247
‘‘(ii) separately, with respect to each 
plan year, the net experience gain (if any) 
under the plan, over a period of 15 plan 
years, and 
‘‘(iii) 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, 
‘‘(C) the amount of the waived funding de-
ficiency 
(within 
the 
meaning 
of 
section 
412(c)(3)) for the plan year, and 
‘‘(D) in the case of a plan year for which 
the accumulated funding deficiency is deter-
mined under the funding standard account if 
such plan year follows a plan year for which 
such deficiency was determined under the alter-
native minimum funding standard under section 
412(g) (as in effect on the day before the date 
of the enactment of the Pension Protection Act 
of 2005), the excess (if any) of any debit bal-
ance in the funding standard account (deter-
mined without regard to this subparagraph) 
over any debit balance in the alternative min-
imum funding standard account.
248
‘‘(4) SPECIAL RULES FOR PRE-2007 AMORTIZA-
TIONS.—
‘‘(A) IN
GENERAL.—In the case of any 
amount amortized under section 412(b) (as in 
effect on the day before the date of the enact-
ment of the Pension Protection Act of 2005) 
over any period beginning with a plan year be-
ginning before 2007, 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. 
‘‘(B) INTEREST
RATE.—For purposes of 
amortizations under section 412(b) (as in effect 
on the day before the date of the enactment of 
the Pension Protection Act of 2005), in the 
case of any waiver under section 412(d) (as so 
in effect) or extension under section 412(e) (as 
so in effect) with respect to which application 
has been made before June 30, 2005, the inter-
est rate under section 412(d)(1)(A) (as so in ef-
fect) or section 412(e) (as so in effect), as the 
case may be, shall apply. 
‘‘(5) COMBINING
AND
OFFSETTING
AMOUNTS 
TO BE AMORTIZED.—Under regulations prescribed 
by the Secretary, amounts required to be amortized
249
under paragraph (2) or paragraph (3), as the case 
may be—
‘‘(A) 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 
‘‘(B) may be offset against amounts re-
quired to be amortized under the other such 
paragraph, with the resulting amount to be am-
ortized 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. 
‘‘(6) INTEREST.—Except as provided in sub-
section (c)(9), the funding standard account (and 
items therein) shall be charged or credited (as deter-
mined under regulations prescribed by the Sec-
retary) with interest at the appropriate rate con-
sistent with the rate or rates of interest used under 
the plan to determine costs. 
‘‘(7) CERTAIN
AMORTIZATION
CHARGES
AND 
CREDITS.—In the case of a plan which, immediately 
before the date of the enactment of the Multiem-
ployer Pension Plan Amendments Act of 1980, was
250
a multiemployer plan (within the meaning of section 
414(f) as in effect immediately before such date)—
‘‘(A) any amount described in paragraph 
(2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this sub-
section which arose in a plan year beginning be-
fore such date shall be amortized in equal an-
nual installments (until fully amortized) over 40 
plan years, beginning with the plan year in 
which the amount arose, 
‘‘(B) 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, be-
ginning with the plan year in which the amount 
arose, 
‘‘(C) 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 install-
ments (until fully amortized) over 40 plan 
years, beginning with the plan year in which the 
change arises, and
251
‘‘(D) 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—
‘‘(i) was adopted before such date, 
and 
‘‘(ii) was effective for any plan partici-
pant before the beginning of the first plan 
year beginning on or after such date, 
shall be amortized in equal annual installments 
(until fully amortized) over 40 plan years, be-
ginning with the plan year in which the change 
arises. 
‘‘(8) SPECIAL RULES RELATING TO CHARGES 
AND CREDITS TO FUNDING STANDARD ACCOUNT.—
For purposes of this section—
‘‘(A) 
WITHDRAWAL
LIABILITY.—Any 
amount received by a multiemployer plan in 
payment of all or part of an employer’s with-
drawal liability under part 1 of subtitle E of 
title IV of the Employee Retirement Income Se-
curity Act of 1974 shall be considered an 
amount contributed by the employer to or
252
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 li-
ability payments from being unduly reflected as 
advance funding for plan liabilities. 
‘‘(B) ADJUSTMENTS
WHEN
A
MULTIEM-
PLOYER PLAN LEAVES REORGANIZATION.—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—
‘‘(i) shall be eliminated by an offset-
ting credit or charge (as the case may be), 
but 
‘‘(ii) shall be taken into account in 
subsequent plan years by being amortized 
in equal annual installments (until fully 
amortized) over 30 plan years. 
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.
253
‘‘(C) PLAN PAYMENTS TO SUPPLEMENTAL 
PROGRAM OR WITHDRAWAL LIABILITY PAYMENT 
FUND.—Any amount paid by a plan during a 
plan year to the Pension Benefit Guaranty Cor-
poration pursuant to section 4222 of the Em-
ployee Retirement Income Security Act of 1974 
or to a fund exempt under section 501(c)(22) 
pursuant to section 4223 of such Act shall re-
duce the amount of contributions considered re-
ceived by the plan for the plan year. 
‘‘(D) INTERIM
WITHDRAWAL
LIABILITY 
PAYMENTS.—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 of such Act and subsequently re-
funded to the employer by the plan shall be 
charged to the funding standard account in ac-
cordance with regulations prescribed by the 
Secretary. 
‘‘(E) 
ELECTION
FOR
DEFERRAL
OF 
CHARGE
FOR
PORTION
OF
NET
EXPERIENCE 
LOSS.—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 the Pension Protection 
Act of 2005) for any plan year, the funding
254
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). 
‘‘(F) 
FINANCIAL
ASSISTANCE.—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. 
‘‘(G) SHORT-TERM BENEFITS.—To the ex-
tent that any plan amendment increases the un-
funded past service liability under the plan by 
reason of an increase in benefits which are pay-
able under the plan during a period that does 
not exceed 14 years, paragraph (2)(B)(iii) shall 
be applied separately with respect to such in-
crease in unfunded past service liability by sub-
stituting the number of years of the period dur-
ing which such benefits are payable for ‘15’. 
‘‘(c) ADDITIONAL RULES.—
255
‘‘(1) DETERMINATIONS
TO
BE
MADE
UNDER 
FUNDING METHOD.—For purposes of this section, 
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. 
‘‘(2) VALUATION OF ASSETS.—
‘‘(A) IN GENERAL.—For purposes of this 
section, the value of the plan’s assets shall be 
determined on the basis of any reasonable actu-
arial method of valuation which takes into ac-
count fair market value and which is permitted 
under regulations prescribed by the Secretary. 
‘‘(B) 
ELECTION
WITH
RESPECT
TO 
BONDS.—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 amor-
tized 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
256
may be revoked only with the consent of the 
Secretary. 
‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REA-
SONABLE.—For purposes of this section, all costs, li-
abilities, rates of interest, and other factors under 
the plan shall be determined on the basis of actu-
arial assumptions and methods—
‘‘(A) each of which is reasonable (taking 
into account the experience of the plan and rea-
sonable expectations), and 
‘‘(B) which, in combination, offer the actu-
ary’s best estimate of anticipated experience 
under the plan. 
‘‘(4) TREATMENT OF CERTAIN CHANGES AS EX-
PERIENCE GAIN OR LOSS.—For purposes of this sec-
tion, if—
‘‘(A) a change in benefits under the Social 
Security Act or in other retirement benefits cre-
ated under Federal or State law, or 
‘‘(B) a change in the definition of the term 
‘wages’ 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),
257
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. 
‘‘(5) FULL FUNDING.—If, as of the close of a 
plan year, a plan would (without regard to this para-
graph) have an accumulated funding deficiency in 
excess of the full funding limitation—
‘‘(A) the funding standard account shall be 
credited with the amount of such excess, and 
‘‘(B) all amounts described in subpara-
graphs (B), (C), and (D) of subsection (b)(2) 
and subparagraph (B) of subsection (b)(3) 
which are required to be amortized shall be con-
sidered fully amortized for purposes of such 
subparagraphs. 
‘‘(6) FULL-FUNDING LIMITATION.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (5), the term ‘full-funding limitation’ 
means the excess (if any) of—
‘‘(i) the accrued liability (including 
normal cost) under the plan (determined 
under the entry age normal funding meth-
od if such accrued liability cannot be di-
rectly calculated under the funding method 
used for the plan), over
258
‘‘(ii) the lesser of—
‘‘(I) the fair market value of the 
plan’s assets, or 
‘‘(II) the value of such assets de-
termined under paragraph (2). 
‘‘(B) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall 
the 
full-funding 
limitation 
determined 
under subparagraph (A) be less than the 
excess (if any) of—
‘‘(I) 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability due 
to benefits accruing during the plan 
year), over 
‘‘(II) the value of the plan’s as-
sets determined under paragraph (2). 
‘‘(ii) ASSETS.—For purposes of clause 
(i), assets shall not be reduced by any 
credit balance in the funding standard ac-
count. 
‘‘(C) FULL
FUNDING
LIMITATION.—For 
purposes of this paragraph, unless otherwise 
provided by the plan, the accrued liability under 
a multiemployer plan shall not include benefits
259
which are not nonforfeitable under the plan 
after the termination of the plan (taking into 
consideration section 411(d)(3)). 
‘‘(D) CURRENT LIABILITY.—For purposes 
of this paragraph—
‘‘(i) IN GENERAL.—The term ‘current 
liability’ means all liabilities to employees 
and their beneficiaries under the plan. 
‘‘(ii) TREATMENT OF UNPREDICTABLE 
CONTINGENT EVENT BENEFITS.—For pur-
poses of clause (i), any benefit contingent 
on an event other than—
‘‘(I) age, service, compensation, 
death, or disability, or 
‘‘(II) an event which is reason-
ably and reliably predictable (as deter-
mined by the Secretary), 
shall not be taken into account until the 
event on which the benefit is contingent oc-
curs. 
‘‘(iii) INTEREST
RATE
USED.—The 
rate of interest used to determine current 
liability under this paragraph shall be the 
rate of interest determined under subpara-
graph (E).
260
‘‘(iv) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD 
TABLE.—In the case of plan years be-
ginning before the first plan year to 
which the first tables prescribed under 
subclause (II) apply, the mortality 
table used in determining current li-
ability under this paragraph shall be 
the table prescribed by the Secretary 
which is based on the prevailing com-
missioners’ standard table (described 
in section 807(d)(5)(A)) used to de-
termine reserves for group annuity 
contracts issued on January 1, 1993. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary may by regula-
tion prescribe for plan years beginning 
after December 31, 1999, mortality 
tables to be used in determining cur-
rent 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 Sec-
retary shall take into account results
261
of available independent studies of 
mortality of individuals covered by 
pension plans. 
‘‘(v) SEPARATE
MORTALITY
TABLES 
FOR
THE
DISABLED.—Notwithstanding 
clause (iv)—
‘‘(I) IN GENERAL.—In the case 
of plan years beginning after Decem-
ber 31, 1995, the Secretary shall es-
tablish mortality tables which may be 
used (in lieu of the tables under 
clause (iv)) to determine current li-
ability under this subsection for indi-
viduals who are entitled to benefits 
under the plan on account of dis-
ability. The Secretary shall establish 
separate tables for individuals whose 
disabilities occur in plan years begin-
ning before January 1, 1995, and for 
individuals whose disabilities occur in 
plan years beginning on or after such 
date. 
‘‘(II) SPECIAL
RULE
FOR
DIS-
ABILITIES OCCURRING AFTER 1994.—
In the case of disabilities occurring in
262
plan years beginning after December 
31, 1994, the tables under subclause 
(I) shall apply only with respect to in-
dividuals described in such subclause 
who are disabled within the meaning 
of title II of the Social Security Act 
and the regulations thereunder. 
‘‘(vi) PERIODIC
REVIEW.—The Sec-
retary 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 pro-
jected trends in such experience. 
‘‘(E) REQUIRED
CHANGE
OF
INTEREST 
RATE.—For purposes of determining a plan’s 
current liability for purposes of this para-
graph—
‘‘(i) IN GENERAL.—If any rate of in-
terest used under the plan under sub-
section (b)(6) to determine cost is not 
within the permissible range, the plan shall 
establish a new rate of interest within the 
permissible range.
263
‘‘(ii) PERMISSIBLE RANGE.—For pur-
poses of this subparagraph—
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), the term 
‘permissible range’ means a rate of in-
terest which is not more than 5 per-
cent above, and not more than 10 per-
cent below, the weighted average of 
the rates of interest on 30-year Treas-
ury securities during the 4-year period 
ending on the last day before the be-
ginning of the plan year. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—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 deter-
mined under such subclause. 
‘‘(iii) 
ASSUMPTIONS.—Notwith-
standing paragraph (3)(A), the interest 
rate used under the plan shall be—
264
‘‘(I) determined without taking 
into account the experience of the 
plan and reasonable expectations, but 
‘‘(II) consistent with the assump-
tions which reflect the purchase rates 
which would be used by insurance 
companies to satisfy the liabilities 
under the plan. 
‘‘(7) ANNUAL VALUATION.—
‘‘(A) IN GENERAL.—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. 
‘‘(B) VALUATION DATE.—
‘‘(i) CURRENT YEAR.—Except as pro-
vided 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.