(3) in section 103(d)(8)(B), by striking ‘‘the re-
quirements of section 302(c)(3)’’ and inserting ‘‘the 
applicable requirements of sections 303(f) and 
304(c)(3)’’; 
(4) in section 103(d), by striking paragraph 
(11) and inserting the following: 
‘‘(11) If the current value of the assets of the 
plan is less than 70 percent of—
‘‘(A) in the case of a single-employer plan, 
the funding target (as defined in section 
303(d)) of the plan, or 
‘‘(B) in the case of a multiemployer plan, 
the current liability (as defined in section 
304(c)(6)(C)) under the plan, 
the percentage which such value is of the amount 
described in subparagraph (A) or (B).’’; 
(5) in section 203(a)(3)(C), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(6) in section 204(g)(1), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(7) in section 204(i)(2)(B), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(8) in section 204(i)(3), by striking ‘‘funded 
current liability percentage (within the meaning of 
section 302(d)(8) of this Act)’’ and inserting ‘‘fund-
ing target attainment percentage (as defined in sec-
tion 303(g)(4))’’; 
(9) in section 204(i)(4), by striking ‘‘section 
302(c)(11)(A), 
without 
regard 
to 
section 
302(c)(11)(B)’’ and inserting ‘‘section 302(b)(1), 
without regard to section 302(b)(2)’’; 
(10) in section 206(e)(1), by striking ‘‘subject 
to the additional funding requirements of section 
302(d)’’ and inserting ‘‘in at-risk status under sec-
tion 303(g)’’, and by striking ‘‘section 302(e)(5)’’ 
and inserting ‘‘section 303(i)(4)(E)(i)’’; 
(11) in section 206(e)(3), by striking ‘‘section 
302(e) by reason of paragraph (5)(A) thereof’’ and 
inserting ‘‘section 303(i)(3) by reason of section 
303(i)(4)(A)’’; and 
(12) in sections 101(e)(3), 403(c)(1), and 
408(b)(13), by striking ‘‘American Jobs Creation 
Act of 2004’’ and inserting ‘‘Pension Protection Act 
of 2005’’. 
(c) REPEAL
OF EXPIRED AUTHORITY
FOR TEM-
PORARY VARIANCES.—Section 207 of such Act (29 U.S.C. 
1057) is repealed. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after 2005.
Subtitle B—Amendments to 
Internal Revenue Code of 1986
SEC. 111. MINIMUM FUNDING STANDARDS. 
(a) IN GENERAL.—Section 412 of the Internal Rev-
enue Code of 1986 (relating to minimum funding stand-
ards) is amended to read as follows: 
‘‘SEC. 412. MINIMUM FUNDING STANDARDS. 
‘‘(a) REQUIREMENT TO MEET MINIMUM FUNDING 
STANDARD.—
‘‘(1) IN GENERAL.—A plan to which this part 
applies shall satisfy the minimum funding standard 
applicable to the plan for any plan year. 
‘‘(2) MINIMUM FUNDING STANDARD.—For pur-
poses of paragraph (1), a plan shall be treated as 
satisfying the minimum funding standard for a plan 
year if—
‘‘(A) in the case of a defined benefit plan 
which is a single-employer plan, the employer 
makes contributions to or under the plan for 
the plan year which, in the aggregate, are not 
less than the minimum required contribution 
determined under section 430 for the plan for 
the plan year, 
‘‘(B) in the case of a money purchase plan 
which is a single-employer plan, the employer
makes contributions to or under the plan for 
the plan year which are required under the 
terms of the plan, and 
‘‘(C) in the case of a multiemployer plan, 
the employers make contributions to or under 
the plan for any plan year which, in the aggre-
gate, are sufficient to ensure that the plan does 
not have an accumulated funding deficiency 
under section 431 as of the end of the plan 
year. 
‘‘(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 430(i)) 
shall be paid by any employer responsible for mak-
ing contributions to or under the plan. 
‘‘(2) JOINT
AND
SEVERAL
LIABILITY
WHERE 
EMPLOYER MEMBER OF CONTROLLED GROUP.—In 
the case of a single-employer plan, if the employer 
referred to in paragraph (1) is a member of a con-
trolled group, each member of such group shall be 
jointly and severally liable for payment of such con-
tributions.
‘‘(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), and 
‘‘(ii) application of the standard would 
be adverse to the interests of plan partici-
pants in the aggregate, 
the Secretary may, subject to subparagraphs 
(B) and (C), waive the requirements of sub-
section (a) for such year with respect to all or 
any portion of the minimum funding standard. 
The Secretary shall not waive the minimum 
funding standard with respect to a plan for 
more than 3 of any 15 (5 of any 15 in the case 
of a multiemployer plan) consecutive 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 430 for the plan year shall 
be reduced by the amount of the waived 
funding deficiency and such amount shall 
be amortized as required under section 
430(j), and 
‘‘(ii) in the case of a multiemployer 
plan, the funding standard account shall 
be credited under section 431(b)(3)(C) 
with the amount of the waived funding de-
ficiency and such amount shall be amor-
tized 
as 
required 
under 
section 
431(b)(2)(C). 
‘‘(C) WAIVER
OF
AMORTIZED
PORTION 
NOT ALLOWED.—The Secretary may not waive 
under subparagraph (A) any portion of the 
minimum funding standard under subsection 
(a) for a plan year which is attributable to any 
amortization payment required to be made for 
such plan year with respect to any amortization 
described in subparagraph (B) of any waived
portion of the minimum funding standard for 
any preceding 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 
hardship in the case of a multiemployer plan) shall 
include (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 and not satisfied by employer contribu-
tions. 
‘‘(4) SECURITY FOR WAIVERS FOR SINGLE-EM-
PLOYER PLANS, CONSULTATIONS.—
‘‘(A) SECURITY MAY BE REQUIRED.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraph (C), the Secretary 
may require an employer maintaining a de-
fined benefit plan which is a single-em-
ployer plan (within the meaning of section 
4001(a)(15) of the Employee Retirement 
and Income Security Act of 1974) to pro-
vide 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) of such Act), or a member of 
such sponsor’s controlled group (within the 
meaning of section 4001(a)(14) of such 
Act).
‘‘(B) CONSULTATION WITH THE PENSION 
BENEFIT GUARANTY CORPORATION.—Except as 
provided in subparagraph (C), the Secretary 
shall, before granting or modifying a waiver 
under this subsection with respect to a plan de-
scribed in subparagraph (A)(i)—
‘‘(i) provide the Pension Benefit 
Guaranty Corporation with—
‘‘(I) notice of the completed ap-
plication for any waiver or modifica-
tion, 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) of the Employee Retire-
ment and Income Security Act of 
1974) representing participants in the 
plan which are submitted in writing to 
the Secretary in connection with such 
application.
Information provided to the Corporation 
under this subparagraph shall be consid-
ered tax return information and subject to 
the safeguarding and reporting require-
ments of section 6103(p). 
‘‘(C) EXCEPTION
FOR
CERTAIN
WAIV-
ERS.—
‘‘(i) IN
GENERAL.—The preceding 
provisions of this paragraph shall not 
apply to any plan with respect to which the 
sum of—
‘‘(I) the shortfall amortization 
charge (within the meaning of section 
303(c)(1)) for the plan year, and 
‘‘(II) the aggregate total of 
shortfall amortization installments de-
termined for succeeding plan years 
under section 303(c)(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. 
‘‘(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 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 sub-
stantial business hardship requirements of 
paragraph (1) shall be treated as met only if 
such requirements 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 may provide that an analysis of 
a trade or business or industry of a member 
need not be conducted if the Secretary deter-
mines such analysis is not necessary because 
the taking into account of such member would 
not significantly affect the determination under 
this paragraph. 
‘‘(6) NOTICE TO EMPLOYEE ORGANIZATIONS.—
‘‘(A) IN GENERAL.—The Secretary shall, 
before granting a waiver under this subsection, 
require each applicant to provide evidence satis-
factory to the Secretary that the applicant has 
provided notice of the filing of the application 
for such waiver to each employee organization 
representing employees covered by the affected 
plan, and participant, beneficiary, and alternate 
payee 
(within 
the 
meaning 
of 
section 
414(p)(8)). Such notice shall include a descrip-
tion of the extent to which the plan is funded 
for benefits which are guaranteed under title IV 
and for benefit liabilities. 
‘‘(B) CONSIDERATION
OF
RELEVANT
IN-
FORMATION.—The Secretary shall consider any
relevant information provided by a person to 
whom notice was given under subparagraph 
(A). 
‘‘(d) MISCELLANEOUS RULES.—
‘‘(1) CHANGE
IN
METHOD
OR
YEAR.—If the 
funding method, the valuation date, or a plan year 
for a plan is changed, the change shall take effect 
only if approved by the Secretary. 
‘‘(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 mul-
tiemployer 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 begin-
ning of the first plan year to which the amend-
ment 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 
circumstances,
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 notifying him 
of such amendment and the Secretary 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 unless 
the Secretary determines 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 extension of the amortiza-
tion period under section 431(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. 
‘‘(4) CERTAIN INSURANCE CONTRACT PLANS.—
A plan is described in this paragraph if—
‘‘(A) the plan is funded exclusively by the 
purchase of individual insurance contracts, 
‘‘(B) such contracts provide for level an-
nual premium payments to be paid extending 
not later than the retirement age for each indi-
vidual participating in the plan, and com-
mencing with the date the individual became a 
participant in the plan (or, in the case of an in-
crease in benefits, commencing at the time such 
increase becomes effective), 
‘‘(C) benefits provided by the plan are 
equal to the benefits provided under each con-
tract at normal retirement age under the plan 
and are guaranteed by an insurance carrier (li-
censed under the laws of a State to do business 
with the plan) to the extent premiums have 
been paid, 
‘‘(D) premiums payable for the plan year, 
and all prior plan years, under such contracts 
have been paid before lapse or there is rein-
statement of the policy, 
‘‘(E) no rights under such contracts have 
been subject to a security interest at any time 
during the plan year, and
‘‘(F) no policy loans are outstanding at 
any time during the plan year. 
A plan funded exclusively by the purchase of group 
insurance contracts which is determined under regu-
lations prescribed by the Secretary to have the same 
characteristics as contracts described in the pre-
ceding sentence shall be treated as a plan described 
in this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after 2005. 
SEC. 112. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Subchapter D of chapter 1 of the 
Internal Revenue Code of 1986 (relating to deferred com-
pensation, etc.) is amended by adding at the end the fol-
lowing new part: 
‘‘PART III—MINIMUM FUNDING STANDARDS FOR 
SINGLE-EMPLOYER DEFINED BENEFIT PEN-
SION PLANS 
‘‘SEC. 430. MINIMUM FUNDING STANDARDS FOR SINGLE-
EMPLOYER 
DEFINED 
BENEFIT 
PENSION 
PLANS. 
‘‘(a) MINIMUM REQUIRED CONTRIBUTION.—
‘‘(1) IN
GENERAL.—For purposes of section 
412(a)(2)(A), except as otherwise provided in this