amendment), upon payment by the plan sponsor 
of a contribution equal to—
‘‘(i) 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 
‘‘(ii) in the case of subparagraph 
(A)(ii), the amount sufficient to result in a 
funding target attainment percentage of 80 
percent. 
‘‘(2) FUNDING-BASED LIMITATION ON CERTAIN 
FORMS OF DISTRIBUTION.—A single-employer plan 
shall provide that, in any case in which the plan’s 
funding target attainment percentage as of the valu-
ation 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)). 
‘‘(3) LIMITATIONS ON BENEFIT ACCRUALS FOR 
PLANS
WITH
SEVERE
FUNDING
SHORTFALLS.—A 
single-employer plan shall provide that, in any case 
in which the plan’s funding target attainment per-
centage 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. 
‘‘(4) NEW
PLANS.—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 ref-
erence in this paragraph to a plan shall include a 
reference to any predecessor plan. 
‘‘(5) PRESUMED
UNDERFUNDING
FOR
PUR-
POSES OF BENEFIT LIMITATIONS BASED ON PRIOR 
YEAR’S FUNDING STATUS.—
‘‘(A) 
PRESUMPTION
OF
CONTINUED 
UNDERFUNDING.—In any case in which a ben-
efit 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 actu-
ary of the plan certifies the actual funding tar-
get attainment percentage of the plan as of the 
valuation date of the plan for the current plan 
year.
‘‘(B) PRESUMPTION
OF
UNDERFUNDING 
AFTER 10TH MONTH.—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 para-
graphs (1), (2), and (3), the plan’s funding tar-
get 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 para-
graphs, to be the valuation date of the plan for 
the current plan year. 
‘‘(C) PRESUMPTION
OF
UNDERFUNDING 
AFTER
4TH
MONTH
FOR
NEARLY
UNDER-
FUNDED PLANS.—In any case in which—
‘‘(i) a benefit limitation under para-
graph (1), (2), or (3) did not apply to a 
plan with respect to the plan year pre-
ceding the current plan year, but the fund-
ing 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 
‘‘(ii) as of the first day of the 4th 
month of the current plan year, the en-
rolled actuary of the plan has not certified 
the actual funding target attainment per-
centage of the plan as of the valuation date 
of the plan for the current plan year, 
until the enrolled actuary so certifies, such first 
day shall be deemed, for purposes of such para-
graph, to be the valuation date of the plan for 
the current plan year and the funding target at-
tainment 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 per-
centage of the plan as of the valuation date of 
the plan for such preceding plan year. 
‘‘(6) RESTORATION BY PLAN AMENDMENT OF 
BENEFITS OR BENEFIT ACCRUAL.—In any case in 
which a prohibition under paragraph (2) of the pay-
ment of lump sum distributions or benefits in any 
other accelerated form or a cessation of benefit ac-
cruals under paragraph (3) is applied to a plan with 
respect to any plan year and such prohibition or ces-
sation, 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). 
‘‘(7) FUNDING TARGET ATTAINMENT PERCENT-
AGE.—For purposes of this subsection, the term 
‘funding target attainment percentage’ has the 
meaning 
provided 
such 
term 
under 
section 
303(d)(2).’’. 
(2) NOTICE REQUIREMENT.—
(A) IN
GENERAL.—Section 101 of such 
Act (29 U.S.C. 1021) is amended—
(i) by redesignating subsection (j) as 
subsection (k); and 
(ii) by inserting after subsection (i) 
the following new subsection: 
‘‘(j) NOTICE OF FUNDING-BASED LIMITATION ON 
CERTAIN FORMS OF DISTRIBUTION.—The plan adminis-
trator of a single-employer plan shall provide a written no-
tice to plan participants and beneficiaries within 30 days 
after the plan has become subject to the restriction de-
scribed in section 206(h)(2) or at such other time as may 
be deterimined by the Secretary.’’. 
(B) PENALTY.—Section 502(c)(1)(A) of 
such Act (29 U.S.C. 1132(c)(1)(A)) is amended 
by striking ‘‘section 606’’ and all that follows 
through ‘‘101(f)’’ and inserting ‘‘section 606, 
101(e)(1), 101(f), or 101(j)’’. 
(c) SPECIAL RULE
FOR PLAN AMENDMENTS.—A 
plan shall not fail to meet the requirements of section 
204(g) of the Employee Retirement Income Security Act 
of 1974 or section 411(d)(6) 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. 
(d) EFFECTIVE DATE.—
(1) SHUTDOWN BENEFITS.—Except as provided 
in paragraph (3), the amendments made by sub-
section (a) shall apply with respect to plant shut-
downs, or other unpredictable contingent events, oc-
curring after 2006. 
(2) OTHER BENEFITS.—Except as provided in 
paragraph (3), the amendments made by subsection 
(b) shall apply with respect to plan years beginning 
after 2006.
(3) COLLECTIVE BARGAINING EXCEPTION.—In 
the case of a plan maintained pursuant to 1 or more 
collective bargaining agreements between employee 
representatives and 1 or more employers ratified be-
fore 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—
(A) the later of—
(i) the date on which the last collec-
tive bargaining agreement relating to the 
plan terminates (determined without re-
gard to any extension thereof agreed to 
after the date of the enactment of this 
Act), or 
(ii) the first day of the first plan year 
to which the amendments made by this 
subsection would (but for this subpara-
graph) apply, or 
(B) January 1, 2009. 
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 collec-
tive bargaining agreement.
SEC. 104. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) SECURITY REQUIRED FOR PLAN AMENDMENT 
RESULTING IN SIGNIFICANT UNDERFUNDING.—Section 
307 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1085b) is amended—
(1) in subsection (a)(1), by striking ‘‘current li-
ability under the plan’’ and inserting ‘‘the funding 
target of the plan’’; 
(2) in subsection (a)(2), by striking ‘‘funded 
current liability percentage’’ and inserting ‘‘funding 
target attainment percentage’’, and by striking ‘‘un-
funded current liability’’ and inserting ‘‘unfunded li-
abilities’’; 
(3) in subsection (c)(1)(A), by striking ‘‘funded 
current liability percentage’’ and inserting ‘‘funding 
target attainment percentage’’, and by ‘‘unfunded 
current liability’’ and inserting ‘‘unfunded liabil-
ities’’; 
(4) in subsection (c)(1)(B), by striking ‘‘current 
liability’’ and inserting ‘‘funding target’’; 
(5) in subsection (d), by striking ‘‘funded cur-
rent liability percentage’’ each place it appears and 
inserting ‘‘funding target attainment percentage’’; 
and 
(6) in subsection (f), by striking ‘‘the terms’’ 
and all that follows and inserting the following: ‘‘the
terms ‘funding target’ and ‘funding target attain-
ment percentage’ shall have the meanings given such 
terms by sections 303(d) and 303(g)(4), respectively, 
and the term ‘unfunded liabilities’ means, with re-
spect 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).’’
(b) MISCELLANEOUS AMENDMENTS.—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(i)’’; 
(2) in section 101(f)(2)(B), by striking clause 
(i) and inserting the following: 
‘‘(i) a statement as to whether—
‘‘(I) in the case of a single-em-
ployer plan, the plan’s funding target 
attainment percentage (as defined in 
section 303(g)(4)), or 
‘‘(II) in the case of a multiem-
ployer plan, the plan’s funded current 
liability percentage (as defined in sec-
tion 305(e)(4)), 
is at least 100 percent (and, if note, the 
actual percentage);’’;