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‘‘(i) the present value of all liabilities 
to participants and their beneficiaries 
under the plan for the plan year, as deter-
mined by using, in addition to the actu-
arial assumptions described in subsection 
(h), the supplemental actuarial assump-
tions described in subparagraph (B), plus 
‘‘(ii) a loading factor determined 
under subparagraph (C). 
‘‘(B) SUPPLEMENTAL ACTUARIAL ASSUMP-
TIONS.—The actuarial assumptions used in de-
termining the valuation of the funding target 
shall include, in addition to the actuarial as-
sumptions described in subsection (h), an as-
sumption 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). 
‘‘(C) LOADING FACTOR.—The loading fac-
tor applied with respect to a plan under this 
paragraph for any plan year is the sum of— 
‘‘(i) $700, times the number of par-
ticipants in the plan, plus
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‘‘(ii) 4 percent of the funding target 
(determined without regard to this para-
graph) of the plan for the plan year. 
‘‘(2) TARGET
NORMAL
COST
OF
AT-RISK 
PLANS.—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— 
‘‘(A) the present value of all benefits which 
are expected to accrue or be earned under the 
plan during the plan year, determined under 
the actuarial assumptions used under para-
graph (1), plus 
‘‘(B) the loading factor under paragraph 
(1)(C), excluding the portion of the loading fac-
tor described in paragraph (1)(C)(i). 
‘‘(3) DETERMINATION OF AT-RISK STATUS.— 
For purposes of this subsection, a plan is in ‘at-risk 
status’ for a plan year if the funding target attain-
ment percentage of the plan for the preceding plan 
year was less than 60 percent. 
‘‘(4) TRANSITION BETWEEN APPLICABLE FUND-
ING TARGETS AND BETWEEN APPLICABLE TARGET 
NORMAL COSTS.— 
‘‘(A) IN GENERAL.—In any case in which 
a plan which is in at-risk status for a plan year
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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 de-
termined without regard to this paragraph, the 
sum of— 
‘‘(i) the amount determined under this 
section without regard to this subsection, 
plus 
‘‘(ii) 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 re-
gard to this subsection. 
‘‘(B) 
TRANSITION
PERCENTAGE.—For 
purposes of this paragraph, the ‘transition per-
centage’ for a plan year is the product derived 
by multiplying— 
‘‘(i) 20 percent, by 
‘‘(ii) the number of plan years during 
the period described in subparagraph (A). 
‘‘(j) PAYMENT OF MINIMUM REQUIRED CONTRIBU-
TIONS.—
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‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the due date for any payment of any minimum 
required contribution for any plan year shall be 81⁄2 
months after the close of the plan year. 
‘‘(2) INTEREST.—Any payment required under 
paragraph (1) for a plan year that is made on a date 
other than the valuation date for such plan year 
shall be adjusted for interest accruing for the period 
between the valuation date and the payment date, at 
the effective rate of interest for the plan for such 
plan year. 
‘‘(3) ACCELERATED QUARTERLY CONTRIBUTION 
SCHEDULE FOR UNDERFUNDED PLANS.— 
‘‘(A) INTEREST PENALTY FOR FAILURE TO 
MEET
ACCELERATED
QUARTERLY
PAYMENT 
SCHEDULE.—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 under-
payment for the period of the underpayment, 
using an interest rate equal to the excess of—
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‘‘(i) 175 percent of the Federal mid- 
term rate (as in effect under section 1274 
for the 1st month of such plan year), over 
‘‘(ii) the effective rate of interest for 
the plan for the plan year. 
‘‘(B) AMOUNT
OF
UNDERPAYMENT, PE-
RIOD
OF
UNDERPAYMENT.—For purposes of 
subparagraph (A)— 
‘‘(i) AMOUNT.—The amount of the 
underpayment shall be the excess of— 
‘‘(I) the required installment, 
over 
‘‘(II) the amount (if any) of the 
installment contributed to or under 
the plan on or before the due date for 
the installment. 
‘‘(ii) PERIOD OF UNDERPAYMENT.— 
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 con-
tributed to or under the plan. 
‘‘(iii) ORDER
OF
CREDITING
CON-
TRIBUTIONS.—For 
purposes 
of 
clause
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(i)(II), contributions shall be credited 
against unpaid required installments in the 
order in which such installments are re-
quired to be paid. 
‘‘(C) NUMBER
OF
REQUIRED
INSTALL-
MENTS; DUE
DATES.—For purposes of this 
paragraph— 
‘‘(i) PAYABLE IN 4 INSTALLMENTS.— 
There shall be 4 required installments for 
each plan year. 
‘‘(ii) TIME
FOR
PAYMENT
OF
IN-
STALLMENTS.—The due dates for required 
installments are set forth in the following 
table: 
‘‘In the case of the following 
required installment: 
The due date is: 
1st ...........................................................................
April 15 
2nd .........................................................................
July 15 
3rd ..........................................................................
October 15 
4th ..........................................................................
January 15 of the fol-
lowing year 
‘‘(D) AMOUNT
OF
REQUIRED
INSTALL-
MENT.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The amount of 
any required installment shall be 25 per-
cent of the required annual payment.
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‘‘(ii) REQUIRED ANNUAL PAYMENT.— 
For purposes of clause (i), the term ‘re-
quired annual payment’ means the lesser 
of— 
‘‘(I) 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 
‘‘(II) in the case of a plan year 
beginning after 2007, 100 percent of 
the minimum required contribution 
(without regard to any waiver under 
section 302(c)) to the plan for the 
preceding plan year. 
Subclause (II) shall not apply if the pre-
ceding plan year referred to in such clause 
was not a year of 12 months. 
‘‘(E) FISCAL YEARS AND SHORT YEARS.— 
‘‘(i) FISCAL YEARS.—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.
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‘‘(ii) SHORT PLAN YEAR.—This sub-
paragraph shall be applied to plan years of 
less than 12 months in accordance with 
regulations prescribed by the Secretary of 
the Treasury. 
‘‘(4) LIQUIDITY REQUIREMENT IN CONNECTION 
WITH QUARTERLY CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—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 install-
ment is less than the liquidity shortfall (wheth-
er or not such liquidity shortfall exceeds the 
amount of such installment required to be paid 
but for this paragraph). 
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a plan 
(other than a plan that would be described in 
subsection (f)(2)(B) if ‘100’ were substituted 
for ‘500’ therein) which— 
‘‘(i) is required to pay installments 
under paragraph (3) for a plan year, and 
‘‘(ii) has a liquidity shortfall for any 
quarter during such plan year.
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‘‘(C) PERIOD
OF
UNDERPAYMENT.—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. 
‘‘(D) LIMITATION
ON
INCREASE.—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. 
‘‘(E) DEFINITIONS.—For purposes of this 
subparagraph: 
‘‘(i) 
LIQUIDITY
SHORTFALL.—The 
term ‘liquidity shortfall’ means, with re-
spect to any required installment, an 
amount equal to the excess (as of the last 
day of the quarter for which such install-
ment is made) of—
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‘‘(I) the base amount with re-
spect to such quarter, over 
‘‘(II) the value (as of such last 
day) of the plan’s liquid assets. 
‘‘(ii) BASE AMOUNT.— 
‘‘(I) IN
GENERAL.—The term 
‘base amount’ means, with respect to 
any quarter, an amount equal to 3 
times the sum of the adjusted dis-
bursements from the plan for the 12 
months ending on the last day of such 
quarter. 
‘‘(II) SPECIAL
RULE.—If the 
amount determined under subclause 
(I) exceeds an amount equal to 2 
times the sum of the adjusted dis-
bursements from the plan for the 36 
months ending on the last day of the 
quarter and an enrolled actuary cer-
tifies to the satisfaction of the Sec-
retary of the Treasury that such ex-
cess is the result of nonrecurring cir-
cumstances, the base amount with re-
spect to such quarter shall be deter-
mined without regard to amounts re-
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lated 
to 
those 
nonrecurring 
cir-
cumstances. 
‘‘(iii) DISBURSEMENTS
FROM
THE 
PLAN.—The term ‘disbursements from the 
plan’ means all disbursements from the 
trust, including purchases of annuities, 
payments of single sums and other bene-
fits, and administrative expenses. 
‘‘(iv) ADJUSTED
DISBURSEMENTS.— 
The term ‘adjusted disbursements’ means 
disbursements from the plan reduced by 
the product of— 
‘‘(I) the plan’s funding target at-
tainment percentage for the plan year, 
and 
‘‘(II) the sum of the purchases of 
annuities, payments of single sums, 
and such other disbursements as the 
Secretary of the Treasury shall pro-
vide in regulations. 
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties, and such other assets as specified by 
the Secretary of the Treasury in regula-
tions.
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‘‘(vi) QUARTER.—The term ‘quarter’ 
means, with respect to any required install-
ment, the 3-month period preceding the 
month in which the due date for such in-
stallment occurs. 
‘‘(F) REGULATIONS.—The Secretary of the 
Treasury may prescribe such regulations as are 
necessary to carry out this paragraph. 
‘‘(k) IMPOSITION
OF LIEN WHERE FAILURE
TO 
MAKE REQUIRED CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—In the case of a plan to 
which this subsection applies (as provided under 
paragraph (2)), if— 
‘‘(A) any person fails to make a contribu-
tion payment required by section 302 and this 
section before the due date for such payment, 
and 
‘‘(B) the unpaid balance of such payment 
(including interest), when added to the aggre-
gate unpaid balance of all preceding such pay-
ments for which payment was not made before 
the due date (including interest), exceeds 
$1,000,000, 
then there shall be a lien in favor of the plan in the 
amount determined under paragraph (3) upon all
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property and rights to property, whether real or per-
sonal, belonging to such person and any other per-
son who is a member of the same controlled group 
of which such person is a member. 
‘‘(2) PLANS TO WHICH SUBSECTION APPLIES.— 
This subsection shall apply to a single-employer plan 
for any plan year for which the funding target at-
tainment percentage (as defined in subsection 
(d)(2)) of such plan is less than 100 percent. This 
subsection shall not apply to any plan to which sec-
tion 4021 does not apply (as such section is in effect 
on the date of the enactment of the Pension Protec-
tion Act of 2005). 
‘‘(3) AMOUNT OF LIEN.—For purposes of para-
graph (1), the amount of the lien shall be equal to 
the aggregate unpaid balance of contribution pay-
ments required under this section and section 302 
for which payment has not been made before the due 
date. 
‘‘(4) NOTICE OF FAILURE; LIEN.— 
‘‘(A) NOTICE
OF
FAILURE.—A person 
committing a failure described in paragraph (1) 
shall notify the Pension Benefit Guaranty Cor-
poration of such failure within 10 days of the 
due date for the required contribution payment.
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‘‘(B) PERIOD OF LIEN.—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 con-
tinues to be described in paragraph (2) during 
the period referred to in the preceding sentence. 
‘‘(C) CERTAIN
RULES
TO
APPLY.—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. 
‘‘(5) ENFORCEMENT.—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 Cor-
poration, by the contributing sponsor (or any mem-
ber of the controlled group of the contributing spon-
sor).
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‘‘(6) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) CONTRIBUTION PAYMENT.—The term 
‘contribution payment’ means, in connection 
with a plan, a contribution payment required to 
be made to the plan, including any required in-
stallment under paragraphs (3) and (4) of sub-
section (i). 
‘‘(B) DUE
DATE; 
REQUIRED
INSTALL-
MENT.—The terms ‘due date’ and ‘required in-
stallment’ have the meanings given such terms 
by subsection (j), except that in the case of a 
payment other than a required installment, the 
due date shall be the date such payment is re-
quired to be made under section 303. 
‘‘(C) CONTROLLED
GROUP.—The term 
‘controlled group’ means any group treated as 
a single employer under subsections (b), (c), 
(m), and (o) of section 414 of the Internal Rev-
enue Code of 1986. 
‘‘(l) QUALIFIED TRANSFERS TO HEALTH BENEFIT 
ACCOUNTS.—In the case of a qualified transfer (as de-
fined in section 420 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.’’.
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(b) CLERICAL AMENDMENT.—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: 
‘‘Sec. 303. Minimum funding standards for single-employer defined benefit pen-
sion plans.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning after 2006. 
SEC. 
103. 
BENEFIT 
LIMITATIONS 
UNDER 
SINGLE-EM-
PLOYER PLANS. 
(a) PROHIBITION
OF SHUTDOWN BENEFITS
AND 
OTHER UNPREDICTABLE CONTINGENT EVENT BENEFITS 
UNDER SINGLE-EMPLOYER PLANS.—Section 206 of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1056) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(g) FUNDING-BASED LIMITATION ON SHUTDOWN 
BENEFITS
AND OTHER UNPREDICTABLE CONTINGENT 
EVENT BENEFITS UNDER SINGLE-EMPLOYER PLANS.— 
‘‘(1) IN
GENERAL.—No defined benefit plan 
which is a single-employer plan may provide benefits 
to which participants are entitled solely by reason of 
the occurrence of a plant shutdown or any other un-
predictable contingent event occurring during any 
plan year if the funding target attainment percent-
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age as of the valuation date of the plan for such 
plan year— 
‘‘(A) is less than 80 percent, or 
‘‘(B) would be less than 80 percent taking 
into account such occurrence. 
‘‘(2) EXEMPTION.—Paragraph (1) shall cease 
to apply with respect to any plan year, effective as 
of the first date of the plan year, upon payment by 
the plan sponsor of a contribution (in addition to 
any minimum required contribution under section 
303) equal to— 
‘‘(A) in the case of paragraph (1)(A), the 
amount of the increase in the funding target of 
the plan (under section 303) for the plan year 
attributable to the occurrence referred to in 
paragraph (1), and 
‘‘(B) in the case of paragraph (1)(B), the 
amount sufficient to result in a funding target 
attainment percentage of 80 percent. 
Rules similar to the rules of subsection (h)(6) shall 
apply for purposes of this paragraph. 
‘‘(3) UNPREDICTABLE CONTINGENT EVENT.— 
For purposes of this subsection, the term ‘unpredict-
able contingent event’ means an event other than—
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‘‘(A) attainment of any age, performance 
of any service, receipt or derivation of any com-
pensation, or the occurrence of death or dis-
ability, or 
‘‘(B) an event which is reasonably and reli-
ably predictable (as determined by the Sec-
retary of the Treasury). 
‘‘(4) NEW
PLANS.—Paragraph (1) 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. 
‘‘(5) DEEMED REDUCTION OF FUNDING BAL-
ANCES.—A rule similar to the rule of subsection 
(h)(8) shall apply for purposes of this subsection.’’. 
(b) OTHER LIMITS ON BENEFITS AND BENEFIT AC-
CRUALS.— 
(1) IN GENERAL.—Section 206 of such Act (as 
amended by subsection (a)) is amended further by 
adding at the end the following new subsection: 
‘‘(h) FUNDING-BASED LIMITS ON BENEFITS AND 
BENEFIT
ACCRUALS
UNDER
SINGLE-EMPLOYER 
PLANS.— 
‘‘(1) LIMITATIONS ON PLAN AMENDMENTS IN-
CREASING LIABILITY FOR BENEFITS.—
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‘‘(A) IN GENERAL.—No amendment to a 
defined benefit plan which is 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— 
‘‘(i) less than 80 percent, or 
‘‘(ii) would be less than 80 percent 
taking into account such amendment. 
For purposes of this subparagraph, any in-
crease in benefits under the plan by reason of 
an increase in the benefit rate provided under 
the plan or on the basis of an increase in com-
pensation shall be treated as effected by plan 
amendment. 
‘‘(B) 
EXEMPTION.—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