103 
are subject to sections 412 and 413 of the Cost Account-
ing Standards (48 C.F.R. 9904.412 and 9904.413). 
(d) COST ACCOUNTING STANDARDS PENSION HAR-
MONIZATION RULE.—The Cost Accounting Standards 
Board shall review and revise sections 412 and 413 of the 
Cost Accounting Standards (48 C.F.R. 9904.412 and 
9904.413) to harmonize the minimum required contribu-
tion under the Employee Retirement Income Security Act 
of 1974 of eligible government contractor plans and gov-
ernment reimbursable pension plan costs not later than 
January 1, 2010. Any final rule adopted by the Cost Ac-
counting Standards Board shall be deemed the Cost Ac-
counting Standards Pension Harmonization Rule. 
SEC. 107. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) MISCELLANEOUS AMENDMENTS TO TITLE I.— 
Subtitle B of title I of such Act (29 U.S.C. 1021 et seq.) 
is amended— 
(1) in section 101(d)(3), by striking ‘‘section 
302(e)’’ and inserting ‘‘section 303(j)’’; 
(2) in section 103(d)(8)(B), by striking ‘‘the re-
quirements of section 302(c)(3)’’ and inserting ‘‘the 
applicable requirements of sections 303(h) and 
304(c)(3)’’; 
(3) in section 103(d), by striking paragraph 
(11) and inserting the following: 
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‘‘(11) If the current value of the assets of the 
plan is less than 70 percent of— 
‘‘(A) in the case of a single-employer plan, 
the funding target (as defined in section 
303(d)(1)) of the plan, or 
‘‘(B) in the case of a multiemployer plan, 
the current liability (as defined in section 
304(c)(6)(D)) under the plan, 
the percentage which such value is of the amount 
described in subparagraph (A) or (B).’’; 
(4) in section 203(a)(3)(C), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(5) in section 204(g)(1), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(6) in section 204(i)(2)(B), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(7) in section 204(i)(3), by striking ‘‘funded 
current liability percentage (within the meaning of 
section 302(d)(8) of this Act)’’ and inserting ‘‘fund-
ing target attainment percentage (as defined in sec-
tion 303(d)(2))’’; 
(8) in section 204(i)(4), by striking ‘‘section 
302(c)(11)(A), 
without 
regard 
to 
section 
302(c)(11)(B)’’ and inserting ‘‘section 302(b)(1), 
without regard to section 302(b)(2)’’; 
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ccoleman on PROD1PC71 with BILLS
105 
(9) in section 206(e)(1), by striking ‘‘section 
302(d)’’ and inserting ‘‘section 303(j)(4)’’, and by 
striking ‘‘section 302(e)(5)’’ and inserting ‘‘section 
303(j)(4)(E)(i)’’; 
(10) in section 206(e)(3), by striking ‘‘section 
302(e) by reason of paragraph (5)(A) thereof’’ and 
inserting ‘‘section 303(j)(3) by reason of section 
303(j)(4)(A)’’; and 
(11) in sections 101(e)(3), 403(c)(1), and 
408(b)(13), by striking ‘‘American Jobs Creation 
Act of 2004’’ and inserting ‘‘Pension Protection Act 
of 2006’’. 
(b) MISCELLANEOUS AMENDMENTS TO TITLE IV.— 
Title IV of such Act is amended— 
(1) 
in 
section 
4001(a)(13) 
(29 
U.S.C. 
1301(a)(13)), by striking ‘‘302(c)(11)(A)’’ and in-
serting ‘‘302(b)(1)’’, by striking ‘‘412(c)(11)(A)’’ 
and 
inserting 
‘‘412(b)(1)’’, 
by 
striking 
‘‘302(c)(11)(B)’’ and inserting ‘‘302(b)(2)’’, and by 
striking ‘‘412(c)(11)(B)’’ and inserting ‘‘412(b)(2)’’; 
(2) 
in 
section 
4003(e)(1) 
(29 
U.S.C. 
1303(e)(1)), by striking ‘‘302(f)(1)(A) and (B)’’ and 
inserting ‘‘303(k)(1)(A) and (B)’’, and by striking 
‘‘412(n)(1)(A) 
and 
(B)’’ 
and 
inserting 
‘‘430(k)(1)(A) and (B)’’; 
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ccoleman on PROD1PC71 with BILLS
106 
(3) 
in 
section 
4010(b)(2) 
(29 
U.S.C. 
1310(b)(2)), by striking ‘‘302(f)(1)(A) and (B)’’ and 
inserting ‘‘303(k)(1)(A) and (B)’’, and by striking 
‘‘412(n)(1)(A) 
and 
(B)’’ 
and 
inserting 
‘‘430(k)(1)(A) and (B)’’; 
(4) in section 4062(c) (29 U.S.C. 1362(c)), by 
striking paragraphs (1), (2), and (3) and inserting 
the following: 
‘‘(1) the sum of the shortfall amortization 
charge (within the meaning of section 303(c)(1) of 
this Act and 430(d)(1) of the Internal Revenue Code 
of 1986) with respect to the plan (if any) for the 
plan year in which the termination date occurs, plus 
the aggregate total of shortfall amortization install-
ments (if any) determined for succeeding plan years 
under section 303(c)(2) of this Act and section 
430(d)(2) of such Code (which, for purposes of this 
subparagraph, shall include any increase in such 
sum which would result if all applications for waiv-
ers of the minimum funding standard under section 
302(c) of this Act and section 412(c) of such Code 
which are pending with respect to such plan were 
denied and if no additional contributions (other than 
those already made by the termination date) were 
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ccoleman on PROD1PC71 with BILLS
107 
made for the plan year in which the termination 
date occurs or for any previous plan year), and 
‘‘(2) the sum of the waiver amortization charge 
(within the meaning of section 303(e)(1) of this Act 
and 430(e)(1) of the Internal Revenue Code of 
1986) with respect to the plan (if any) for the plan 
year in which the termination date occurs, plus the 
aggregate total of waiver amortization installments 
(if any) determined for succeeding plan years under 
section 303(e)(2) of this Act and section 430(e)(2) 
of such Code,’’; 
(5) in section 4071 (29 U.S.C. 1371), by strik-
ing ‘‘302(f)(4)’’ and inserting ‘‘303(k)(4)’’; 
(6) in section 4243(a)(1)(B) (29 U.S.C. 
1423(a)(1)(B)), by striking ‘‘302(a)’’ and inserting 
‘‘304(a)’’, and, in clause (i), by striking ‘‘302(a)’’ 
and inserting ‘‘304(a)’’; 
(7) 
in 
section 
4243(f)(1) 
(29 
U.S.C. 
1423(f)(1)), by striking ‘‘303(a)’’ and inserting 
‘‘302(c)’’; 
(8) 
in 
section 
4243(f)(2) 
(29 
U.S.C. 
1423(f)(2)), by striking ‘‘303(c)’’ and inserting 
‘‘302(c)(3)’’; and 
(9) in section 4243(g) (29 U.S.C. 1423(g)), by 
striking ‘‘302(c)(3)’’ and inserting ‘‘304(c)(3)’’. 
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108 
(c) AMENDMENTS TO REORGANIZATION PLAN NO. 4 
OF 1978.—Section 106(b)(ii) of Reorganization Plan No. 
4 of 1978 (ratified and affirmed as law by Public Law 
98–532 (98 Stat. 2705)) is amended by striking 
‘‘302(c)(8)’’ and inserting ‘‘302(d)(2)’’, by striking 
‘‘304(a) and (b)(2)(A)’’ and inserting ‘‘304(d)(1), (d)(2), 
and (e)(2)(A)’’, and by striking ‘‘412(c)(8), (e), and 
(f)(2)(A)’’ and inserting ‘‘412(c)(2) and 431(d)(1), (d)(2), 
and (e)(2)(A)’’. 
(d) REPEAL
OF EXPIRED AUTHORITY
FOR TEM-
PORARY VARIANCES.—Section 207 of such Act (29 U.S.C. 
1057) is repealed. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after 2007. 
Subtitle B—Amendments to 
Internal Revenue Code of 1986 
SEC. 111. MINIMUM FUNDING STANDARDS. 
(a) NEW MINIMUM FUNDING STANDARDS.—Section 
412 of the Internal Revenue Code of 1986 (relating to 
minimum funding standards) is amended to read as fol-
lows: 
‘‘SEC. 412. MINIMUM FUNDING STANDARDS. 
‘‘(a) REQUIREMENT TO MEET MINIMUM FUNDING 
STANDARD.— 
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ccoleman on PROD1PC71 with BILLS
109 
‘‘(1) IN GENERAL.—A plan to which this sec-
tion applies shall satisfy the minimum funding 
standard applicable to the plan for any plan year. 
‘‘(2) MINIMUM FUNDING STANDARD.—For pur-
poses of paragraph (1), a plan shall be treated as 
satisfying the minimum funding standard for a plan 
year if— 
‘‘(A) in the case of a defined benefit plan 
which is not a multiemployer 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, 
‘‘(B) in the case of a money purchase plan 
which is not a multiemployer plan, the employer 
makes contributions to or under the plan for 
the plan year which are required under the 
terms of the plan, and 
‘‘(C) in the case of a multiemployer plan, 
the employers make contributions to or under 
the plan for any plan year which, in the aggre-
gate, are sufficient to ensure that the plan does 
not have an accumulated funding deficiency 
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ccoleman on PROD1PC71 with BILLS
110 
under section 431 as of the end of the plan 
year. 
‘‘(b) LIABILITY FOR CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of any contribution required 
by this section (including any required installments 
under paragraphs (3) and (4) of section 430(j)) 
shall be paid by the employer responsible for making 
contributions to or under the plan. 
‘‘(2) JOINT
AND
SEVERAL
LIABILITY
WHERE 
EMPLOYER
MEMBER
OF
CONTROLLED
GROUP.—If 
the employer referred to in paragraph (1) is a mem-
ber of a controlled group, each member of such 
group shall be jointly and severally liable for pay-
ment of such contributions. 
‘‘(c) VARIANCE FROM MINIMUM FUNDING STAND-
ARDS.— 
‘‘(1) WAIVER
IN
CASE
OF
BUSINESS
HARD-
SHIP.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) 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 
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ccoleman on PROD1PC71 with BILLS
111 
without temporary substantial business 
hardship (substantial business hardship in 
the case of a multiemployer plan), and 
‘‘(ii) application of the standard would 
be adverse to the interests of plan partici-
pants in the aggregate, 
the Secretary may, subject to subparagraph 
(C), waive the requirements of subsection (a) 
for such year with respect to all or any portion 
of the minimum funding standard. The Sec-
retary 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 multi-
employer plan) consecutive plan years 
‘‘(B) EFFECTS OF WAIVER.—If a waiver is 
granted under subparagraph (A) for any plan 
year— 
‘‘(i) in the case of a defined benefit 
plan which is not a multiemployer plan, 
the minimum required contribution under 
section 430 for the plan year shall be re-
duced by the amount of the waived funding 
deficiency and such amount shall be amor-
tized as required under section 430(e), and 
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ccoleman on PROD1PC71 with BILLS
112 
‘‘(ii) 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 de-
ficiency and such amount shall be amor-
tized 
as 
required 
under 
section 
431(b)(2)(C). 
‘‘(C) WAIVER
OF
AMORTIZED
PORTION 
NOT ALLOWED.—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 
waived funding deficiency for any preceding 
plan year. 
‘‘(2) DETERMINATION
OF
BUSINESS
HARD-
SHIP.—For purposes of this subsection, the factors 
taken into account in determining temporary sub-
stantial business hardship (substantial business 
hardship in the case of a multiemployer plan) shall 
include (but shall not be limited to) whether or 
not— 
‘‘(A) the employer is operating at an eco-
nomic loss, 
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ccoleman on PROD1PC71 with BILLS
113 
‘‘(B) there is substantial unemployment or 
underemployment in the trade or business and 
in the industry concerned, 
‘‘(C) the sales and profits of the industry 
concerned are depressed or declining, and 
‘‘(D) it is reasonable to expect that the 
plan will be continued only if the waiver is 
granted. 
‘‘(3) WAIVED FUNDING DEFICIENCY.—For pur-
poses of this section and part III of this subchapter, 
the term ‘waived funding deficiency’ means the por-
tion of the minimum funding standard under sub-
section (a) (determined without regard to the waiv-
er) for a plan year waived by the Secretary and not 
satisfied by employer contributions. 
‘‘(4) SECURITY FOR WAIVERS FOR SINGLE-EM-
PLOYER PLANS, CONSULTATIONS.— 
‘‘(A) SECURITY MAY BE REQUIRED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraph (C), the Secretary 
may require an employer maintaining a de-
fined benefit plan which is a single-em-
ployer plan (within the meaning of section 
4001(a)(15) of the Employee Retirement 
Income Security Act of 1974) to provide 
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ccoleman on PROD1PC71 with BILLS
114 
security to such plan as a condition for 
granting or modifying a waiver under 
paragraph (1). 
‘‘(ii) SPECIAL
RULES.—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 spon-
sor 
(within 
the 
meaning 
of 
section 
4001(a)(13) of the Employee Retirement 
Income Security Act of 1974), or a mem-
ber of such sponsor’s controlled group 
(within the meaning of section 4001(a)(14) 
of such Act). 
‘‘(B) CONSULTATION WITH THE PENSION 
BENEFIT GUARANTY CORPORATION.—Except as 
provided in subparagraph (C), the Secretary 
shall, before granting or modifying a waiver 
under this subsection with respect to a plan de-
scribed in subparagraph (A)(i)— 
‘‘(i) provide the Pension Benefit 
Guaranty Corporation with— 
‘‘(I) notice of the completed ap-
plication for any waiver or modifica-
tion, and 
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ccoleman on PROD1PC71 with BILLS
115 
‘‘(II) an opportunity to comment 
on such application within 30 days 
after receipt of such notice, and 
‘‘(ii) consider— 
‘‘(I) any comments of the Cor-
poration under clause (i)(II), and 
‘‘(II) any views of any employee 
organization (within the meaning of 
section 3(4) of the Employee Retire-
ment Income Security Act of 1974) 
representing participants in the plan 
which are submitted in writing to the 
Secretary in connection with such ap-
plication. 
Information provided to the Corporation under 
this subparagraph shall be considered tax re-
turn information and subject to the safe-
guarding and reporting requirements of section 
6103(p). 
‘‘(C) EXCEPTION
FOR
CERTAIN
WAIV-
ERS.— 
‘‘(i) IN
GENERAL.—The preceding 
provisions of this paragraph shall not 
apply to any plan with respect to which the 
sum of— 
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116 
‘‘(I) the aggregate unpaid min-
imum required contributions (within 
the meaning of section 4971(c)(4)) for 
the plan year and all preceding plan 
years, and 
‘‘(II) the present value of all 
waiver amortization installments de-
termined for the plan year and suc-
ceeding plan years under section 
430(e)(2), 
is less than $1,000,000. 
‘‘(ii) TREATMENT
OF
WAIVERS
FOR 
WHICH APPLICATIONS ARE PENDING.—The 
amount described in clause (i)(I) shall in-
clude 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 re-
spect to such plan were denied. 
‘‘(5) SPECIAL
RULES
FOR
SINGLE-EMPLOYER 
PLANS.— 
‘‘(A) APPLICATION MUST BE SUBMITTED 
BEFORE DATE 21⁄2 MONTHS AFTER CLOSE OF 
YEAR.—In the case of a defined benefit plan 
which is not a multiemployer plan, no waiver 
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ccoleman on PROD1PC71 with BILLS
117 
may be granted under this subsection with re-
spect to any plan for any plan year unless an 
application therefor is submitted to the Sec-
retary not later than the 15th day of the 3rd 
month beginning after the close of such plan 
year. 
‘‘(B) SPECIAL RULE IF EMPLOYER IS MEM-
BER OF CONTROLLED GROUP.—In the case of a 
defined benefit plan which is not a multiem-
ployer 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 require-
ments are met— 
‘‘(i) with respect to such employer, 
and 
‘‘(ii) 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). 
The Secretary may provide that an analysis of 
a trade or business or industry of a member 
need not be conducted if the Secretary deter-
mines such analysis is not necessary because 
the taking into account of such member would 
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ccoleman on PROD1PC71 with BILLS
118 
not significantly affect the determination under 
this paragraph. 
‘‘(6) ADVANCE NOTICE.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
before granting a waiver under this subsection, 
require each applicant to provide evidence satis-
factory to the Secretary that the applicant has 
provided notice of the filing of the application 
for such waiver to each affected party (as de-
fined in section 4001(a)(21) of the Employee 
Retirement Income Security Act of 1974). Such 
notice shall include a description of the extent 
to which the plan is funded for benefits which 
are guaranteed under title IV of the Employee 
Retirement Income Security Act of 1974 and 
for benefit liabilities. 
‘‘(B) CONSIDERATION
OF
RELEVANT
IN-
FORMATION.—The Secretary shall consider any 
relevant information provided by a person to 
whom notice was given under subparagraph 
(A). 
‘‘(7) RESTRICTION ON PLAN AMENDMENTS.— 
‘‘(A) IN GENERAL.—No amendment of a 
plan which increases the liabilities of the plan 
by reason of any increase in benefits, any 
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ccoleman on PROD1PC71 with BILLS
119 
change in the accrual of benefits, or any change 
in the rate at which benefits become nonforfeit-
able under the plan shall be adopted if a waiver 
under this subsection or an extension of time 
under section 431(d) is in effect with respect to 
the plan, or if a plan amendment described in 
subsection (d)(2) has been made at any time in 
the preceding 12 months (24 months in the 
case of a multiemployer plan). 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. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply to any plan amendment which— 
‘‘(i) the Secretary determines to be 
reasonable and which provides for only de 
minimis increases in the liabilities of the 
plan, 
‘‘(ii) only repeals an amendment de-
scribed in subsection (d)(2), or 
‘‘(iii) is required as a condition of 
qualification under part I of subchapter D, 
of chapter 1. 
‘‘(d) MISCELLANEOUS RULES.— 
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ccoleman on PROD1PC71 with BILLS
120 
‘‘(1) CHANGE
IN
METHOD
OR
YEAR.—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. 
‘‘(2) CERTAIN
RETROACTIVE
PLAN
AMEND-
MENTS.—For purposes of this section, any amend-
ment applying to a plan year which— 
‘‘(A) is adopted after the close of such plan 
year but no later than 21⁄2 months after the 
close of the plan year (or, in the case of a mul-
tiemployer plan, no later than 2 years after the 
close of such plan year), 
‘‘(B) does not reduce the accrued benefit 
of any participant determined as of the begin-
ning of the first plan year to which the amend-
ment applies, and 
‘‘(C) does not reduce the accrued benefit of 
any participant determined as of the time of 
adoption except to the extent required by the 
circumstances, 
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 para-
graph which reduces the accrued benefits of any par-
ticipant shall take effect unless the plan adminis-
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ccoleman on PROD1PC71 with BILLS
121 
trator 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 temporary substantial busi-
ness hardship (as determined under subsection 
(c)(2)) or a substantial business hardship (as so de-
termined) in the case of a multiemployer plan and 
that a waiver under subsection (c) (or, in the case 
of a multiemployer plan, any extension of the amor-
tization period under section 431(d)) is unavailable 
or inadequate. 
‘‘(3) CONTROLLED
GROUP.—For purposes of 
this section, the term ‘controlled group’ means any 
group treated as a single employer under subsection 
(b), (c), (m), or (o) of section 414. 
‘‘(e) PLANS TO WHICH SECTION APPLIES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (4), this section applies to a plan if, 
for any plan year beginning on or after the effective 
date of this section for such plan under the Em-
ployee Retirement Income Security Act of 1974— 
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ccoleman on PROD1PC71 with BILLS
122 
‘‘(A) such plan included a trust which 
qualified (or was determined by the Secretary 
to have qualified) under section 401(a), or 
‘‘(B) such plan satisfied (or was deter-
mined by the Secretary to have satisfied) the 
requirements of section 403(a). 
‘‘(2) EXCEPTIONS.—This section shall not 
apply to— 
‘‘(A) any profit-sharing or stock bonus 
plan, 
‘‘(B) any insurance contract plan described 
in paragraph (3), 
‘‘(C) any governmental plan (within the 
meaning of section 414(d)), 
‘‘(D) any church plan (within the meaning 
of section 414(e)) with respect to which the 
election provided by section 410(d) has not been 
made, 
‘‘(E) any plan which has not, at any time 
after September 2, 1974, provided for employer 
contributions, or 
‘‘(F) any plan established and maintained 
by a society, order, or association described in 
section 501(c)(8) or (9), if no part of the con-
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ccoleman on PROD1PC71 with BILLS
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tributions to or under such plan are made by 
employers of participants in such plan. 
No plan described in subparagraph (C), (D), or (F) 
shall be treated as a qualified plan for purposes of 
section 401(a) unless such plan meets the require-
ments of section 401(a)(7) as in effect on September 
1, 1974. 
‘‘(3) CERTAIN INSURANCE CONTRACT PLANS.— 
A plan is described in this paragraph if— 
‘‘(A) the plan is funded exclusively by the 
purchase of individual insurance contracts, 
‘‘(B) such contracts provide for level an-
nual premium payments to be paid extending 
not later than the retirement age for each indi-
vidual participating in the plan, and com-
mencing with the date the individual became a 
participant in the plan (or, in the case of an in-
crease in benefits, commencing at the time such 
increase becomes effective), 
‘‘(C) benefits provided by the plan are 
equal to the benefits provided under each con-
tract at normal retirement age under the plan 
and are guaranteed by an insurance carrier (li-
censed under the laws of a State to do business 
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124 
with the plan) to the extent premiums have 
been paid, 
‘‘(D) premiums payable for the plan year, 
and all prior plan years, under such contracts 
have been paid before lapse or there is rein-
statement of the policy, 
‘‘(E) no rights under such contracts have 
been subject to a security interest at any time 
during the plan year, and 
‘‘(F) no policy loans are outstanding at 
any time during the plan year. 
A plan funded exclusively by the purchase of group 
insurance contracts which is determined under regu-
lations prescribed by the Secretary to have the same 
characteristics as contracts described in the pre-
ceding sentence shall be treated as a plan described 
in this paragraph. 
‘‘(4) CERTAIN
TERMINATED
MULTIEMPLOYER 
PLANS.—This section applies with respect to a ter-
minated multiemployer plan to which section 4021 
of the Employee Retirement Income Security Act of 
1974 applies until the last day of the plan year in 
which the plan terminates (within the meaning of 
section 4041A(a)(2) of such Act).’’. 
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125 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2007. 
SEC. 112. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Subchapter D of chapter 1 of the 
Internal Revenue Code of 1986 (relating to deferred com-
pensation, etc.) is amended by adding at the end the fol-
lowing new part: 
‘‘PART III—MINIMUM FUNDING STANDARDS FOR 
SINGLE-EMPLOYER DEFINED BENEFIT PEN-
SION PLANS 
‘‘SEC. 430. MINIMUM FUNDING STANDARDS FOR SINGLE- 
EMPLOYER 
DEFINED 
BENEFIT 
PENSION 
PLANS. 
‘‘(a) MINIMUM
REQUIRED
CONTRIBUTION.—For 
purposes of this section and section 412(a)(2)(A), except 
as provided in subsection (f), the term ‘minimum required 
contribution’ means, with respect to any plan year of a 
defined benefit plan which is not a multiemployer plan— 
‘‘(1) in any case in which the value of plan as-
sets of the plan (as reduced under subsection 
(f)(4)(B)) is less than the funding target of the plan 
for the plan year, the sum of— 
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ccoleman on PROD1PC71 with BILLS
126 
‘‘(A) the target normal cost of the plan for 
the plan year, 
‘‘(B) the shortfall amortization charge (if 
any) for the plan for the plan year determined 
under subsection (c), and 
‘‘(C) the waiver amortization charge (if 
any) for the plan for the plan year as deter-
mined under subsection (e); 
‘‘(2) in any case in which the value of plan as-
sets of the plan (as reduced under subsection 
(f)(4)(B)) equals or exceeds the funding target of 
the plan for the plan year, the target normal cost of 
the plan for the plan year reduced (but not below 
zero) by such excess. 
‘‘(b) TARGET NORMAL COST.—For purposes of this 
section, except as provided in subsection (i)(2) with re-
spect to plans in at-risk status, the term ‘target normal 
cost’ 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. For purposes of this 
subsection, if any benefit attributable to services per-
formed in a preceding plan year is increased by reason 
of any increase in compensation during the current plan 
year, the increase in such benefit shall be treated as hav-
ing accrued during the current plan year. 
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ccoleman on PROD1PC71 with BILLS
127 
‘‘(c) SHORTFALL AMORTIZATION CHARGE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the shortfall amortization charge for a plan for 
any plan year is the aggregate total (not less than 
zero) of the shortfall amortization installments for 
such plan year with respect to the shortfall amorti-
zation bases for such plan year and each of the 6 
preceding plan years. 
‘‘(2) 
SHORTFALL
AMORTIZATION
INSTALL-
MENT.—For purposes of paragraph (1)— 
‘‘(A) DETERMINATION.—The shortfall am-
ortization installments are the amounts nec-
essary to amortize the shortfall amortization 
base of the plan for any plan year in level an-
nual installments over the 7-plan-year period 
beginning with such plan year. 
‘‘(B) 
SHORTFALL
INSTALLMENT.—The 
shortfall amortization installment for any plan 
year in the 7-plan-year period under subpara-
graph (A) with respect to any shortfall amorti-
zation base is the annual installment deter-
mined under subparagraph (A) for that year for 
that base. 
‘‘(C) SEGMENT
RATES.—In determining 
any shortfall amortization installment under 
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ccoleman on PROD1PC71 with BILLS
128 
this paragraph, the plan sponsor shall use the 
segment rates determined under subparagraph 
(C) of subsection (h)(2), applied under rules 
similar to the rules of subparagraph (B) of sub-
section (h)(2). 
‘‘(3) SHORTFALL
AMORTIZATION
BASE.—For 
purposes of this section, the shortfall amortization 
base of a plan for a plan year is— 
‘‘(A) the funding shortfall of such plan for 
such plan year, minus 
‘‘(B) the present value (determined using 
the segment rates determined under subpara-
graph (C) of subsection (h)(2), applied under 
rules similar to the rules of subparagraph (B) 
of subsection (h)(2)) of the aggregate total of 
the shortfall amortization installments and 
waiver amortization installments which have 
been determined for such plan year and any 
succeeding plan year with respect to the short-
fall amortization bases and waiver amortization 
bases of the plan for any plan year preceding 
such plan year. 
‘‘(4) FUNDING SHORTFALL.—For purposes of 
this section, the funding shortfall of a plan for any 
plan year is the excess (if any) of— 
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ccoleman on PROD1PC71 with BILLS
129 
‘‘(A) the funding target of the plan for the 
plan year, over 
‘‘(B) the value of plan assets of the plan 
(as reduced under subsection (f)(4)(B)) for the 
plan year which are held by the plan on the 
valuation date. 
‘‘(5) EXEMPTION FROM NEW SHORTFALL AM-
ORTIZATION BASE.— 
‘‘(A) IN GENERAL.—In any case in which 
the value of plan assets of the plan (as reduced 
under subsection (f)(4)(A)) is equal to or great-
er than the funding target of the plan for the 
plan year, the shortfall amortization base of the 
plan for such plan year shall be zero. 
‘‘(B) TRANSITION RULE.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (iii) and (iv), in the case 
of plan years beginning after 2007 and be-
fore 2011, only the applicable percentage 
of the funding target shall be taken into 
account under paragraph (3)(A) in deter-
mining the funding shortfall for the plan 
year for purposes of subparagraph (A). 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of subparagraph (A), the applica-
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ccoleman on PROD1PC71 with BILLS
130 
ble percentage shall be determined in ac-
cordance with the following table: 
‘‘In the case of a plan year 
The applicable 
beginning in calendar year: 
percentage is 
2008 ...................................................................................................
2009 ...................................................................................................
2010 ...................................................................................................
96. 
‘‘(iii) LIMITATION.—Clause (i) shall 
not apply with respect to any plan year 
after 2008 unless the shortfall amortiza-
tion base for each of the preceding years 
beginning after 2007 was zero (determined 
after application of this subparagraph). 
‘‘(iv) TRANSITION RELIEF NOT AVAIL-
ABLE FOR NEW OR DEFICIT REDUCTION 
PLANS.—Clause (i) shall not apply to a 
plan— 
‘‘(I) which was not in effect for a 
plan year beginning in 2007, or 
‘‘(II) which was in effect for a 
plan year beginning in 2007 and 
which was subject to section 412(l) 
(as in effect for plan years beginning 
in 2007), determined after the appli-
cation of paragraphs (6) and (9) 
thereof. 
‘‘(6) EARLY DEEMED AMORTIZATION UPON AT-
TAINMENT OF FUNDING TARGET.—In any case in 
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ccoleman on PROD1PC71 with BILLS
131 
which the funding shortfall of a plan for a plan year 
is zero, for purposes of determining the shortfall am-
ortization charge for such plan year and succeeding 
plan years, the shortfall amortization bases for all 
preceding plan years (and all shortfall amortization 
installments determined with respect to such bases) 
shall be reduced to zero. 
‘‘(d) RULES RELATING TO FUNDING TARGET.—For 
purposes of this section— 
‘‘(1) FUNDING TARGET.—Except as provided in 
subsection (i)(1) with respect to plans in at-risk sta-
tus, the funding target of a plan for a plan year is 
the present value of all benefits accrued or earned 
under the plan as of the beginning of the plan year. 
‘‘(2) FUNDING TARGET ATTAINMENT PERCENT-
AGE.—The ‘funding target attainment percentage’ of 
a plan for a plan year is the ratio (expressed as a 
percentage) which— 
‘‘(A) the value of plan assets for the plan 
year (as reduced under subsection (f)(4)(B)), 
bears to 
‘‘(B) the funding target of the plan for the 
plan year (determined without regard to sub-
section (i)(1)). 
‘‘(e) WAIVER AMORTIZATION CHARGE.— 
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ccoleman on PROD1PC71 with BILLS
132 
‘‘(1) DETERMINATION
OF
WAIVER
AMORTIZA-
TION CHARGE.—The waiver amortization charge (if 
any) 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 amortiza-
tion bases for each of the 5 preceding plan years. 
‘‘(2) WAIVER AMORTIZATION INSTALLMENT.— 
For purposes of paragraph (1)— 
‘‘(A) DETERMINATION.—The waiver amor-
tization installments are the amounts necessary 
to amortize the waiver amortization base of the 
plan for any plan year in level annual install-
ments over a period of 5 plan years beginning 
with the succeeding plan year. 
‘‘(B) WAIVER INSTALLMENT.—The waiver 
amortization installment for any plan year in 
the 5-year period under subparagraph (A) with 
respect to any waiver amortization base is the 
annual installment determined under subpara-
graph (A) for that year for that base. 
‘‘(3) INTEREST
RATE.—In determining any 
waiver amortization installment under this sub-
section, the plan sponsor shall use the segment rates 
determined under subparagraph (C) of subsection 
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ccoleman on PROD1PC71 with BILLS
133 
(h)(2), applied under rules similar to the rules of 
subparagraph (B) of subsection (h)(2). 
‘‘(4) WAIVER AMORTIZATION BASE.—The waiv-
er amortization base of a plan for a plan year is the 
amount of the waived funding deficiency (if any) for 
such plan year under section 412(c). 
‘‘(5) EARLY DEEMED AMORTIZATION UPON AT-
TAINMENT OF FUNDING TARGET.—In any case in 
which the funding shortfall of a plan for a plan year 
is zero, for purposes of determining the waiver am-
ortization charge for such plan year and succeeding 
plan years, the waiver amortization bases for all pre-
ceding plan years (and all waiver amortization in-
stallments determined with respect to such bases) 
shall be reduced to zero. 
‘‘(f) REDUCTION OF MINIMUM REQUIRED CONTRIBU-
TION BY PREFUNDING BALANCE AND FUNDING STAND-
ARD CARRYOVER BALANCE.— 
‘‘(1) ELECTION TO MAINTAIN BALANCES.— 
‘‘(A) PREFUNDING
BALANCE.—The plan 
sponsor of a defined benefit plan which is not 
a multiemployer plan may elect to maintain a 
prefunding balance. 
‘‘(B) FUNDING
STANDARD
CARRYOVER 
BALANCE.— 
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ccoleman on PROD1PC71 with BILLS
134 
‘‘(i) IN GENERAL.—In the case of a 
defined benefit plan (other than a multiem-
ployer plan) described in clause (ii), the 
plan sponsor may elect to maintain a fund-
ing standard carryover balance, until such 
balance is reduced to zero. 
‘‘(ii) PLANS
MAINTAINING
FUNDING 
STANDARD ACCOUNT IN 2007.—A plan is 
described in this clause if the plan— 
‘‘(I) was in effect for a plan year 
beginning in 2007, and 
‘‘(II) 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. 
‘‘(2) 
APPLICATION
OF
BALANCES.—A 
prefunding balance and a funding standard carry-
over balance maintained pursuant to this para-
graph— 
‘‘(A) shall be available for crediting against 
the minimum required contribution, pursuant to 
an election under paragraph (3), 
‘‘(B) shall be applied as a reduction in the 
amount treated as the value of plan assets for 
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ccoleman on PROD1PC71 with BILLS
135 
purposes of this section, to the extent provided 
in paragraph (4), and 
‘‘(C) may be reduced at any time, pursu-
ant to an election under paragraph (5). 
‘‘(3) ELECTION TO APPLY BALANCES AGAINST 
MINIMUM REQUIRED CONTRIBUTION.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (B) and (C), in the case of any 
plan year in which the plan sponsor elects to 
credit against the minimum required contribu-
tion for the current plan year all or a portion 
of the prefunding balance or the funding stand-
ard carryover balance for the current plan year 
(not in excess of such minimum required con-
tribution), the minimum required contribution 
for the plan year shall be reduced as of the first 
day of the plan year by the amount so credited 
by the plan sponsor as of the first day of the 
plan year. For purposes of the preceding sen-
tence, the minimum required contribution shall 
be determined after taking into account any 
waiver under section 412(c). 
‘‘(B) 
COORDINATION
WITH
FUNDING 
STANDARD CARRYOVER BALANCE.—To the ex-
tent that any plan has a funding standard car-
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ccoleman on PROD1PC71 with BILLS
136 
ryover balance greater than zero, no amount of 
the prefunding balance of such plan may be 
credited under this paragraph in reducing the 
minimum required contribution. 
‘‘(C) LIMITATION
FOR
UNDERFUNDED 
PLANS.—The preceding provisions of this para-
graph shall not apply for any plan year if the 
ratio (expressed as a percentage) which— 
‘‘(i) the value of plan assets for the 
preceding plan year (as reduced under 
paragraph (4)(C)), bears to 
‘‘(ii) the funding target of the plan for 
the preceding plan year (determined with-
out regard to subsection (i)(1)), 
is less than 80 percent. In the case of plan 
years beginning in 2008, the ratio under this 
subparagraph may be determined using such 
methods of estimation as the Secretary may 
prescribe. 
‘‘(4) EFFECT
OF
BALANCES
ON
AMOUNTS 
TREATED AS VALUE OF PLAN ASSETS.—In the case 
of any plan maintaining a prefunding balance or a 
funding standard carryover balance pursuant to this 
subsection, the amount treated as the value of plan 
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ccoleman on PROD1PC71 with BILLS
137 
assets shall be deemed to be such amount, reduced 
as provided in the following subparagraphs: 
‘‘(A) APPLICABILITY OF SHORTFALL AM-
ORTIZATION BASE.—For purposes of subsection 
(c)(5), the value of plan assets is deemed to be 
such amount, reduced by the amount of the 
prefunding balance, but only if an election 
under paragraph (2) applying any portion of 
the prefunding balance in reducing the min-
imum required contribution is in effect for the 
plan year. 
‘‘(B) DETERMINATION OF EXCESS ASSETS, 
FUNDING SHORTFALL, AND FUNDING TARGET 
ATTAINMENT PERCENTAGE.— 
‘‘(i) IN
GENERAL.—For purposes of 
subsections (a), (c)(4)(B), and (d)(2)(A), 
the value of plan assets is deemed to be 
such amount, reduced by the amount of 
the prefunding balance and the funding 
standard carryover balance. 
‘‘(ii) SPECIAL
RULE
FOR
CERTAIN 
BINDING AGREEMENTS WITH PBGC.—For 
purposes of subsection (c)(4)(B), the value 
of plan assets shall not be deemed to be re-
duced for a plan year by the amount of the 
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ccoleman on PROD1PC71 with BILLS
138 
specified balance if, with respect to such 
balance, there is in effect for a plan year 
a binding written agreement with the Pen-
sion Benefit Guaranty Corporation which 
provides that such balance is not available 
to reduce the minimum required contribu-
tion for the plan year. For purposes of the 
preceding sentence, the term ‘specified bal-
ance’ means the prefunding balance or the 
funding standard carryover balance, as the 
case may be. 
‘‘(C) AVAILABILITY OF BALANCES IN PLAN 
YEAR FOR CREDITING AGAINST MINIMUM RE-
QUIRED
CONTRIBUTION.—For 
purposes 
of 
paragraph (3)(C)(i) of this subsection, the value 
of plan assets is deemed to be such amount, re-
duced by the amount of the prefunding balance. 
‘‘(5) ELECTION TO REDUCE BALANCE PRIOR TO 
DETERMINATIONS OF VALUE OF PLAN ASSETS AND 
CREDITING AGAINST MINIMUM REQUIRED CONTRIBU-
TION.— 
‘‘(A) IN GENERAL.—The plan sponsor may 
elect to reduce by any amount the balance of 
the prefunding balance and the funding stand-
ard carryover balance for any plan year (but 
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ccoleman on PROD1PC71 with BILLS
139 
not below zero). Such reduction shall be effec-
tive prior to any determination of the value of 
plan assets for such plan year under this sec-
tion and application of the balance in reducing 
the minimum required contribution for such 
plan for such plan year pursuant to an election 
under paragraph (2). 
‘‘(B) 
COORDINATION
BETWEEN 
PREFUNDING BALANCE AND FUNDING STAND-
ARD CARRYOVER BALANCE.—To the extent that 
any plan has a funding standard carryover bal-
ance greater than zero, no election may be 
made under subparagraph (A) with respect to 
the prefunding balance. 
‘‘(6) PREFUNDING BALANCE.— 
‘‘(A) IN GENERAL.—A prefunding balance 
maintained by a plan shall consist of a begin-
ning balance of zero, increased and decreased to 
the extent provided in subparagraphs (B) and 
(C), and adjusted further as provided in para-
graph (8). 
‘‘(B) INCREASES.— 
‘‘(i) IN GENERAL.—As of the first day 
of each plan year beginning after 2008, the 
prefunding balance of a plan shall be in-
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ccoleman on PROD1PC71 with BILLS
140 
creased by the amount elected by the plan 
sponsor for the plan year. Such amount 
shall not exceed the excess (if any) of— 
‘‘(I) the aggregate total of em-
ployer contributions to the plan for 
the preceding plan year, over— 
‘‘(II) the minimum required con-
tribution for such preceding plan year. 
‘‘(ii) ADJUSTMENTS FOR INTEREST.— 
Any excess contributions under clause (i) 
shall be properly adjusted for interest ac-
cruing for the periods between the first 
day of the current plan year and the dates 
on which the excess contributions were 
made, determined by using the effective in-
terest rate for the preceding plan year and 
by treating contributions as being first 
used to satisfy the minimum required con-
tribution. 
‘‘(iii) CERTAIN CONTRIBUTIONS NEC-
ESSARY TO AVOID BENEFIT LIMITATIONS 
DISREGARDED.—The excess described in 
clause (i) with respect to any preceding 
plan year shall be reduced (but not below 
zero) by the amount of contributions an 
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ccoleman on PROD1PC71 with BILLS
141 
employer would be required to make under 
paragraph (1), (2), or (4) of section 206(g) 
to avoid a benefit limitation which would 
otherwise be imposed under such para-
graph for the preceding plan year. Any 
contribution which may be taken into ac-
count in satisfying the requirements of 
more than 1 of such paragraphs shall be 
taken into account only once for purposes 
of this clause. 
‘‘(C) DECREASES.—The prefunding bal-
ance of a plan shall be decreased (but not below 
zero) by the sum of— 
‘‘(i) as of the first day of each plan 
year after 2008, the amount of such bal-
ance credited under paragraph (2) (if any) 
in reducing the minimum required con-
tribution of the plan for the preceding plan 
year, and 
‘‘(ii) as of the time specified in para-
graph (5))(A), any reduction in such bal-
ance elected under paragraph (5). 
‘‘(7) FUNDING
STANDARD
CARRYOVER
BAL-
ANCE.— 
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ccoleman on PROD1PC71 with BILLS
142 
‘‘(A) IN
GENERAL.—A funding standard 
carryover balance maintained by a plan shall 
consist of a beginning balance determined 
under subparagraph (B), decreased to the ex-
tent provided in subparagraph (C), and ad-
justed further as provided in paragraph (8). 
‘‘(B) BEGINNING
BALANCE.—The begin-
ning balance of the funding standard carryover 
balance shall be the positive balance described 
in paragraph (1)(B)(ii)(II). 
‘‘(C) DECREASES.—The funding standard 
carryover balance of a plan shall be decreased 
(but not below zero) by— 
‘‘(i) as of the first day of each plan 
year after 2008, the amount of such bal-
ance credited under paragraph (2) (if any) 
in reducing the minimum required con-
tribution of the plan for the preceding plan 
year, and 
‘‘(ii) as of the time specified in para-
graph (5))(A), any reduction in such bal-
ance elected under paragraph (5). 
‘‘(8) ADJUSTMENTS FOR INVESTMENT EXPERI-
ENCE.—In determining the prefunding balance or 
the funding standard carryover balance of a plan as 
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ccoleman on PROD1PC71 with BILLS
143 
of the first day of the plan year, the plan sponsor 
shall, in accordance with regulations prescribed by 
the Secretary of the Treasury, adjust such balance 
to reflect the rate of return on plan assets for the 
preceding plan year. Notwithstanding subsection 
(g)(3), such rate of return shall be determined on 
the basis of fair market value and shall properly 
take into account, in accordance with such regula-
tions, all contributions, distributions, and other plan 
payments made during such period. 
‘‘(9) ELECTIONS.—Elections under this sub-
section shall be made at such times, and in such 
form and manner, as shall be prescribed in regula-
tions of the Secretary. 
‘‘(g) VALUATION
OF PLAN ASSETS
AND LIABIL-
ITIES.— 
‘‘(1) TIMING OF DETERMINATIONS.—Except as 
otherwise provided under this subsection, all deter-
minations under this section for a plan year shall be 
made as of the valuation date of the plan for such 
plan year. 
‘‘(2) VALUATION DATE.—For purposes of this 
section— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the valuation date of a plan 
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for any plan year shall be the first day of the 
plan year. 
‘‘(B) EXCEPTION FOR SMALL PLANS.—If, 
on each day during the preceding plan year, a 
plan had 100 or fewer participants, the plan 
may designate any day during the plan year as 
its valuation date for such plan year and suc-
ceeding plan years. For purposes of this sub-
paragraph, 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 participants with respect to such employer 
or member shall be taken into account. 
‘‘(C) APPLICATION OF CERTAIN RULES IN 
DETERMINATION OF PLAN SIZE.—For purposes 
of this paragraph— 
‘‘(i) PLANS
NOT
IN
EXISTENCE
IN 
PRECEDING YEAR.—In the case of the first 
plan year of any plan, subparagraph (B) 
shall apply to such plan by taking into ac-
count the number of participants that the 
plan is reasonably expected to have on 
days during such first plan year. 
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‘‘(ii) PREDECESSORS.—Any reference 
in subparagraph (B) to an employer shall 
include a reference to any predecessor of 
such employer. 
‘‘(3) DETERMINATION OF VALUE OF PLAN AS-
SETS.—For purposes of this section— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the value of plan assets shall 
be the fair market value of the assets. 
‘‘(B) AVERAGING ALLOWED.—A plan may 
determine the value of plan assets on the basis 
of the averaging of fair market values, but only 
if such method— 
‘‘(i) is permitted under regulations 
prescribed by the Secretary, 
‘‘(ii) does not provide for averaging of 
such values over more than the period be-
ginning on the last day of the 25th month 
preceding the month in which the valuation 
date occurs and ending on the valuation 
date (or a similar period in the case of a 
valuation date which is not the 1st day of 
a month), and 
‘‘(iii) does not result in a determina-
tion of the value of plan assets which, at 
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any time, is lower than 90 percent or 
greater than 110 percent of the fair mar-
ket value of such assets at such time. 
Any such averaging shall be adjusted for con-
tributions and distributions (as provided by the 
Secretary). 
‘‘(4) ACCOUNTING
FOR
CONTRIBUTION
RE-
CEIPTS.—For purposes of determining the value of 
assets under paragraph (3)— 
‘‘(A) PRIOR YEAR CONTRIBUTIONS.—If— 
‘‘(i) an employer makes any contribu-
tion to the plan after the valuation date for 
the plan year in which the contribution is 
made, and 
‘‘(ii) the contribution is for a pre-
ceding plan year, 
the contribution shall be taken into account as 
an asset of the plan as of the valuation date, 
except that in the case of any plan year begin-
ning after 2008, only the present value (deter-
mined as of the valuation date) of such con-
tribution may be taken into account. For pur-
poses of the preceding sentence, present value 
shall be determined using the effective interest 
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