current plan year, in any case in which a con-
tribution properly allocable to amounts owed for 
a preceding plan year is made on or after the 
valuation date of the plan for such current plan 
year, such contribution shall be taken into ac-
count, except that any such contribution made 
during any such current plan year beginning 
after 2006 shall be taken into account only in 
an amount equal to its present value (deter-
mined using the effective rate of interest for the 
plan for the preceding plan year) as of the valu-
ation date of the plan for such current plan 
year. 
‘‘(B) CONTRIBUTIONS FOR CURRENT PLAN 
YEAR DISREGARDED.—For purposes of deter-
mining the value of plan assets for any current 
plan year, contributions which are properly allo-
cable to amounts owed for such plan year shall 
not be taken into account, and, in the case of 
any such contribution made before the valuation 
date of the plan for such plan year, such value 
of plan assets shall be reduced for interest on 
such amount determined using the effective rate 
of interest of the plan for the preceding plan 
year for the period beginning when such pay-
ment was made and ending on the valuation 
date of the plan. 
‘‘(6) ACCOUNTING
FOR
PLAN
LIABILITIES.—
For purposes of this section—
‘‘(A) LIABILITIES TAKEN INTO ACCOUNT 
FOR CURRENT PLAN YEAR.—In determining the 
value of liabilities under a plan for a plan year, 
liabilities shall be taken into account to the ex-
tent attributable to benefits (including any early 
retirement or similar benefit) accrued as of the 
beginning of the plan year. 
‘‘(B) ACCRUALS DURING CURRENT PLAN 
YEAR
DISREGARDED.—For purposes of sub-
paragraph (A), benefits accrued during such 
plan year (after those taken into account under 
subparagraph (A)) 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. 
‘‘(f) 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) 
would result in an amount equal to the funding 
target of the plan for such plan year. 
‘‘(B) APPLICATION
TO
FUNDING
TAR-
GET.—For purposes of determining 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. 
‘‘(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-
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 averaging methodology 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 weighted 15 percent. 
‘‘(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 administrator, any of the 4 
months which precede such month. Any election 
made under this subparagraph shall apply to 
the plan year for which made and all succeeding 
plan years unless 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)(A)(iii)(I)) for such month 
and each of the rates determined under sub-
paragraph (B) for such month. The Secretary 
shall also publish a description of the method-
ology used to determine such yield curve and 
such rates which is sufficiently detailed to en-
able plans to make reasonable projections re-
garding the yield curve and such rates for fu-
ture months based on the plan’s projection of 
future interest rates. 
‘‘(G) TRANSITION RULE.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding provisions of this paragraph, 
for plan years beginning in 2006 or 2007, 
the first, second, and third segment rates 
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 2005), multi-
100
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 2006 and 662⁄3 percent for plan 
years beginning in 2007. 
‘‘(3) MORTALITY TABLE.—
‘‘(A) IN GENERAL.—The mortality tables 
used in determining any present value or mak-
ing any computation under this section shall be 
the RP–2000 Combined Mortality Table, as 
published by the Society of American Actuaries, 
as in effect on the date of the enactment of the 
Pension Protection Act of 2005 and as revised 
from time to time under subparagraph (B). 
‘‘(B) PERIODIC REVISION.—The Secretary 
shall (at least every 10 years) make revisions in 
any tables in effect under this paragraph to re-
flect the actual experience of pension plans and 
projected trends in such experience. 
‘‘(C) TRANSITION
RULE.—Under regula-
tions of the Secretary, any difference in as-
sumptions as set forth in the mortality table
101
specified in subparagraph (A) and assumptions 
as set forth in the mortality table described in 
section 412(d)(7)(C)(ii) (as in effect for plan 
years beginning in 2005) shall be phased in rat-
ably over the first period of 5 plan years begin-
ning in or after 2006 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 
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 
benefits, which are different from those speci-
fied in this subsection.
102
‘‘(5) APPROVAL OF LARGE CHANGES IN ACTU-
ARIAL ASSUMPTIONS.—
‘‘(A) IN GENERAL.—No actuarial assump-
tion used to determine the funding target for a 
single-employer 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 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 and Income Security Act of 1974) of 
such plan and all other plans maintained 
by the contributing sponsors (as defined in 
section 4001(a)(13) of such Act) and 
members of such sponsors’ controlled 
groups (as defined in section 4001(a)(14) 
of such Act) which are covered by title IV 
(disregarding plans with no unfunded vest-
ed benefits) exceed $50,000,000; and 
‘‘(ii) the change in assumptions (de-
termined after taking into account any