147 
rate for the preceding plan year to which the 
contribution is properly allocable. 
‘‘(B) SPECIAL RULE FOR CURRENT YEAR 
CONTRIBUTIONS
MADE
BEFORE
VALUATION 
DATE.—If any contributions for any plan year 
are made to or under the plan during the plan 
year but before the valuation date for the plan 
year, the assets of the plan as of the valuation 
date shall not include— 
‘‘(i) such contributions, and 
‘‘(ii) interest on such contributions for 
the period between the date of the con-
tributions and the valuation date, deter-
mined by using the effective interest rate 
for the 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 
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‘‘(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 accrued or earned benefits referred to in 
subsection (d)(1), 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 benefits reasonably 
determined to be payable during the 5-year 
period beginning on the first day of the 
plan year, the first segment rate with re-
spect to the applicable month, 
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‘‘(ii) in the case of benefits reasonably 
determined to be payable during the 15- 
year period beginning at the end of the pe-
riod described in clause (i), the second seg-
ment rate with respect to the applicable 
month, and 
‘‘(iii) in the case of benefits 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-
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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 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 
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and which reflects the average, for the 24- 
month period ending with the month pre-
ceding such month, of monthly yields on 
investment grade corporate bonds with 
varying maturities and that are in the top 
3 quality levels available. 
‘‘(ii) 
ELECTION
TO
USE
YIELD 
CURVE.—Solely for purposes of deter-
mining the minimum required contribution 
under this section, the plan sponsor may, 
in lieu of the segment rates determined 
under subparagraph (C), elect to use inter-
est rates under the corporate bond yield 
curve. For purposes of the preceding sen-
tence such curve shall be determined with-
out regard to the 24-month averaging de-
scribed in clause (i) . Such election, once 
made, may be revoked only with the con-
sent of the Secretary. 
‘‘(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 
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152 
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. 
‘‘(G) TRANSITION RULE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding provisions of this paragraph, 
for plan years beginning in 2008 or 2009, 
the first, second, or third segment rate for 
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153 
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 2007), 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 2008 and 662⁄3 percent for plan 
years beginning in 2009. 
‘‘(iii) 
NEW
PLANS
INELIGIBLE.— 
Clause (i) shall not apply to any plan if the 
first plan year of the plan begins after De-
cember 31, 2007. 
‘‘(iv) ELECTION.—The plan sponsor 
may elect not to have this subparagraph 
apply. Such election, once made, may be 
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154 
revoked only with the consent of the Sec-
retary. 
‘‘(3) MORTALITY TABLES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C) or (D), the Secretary shall by 
regulation prescribe mortality tables to be used 
in determining any present value or making any 
computation under this section. Such tables 
shall be based on the actual experience of pen-
sion plans and projected trends in such experi-
ence. In prescribing such tables, the Secretary 
shall take into account results of available inde-
pendent studies of mortality of individuals cov-
ered by pension plans. 
‘‘(B) PERIODIC REVISION.—The Secretary 
shall (at least every 10 years) make revisions in 
any table in effect under subparagraph (A) to 
reflect the actual experience of pension plans 
and projected trends in such experience. 
‘‘(C) SUBSTITUTE MORTALITY TABLE.— 
‘‘(i) IN GENERAL.—Upon request by 
the plan sponsor and approval by the Sec-
retary, a mortality table which meets the 
requirements of clause (iii) shall be used in 
determining any present value or making 
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155 
any computation under this section during 
the period of consecutive plan years (not to 
exceed 10) specified in the request. 
‘‘(ii) EARLY
TERMINATION
OF
PE-
RIOD.—Notwithstanding clause (i), a mor-
tality table described in clause (i) shall 
cease to be in effect as of the earliest of— 
‘‘(I) the date on which there is a 
significant change in the participants 
in the plan by reason of a plan spinoff 
or merger or otherwise, or 
‘‘(II) the date on which the plan 
actuary determines that such table 
does not meet the requirements of 
clause (iii). 
‘‘(iii) REQUIREMENTS.—A mortality 
table meets the requirements of this clause 
if— 
‘‘(I) there is a sufficient number 
of plan participants, and the pension 
plans have been maintained for a suf-
ficient period of time, to have credible 
information necessary for purposes of 
subclause (II), and 
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156 
‘‘(II) such table reflects the ac-
tual experience of the pension plans 
maintained by the sponsor and pro-
jected trends in general mortality ex-
perience. 
‘‘(iv) ALL
PLANS
IN
CONTROLLED 
GROUP MUST USE SEPARATE TABLE.—Ex-
cept as provided by the Secretary, a plan 
sponsor may not use a mortality table 
under this subparagraph for any plan 
maintained by the plan sponsor unless— 
‘‘(I) a separate mortality table is 
established and used under this sub-
paragraph for each other plan main-
tained by the plan sponsor and if the 
plan sponsor is a member of a con-
trolled group, each member of the 
controlled group, and 
‘‘(II) the requirements of clause 
(iii) are met separately with respect to 
the table so established for each such 
plan, determined by only taking into 
account the participants of such plan, 
the time such plan has been in exist-
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ence, and the actual experience of 
such plan. 
‘‘(v) DEADLINE FOR SUBMISSION AND 
DISPOSITION OF APPLICATION.— 
‘‘(I) 
SUBMISSION.—The 
plan 
sponsor shall submit a mortality table 
to the Secretary for approval under 
this subparagraph at least 7 months 
before the 1st day of the period de-
scribed in clause (i). 
‘‘(II) DISPOSITION.—Any mor-
tality table submitted to the Secretary 
for approval under this subparagraph 
shall be treated as in effect as of the 
1st day of the period described in 
clause (i) unless the Secretary, during 
the 180-day period beginning on the 
date of such submission, disapproves 
of such table and provides the reasons 
that such table fails to meet the re-
quirements of clause (iii). The 180- 
day period shall be extended upon mu-
tual agreement of the Secretary and 
the plan sponsor. 
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158 
‘‘(D) SEPARATE MORTALITY TABLES FOR 
THE
DISABLED.—Notwithstanding 
subpara-
graph (A)— 
‘‘(i) IN
GENERAL.—The Secretary 
shall establish mortality tables which may 
be used (in lieu of the tables under sub-
paragraph (A)) under this subsection for 
individuals who are entitled to benefits 
under the plan on account of disability. 
The Secretary shall establish separate ta-
bles for individuals whose disabilities occur 
in plan years beginning before January 1, 
1995, and for individuals whose disabilities 
occur in plan years beginning on or after 
such date. 
‘‘(ii) SPECIAL RULE FOR DISABILITIES 
OCCURRING AFTER 1994.—In the case of 
disabilities occurring in plan years begin-
ning after December 31, 1994, the tables 
under clause (i) shall apply only with re-
spect to individuals described in such sub-
clause who are disabled within the meaning 
of title II of the Social Security Act and 
the regulations thereunder. 
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‘‘(iii) PERIODIC REVISION.—The Sec-
retary shall (at least every 10 years) make 
revisions in any table in effect under clause 
(i) to reflect the actual experience of pen-
sion plans and projected trends in such ex-
perience. 
‘‘(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. 
‘‘(5) APPROVAL OF LARGE CHANGES IN ACTU-
ARIAL ASSUMPTIONS.— 
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