have been determined with respect to the 
waiver amortization bases of the plan for 
each of the 5 plan years preceding such 
plan year. 
In any case in which the value of plan assets of 
the plan (as reduced under subsection (f)(4)) is 
equal to or greater 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. 
‘‘(4) FUNDING SHORTFALL.— 
‘‘(A) IN
GENERAL.—For purposes of this 
section, except as provided in subparagraph (B), 
the funding shortfall of a plan for any plan year 
is the excess (if any) of— 
‘‘(i) the funding target of the plan for 
the plan year, over 
‘‘(ii) the value of plan assets of the 
plan (as reduced under subsection (f)(4)) for 
the plan year which are held by the plan on 
the valuation date. 
‘‘(B) TRANSITION RULE.— 
‘‘(i) IN
GENERAL.—For purposes of 
paragraph (3), in the case of a non-defecit 
reduction plan, subparagraph (A) shall be 
applied to plan years beginning after 2005
and before 2010 by substituting for the 
amount described in subparagraph (A)(i) 
the applicable percentage of the funding tar-
get of the plan for the plan year determined 
under the following table: 
‘‘In the case of a plan year beginning in calendar 
year: 
The appli-
cable per-
centage 
is: 
2006 .......................................................................................................
92 percent
2007 .......................................................................................................
94 percent
2008 .......................................................................................................
96 percent
2009 .......................................................................................................
98 percent. 
‘‘(ii) NON-DEFICIT REDUCTION PLAN.— 
For purposes of clause (i), the term ‘non- 
deficit reduction plan’ means any plan— 
‘‘(I) to which this part (as in ef-
fect on the day before the date of the 
enactment of the Pension Protection 
Act of 2005) applied for the plan year 
beginning in 2005, and 
‘‘(II) to which section 302(d) (as 
so in effect) did not apply for such 
plan year. 
‘‘(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 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 liabilities to participants and 
their beneficiaries under the plan for 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)), 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.— 
‘‘(1) DETERMINATION OF WAIVER AMORTIZATION 
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 amortization bases for 
each of the 5 preceding plan years. 
‘‘(2) WAIVER
AMORTIZATION
INSTALLMENT.— 
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 the suc-
ceeding plan year. For purposes of paragraph (1), 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 re-
spect to such waiver amortization 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 
(h)(2), applied under rules similar to the rules of sub-
paragraph (B) of subsection (h)(2). 
‘‘(4) WAIVER AMORTIZATION BASE.—The waiver 
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 302(c).