685F3341" commented="no"><enum>(B)</enum><header>Funding target</header><text>The term <term>funding target</term> has the meaning provided under section 303(d)(1).</text></subparagraph>
<subparagraph id="H28E32CCFF17549CFA88DBA076B0099DF" commented="no"><enum>(C)</enum><header>Funding target attainment percentage</header><text>The term <term>funding target attainment percentage</term> has the meaning provided in section 303(d)(2). </text></subparagraph>
<subparagraph id="H03AA4A9B2F7145E3BD03C8DDF460B89E" commented="no"><enum>(D)</enum><header>Aggregate funding target attainment percentage</header><text>The term <term>aggregate funding targets attainment percentage</term> with respect to a contributing sponsor for a plan year is the percentage, taking into account all plans maintained by the contributing sponsor and the members of its controlled group as of the end of such plan year, which</text>
<clause id="H59A449E8AF0F4B8280FE44B914DF800" commented="no"><enum>(i)</enum><text>the aggregate total of the values of plan assets, as of the end of such plan year, of such plans, is of</text></clause>
<clause id="H020265ABBC9D456680143CF6384E15C4" commented="no"><enum>(ii)</enum><text>the aggregate total of the funding targets of such plans, as of the end of such plan year, taking into account only benefits to which participants and beneficiaries have a nonforfeitable right.</text></clause></subparagraph>
<subparagraph id="H25E42B3A9AE74E58A4FDD685070050DC"><enum>(E)</enum><header>At-risk status</header><text>The term <term>at-risk status</term> has the meaning provided in section 303(h)(3). </text></subparagraph></paragraph>
<paragraph id="HC6FC77361EA74663A1AA6331086650B8" display-inline="no-display-inline" commented="no"><enum>(3)</enum><header>Compliance</header>
<subparagraph id="HDE867C2122FB4BFB951562959876D12E" commented="no"><enum>(A)</enum><header>In general</header><text>Any notice required to be provided under paragraph (1) may be provided in written, electronic, or other appropriate form to the extent such form is reasonably accessible to individuals to whom the information is required to be provided.</text></subparagraph>
<subparagraph id="H96A823FAB1D34966AC1CE2738FCFA2E5" commented="no"><enum>(B)</enum><header>Limitations</header><text>In no case shall a participant or beneficiary be entitled under this subsection to receive more than one notice described in paragraph (1) during any one 12-month period. The person required to provide such notice may make a reasonable charge to cover copying, mailing, and other costs of furnishing such notice pursuant to paragraph (1). The corporation may by regulations prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H919D44E9E6E04F15AC1F0081B9EFD3D9"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply with respect to plan years beginning after 2006.</text></subsection></section>
<enum>VI</enum><header>Investment advice</header>
<section id="H63AEA4058F0E44C99586BF3BDB98DCEA" section-type="subsequent-section"><enum>601.</enum><header>Amendments to Employee Retirement Income Security Act of 1974 providing prohibited transaction exemption for provision of investment advice</header>
<subsection id="HC197BB09ED684EF2868065F0E1929980"><enum>(a)</enum><header>Exemption from prohibited transactions</header><text>Section 408(b) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1108">29 U.S.C. 1108(b)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="Employee" id="HE613C006B51144158CFA4B7EFE00ECEE">
<paragraph id="HB1AC5C820C284D2490209D266F40BF34"><enum>(14)</enum>
<subparagraph id="H01D81B4B64804502A642005098855C35" display-inline="yes-display-inline"><enum>(A)</enum><text>Any transaction described in subparagraph (B) in connection with the provision of investment advice described in section 3(21)(A)(ii), in any case in which—</text>
<clause id="H21058BE1B6B74840AE795657CBFA0050" indent="up1"><enum>(i)</enum><text>the investment of assets of the plan is subject to the direction of plan participants or beneficiaries,</text></clause>
<clause id="HF7A15B7D41564926910069E9833F6953" indent="up1"><enum>(ii)</enum><text>the advice is provided to the plan or a participant or beneficiary of the plan by a fiduciary adviser in connection with any sale, acquisition, or holding of a security or other property for purposes of investment of plan assets, and</text></clause>
<clause id="H5D9660DE89464D1CBBBAD1C27B7BF57D" indent="up1"><enum>(iii)</enum><text>the requirements of subsection (g) are met in connection with the provision of the advice.</text></clause></subparagraph>
<subparagraph id="H86190FF1384E47429ED061D4E85F0727" indent="paragraph"><enum>(B)</enum><text>The transactions described in this subparagraph are the following:</text>
<clause id="H39C9980F65A64B0EB7FB81BFD4BBFC53"><enum>(i)</enum><text>the provision of the advice to the plan, participant, or beneficiary;</text></clause>
<clause id="H1D5B957B85D848838FB0F1F6F2594D8F"><enum>(ii)</enum><text>the sale, acquisition, or holding of a security or other property (including any lending of money or other extension of credit associated with the sale, acquisition, or holding of a security or other property) pursuant to the advice; and</text></clause>
<clause id="H0F348FC12F7D452FB497EDD1A196BAFE"><enum>(iii)</enum><text>the direct or indirect receipt of fees or other compensation by the fiduciary adviser or an affiliate thereof (or any employee, agent, or registered representative of the fiduciary adviser or affiliate) in connection with the provision of the advice or in connection with a sale, acquisition, or holding of a security or other property pursuant to the advice.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HCA7F75DF04F7456F00ECA1008EC7E7D3"><enum>(b)</enum><header>Requirements</header><text>Section 408 of such Act is amended further by adding at the end the following new subsection:</text>
<quoted-block id="HB2E58EC1BAFF4D93B3BB11B674B4CCD">
<subsection id="HF56B8F2455D44DD69DC138995B4CF6BA"><enum>(g)</enum><header>Requirements relating to provision of investment advice by fiduciary advisers</header>
<paragraph id="H39BB025261BD4FECADD8035BA4E5AD92"><enum>(1)</enum><header>In general</header><text>The requirements of this subsection are met in connection with the provision of investment advice referred to in section 3(21)(A)(ii), provided to an employee benefit plan or a participant or beneficiary of an employee benefit plan by a fiduciary adviser with respect to the plan in connection with any sale, acquisition, or holding of a security or other property for purposes of investment of amounts held by the plan, if—</text>
<subparagraph id="H39A4C43035AD47DF91B8F83FACB750E0"><enum>(A)</enum><text>in the case of the initial provision of the advice with regard to the security or other property by the fiduciary adviser to the plan, participant, or beneficiary, the fiduciary adviser provides to the recipient of the advice, at a time reasonably contemporaneous with the initial provision of the advice, a written notification (which may consist of notification by means of electronic communication)—</text>
<clause id="H29F58DEF5B934A06B46DF8D9759B63E6"><enum>(i)</enum><text>of all fees or other compensation relating to the advice that the fiduciary adviser or any affiliate thereof is to receive (including compensation provided by any third party) in connection with the provision of the advice or in connection with the sale, acquisition, or holding of the security or other property,</text></clause>
<clause id="HE9CCC429463C4EDF9100C6E5D3D2D700"><enum>(ii)</enum><text>of any material affiliation or contractual relationship of the fiduciary adviser or affiliates thereof in the security or other property,</text></clause>
<clause id="HE62BF8A6AB3F4DA7A4FC834716F39B49"><enum>(iii)</enum><text>of any limitation placed on the scope of the investment advice to be provided by the fiduciary adviser with respect to any such sale, acquisition, or holding of a security or other property,</text></clause>
<clause id="HFE684EDCBD57435C8FCC4991E209D42B"><enum>(iv)</enum><text>of the types of services provided by the fiduciary adviser in connection with the provision of investment advice by the fiduciary adviser,</text></clause>
<clause id="H848FE539F5F84308BB910849A6A02DE8"><enum>(v)</enum><text>that the adviser is acting as a fiduciary of the plan in connection with the provision of the advice, and</text></clause>
<clause id="HF844C4A424664DBF8D9F002E5C8C9C01"><enum>(vi)</enum><text>that a recipient of the advice may separately arrange for the provision of advice by another adviser, that could have no material affiliation with and receive no fees or other compensation in connection with the security or other property,</text></clause></subparagraph>
<subparagraph id="H54FB62013CED4BF7A711F2FB7400EB96"><enum>(B)</enum><text>the fiduciary adviser provides appropriate disclosure, in connection with the sale, acquisition, or holding of the security or other property, in accordance with all applicable securities laws,</text></subparagraph>
<subparagraph id="H334BBB137D10476A97E4136C307548BF"><enum>(C)</enum><text>the sale, acquisition, or holding occurs solely at the direction of the recipient of the advice,</text></subparagraph>
<subparagraph id="HBEFF2AA6063B4FA0999C67ACD1750087"><enum>(D)</enum><text>the compensation received by the fiduciary adviser and affiliates thereof in connection with the sale, acquisition, or holding of the security or other property is reasonable, and</text></subparagraph>
<subparagraph id="HFC3ED002E152432F9FA03FAB7BBE647"><enum>(E)</enum><text>the terms of the sale, acquisition, or holding of the security or other property are at least as favorable to the plan as an arm’s length transaction would be.</text></subparagraph></paragraph>
<paragraph id="H857DB0685B2641AD87BE5DB93C639698"><enum>(2)</enum><header>Standards for presentation of information</header>
<subparagraph id="HD3871B3B498E444DB56546CC069888E1"><enum>(A)</enum><header>In general</header><text>The notification required to be provided to participants and beneficiaries under paragraph (1)(A) shall be written in a clear and conspicuous manner and in a manner calculated to be understood by the average plan participant and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of the information required to be provided in the notification.</text></subparagraph>
<subparagraph id="HE65B03922DD64FDBB1FDF44CBAA37648"><enum>(B)</enum><header>Model form for disclosure of fees and other compensation</header><text>The Secretary shall issue a model form for the disclosure of fees and other compensation required in paragraph (1)(A)(i) which meets the requirements of subparagraph (A).</text></subparagraph></paragraph>
<paragraph id="HE405D9EB97C54AA79B00B4ECA2D7D06"><enum>(3)</enum><header>Exemption conditioned on making required information available annually, on request, and in the event of material change</header><text>The requirements of paragraph (1)(A) shall be deemed not to have been met in connection with the initial or any subsequent provision of advice described in paragraph (1) to the plan, participant, or beneficiary if, at any time during the provision of advisory services to the plan, participant, or beneficiary, the fiduciary adviser fails to maintain the information described in clauses (i) through (iv) of subparagraph (A) in currently accurate form and in the manner described in paragraph (2) or fails—</text>
<subparagraph id="HC3484453B2654EBD8B58C3B03BA731C"><enum>(A)</enum><text>to provide, without charge, such currently accurate information to the recipient of the advice no less than annually,</text></subparagraph>
<subparagraph id="H033D185D17CD497B90069D1332A6D212"><enum>(B)</enum><text>to make such currently accurate information available, upon request and without charge, to the recipient of the advice, or</text></subparagraph>
<subparagraph id="H17783BB43A4C4039A9C3D406FAE35DA"><enum>(C)</enum><text>in the event of a material change to the information described in clauses (i) through (iv) of paragraph (1)(A), to provide, without charge, such currently accurate information to the recipient of the advice at a time reasonably contemporaneous to the material change in information.</text></subparagraph></paragraph>
<paragraph id="HBCAA57E7DE934FD5AA17168723EC952F"><enum>(4)</enum><header>Maintenance for 6 years of evidence of compliance</header><text>A fiduciary adviser referred to in paragraph (1) who has provided advice referred to in such paragraph shall, for a period of not less than 6 years after the provision of the advice, maintain any records necessary for determining whether the requirements of the preceding provisions of this subsection and of subsection (b)(14) have been met. A transaction prohibited under section 406 shall not be considered to have occurred solely because the records are lost or destroyed prior to the end of the 6-year period due to circumstances beyond the control of the fiduciary adviser.</text></paragraph>
<paragraph id="H77C8205101654D408F511FC639D96E4E"><enum>(5)</enum><header>Exemption for plan sponsor and certain other fiduciaries</header>
<subparagraph id="H5035F6C7F8534497B9002934D1B7B33"><enum>(A)</enum><header>In general</header><text>Subject to subparagraph (B), a plan sponsor or other person who is a fiduciary (other than a fiduciary adviser) shall not be treated as failing to meet the requirements of this part solely by reason of the provision of investment advice referred to in section 3(21)(A)(ii) (or solely by reason of contracting for or otherwise arranging for the provision of the advice), if—</text>
<clause id="H0EE68487EE474C4BACA5267BB9939DD2"><enum>(i)</enum><text>the advice is provided by a fiduciary adviser pursuant to an arrangement between the plan sponsor or other fiduciary and the fiduciary adviser for the provision by the fiduciary adviser of investment advice referred to in such section,</text></clause>
<clause id="HEC785954D75E4F33AC6491FDE0C64F4F"><enum>(ii)</enum><text>the terms of the arrangement require compliance by the fiduciary adviser with the requirements of this subsection, and</text></clause>
<clause id="H444EE15325D546EB8667D07DB849BA41"><enum>(iii)</enum><text>the terms of the arrangement include a written acknowledgment by the fiduciary adviser that the fiduciary adviser is a fiduciary of the plan with respect to the provision of the advice.</text></clause></subparagraph>
<subparagraph id="HF6FED333B30544558BFD7FE22D9C4F"><enum>(B)</enum><header>Continued duty of prudent selection of adviser and periodic review</header><text>Nothing in subparagraph (A) shall be construed to exempt a plan sponsor or other person who is a fiduciary from any requirement of this part for the prudent selection and periodic review of a fiduciary adviser with whom the plan sponsor or other person enters into an arrangement for the provision of advice referred to in section 3(21)(A)(ii). The plan sponsor or other person who is a fiduciary has no duty under this part to monitor the specific investment advice given by the fiduciary adviser to any particular recipient of the advice.</text></subparagraph>
<subparagraph id="H4EB8D12AB9A944A3B5D44EFF3D008EFA"><enum>(C)</enum><header>Availability of plan assets for payment for advice</header><text>Nothing in this part shall be construed to preclude the use of plan assets to pay for reasonable expenses in providing investment advice referred to in section 3(21)(A)(ii).</text></subparagraph></paragraph>
<paragraph id="H5E417977421241FAA7E2922BB598F51"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection and subsection (b)(14)—</text>
<subparagraph id="HD1111F2C8C014BED98723182C4D6E206"><enum>(A)</enum><header>Fiduciary adviser</header><text>The term <term>fiduciary adviser</term> means, with respect to a plan, a person who is a fiduciary of the plan by reason of the provision of investment advice by the person to the plan or to a participant or beneficiary and who is—</text>
<clause id="H2AA9B25B595C40E59DC9E1BDB392563F"><enum>(i)</enum><text>registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>) or under the laws of the State in which the fiduciary maintains its principal office and place of business,</text></clause>
<clause id="H5FCE1DD494094B63B2FEAB564121993"><enum>(ii)</enum><text>a bank or similar financial institution referred to in section 408(b)(4) or a savings association (as defined in section 3(b)(1) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813(b)(1)</external-xref>)), but only if the advice is provided through a trust department of the bank or similar financial institution or savings association which is subject to periodic examination and review by Federal or State banking authorities,</text></clause>
<clause id="H628280B4E1E2474D0002AD49EC8B644C"><enum>(iii)</enum><text>an insurance company qualified to do business under the laws of a State,</text></clause>
<clause id="H92E9846BA4274CCEA8A7C9D68C5CC34"><enum>(iv)</enum><text>a person registered as a broker or dealer under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>),</text></clause>
<clause id="H17BDF4B6827245649C5DB991BC5399B"><enum>(v)</enum><text>an affiliate of a person described in any of clauses (i) through (iv), or</text></clause>
<clause id="H7B549127D250499C803DEB6C400A8B2"><enum>(vi)</enum><text>an employee, agent, or registered representative of a person described in any of clauses (i) through (v) who satisfies the requirements of applicable insurance, banking, and securities laws relating to the provision of the advice.</text></clause></subparagraph>
<subparagraph id="H49D5EC3737B64822ABFD7FE26723C61F"><enum>(B)</enum><header>Affiliate</header><text>The term <term>affiliate</term> of another entity means an affiliated person of the entity (as defined in section 2(a)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2(a)(3)</external-xref>)).</text></subparagraph>
<subparagraph id="HE3245EB22CE14D9F811FD0E873E79FFB"><enum>(C)</enum><header>Registered representative</header><text>The term <term>registered representative</term> of another entity means a person described in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(18)</external-xref>) (substituting the entity for the broker or dealer referred to in such section) or a person described in section 202(a)(17) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(17)</external-xref>) (substituting the entity for the investment adviser referred to in such section).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H4D3C071405B344699BB6B71771006365"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to advice referred to in section 3(21)(A)(ii) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> provided on or after January 1, 2006.</text></subsection></section>
<section id="HED035E70A98E4A2695FC21F8E993A89D"><enum>602.</enum><header>Amendments to Internal Revenue Code of 1986 providing prohibited transaction exemption for provision of investment advice</header>
<subsection id="H9CDF3366082F47C5AB8D00AF4200BD9B"><enum>(a)</enum><header>Exemption from prohibited transactions</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/4975">section 4975</external-xref> of the Internal Revenue Code of 1986 (relating to exemptions from tax on prohibited transactions) is amended—</text>
<paragraph id="H1313831052504D55914EC67F1F08FEDC"><enum>(1)</enum><text>in paragraph (14), by striking <quote>or</quote> at the end;</text></paragraph>
<paragraph id="HBD07A0218D8047CFA2DAA31E008C7374"><enum>(2)</enum><text>in paragraph (15), by striking the period at the end and inserting <quote>; or</quote>; and</text></paragraph>
<paragraph id="H971B3CBC0C4F4DCBBCAEC1F57814BC2F"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HB80E2D52C3C44BA1A684950766ED1D7E">
<paragraph id="H2F5183346E64475480AECE00235BF8EA"><enum>(16)</enum><text>any transaction described in subsection (f)(7)(A) in connection with the provision of investment advice described in subsection (e)(3)(B)(i), in any case in which—</text>
<subparagraph id="H902BA1D022A44F32A70005D5C983008F"><enum>(A)</enum><text>the investment of assets of the plan is subject to the direction of plan participants or beneficiaries,</text></subparagraph>
<subparagraph id="H126542D258FD4FDFAD973E0011C5C2E"><enum>(B)</enum><text>the advice is provided to the plan or a participant or beneficiary of the plan by a fiduciary adviser in connection with any sale, acquisition, or holding of a security or other property for purposes of investment of plan assets, and</text></subparagraph>
<subparagraph id="H2012538648A44E739419EBF4E613FD91"><enum>(C)</enum><text>the requirements of subsection (f)(7)(B) are met in connection with the provision of the advice.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H85FB1A3AE174424882C89116D93EBC64"><enum>(b)</enum><header>Allowed transactions and requirements</header><text>Subsection (f) of such section 4975 (relating to other definitions and special rules) is amended by adding at the end the following new paragraph:</text>
<quoted-block id="H050E97EF8CAA456A8FC153A669D3AE44">
<paragraph id="HAD9FED00F79F445E9599AE8EB5647986"><enum>(7)</enum><header>Provisions relating to investment advice provided by fiduciary advisers</header>
<subparagraph id="HDE5AC8A773894CFB9C46FFDBDACE53B1"><enum>(A)</enum><header>Transactions allowable in connection with investment advice provided by fiduciary advisers</header><text>The transactions referred to in subsection (d)(16), in connection with the provision of investment advice by a fiduciary adviser, are the following:</text>
<clause id="H444F6A475E6D42DFA0F48157527D73EC"><enum>(i)</enum><text>the provision of the advice to the plan, participant, or beneficiary;</text></clause>
<clause id="HFD666839B2E248F5B68CBF73B4800742"><enum>(ii)</enum><text>the sale, acquisition, or holding of a security or other property (including any lending of money or other extension of credit associated with the sale, acquisition, or holding of a security or other property) pursuant to the advice; and</text></clause>
<clause id="HFD9A39D25EA04E6500528B4065ECC546"><enum>(iii)</enum><text>the direct or indirect receipt of fees or other compensation by the fiduciary adviser or an affiliate thereof (or any employee, agent, or registered representative of the fiduciary adviser or affiliate) in connection with the provision of the advice or in connection with a sale, acquisition, or holding of a security or other property pursuant to the advice.</text></clause></subparagraph>
<subparagraph id="H75FAC6C1370F430B92897F1C5D20D2D1"><enum>(B)</enum><header>Requirements relating to provision of investment advice by fiduciary advisers</header><text>The requirements of this subparagraph (referred to in subsection (d)(16)(C)) are met in connection with the provision of investment advice referred to in subsection (e)(3)(B), provided to a plan or a participant or beneficiary of a plan by a fiduciary adviser with respect to the plan in connection with any sale, acquisition, or holding of a security or other property for purposes of investment of amounts held by the plan, if—</text>
<clause id="H50F3863ECE20441CAB515C6CF7FF78EB"><enum>(i)</enum><text>in the case of the initial provision of the advice with regard to the security or other property by the fiduciary adviser to the plan, participant, or beneficiary, the fiduciary adviser provides to the recipient of the advice, at a time reasonably contemporaneous with the initial provision of the advice, a written notification (which may consist of notification by means of electronic communication)—</text>
<subclause id="HCD56ED6932F245C2852481B5F74F92B0"><enum>(I)</enum><text>of all fees or other compensation relating to the advice that the fiduciary adviser or any affiliate thereof is to receive (including compensation provided by any third party) in connection with the provision of the advice or in connection with the sale, acquisition, or holding of the security or other property,</text></subclause>
<subclause id="H99FBE8404F014017A4594CB474492C45"><enum>(II)</enum><text>of any material affiliation or contractual relationship of the fiduciary adviser or affiliates thereof in the security or other property,</text></subclause>
<subclause id="HB71899C6BCB8493697A58E32486DE174"><enum>(III)</enum><text>of any limitation placed on the scope of the investment advice to be provided by the fiduciary adviser with respect to any such sale, acquisition, or holding of a security or other property,</text></subclause>
<subclause id="HBB544405D5E14604A42C36F4A7FA8D6B"><enum>(IV)</enum><text>of the types of services provided by the fiduciary adviser in connection with the provision of investment advice by the fiduciary adviser,</text></subclause>
<subclause id="HA591926C98764A88A6E2EFA640872648"><enum>(V)</enum><text>that the adviser is acting as a fiduciary of the plan in connection with the provision of the advice, and</text></subclause>
<subclause id="HC10222D3C40C491B82B15451000050C9"><enum>(VI)</enum><text>that a recipient of the advice may separately arrange for the provision of advice by another adviser, that could have no material affiliation with and receive no fees or other compensation in connection with the security or other property,</text></subclause></clause>
<clause id="HA4A9CB3B8F5A424CB6009E337990AD2E"><enum>(ii)</enum><text>the fiduciary adviser provides appropriate disclosure, in connection with the sale, acquisition, or holding of the security or other property, in accordance with all applicable securities laws,</text></clause>
<clause id="H239667E3FC2E4B8A88006000ECFDAEDA"><enum>(iii)</enum><text>the sale, acquisition, or holding occurs solely at the direction of the recipient of the advice,</text></clause>
<clause id="HD957B8F5F38241C791323CA94732EA90"><enum>(iv)</enum><text>the compensation received by the fiduciary adviser and affiliates thereof in connection with the sale, acquisition, or holding of the security or other property is reasonable, and</text></clause>
<clause id="HFF7723F837274770B979DF00D0400700"><enum>(v)</enum><text>the terms of the sale, acquisition, or holding of the security or other property are at least as favorable to the plan as an arm’s length transaction would be.</text></clause></subparagraph>
<subparagraph id="H3E7649C2822A44589409321225D44BCE"><enum>(C)</enum><header>Standards for presentation of information</header><text>The notification required to be provided to participants and beneficiaries under subparagraph (B)(i) shall be written in a clear and conspicuous manner and in a manner calculated to be understood by the average plan participant and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of the information required to be provided in the notification.</text></subparagraph>
<subparagraph id="H7BB701E604B44AD9A0A31DACB417CF79"><enum>(D)</enum><header>Exemption conditioned on making required information available annually, on request, and in the event of material change</header><text>The requirements of subparagraph (B)(i) shall be deemed not to have been met in connection with the initial or any subsequent provision of advice described in subparagraph (B) to the plan, participant, or beneficiary if, at any time during the provision of advisory services to the plan, participant, or beneficiary, the fiduciary adviser fails to maintain the information described in subclauses (I) through (IV) of subparagraph (B)(i) in currently accurate form and in the manner required by subparagraph (C), or fails—</text>
<clause id="H65674D21C405413ABC30295B2BF5FE9"><enum>(i)</enum><text>to provide, without charge, such currently accurate information to the recipient of the advice no less than annually,</text></clause>
<clause id="H62C7195718804BEEB811A27EEB13C1F2"><enum>(ii)</enum><text>to make such currently accurate information available, upon request and without charge, to the recipient of the advice, or</text></clause>
<clause id="HBDEAE478F9474FD788F9BBD03D9868C2"><enum>(iii)</enum><text>in the event of a material change to the information described in subclauses (I) through (IV) of subparagraph (B)(i), to provide, without charge, such currently accurate information to the recipient of the advice at a time reasonably contemporaneous to the material change in information.</text></clause></subparagraph>
<subparagraph id="H012C2B9E3D4A4258A621DB2150BF2CDB"><enum>(E)</enum><header>Maintenance for 6 years of evidence of compliance</header><text>A fiduciary adviser referred to in subparagraph (B) who has provided advice referred to in such subparagraph shall, for a period of not less than 6 years after the provision of the advice, maintain any records necessary for determining whether the requirements of the preceding provisions of this paragraph and of subsection (d)(16) have been met. A transaction prohibited under subsection (c)(1) shall not be considered to have occurred solely because the records are lost or destroyed prior to the end of the 6-year period due to circumstances beyond the control of the fiduciary adviser.</text></subparagraph>
<subparagraph id="H9FB1A31644654DBE816E60F7E6002769"><enum>(F)</enum><header>Exemption for plan sponsor and certain other fiduciaries</header><text>A plan sponsor or other person who is a fiduciary (other than a fiduciary adviser) shall not be treated as failing to meet the requirements of this section solely by reason of the provision of investment advice referred to in subsection (e)(3)(B) (or solely by reason of contracting for or otherwise arranging for the provision of the advice), if—</text>
<clause id="HD7E630533B224170865BEA1CB88147C"><enum>(i)</enum><text>the advice is provided by a fiduciary adviser pursuant to an arrangement between the plan sponsor or other fiduciary and the fiduciary adviser for the provision by the fiduciary adviser of investment advice referred to in such section,</text></clause>
<clause id="H0FB290EE75FB458AACB02EB7F5197D"><enum>(ii)</enum><text>the terms of the arrangement require compliance by the fiduciary adviser with the requirements of this paragraph,</text></clause>
<clause id="H610FEB36C4794A07987DC0A0F79CEDB7"><enum>(iii)</enum><text>the terms of the arrangement include a written acknowledgment by the fiduciary adviser that the fiduciary adviser is a fiduciary of the plan with respect to the provision of the advice, and</text></clause>
<clause id="HADFDF3E7D1FD49F4A3FDEB006193C886"><enum>(iv)</enum><text>the requirements of part 4 of subtitle B of title I of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> are met in connection with the provision of such advice.</text></clause></subparagraph>
<subparagraph id="H4ABA1B164B0746A58601559BC57218CB"><enum>(G)</enum><header>Definitions</header><text>For purposes of this paragraph and subsection (d)(16)—</text>
<clause id="H6FE601EDF0F049DA8BB1E9A63F64379F"><enum>(i)</enum><header>Fiduciary adviser</header><text>The term <term>fiduciary adviser</term> means, with respect to a plan, a person who is a fiduciary of the plan by reason of the provision of investment advice by the person to the plan or to a participant or beneficiary and who is—</text>
<subclause id="H0F7384836EA44892B1FA35FA52330400"><enum>(I)</enum><text>registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>) or under the laws of the State in which the fiduciary maintains its principal office and place of business,</text></subclause>
<subclause id="HD0AD1241E9B44572B78403C5AE6BD988"><enum>(II)</enum><text>a bank or similar financial institution referred to in subsection (d)(4) or a savings association (as defined in section 3(b)(1) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813(b)(1)</external-xref>)), but only if the advice is provided through a trust department of the bank or similar financial institution or savings association which is subject to periodic examination and review by Federal or State banking authorities,</text></subclause>
<subclause id="HCA1488A26AB04346A42BF06221EA6B11"><enum>(III)</enum><text>an insurance company qualified to do business under the laws of a State,</text></subclause>
<subclause id="HE0EBE60C6A9B448283FD00A35B00E195"><enum>(IV)</enum><text>a person registered as a broker or dealer under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>),</text></subclause>
<subclause id="HA26A001493414DC8A0E7F885653CC267"><enum>(V)</enum><text>an affiliate of a person described in any of subclauses (I) through (IV), or</text></subclause>
<subclause id="HE5721C0037AD409FBA4BC2839CE4B2D"><enum>(VI)</enum><text>an employee, agent, or registered representative of a person described in any of subclauses (I) through (V) who satisfies the requirements of applicable insurance, banking, and securities laws relating to the provision of the advice.</text></subclause></clause>
<clause id="H8E45EB3D36E84B85AC396F77C397EDAA"><enum>(ii)</enum><header>Affiliate</header><text>The term <term>affiliate</term> of another entity means an affiliated person of the entity (as defined in section 2(a)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2(a)(3)</external-xref>)).</text></clause>
<clause id="H818A1B7971EB404485F343375D6CFFF"><enum>(iii)</enum><header>Registered representative</header><text>The term <term>registered representative</term> of another entity means a person described in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(18)</external-xref>) (substituting the entity for the broker or dealer referred to in such section) or a person described in section 202(a)(17) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(17)</external-xref>) (substituting the entity for the investment adviser referred to in such section).</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HE9EB33BFE66A45A49DFD1C791F51801"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to advice referred to in <external-xref legal-doc="usc" parsable-cite="usc/26/4975">section 4975(c)(3)(B)</external-xref> of the Internal Revenue Code of 1986 provided on or after January 1, 2006.</text></subsection></section>
<enum>VII</enum><header>Deduction limitations</header>
<section id="HE5AD02C4AD6745B6960002BF72784519" display-inline="no-display-inline" section-type="subsequent-section"><enum>701.</enum><header>Increase in deduction limits</header>
<subsection id="H4C1EBB275E3B4B9F91B538B18690D701"><enum>(a)</enum><header>Increase in deduction limit for single-employer plans</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/404">Section 404</external-xref> of the Internal Revenue Code of 1986 (relating to deduction for contributions of an employer to an employees' trust or annuity plan and compensation under a deferred payment plan) is amended—</text>
<paragraph id="HB8EF5B7A609242518CE287FABF6C0DB"><enum>(1)</enum><text>in subsection (a)(1)(A), by inserting <quote>in the case of a defined benefit plan other than a multiemployer plan, in an amount determined under subsection (o), and in the case of any other plan</quote> after <quote>section 501(a),</quote>, and</text></paragraph>
<paragraph id="H01D78F4826EB4B98A60899A4B0FCA97D"><enum>(2)</enum><text>by inserting at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H11705D8C4C59497192A3C7D9EB8CBFE" style="OLC">
<subsection id="HA5F881EB785A4BC8A2F8E89B8F2624BD"><enum>(o)</enum><header>Deduction limit for single-employer plans</header><text>For purposes of subsection (a)(1)(A)—</text>
<paragraph id="H3100BD1988DA42CCBE001C2297D8A717"><enum>(1)</enum><header>In general</header><text>In the case of a defined benefit plan to which subsection (a)(1)(A) applies (other than a multiemployer plan), the amount determined under this subsection for any taxable year shall be equal to the amount determined under paragraph (2) with respect to each plan year ending with or within the taxable year.</text></paragraph>
<paragraph id="H87B0BBFBBAEE44D685A441FD7E814598"><enum>(2)</enum><header>Determination of amount</header><text display-inline="yes-display-inline">The amount determined under this paragraph for any plan year shall be equal to the excess (if any) of—</text>
<subparagraph id="H8048533550B7437BA541CE8F91F68006"><enum>(A)</enum><text>the greater of—</text>
<clause id="HC9F1F5676299482CBF506C7D148E70C0"><enum>(i)</enum><text>the sum of—</text>
<subclause id="HDC738FCBDD6B4227B8105FC43C059FA0"><enum>(I)</enum><text>150 percent of the funding target applicable to the plan for such plan year, determined under section 430(e), plus</text></subclause>
<subclause id="H261FA71A31C84140B800BBDA41B13CF"><enum>(II)</enum><text display-inline="yes-display-inline">the target normal cost applicable to the plan for such plan year, determined under section 430(b), or</text></subclause></clause>
<clause id="H692236D0F1CB475ABD7800EF33C4A255"><enum>(ii)</enum><text display-inline="yes-display-inline">in the case of a plan that is not in an at-risk status (as determined under 430(g)), the sum of—</text>
<subclause id="HA1B179E9184D4A71A3BD5151EDCE1B86"><enum>(I)</enum><text>the funding target which would be applicable to the plan for such plan year if such plan were in an at-risk status, determined under section 430(e) (with regard to section 430(g)), plus</text></subclause>
<subclause id="HD588C0CEC45742A299743E8DB74D8C62"><enum>(II)</enum><text display-inline="yes-display-inline">the target normal cost which would be applicable to the plan for such plan year if such plan were in an at-risk status, determined under section 430(b) (with regard to section 430(g)), over</text></subclause></clause> </subparagraph>
<subparagraph id="H5AAFE52CF0C84E2E91E59FE967076CA6"><enum>(B)</enum><text>the value of the plan assets (determined under section 430(e) as of the valuation date of the plan).</text></subparagraph></paragraph>
<paragraph id="HD0DEB6323C7D4BABA4ECAA4E66E488D7"><enum>(3)</enum><header>Special rule for terminating plans</header><text display-inline="yes-display-inline">In the case of a plan which, subject to section 4041 of the Employee Retirement Income Security Act of 1974, terminates during the plan year, the amount determined under paragraph (2) shall not be less than the amount required to make the plan sufficient for benefit liabilities (within the meaning of section 4041(d) of such Act). </text> </paragraph>
<paragraph id="HAABA7B98A01F48249503FE4C368E008C"><enum>(4)</enum><header>Definitions</header><text>Any term used in this subsection which is also used in section 430 shall have the same meaning given such term by section 430.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H7667631959B845DBA35D209D5C03B69"><enum>(b)</enum><header>Increase in deduction limit for multiemployer plans</header><text>Section 404(a)(1)(D) of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H732E775A7FCB44119809713825DB68C3" style="OLC">
<subparagraph id="H5DD516C15BFF4D30AB6030234BAABC04"><enum>(D)</enum><header>Amount determined on basis of unfunded current liability</header>
<clause id="H844A91C492B5448B9268204C14E73259"><enum>(i)</enum><header>In general</header><text>In the case of a defined benefit plan which is a multiemployer plan, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded current liability of the plan.</text></clause>
<clause id="HE7CC9DF6797443C185AFEF64FBC2C703"><enum>(ii)</enum><header>Unfunded current liability</header><text>For purposes of clause (i), the term <term>unfunded current liability</term> means the excess (if any) of—</text>
<subclause id="H99FB21F8866E47D59E2EC6E20088FCDC"><enum>(I)</enum><text>140 percent of the current liability of the plan determined under section 431(c)(6)(C), over</text></subclause>
<subclause id="HA8E9719D8D37470D8142BC628748FC00"><enum>(II)</enum><text>the value of the plan's assets determined under section 431(c)(2).</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC8AAD45CE1FB412AA018C59C36BCE05E"><enum>(c)</enum><header>Technical and conforming amendments</header>
<paragraph id="H6E03DE2116394E3C86C643EE3500EDE0"><enum>(1)</enum><text>The last sentence of section 404(a)(1)(A) of such Code is amended by striking <quote>section 412</quote> each place it appears and inserting <quote>section 431</quote>.</text></paragraph>
<paragraph id="HA77A6D97A7C34DCF008E63CCA91285D1"><enum>(2)</enum><text>Section 404(a)(1)(B) of such Code is amended—</text>
<subparagraph id="H4FD77016485B4B9087F40016AEA6E221"><enum>(A)</enum><text>by striking <quote>In the case of a plan</quote> and inserting <quote>In the case of a multiemployer plan</quote>,</text></subparagraph>
<subparagraph id="H481CE10C94354D8AA6E99EADEED400A9"><enum>(B)</enum><text>by striking <quote>section 412(c)(7)</quote> each place it appears and inserting <quote>section 431(c)(6)</quote>,</text></subparagraph>
<subparagraph id="H2695536611024F1A987E04F99EB788A1"><enum>(C)</enum><text>by striking <quote>section 412(c)(7)(B)</quote> and inserting <quote>section 431(c)(6)(A)(ii)</quote>,</text></subparagraph>
<subparagraph id="HAC4C55F880364D3AA872477FA39DC0B0"><enum>(D)</enum><text>by striking <quote>section 412(c)(7)(A)</quote> and inserting <quote>section 431(c)(6)(A)(i)</quote>, and</text></subparagraph>
<subparagraph id="HF4FC93E1DC894540B5579D7B32CB49F5"><enum>(E)</enum><text>by striking <quote>section 412</quote> and inserting <quote>section 431</quote>.</text></subparagraph></paragraph>
<paragraph id="H0BF9A78101A24FAD9281EBECD6EEB1D8"><enum>(3)</enum><text>Section 404(a)(1) of such Code is amended by striking subparagraph (F).</text></paragraph>
<paragraph id="H0EB8EFC67CB843D8B2199C812B973143"><enum>(4)</enum><text>Section 404(a)(7) of such Code is amended—</text>
<subparagraph commented="no" id="H6BF009B94B9F4D2C81FBF78E8721BB99"><enum>(A)</enum><text>in subparagraph (A)(ii), by striking <quote>for the plan year</quote> and all that follows and inserting <quote>which are multiemployer plans for the plan year which ends with or within such taxable year (or for any prior plan year) and the maximum amount of employer contributions allowable under subsection (o) with respect to any such defined benefit plans which are not multiemployer plans for the plan year.</quote>,</text></subparagraph>
<subparagraph id="H97ABDCF71681488CAD71E62804985015"><enum>(B)</enum><text>by striking <quote>section 412(l)</quote> in the last sentence of subparagraph (A) and inserting <quote>paragraph (1)(D)(ii)</quote>, and</text></subparagraph>
<subparagraph id="H85186571FC7F43328812C5E3E9E56559"><enum>(C)</enum><text>by striking subparagraph (D) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="H9E7CF202DF5B4A6482EDB258EBCF9620" style="OLC">
<subparagraph id="H452AD5AB50A647A38DE1EC60B7051200"><enum>(D)</enum><header>Insurance contract plans</header><text>For purposes of this paragraph, a plan described in section 412(d)(3) shall be treated as a defined benefit plan.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HE3BACF2E380741208D93F94F00227458"><enum>(5)</enum><text>Section 404A(g)(3)(A) of such Code is amended by striking <quote>paragraphs (3) and (7) of section 412(c)</quote> and inserting <quote>sections 430(d)(1) and 431(c) (3) and (6)</quote>.</text></paragraph></subsection>
<subsection id="H3114B9B0003A4D71A0FFE7FB008CE473"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to contributions for taxable years beginning after 2005.</text></subsection></section>
<section id="H221D4BB84347491C8C549EB3D9268500" display-inline="no-display-inline" section-type="subsequent-section"><enum>702.</enum><header>Updating deduction rules for combination of plans</header>
<subsection id="H819F8037D97B457CB3F1ACEF19DAEC57"><enum>(a)</enum><header>In general</header><text>Subparagraph (C) of section 404(a)(7) (relating to limitation on deductions where combination of defined contribution plan and defined benefit plan) is amended by adding after clause (ii) the following new clause:</text>
<quoted-block id="H36E059F4658B4AA9B5D29BA3897693B6">
<clause id="H5861AFE252DB487196C247E0605C1C8C"><enum>(iii)</enum><header>Limitation</header><text>In the case of employer contributions to 1 or more defined contribution plans, this paragraph shall only apply to the extent that such contributions exceed 6 percent of the compensation otherwise paid or accrued during the taxable year to the beneficiaries under such plans. For purposes of this clause, amounts carried over from preceding taxable years under subparagraph (B) shall be treated as employer contributions to 1 or more defined contributions to the extent attributable to employer contributions to such plans in such preceding taxable years.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC642D91DCE3F4A51A6B43B717EE8F8C8"><enum>(b)</enum><header>Conforming amendments</header><text>Subparagraph (A) of section 4972(c)(6) of such Code (relating to nondeductible contributions) is amended to read as follows:</text>
<quoted-block id="H44F7CC130AFD437384EDFC3C1E5CBF">
<subparagraph id="H1DB0B08671B44865BC63AFC48F2BBBA5"><enum>(A)</enum><text>so much of the contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404(a)(7) as does not exceed the amount of contributions described in section 401(m)(4)(A), or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H1CE2B601D8334DDCB3E3F4BC91AEA8E" commented="no"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to contributions for taxable years beginning after December 31, 2005.</text></subsection></section>