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‘‘(I) the product of such rate for
such month determined without regard
to this subparagraph, multiplied by the
applicable percentage, and
‘‘(II) the product of the rate deter-
mined under the rules of section
302(b)(5)(B)(ii)(II) (as in effect for
plan years beginning in 2006), multi-
plied by a percentage equal to 100 per-
cent minus the applicable percentage.
‘‘(ii) APPLICABLE PERCENTAGE.—For
purposes of clause (i), the applicable per-
centage is 331⁄3 percent for plan years be-
ginning in 2007 and 662⁄3 percent for plan
years beginning in 2008.
‘‘(3) MORTALITY TABLES.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (C) and (D), the mortality table
used in determining any present value or mak-
ing any computation under this section shall be
the RP–2000 Combined Mortality Table, using
Scale AA, as published by the Society of Actu-
aries, as in effect on the date of the enactment
of the Pension Security and Transparency Act of
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2005 and as revised from time to time under
subparagraph (B).
‘‘(B) PERIODIC
REVISION.—The Secretary
of the Treasury shall (at least every 10 years)
make revisions in any table in effect under sub-
paragraph (A) to reflect the actual experience of
pension plans and projected trends in such expe-
rience.
‘‘(C) SUBSTITUTE MORTALITY TABLE.—
‘‘(i) IN
GENERAL.—Upon request by
the plan sponsor and approval by the Sec-
retary of the Treasury, a mortality table
which meets the requirements of clause (ii)
shall be used in determining any present
value or making any computation under
this section during the 10-consecutive plan
year period specified in the request. A mor-
tality table described in this clause shall
cease to be in effect if the plan actuary de-
termines at any time that such table does
not meet the requirements of clause (ii).
‘‘(ii) REQUIREMENTS.—A mortality
table meets the requirements of this clause if
the Secretary of the Treasury determines
that—
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‘‘(I) there is a sufficient number
of plan participants, and the pension
plans have been maintained for a suffi-
cient period of time, to have credible
information necessary for purposes of
subclause (II),
‘‘(II) such table reflects the actual
experience of the pension plans main-
tained by the sponsor and projected
trends in general mortality experience,
‘‘(III) except as provided by the
Secretary, such table will be used by
all plans maintained by the plan spon-
sor and all members of any controlled
group which includes the plan sponsor,
and
‘‘(IV) such table is significantly
different from the table described in
subparagraph (A).
‘‘(iii) DEADLINE FOR DISPOSITION OF
APPLICATION.—Any mortality table sub-
mitted to the Secretary of the Treasury for
approval under this subparagraph shall be
treated as in effect for the first plan year in
the 10-year period described in clause (i)
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unless the Secretary of the Treasury, during
the 180-day period beginning on the date of
such submission, disapproves of such table
and provides the reasons that such table
fails to meet the requirements of clause (ii).
The 180-day period shall be extended for
any period during which the Secretary of
the Treasury has requested information
from the plan sponsor and such information
has not been provided.
‘‘(D) SEPARATE
MORTALITY
TABLES
FOR
THE DISABLED.—Notwithstanding subparagraph
(A)—
‘‘(i) IN
GENERAL.—The Secretary of
the Treasury shall establish mortality tables
which may be used (in lieu of the tables
under subparagraph (A)) under this sub-
section for individuals who are entitled to
benefits under the plan on account of dis-
ability. The Secretary of the Treasury shall
establish separate tables for individuals
whose disabilities occur in plan years begin-
ning before January 1, 1995, and for indi-
viduals whose disabilities occur in plan
years beginning on or after such date.
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‘‘(ii) SPECIAL RULE FOR DISABILITIES
OCCURRING AFTER 1994.—In the case of dis-
abilities occurring in plan years beginning
after December 31, 1994, the tables under
clause (i) shall apply only with respect to
individuals described in such subclause who
are disabled within the meaning of title II
of the Social Security Act and the regula-
tions thereunder.
‘‘(iii) PERIODIC REVISION.—The Sec-
retary of the Treasury shall (at least every
10 years) make revisions in any table in ef-
fect under clause (i) to reflect the actual ex-
perience of pension plans and projected
trends in such experience.
‘‘(E) TRANSITION
RULE.—Under regula-
tions of the Secretary of the Treasury, any dif-
ference in present value resulting from any dif-
ferences in assumptions as set forth in the mor-
tality table specified in subparagraph (A) and
assumptions as set forth in the mortality table
described in section 302(d)(7)(C)(ii) (as in effect
for plan years beginning in 2006) shall be
phased in ratably over the first period of 5 plan
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years beginning in or after 2007 so as to be fully
effective for the fifth plan year.
‘‘(4) PROBABILITY
OF
BENEFIT
PAYMENTS
IN
THE
FORM
OF
LUMP
SUMS
OR
OTHER
OPTIONAL
FORMS.—For purposes of determining any present
value or making any computation under this section,
there shall be taken into account—
‘‘(A) the probability that future benefit pay-
ments under the plan will be made in the form
of optional forms of benefits provided under the
plan (including lump sum distributions, deter-
mined on the basis of the plan’s experience and
other related assumptions), and
‘‘(B) any difference in the present value of
such future benefit payments resulting from the
use of actuarial assumptions, in determining
benefit payments in any such optional form of
benefits, which are different from those specified
in this subsection.
‘‘(5) APPROVAL OF LARGE CHANGES IN ACTU-
ARIAL ASSUMPTIONS.—
‘‘(A) IN GENERAL.—No actuarial assump-
tion used to determine the funding target for a
plan to which this paragraph applies may be
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changed without the approval of the Secretary of
the Treasury.
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a plan
only if—
‘‘(i) the aggregate unfunded benefits as
of the close of the preceding plan year (as
determined 
under 
section
4006(a)(3)(E)(iii)) of such plan and all
other plans maintained by the contributing
sponsors (as defined in section 4001(a)(13))
and members of such sponsors’ controlled
groups (as defined in section 4001(a)(14))
which are covered by title IV (disregarding
plans with no unfunded benefits) exceed
$50,000,000; and
‘‘(ii) the change in assumptions (deter-
mined after taking into account any
changes in interest rate and mortality
table) results in a decrease in the funding
shortfall of the plan for the current plan
year that exceeds $50,000,000, or that ex-
ceeds $5,000,000 and that is 5 percent or
more of the funding target of the plan before
such change.
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‘‘(i) SPECIAL RULES FOR AT-RISK PLANS.—
‘‘(1) FUNDING TARGET FOR PLANS IN AT-RISK
STATUS.—
‘‘(A) IN GENERAL.—In the case of a plan to
which this subsection applies for a plan year, the
funding target of the plan for the plan year is
equal to the present value of all liabilities to par-
ticipants and their beneficiaries under the plan
for the plan year, as determined by using the ad-
ditional actuarial assumptions described in sub-
paragraph (B).
‘‘(B) 
ADDITIONAL
ACTUARIAL
ASSUMP-
TIONS.—The actuarial assumptions described in
this subparagraph are as follows:
‘‘(i) All employees who are not other-
wise assumed to retire as of the valuation
date but who will be eligible to elect benefits
during the plan year and the 7 succeeding
plan years shall be assumed to retire at the
earliest retirement date under the plan but
not before the end of the plan year for which
the at-risk target liability and at-risk target
normal cost are being determined.
‘‘(ii) All employees shall be assumed to
elect the retirement benefit available under
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the plan at the assumed retirement age (de-
termined after application of clause (i))
which would result in the highest present
value of liabilities.
‘‘(2) 
TARGET
NORMAL
COST
OF
AT-RISK
PLANS.—In the case of a plan to which this subsection
applies for a plan year, the target normal cost of the
plan for such plan year shall be equal to the present
value of all benefits which are expected to accrue or
be earned under the plan during the plan year, deter-
mined using the additional actuarial assumptions de-
scribed in paragraph (1)(B).
‘‘(3) MINIMUM AMOUNT.—In no event shall—
‘‘(A) the at-risk target liability be less than
the target liability, as determined without regard
to this subsection, or
‘‘(B) the at-risk target normal cost be less
than the target normal cost, as determined with-
out regard to this subsection.
‘‘(4) DETERMINATION OF AT-RISK STATUS.—For
purposes of this subsection, a plan is in at-risk status
for a plan year if—
‘‘(A) the plan is maintained by a finan-
cially-weak employer, and
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‘‘(B) the funding target attainment percent-
age for the plan year is less than 93 percent.
‘‘(5) FINANCIALLY-WEAK EMPLOYER.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, the term ‘financially-weak employer’
means any employer if—
‘‘(i) as of the valuation date for each
of the years during a period of at least 3
consecutive plan years ending with the plan
year—
‘‘(I) the employer has an out-
standing senior unsecured debt instru-
ment which is rated lower than invest-
ment grade by each of the nationally
recognized statistical rating organiza-
tions for corporate bonds that has
issued a credit rating for such instru-
ment, or
‘‘(II) if no such debt instrument
has been rated by such an organization
but 1 or more of such organizations
has made an issuer credit rating for
such employer, all such organizations
which have so rated the employer have
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rated such employer lower than invest-
ment grade, and
‘‘(ii) at least 2 of the years during such
period are deterioration years.
If an employer is treated as a financially-weak
employer for any plan year, clause (ii) shall not
apply in determining whether the employer is so
treated for any succeeding plan year in any con-
tinuous period of plan years for which the em-
ployer is treated as a financially-weak employer.
‘‘(B) CONTROLLED GROUP EXCEPTION.—If
an employer treated as a financially-weak em-
ployer under subparagraph (A) is a member of
a controlled group (as defined in section
302(d)(3)), the employer shall not be treated as
a financially-weak employer if a significant
member (as determined under regulations pre-
scribed by the Secretary of the Treasury) of such
group has an outstanding senior unsecured debt
instrument that is rated as being investment
grade by an organization described in subpara-
graph (A).
‘‘(C) EMPLOYERS WITH NO RATINGS.—If—
‘‘(i) an employer has no debt instru-
ment described in subparagraph (A)(i)