333 
mining a plan’s current liability for 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—If any rate of 
interest 
used 
under 
the 
plan 
under subsection (b)(6) to deter-
mine cost is not within the per-
missible range, the plan shall es-
tablish a new rate of interest 
within the permissible range. 
‘‘(ii) PERMISSIBLE
RANGE.—For 
purposes of this subparagraph— 
‘‘(I) IN
GENERAL.—Except 
as provided in subclause (II), 
the term ‘permissible range’ 
means a rate of interest which 
is not more than 5 percent 
above, and not more than 10 
percent below, the weighted 
average of the rates of inter-
est on 30-year Treasury secu-
rities during the 4-year period 
ending on the last day before 
the beginning of the plan 
year.
334 
‘‘(II) SECRETARIAL AUTHOR-
ITY.—If the Secretary finds 
that the lowest rate of inter-
est permissible under sub-
clause 
(I) 
is 
unreasonably 
high, the Secretary may pre-
scribe a lower rate of interest, 
except that such rate may not 
be less than 80 percent of the 
average 
rate 
determined 
under such subclause. 
‘‘(iii) 
ASSUMPTIONS.—Notwith-
standing paragraph (3)(A), the in-
terest rate used under the plan 
shall be— 
‘‘(I) 
determined 
without 
taking into account the expe-
rience of the plan and reason-
able expectations, but 
‘‘(II) consistent with the 
assumptions which reflect the 
purchase rates which would 
be used by insurance compa-
nies to satisfy the liabilities 
under the plan.
335 
‘‘(7) ANNUAL VALUATION.— 
‘‘(A) IN GENERAL.—For purposes of 
this section, a determination of expe-
rience gains and losses and a valu-
ation of the plan’s liability shall be 
made not less frequently than once 
every year, except that such deter-
mination shall be made more fre-
quently to the extent required in par-
ticular cases under regulations pre-
scribed by the Secretary. 
‘‘(B) VALUATION DATE.— 
‘‘(i) CURRENT YEAR.—Except as 
provided in clause (ii), the valu-
ation referred to in subparagraph 
(A) shall be made as of a date 
within the plan year to which the 
valuation refers or within one 
month prior to the beginning of 
such year. 
‘‘(ii) USE OF PRIOR YEAR VALU-
ATION.—The valuation referred to 
in subparagraph (A) may be made 
as of a date within the plan year 
prior to the year to which the
336 
valuation refers if, as of such 
date, the value of the assets of the 
plan are not less than 100 percent 
of the plan’s current liability (as 
defined in paragraph (6)(D) with-
out regard to clause (iv) thereof). 
‘‘(iii) ADJUSTMENTS.—Informa-
tion under clause (ii) shall, in ac-
cordance with regulations, be ac-
tuarially adjusted to reflect sig-
nificant differences in partici-
pants. 
‘‘(iv) LIMITATION.—A change in 
funding method to use a prior 
year valuation, as provided in 
clause (ii), may not be made un-
less as of the valuation date with-
in the prior plan year, the value 
of the assets of the plan are not 
less than 125 percent of the plan’s 
current liability (as defined in 
paragraph (6)(D) without regard 
to clause (iv) thereof). 
‘‘(8) TIME
WHEN
CERTAIN
CONTRIBU-
TIONS DEEMED MADE.—For purposes of this
337 
section, any contributions for a plan year 
made by an employer after the last day of 
such plan year, but not later than two 
and one-half months after such day, shall 
be deemed to have been made on such 
last day. For purposes of this subpara-
graph, such two and one-half month pe-
riod may be extended for not more than 
six months under regulations prescribed 
by the Secretary. 
‘‘(9) INTEREST RULE FOR WAIVERS AND 
EXTENSIONS.—The interest rate applicable 
for any plan year for purposes of com-
puting the amortization charge described 
in subsection (b)(2)(C) and in connection 
with an extension granted under sub-
section (d) shall be the greater of— 
‘‘(A) 150 percent of the Federal 
mid-term rate (as in effect under sec-
tion 1274 for the 1st month of such 
plan year), or 
‘‘(B) the rate of interest used 
under the plan for determining costs.
338 
‘‘(d) EXTENSION OF AMORTIZATION PERIODS 
FOR MULTIEMPLOYER PLANS.—In the case of a 
multiemployer plan— 
‘‘(1) EXTENSION.—The period of years 
required to amortize any unfunded liabil-
ity (described in any clause of subsection 
(b)(2)(B)) of any multiemployer plan shall 
be extended by the Secretary for a period 
of time (not in excess of 5 years) if the 
Secretary determines that— 
‘‘(A) absent the extension, the 
plan would have an accumulated 
funding deficiency in any of the next 
10 plan years, 
‘‘(B) the plan sponsor has adopted 
a plan to improve the plan’s funding 
status, and 
‘‘(C) taking into account the ex-
tension, the plan is projected to have 
sufficient assets to timely pay its ex-
pected benefit liabilities and other 
anticipated expenditures 
‘‘(2) ADDITIONAL
EXTENSION.—The pe-
riod of years required to amortize any 
unfunded 
liability 
(described 
in 
any
339 
clause of subsection (b)(2)(B)) of any mul-
tiemployer plan may be extended (in ad-
dition to any extension under paragraph 
(1)) by the Secretary for a period of time 
(not in excess of 5 years) if the Secretary 
determines that such extension would 
carry out the purposes of the Employee 
Retirement Income Security Act of 1974 
and would provide adequate protection 
for participants under the plan and their 
beneficiaries and if the Secretary deter-
mines that the failure to permit such ex-
tension would— 
‘‘(A) result in— 
‘‘(i) a substantial risk to the 
voluntary 
continuation 
of 
the 
plan, or 
‘‘(ii) a substantial curtailment 
of pension benefit levels or em-
ployee compensation, and 
‘‘(B) be adverse to the interests of 
plan participants in the aggregate. 
‘‘(3) ADVANCE NOTICE.— 
‘‘(A) IN
GENERAL.—The Secretary 
shall, before granting an extension
340 
under this section, require each ap-
plicant to provide evidence satisfac-
tory to the Secretary that the appli-
cant has provided notice of the filing 
of the application for such extension 
to each affected party (as defined in 
section 4001(a)(21) of the Employee 
Retirement Income Security Act of 
1974) with respect to the affected 
plan. Such notice shall include a de-
scription of the extent to which the 
plan is funded for benefits which are 
guaranteed under title IV of such Act 
and for benefit liabilities. 
‘‘(B) CONSIDERATION
OF
RELEVANT 
INFORMATION.—The 
Secretary 
shall 
consider any relevant information 
provided by a person to whom notice 
was given under paragraph (1).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 418(b)(2) of such Code is 
amended— 
(A) by striking ‘‘section 412(b)(2)’’ 
in subparagraph (A) and inserting 
‘‘section 431(b)(2)’’, and
341 
(B) 
by 
striking 
‘‘section 
412(b)(3)(B)’’ in subparagraph (B) and 
inserting ‘‘section 431(b)(3)(B)’’. 
(2) Section 418B of such Code is 
amended— 
(A) 
by 
striking 
‘‘section 
412(b)(2)(A) or (B)’’ in subsection 
(d)(1)(B) 
and 
inserting 
‘‘section 
431(b)(2)(A) or (B)’’, 
(B) by striking ‘‘section 412(c)(8)’’ 
in subsection (e) and inserting ‘‘sec-
tion 412(d)(2)’’, and 
(C) by striking ‘‘section 412(c)(3)’’ 
in subsection (g) and inserting ‘‘sec-
tion 431(c)(3)’’. 
(3) Section 418D(a)(2) of such Code is 
amended— 
(A) by striking ‘‘section 412(c)(8)’’ 
and inserting ‘‘section 412(d)(2)’’, and 
(B) by striking ‘‘section 412(c)(10)’’ 
and inserting ‘‘section 431(c)(8)’’. 
(c) CLERICAL AMENDMENT.—The table of 
sections for subpart A of part III of sub-
chapter D of chapter 1 of such Code is amend-
342 
ed by adding after the item relating to section 
430 the following new item: 
‘‘Sec. 431. Minimum 
funding 
standards 
for 
multiemployer 
plans.’’. 
(d) EFFECTIVE
DATE.—The amendments 
made by this section shall apply to plan years 
beginning after December 31, 2006. 
SEC. 212. ADDITIONAL FUNDING RULES FOR MULTIEM-
PLOYER PLANS IN ENDANGERED OR CRIT-
ICAL STATUS. 
(a) IN GENERAL.—Subpart A of part III of 
subchapter D of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting 
after section 431 the following new section: 
‘‘SEC. 432. ADDITIONAL FUNDING RULES FOR MULTIEM-
PLOYER PLANS IN ENDANGERED STATUS OR 
CRITICAL STATUS. 
‘‘(a) ANNUAL CERTIFICATION BY PLAN ACTU-
ARY.— 
‘‘(1) IN
GENERAL.—During the 90-day 
period beginning on first day of each 
plan year of a multiemployer plan, the 
plan actuary shall certify to the Sec-
retary whether or not the plan is in en-
dangered status for such plan year and
343 
whether or not the plan is in critical sta-
tus for such plan year. 
‘‘(2) ACTUARIAL PROJECTIONS OF ASSETS 
AND LIABILITIES.— 
‘‘(A) IN GENERAL.—In making the 
determinations under paragraph (1), 
the plan actuary shall make projec-
tions under subsections (b)(2) and 
(c)(2) for the current and succeeding 
plan years, using reasonable actu-
arial assumptions and methods, of the 
current value of the assets of the plan 
and the present value of all liabilities 
to 
participants 
and 
beneficiaries 
under the plan for the current plan 
year as of the beginning of such year, 
as based on the actuarial statement 
prepared for the preceding plan year 
under section 103(d) of the Employee 
Retirement Income Security Act of 
1974. 
‘‘(B) DETERMINATIONS
OF
FUTURE 
CONTRIBUTIONS.—Any such actuarial 
projection of plan assets shall as-
sume—
344 
‘‘(i) 
reasonably 
anticipated 
employer and employee contribu-
tions for the current and suc-
ceeding plan years, assuming that 
the terms of the one or more col-
lective 
bargaining 
agreements 
pursuant to which the plan is 
maintained for the current plan 
year continue in effect for suc-
ceeding plan years, or 
‘‘(ii) that employer and em-
ployee contributions for the most 
recent plan year will continue in-
definitely, but only if the plan ac-
tuary determines there have been 
no 
significant 
demographic 
changes that would make contin-
ued application of such terms un-
reasonable. 
‘‘(3) PRESUMED STATUS IN ABSENCE OF 
TIMELY
ACTUARIAL
CERTIFICATION.—If cer-
tification under this subsection is not 
made before the end of the 90-day period 
specified in paragraph (1), the plan shall 
be presumed to be in critical status for
345 
such plan year until such time as the 
plan actuary makes a contrary certifi-
cation. 
‘‘(4) NOTICE.—In any case in which a 
multiemployer plan is certified to be in 
endangered status under paragraph (1) 
or enters into critical status, the plan 
sponsor shall, not later than 30 days after 
the date of the certification or entry, pro-
vide notification of the endangered or 
critical status to the participants and 
beneficiaries, the bargaining parties, the 
Pension Benefit Guaranty Corporation, 
the Secretary of the Treasury, and the 
Secretary of Labor. 
‘‘(b) FUNDING RULES FOR MULTIEMPLOYER 
PLANS IN ENDANGERED STATUS.— 
‘‘(1) IN
GENERAL.—In any case in 
which a multiemployer plan is in endan-
gered status for a plan year and no fund-
ing improvement plan under this sub-
section with respect to such multiem-
ployer plan is in effect for the plan year, 
the plan sponsor shall, in accordance 
with this subsection, amend the multiem-
346 
ployer plan to include a funding improve-
ment plan upon approval thereof by the 
bargaining parties under this subsection. 
The amendment shall be adopted not 
later than 240 days after the date on 
which the plan is certified to be in en-
dangered status under subsection (a)(1). 
‘‘(2) ENDANGERED STATUS.—A multiem-
ployer plan is in endangered status for a 
plan year if, as determined by the plan 
actuary under subsection (a)— 
‘‘(A) the plan’s funded percentage 
for such plan year is less than 80 per-
cent, or 
‘‘(B) the plan has an accumulated 
funding deficiency for such plan year 
under section 431 or is projected to 
have such an accumulated funding 
deficiency for any of the 6 succeeding 
plan years, taking into account any 
extension 
of 
amortization 
periods 
under section 431(d). 
‘‘(3) FUNDING IMPROVEMENT PLAN.— 
‘‘(A) BENCHMARKS.—A funding im-
provement 
plan 
shall 
consist 
of
347 
amendments to the plan formulated 
to provide, under reasonable actu-
arial assumptions, for the attainment, 
during the funding improvement pe-
riod under the funding improvement 
plan, of the following benchmarks: 
‘‘(i) INCREASE
IN
FUNDED
PER-
CENTAGE.—An 
increase 
in 
the 
plan’s funded percentage such 
that— 
‘‘(I) 
the 
difference 
be-
tween 100 percent and the 
plan’s funded percentage for 
the last year of the funding 
improvement period, is not 
more than 
‘‘(II) 2⁄3 of the difference 
between 100 percent and the 
plan’s funded percentage for 
the first year of the funding 
improvement period. 
‘‘(ii) AVOIDANCE
OF
ACCUMU-
LATED
FUNDING
DEFICIENCIES.—No 
accumulated funding deficiency 
for any plan year during the
348 
funding improvement period (tak-
ing into account any extension of 
amortization periods under sec-
tion 431(d)). 
‘‘(B) FUNDING
IMPROVEMENT
PE-
RIOD.—The funding improvement pe-
riod for any funding improvement 
plan adopted pursuant to this sub-
section is the 10-year period begin-
ning on the earlier of— 
‘‘(i) the second anniversary of 
the date of the adoption of the 
funding improvement plan, or 
‘‘(ii) the first day of the first 
plan year of the multiemployer 
plan following the plan year in 
which occurs the first date after 
the day of the certification as of 
which 
collective 
bargaining 
agreements covering on the day 
of such certification at least 75 
percent of active participants in 
such multiemployer plan have ex-
pired.
349 
‘‘(C) SPECIAL
RULES
FOR
CERTAIN 
SERIOUSLY UNDERFUNDED PLANS.— 
‘‘(i) In the case of a plan in 
which the funded percentage of a 
plan for the plan year is 70 per-
cent 
or 
less, 
subparagraph 
(A)(i)(II) shall be applied by sub-
stituting ‘4⁄5’ for ‘2⁄3’ and subpara-
graph (B) shall be applied by sub-
stituting ‘the 15-year period’ for 
‘the 10-year period’. 
‘‘(ii) In the case of a plan in 
which the funded percentage of a 
plan for the plan year is more 
than 70 percent but less than 80 
percent, and— 
‘‘(I) the plan actuary cer-
tifies within 30 days after cer-
tification 
under 
subsection 
(a)(1) that the plan is not able 
to attain the increase de-
scribed in subparagraph (A)(i) 
over the period described in 
subparagraph (B), and