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‘‘(B) ACCRUALS DURING CURRENT PLAN 
YEAR
DISREGARDED.—For purposes of sub-
paragraph (A), benefits accrued or earned dur-
ing such plan year shall not be taken into ac-
count, irrespective of whether the valuation date 
of the plan for such plan year is later than the 
first day of such plan year. 
‘‘(h) ACTUARIAL ASSUMPTIONS AND METHODS.— 
‘‘(1) IN GENERAL.—Subject to this subsection, 
the determination of any present value or other com-
putation under this section shall be made on the 
basis of actuarial assumptions and methods— 
‘‘(A) each of which is reasonable (taking 
into account the experience of the plan and rea-
sonable expectations), and 
‘‘(B) which, in combination, offer the actu-
ary’s best estimate of anticipated experience 
under the plan. 
‘‘(2) INTEREST RATES.— 
‘‘(A) EFFECTIVE
INTEREST
RATE.—For 
purposes of this section, the term ‘effective in-
terest rate’ means, with respect to any plan for 
any plan year, the single rate of interest which, 
if used to determine the present value of the 
plan’s liabilities referred to in subsection (d)(1),
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would result in an amount equal to the funding 
target of the plan for such plan year. 
‘‘(B) INTEREST RATES FOR DETERMINING 
FUNDING
TARGET.—For purposes of deter-
mining the funding target of a plan for any 
plan year, the interest rate used in determining 
the present value of the liabilities of the plan 
shall be— 
‘‘(i) in the case of liabilities reason-
ably determined to be payable during the 
5-year period beginning on the first day of 
the plan year, the first segment rate with 
respect to the applicable month, 
‘‘(ii) in the case of liabilities reason-
ably determined to be payable during the 
15-year period beginning at the end of the 
period described in clause (i), the second 
segment rate with respect to the applicable 
month, and 
‘‘(iii) in the case of liabilities reason-
ably determined to be payable after the pe-
riod described in clause (ii), the third seg-
ment rate with respect to the applicable 
month.
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‘‘(C) SEGMENT RATES.—For purposes of 
this paragraph— 
‘‘(i) FIRST
SEGMENT
RATE.—The 
term ‘first segment rate’ means, with re-
spect to any month, the single rate of in-
terest which shall be determined by the 
Secretary for such month on the basis of 
the corporate bond yield curve for such 
month, taking into account only that por-
tion of such yield curve which is based on 
bonds maturing during the 5-year period 
commencing with such month. 
‘‘(ii) SECOND
SEGMENT
RATE.—The 
term ‘second segment rate’ means, with re-
spect to any month, the single rate of in-
terest which shall be determined by the 
Secretary for such month on the basis of 
the corporate bond yield curve for such 
month, taking into account only that por-
tion of such yield curve which is based on 
bonds maturing during the 15-year period 
beginning at the end of the period de-
scribed in clause (i). 
‘‘(iii) THIRD
SEGMENT
RATE.—The 
term ‘third segment rate’ means, with re-
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spect to any month, the single rate of in-
terest which shall be determined by the 
Secretary for such month on the basis of 
the corporate bond yield curve for such 
month, taking into account only that por-
tion of such yield curve which is based on 
bonds maturing during periods beginning 
after the period described in clause (ii). 
‘‘(D) CORPORATE BOND YIELD CURVE.— 
For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The term ‘cor-
porate bond yield curve’ means, with re-
spect to any month, a yield curve which is 
prescribed by the Secretary for such month 
and which reflects a 3-year weighted aver-
age of yields on investment grade cor-
porate bonds with varying maturities. 
‘‘(ii) 3-YEAR WEIGHTED AVERAGE.— 
The term ‘3-year weighted average’ means 
an average determined by using a method-
ology under which the most recent year is 
weighted 50 percent, the year preceding 
such year is weighted 35 percent, and the 
second year preceding such year is weight-
ed 15 percent.
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‘‘(E) APPLICABLE MONTH.—For purposes 
of this paragraph, the term ‘applicable month’ 
means, with respect to any plan for any plan 
year, the month which includes the valuation 
date of such plan for such plan year or, at the 
election of the plan sponsor, any of the 4 
months which precede such month. Any election 
made under this subparagraph shall apply to 
the plan year for which the election is made and 
all succeeding plan years, unless the election is 
revoked with the consent of the Secretary. 
‘‘(F) PUBLICATION REQUIREMENTS.—The 
Secretary shall publish for each month the cor-
porate bond yield curve (and the corporate bond 
yield curve reflecting the modification described 
in section 417(e)(3)(D)(i) for such month and 
each of the rates determined under subpara-
graph (B) for such month. The Secretary shall 
also publish a description of the methodology 
used to determine such yield curve and such 
rates which is sufficiently detailed to enable 
plans to make reasonable projections regarding 
the yield curve and such rates for future 
months based on the plan’s projection of future 
interest rates.
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‘‘(G) TRANSITION RULE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding provisions of this paragraph, 
for plan years beginning in 2007 or 2008, 
the first, second, or third segment rate for 
a plan with respect to any month shall be 
equal to the sum of— 
‘‘(I) the product of such rate for 
such month determined without re-
gard to this subparagraph, multiplied 
by the applicable percentage, and 
‘‘(II) the product of the rate de-
termined under the rules of section 
412(b)(5)(B)(ii)(II) (as in effect for 
plan years beginning in 2006), multi-
plied by a percentage equal to 100 
percent minus the applicable percent-
age. 
‘‘(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. 
‘‘(iii) 
NEW
PLANS
INELIGIBLE.— 
Clause (i) shall not apply to any plan if the
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first plan year of the plan begins after De-
cember 31, 2006. 
‘‘(3) MORTALITY TABLE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the mortality table used in 
determining any present value or making any 
computation under this section shall be the 
RP–2000 Combined Mortality Table using 
Scale AA published by the Society of Actuaries 
(as in effect on the date of the enactment of the 
Pension Protection Act of 2005), projected as 
of the plan’s valuation date. 
‘‘(B) SUBSTITUTE MORTALITY TABLE.— 
‘‘(i) IN GENERAL.—Upon request by 
the plan sponsor and approval by the Sec-
retary for a period not to exceed 10 years, 
a mortality table which meets the require-
ments of clause (ii) shall be used in deter-
mining any present value or making any 
computation under this section. 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 subclauses 
(I) and (II) of clause (ii).
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‘‘(ii) REQUIREMENTS.—A mortality 
table meets the requirements of this clause 
if the Secretary determines that— 
‘‘(I) such table reflects the actual 
experience of the pension plan and 
projected trends in such experience, 
and 
‘‘(II) 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 for approval under 
this subparagraph shall be treated as in ef-
fect for the succeeding plan year unless the 
Secretary, during the 180-day period be-
ginning 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). 
‘‘(C) TRANSITION
RULE.—Under regula-
tions of the Secretary, any difference in present 
value resulting from the difference in the as-
sumptions as set forth in the mortality table 
specified in subparagraph (A) and the assump-
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tions as set forth in the mortality table de-
scribed in section 412(l)(7)(C)(ii) (as in effect 
for plan years beginning in 2006) shall be 
phased in ratably over the first period of 5 plan 
years beginning in or after 2007 so as to be 
fully effective for the fifth plan year. The pre-
ceding sentence shall not apply to any plan if 
the first plan year of the plan begins after De-
cember 31, 2006. 
‘‘(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 
payments under the plan will be made in the 
form of optional forms of benefits provided 
under the plan (including lump sum distribu-
tions, determined on the basis of the plan’s ex-
perience 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
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benefits, which are different from those speci-
fied 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 
changed without the approval of the Secretary. 
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a plan 
only if— 
‘‘(i) the plan is a defined benefit plan 
(other than a multiemployer plan) to which 
title IV of the Employee Retirement In-
come Security Act of 1974 applies, 
‘‘(ii) the aggregate unfunded vested 
benefits as of the close of the preceding 
plan year (as determined under section 
4006(a)(3)(E)(iii) of the Employee Retire-
ment Income Security Act of 1974) of such 
plan and all other plans maintained by the 
contributing sponsors (as defined in sec-
tion 4001(a)(13) of such Act) and mem-
bers of such sponsors’ controlled groups 
(as defined in section 4001(a)(14) of such
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HR 2830 PCS 
Act) which are covered by title IV (dis-
regarding plans with no unfunded vested 
benefits) exceed $50,000,000, and 
‘‘(iii) the change in assumptions (de-
termined 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 be-
fore such change. 
‘‘(i) SPECIAL RULES FOR AT-RISK PLANS.— 
‘‘(1) FUNDING TARGET FOR PLANS IN AT-RISK 
STATUS.— 
‘‘(A) IN GENERAL.—In any case in which 
a plan is in at-risk status for a plan year, the 
funding target of the plan for the plan year is 
the sum of— 
‘‘(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
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(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 
‘‘(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—
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‘‘(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 
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—
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‘‘(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.— 
‘‘(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
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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— 
‘‘(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)—