‘‘(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 303(j)) shall 
be paid by the employer responsible for making con-
tributions to or under the plan. 
‘‘(2) JOINT AND SEVERAL LIABILITY WHERE EM-
PLOYER
MEMBER
OF
CONTROLLED
GROUP.—In the 
case of a single-employer plan, if the employer re-
ferred to in paragraph (1) is a member of a controlled 
group, each member of such group shall be jointly and 
severally liable for payment 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 
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 of the Treasury 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 stand-
ard. The Secretary of the Treasury shall not 
waive the minimum funding standard with re-
spect to a plan for more than 3 of any 15 (5 of 
any 15 in the case of a multiemployer plan) con-
secutive plan years. 
‘‘(B) EFFECTS OF WAIVER.—If a waiver is 
granted under subparagraph (A) for any plan 
year— 
‘‘(i) in the case of a single-employer 
plan, the minimum required contribution 
under section 303 for the plan year shall be 
reduced by the amount of the waived fund-
ing deficiency and such amount shall be 
amortized as required under section 303(e), 
and
‘‘(ii) in the case of a multiemployer 
plan, the funding standard account shall be 
credited under section 304(b)(3)(C) with the 
amount of the waived funding deficiency 
and such amount shall be amortized as re-
quired under section 304(b)(2)(C). 
‘‘(C) WAIVER OF AMORTIZED PORTION NOT 
ALLOWED.—The Secretary of the Treasury may 
not waive under subparagraph (A) any portion 
of the minimum funding standard under sub-
section (a) for a plan year which is attributable 
to any waived funding deficiency for any pre-
ceding 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 hard-
ship in the case of a multiemployer plan) shall in-
clude (but shall not be limited to) whether or not— 
‘‘(A) the employer is operating at an eco-
nomic loss, 
‘‘(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 part, the term ‘waived funding defi-
ciency’ means the portion of the minimum funding 
standard under subsection (a) (determined without 
regard to the waiver) for a plan year waived by the 
Secretary of the Treasury and not satisfied by em-
ployer contributions. 
‘‘(4) SECURITY FOR WAIVERS FOR SINGLE-EM-
PLOYER PLANS, CONSULTATIONS.— 
‘‘(A) SECURITY MAY BE REQUIRED.— 
‘‘(i) IN GENERAL.—Except as provided 
in subparagraph (C), the Secretary of the 
Treasury may require an employer main-
taining a defined benefit plan which is a 
single-employer plan (within the meaning 
of section 4001(a)(15)) to provide 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)), or a member of such sponsor’s 
controlled group (within the meaning of sec-
tion 4001(a)(14)). 
‘‘(B) CONSULTATION
WITH
THE
PENSION 
BENEFIT
GUARANTY
CORPORATION.—Except as 
provided in subparagraph (C), the Secretary of 
the Treasury shall, before granting or modifying 
a waiver under this subsection with respect to a 
plan described in subparagraph (A)(i)— 
‘‘(i) provide the Pension Benefit Guar-
anty Corporation with— 
‘‘(I) notice of the completed appli-
cation for any waiver or modification, 
and 
‘‘(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)) representing participants 
in the plan which are submitted in 
writing to the Secretary of the Treas-
ury in connection with such applica-
tion. 
Information provided to the Corporation under 
this subparagraph shall be considered tax return 
information and subject to the safeguarding and 
reporting requirements of section 6103(p) of the 
Internal Revenue Code of 1986. 
‘‘(C) EXCEPTION FOR CERTAIN WAIVERS.— 
‘‘(i) IN GENERAL.—The preceding pro-
visions of this paragraph shall not apply to 
any plan with respect to which the sum 
of— 
‘‘(I) the aggregate unpaid min-
imum required contribution 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 
303(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. 
‘‘(iii) UNPAID
MINIMUM
REQUIRED 
CONTRIBUTION.—For purposes of this sub-
paragraph— 
‘‘(I) IN GENERAL.—The term ‘un-
paid minimum required contribution’ 
means, with respect to any plan year, 
any minimum required contribution 
under section 303 for the plan year 
which is not paid on or before the due 
date (as determined under section 
303(j)(1)) for the plan year. 
‘‘(II) ORDERING RULE.—For pur-
poses of subclause (I), any payment to 
or under a plan for any plan year 
shall be allocated first to unpaid min-
imum required contributions for all 
preceding plan years on a first-in,
first-out basis and then to the min-
imum required contribution under sec-
tion 303 for the plan year. 
‘‘(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 single-employer plan, no 
waiver may be granted under this subsection 
with respect to any plan for any plan year un-
less an application therefor is submitted to the 
Secretary of the Treasury 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 
single-employer plan, if an employer is a mem-
ber of a controlled group, the temporary substan-
tial 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 of the Treasury may provide that 
an analysis of a trade or business or industry of 
a member need not be conducted if the Secretary 
of the Treasury determines such analysis is not 
necessary because the taking into account of such 
member would not significantly affect the deter-
mination under this paragraph. 
‘‘(6) ADVANCE NOTICE.— 
‘‘(A) IN
GENERAL.—The Secretary of the 
Treasury shall, before granting a waiver under 
this subsection, require each applicant to provide 
evidence satisfactory to such Secretary that the 
applicant has provided notice of the filing of the 
application for such waiver to each affected 
party (as defined in section 4001(a)(21)). Such 
notice shall include a description of the extent to 
which the plan is funded for benefits which are 
guaranteed under title IV and for benefit liabil-
ities. 
‘‘(B) CONSIDERATION OF RELEVANT INFOR-
MATION.—The Secretary of the Treasury shall 
consider any relevant information provided by a
person to whom notice was given under subpara-
graph (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 change in 
the accrual of benefits, or any change in the rate 
at which benefits become nonforfeitable under the 
plan shall be adopted if a waiver under this sub-
section or an extension of time under section 
304(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 24 
months. 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.—Paragraph (1) shall not 
apply to any plan amendment which— 
‘‘(i) the Secretary of the Treasury de-
termines to be reasonable and which pro-
vides 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 of the Internal Revenue Code of 
1986. 
‘‘(8) CROSS
REFERENCE.—For corresponding 
duties of the Secretary of the Treasury with regard to 
implementation of the Internal Revenue Code of 1986, 
see section 412(c) of such Code. 
‘‘(d) MISCELLANEOUS RULES.— 
‘‘(1) CHANGE IN METHOD OR YEAR.—If the fund-
ing method, the valuation date, or a plan year for a 
plan is changed, the change shall take effect only if 
approved by the Secretary of the Treasury. 
‘‘(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 multiem-
ployer 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 beginning
of the first plan year to which the amendment 
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 cir-
cumstances, 
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-
trator files a notice with the Secretary of the Treas-
ury notifying him of such amendment and such Sec-
retary 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 of the Treasury unless such Secretary deter-
mines that such amendment is necessary because of a 
substantial business hardship (as determined under 
subsection (c)(2)) and that a waiver under subsection 
(c) (or, in the case of a multiemployer plan, any ex-
tension of the amortization period under section 
304(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 of the Internal Revenue 
Code of 1986.’’. 
(c) CLERICAL AMENDMENT.—The table of contents in 
section 1 of such Act is amended by striking the items relat-
ing to sections 302 through 308 and inserting the following 
new item: 
‘‘Sec. 302. Minimum funding standards.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to plan years beginning after 2005. 
SEC. 102. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Part 3 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as 
amended by section 101 of this Act) is amended further by 
inserting after section 302 the following new section: 
‘‘MINIMUM FUNDING STANDARDS FOR SINGLE-EMPLOYER 
DEFINED BENEFIT PENSION PLANS 
‘‘SEC. 303. (a) MINIMUM REQUIRED CONTRIBUTION.— 
For purposes of this section and section 302(a)(2)(A), except 
as provided in subsection (f), the term ‘minimum required 
contribution’ means, with respect to any plan year of a de-
fined benefit plan which is a single employer plan—
‘‘(1) in any case in which the value of plan as-
sets of the plan (as reduced under subsection (f)(4)) 
is less than the funding target of the plan for the plan 
year, the sum of— 
‘‘(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)) 
exceeds the funding target of the plan for the plan 
year, the target normal cost of the plan for the plan 
year reduced by such excess; or 
‘‘(3) in any other case, the target normal cost of 
the plan for the plan year. 
‘‘(b) TARGET NORMAL COST.—For purposes of this 
section, except as provided in subsection (i)(2) with respect 
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 performed in a preceding 
plan year is increased by reason of any increase in com-
pensation during the current plan year, the increase in such 
benefit shall be treated as having accrued during the current 
plan year. 
‘‘(c) SHORTFALL AMORTIZATION CHARGE.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the shortfall amortization charge for a plan for any 
plan year is the aggregate total of the shortfall amor-
tization installments for such plan year with respect 
to the shortfall amortization bases for such plan year 
and each of the 6 preceding plan years. 
‘‘(2) 
SHORTFALL
AMORTIZATION
INSTALL-
MENT.—The plan sponsor shall determine, with re-
spect to the shortfall amortization base of the plan for 
any plan year, the amounts necessary to amortize 
such shortfall amortization base, in level annual in-
stallments over a period of 7 plan years beginning 
with such plan year. For purposes of paragraph (1), 
the annual installment of such amortization for each 
plan year in such 7-plan-year period is the shortfall 
amortization installment for such plan year with re-
spect to such shortfall amortization base. In deter-
mining any shortfall amortization installment under 
this paragraph, the plan sponsor shall use the seg-
ment rates determined under subparagraph (C) of 
subsection (h)(2), applied under rules similar to the 
rules of subparagraph (B) of subsection (h)(2). 
‘‘(3) SHORTFALL
AMORTIZATION
BASE.—For 
purposes of this section, the shortfall amortization 
base of a plan for a plan year is the excess (if any) 
of— 
‘‘(A) the funding shortfall of such plan for 
such plan year, over 
‘‘(B) the sum of— 
‘‘(i) the present value (determined 
using the segment rates determined under 
subparagraph (C) of subsection (h)(2), ap-
plied under rules similar to the rules of sub-
paragraph (B) of subsection (h)(2)) of the 
aggregate total of the shortfall amortization 
installments, for such plan year and the 5 
succeeding plan years, which have been de-
termined with respect to the shortfall amor-
tization bases of the plan for each of the 6 
plan years preceding such plan year, and 
‘‘(ii) the present value (as so deter-
mined) of the aggregate total of the waiver 
amortization installments for such plan 
year and the 5 succeeding plan years, which