years (beginning with the first plan year for which 
this part applies to the plan) over the total credits to 
such account for such years, and 
‘‘(2) if the multiemployer plan is in reorganiza-
tion for any plan year, the accumulated funding defi-
ciency of the plan determined under section 4243. 
‘‘(b) FUNDING STANDARD ACCOUNT.— 
‘‘(1) ACCOUNT REQUIRED.—Each multiemployer 
plan to which this part applies shall establish and 
maintain a funding standard account. Such account 
shall be credited and charged solely as provided in 
this section. 
‘‘(2) CHARGES TO ACCOUNT.—For a plan year, 
the funding standard account shall be charged with 
the sum of— 
‘‘(A) the normal cost of the plan for the 
plan year, 
‘‘(B) the amounts necessary to amortize in 
equal annual installments (until fully amor-
tized)— 
‘‘(i) in the case of a plan in existence 
on January 1, 1974, the unfunded past 
service liability under the plan on the first 
day of the first plan year to which this sec-
tion applies, over a period of 40 plan years,
‘‘(ii) in the case of a plan which comes 
into existence after January 1, 1974, the 
unfunded past service liability under the 
plan on the first day of the first plan year 
to which this section applies, over a period 
of 15 plan years, 
‘‘(iii) separately, with respect to each 
plan year, the net increase (if any) in un-
funded past service liability under the plan 
arising from plan amendments adopted in 
such year, over a period of 15 plan years, 
‘‘(iv) separately, with respect to each 
plan year, the net experience loss (if any) 
under the plan, over a period of 15 plan 
years, and 
‘‘(v) separately, with respect to each 
plan year, the net loss (if any) resulting 
from changes in actuarial assumptions used 
under the plan, over a period of 15 plan 
years, 
‘‘(C) the amount necessary to amortize each 
waived funding deficiency (within the meaning 
of section 302(c)(3)) for each prior plan year in 
equal annual installments (until fully amor-
tized) over a period of 15 plan years,
‘‘(D) the amount necessary to amortize in 
equal annual installments (until fully amor-
tized) over a period of 5 plan years any amount 
credited to the funding standard account under 
section 302(b)(3)(D) (as in effect on the day be-
fore the date of the enactment of the Pension 
Protection Act of 2005), and 
‘‘(E) the amount necessary to amortize in 
equal annual installments (until fully amor-
tized) over a period of 20 years the contributions 
which would be required to be made under the 
plan 
but 
for 
the 
provisions 
of 
section 
302(c)(7)(A)(i)(I) (as in effect on the day before 
the date of the enactment of the Pension Protec-
tion Act of 2005). 
‘‘(3) CREDITS TO ACCOUNT.—For a plan year, 
the funding standard account shall be credited with 
the sum of— 
‘‘(A) the amount considered contributed by 
the employer to or under the plan for the plan 
year, 
‘‘(B) the amount necessary to amortize in 
equal annual installments (until fully amor-
tized)—
‘‘(i) separately, with respect to each 
plan year, the net decrease (if any) in un-
funded past service liability under the plan 
arising from plan amendments adopted in 
such year, over a period of 15 plan years, 
‘‘(ii) separately, with respect to each 
plan year, the net experience gain (if any) 
under the plan, over a period of 15 plan 
years, and 
‘‘(iii) separately, with respect to each 
plan year, the net gain (if any) resulting 
from changes in actuarial assumptions used 
under the plan, over a period of 15 plan 
years, 
‘‘(C) the amount of the waived funding defi-
ciency (within the meaning of section 302(c)(3)) 
for the plan year, and 
‘‘(D) in the case of a plan year for which 
the accumulated funding deficiency is deter-
mined under the funding standard account if 
such plan year follows a plan year for which 
such deficiency was determined under the alter-
native minimum funding standard under section 
305 (as in effect on the day before the date of the 
enactment of the Pension Protection Act of
2005), the excess (if any) of any debit balance in 
the funding standard account (determined with-
out regard to this subparagraph) over any debit 
balance in the alternative minimum funding 
standard account. 
‘‘(4) SPECIAL RULE FOR AMOUNTS FIRST AMOR-
TIZED TO PLAN YEARS BEFORE 2006.—In the case of 
any amount amortized under section 302(b) (as in ef-
fect on the day before the date of the enactment of the 
Pension Protection Act of 2005) over any period be-
ginning with a plan year beginning before 2006, in 
lieu of the amortization described in paragraphs 
(2)(B) and (3)(B), such amount shall continue to be 
amortized under such section as so in effect. 
‘‘(5) COMBINING AND OFFSETTING AMOUNTS TO 
BE AMORTIZED.—Under regulations prescribed by the 
Secretary of the Treasury, amounts required to be 
amortized under paragraph (2) or paragraph (3), as 
the case may be— 
‘‘(A) may be combined into one amount 
under such paragraph to be amortized over a pe-
riod determined on the basis of the remaining 
amortization period for all items entering into 
such combined amount, and
‘‘(B) may be offset against amounts re-
quired to be amortized under the other such 
paragraph, with the resulting amount to be am-
ortized over a period determined on the basis of 
the remaining amortization periods for all items 
entering into whichever of the two amounts being 
offset is the greater. 
‘‘(6) INTEREST.—Except as provided in sub-
section (c)(9), the funding standard account (and 
items therein) shall be charged or credited (as deter-
mined under regulations prescribed by the Secretary 
of the Treasury) with interest at the appropriate rate 
consistent with the rate or rates of interest used under 
the plan to determine costs. 
‘‘(7) CERTAIN
AMORTIZATION
CHARGES
AND 
CREDITS.—In the case of a plan which, immediately 
before the date of the enactment of the Multiemployer 
Pension Plan Amendments Act of 1980, was a multi-
employer plan (within the meaning of section 3(37) 
as in effect immediately before such date)— 
‘‘(A) any amount described in paragraph 
(2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this sub-
section which arose in a plan year beginning be-
fore such date shall be amortized in equal annual 
installments (until fully amortized) over 40 plan
years, beginning with the plan year in which the 
amount arose; 
‘‘(B) any amount described in paragraph 
(2)(B)(iv) or (3)(B)(ii) of this subsection which 
arose in a plan year beginning before such date 
shall be amortized in equal annual installments 
(until fully amortized) over 20 plan years, begin-
ning with the plan year in which the amount 
arose; 
‘‘(C) any change in past service liability 
which arises during the period of 3 plan years 
beginning on or after such date, and results from 
a plan amendment adopted before such date, 
shall be amortized in equal annual installments 
(until fully amortized) over 40 plan years, begin-
ning with the plan year in which the change 
arises; and 
‘‘(D) any change in past service liability 
which arises during the period of 2 plan years 
beginning on or after such date, and results from 
the changing of a group of participants from one 
benefit level to another benefit level under a 
schedule of plan benefits which— 
‘‘(i) was adopted before such date, and
‘‘(ii) was effective for any plan partici-
pant before the beginning of the first plan 
year beginning on or after such date, 
shall be amortized in equal annual installments 
(until fully amortized) over 40 plan years, begin-
ning with the plan year in which the change 
arises. 
‘‘(8) SPECIAL
RULES
RELATING
TO
CHARGES 
AND CREDITS TO FUNDING STANDARD ACCOUNT.—For 
purposes of this part— 
‘‘(A) 
WITHDRAWAL
LIABILITY.—Any 
amount received by a multiemployer plan in 
payment of all or part of an employer’s with-
drawal liability under part 1 of subtitle E of 
title IV shall be considered an amount contrib-
uted by the employer to or under the plan. The 
Secretary of the Treasury may prescribe by regu-
lation additional charges and credits to a multi-
employer plan’s funding standard account to the 
extent necessary to prevent withdrawal liability 
payments from being unduly reflected as advance 
funding for plan liabilities. 
‘‘(B) ADJUSTMENTS
WHEN
A
MULTIEM-
PLOYER PLAN LEAVES REORGANIZATION.—If a 
multiemployer plan is not in reorganization in
the plan year but was in reorganization in the 
immediately preceding plan year, any balance 
in the funding standard account at the close of 
such immediately preceding plan year— 
‘‘(i) shall be eliminated by an offset-
ting credit or charge (as the case may be), 
but 
‘‘(ii) shall be taken into account in 
subsequent plan years by being amortized 
in equal annual installments (until fully 
amortized) over 30 plan years. 
The preceding sentence shall not apply to the ex-
tent of any accumulated funding deficiency 
under section 4243(a) as of the end of the last 
plan year that the plan was in reorganization. 
‘‘(C) PLAN
PAYMENTS
TO
SUPPLEMENTAL 
PROGRAM OR WITHDRAWAL LIABILITY PAYMENT 
FUND.—Any amount paid by a plan during a 
plan year to the Pension Benefit Guaranty Cor-
poration pursuant to section 4222 of this Act or 
to a fund exempt under section 501(c)(22) of the 
Internal Revenue Code of 1986 pursuant to sec-
tion 4223 of this Act shall reduce the amount of 
contributions considered received by the plan for 
the plan year.
‘‘(D) INTERIM WITHDRAWAL LIABILITY PAY-
MENTS.—Any amount paid by an employer 
pending a final determination of the employer’s 
withdrawal liability under part 1 of subtitle E 
of title IV and subsequently refunded to the em-
ployer by the plan shall be charged to the fund-
ing standard account in accordance with regula-
tions prescribed by the Secretary of the Treasury. 
‘‘(E) ELECTION FOR DEFERRAL OF CHARGE 
FOR PORTION OF NET EXPERIENCE LOSS.—If an 
election is in effect under section 302(b)(7)(F) 
(as in effect on the day before the date of the en-
actment of the Pension Protection Act of 2005) 
for any plan year, the funding standard account 
shall be charged in the plan year to which the 
portion of the net experience loss deferred by 
such election was deferred with the amount so 
deferred (and paragraph (2)(B)(iv) shall not 
apply to the amount so charged). 
‘‘(F) FINANCIAL ASSISTANCE.—Any amount 
of any financial assistance from the Pension 
Benefit Guaranty Corporation to any plan, and 
any repayment of such amount, shall be taken 
into account under this section and section 412
in such manner as is determined by the Sec-
retary of the Treasury. 
‘‘(G) SHORT-TERM BENEFITS.—To the ex-
tent that any plan amendment increases the un-
funded past service liability under the plan by 
reason of an increase in benefits which are pay-
able under the plan during a period that does 
not exceed 14 years, paragraph (2)(B)(iii) shall 
be applied separately with respect to such in-
crease in unfunded past service liability by sub-
stituting the number of years of the period dur-
ing which such benefits are payable for ‘15’. 
‘‘(c) ADDITIONAL RULES.— 
‘‘(1) DETERMINATIONS
TO
BE
MADE
UNDER 
FUNDING METHOD.—For purposes of this part, nor-
mal costs, accrued liability, past service liabilities, 
and experience gains and losses shall be determined 
under the funding method used to determine costs 
under the plan. 
‘‘(2) VALUATION OF ASSETS.— 
‘‘(A) IN
GENERAL.—For purposes of this 
part, the value of the plan’s assets shall be deter-
mined on the basis of any reasonable actuarial 
method of valuation which takes into account 
fair market value and which is permitted under
regulations prescribed by the Secretary of the 
Treasury. 
‘‘(B) 
ELECTION
WITH
RESPECT
TO 
BONDS.—The value of a bond or other evidence 
of indebtedness which is not in default as to 
principal or interest may, at the election of the 
plan administrator, be determined on an amor-
tized basis running from initial cost at purchase 
to par value at maturity or earliest call date. 
Any election under this subparagraph shall be 
made at such time and in such manner as the 
Secretary of the Treasury shall by regulations 
provide, shall apply to all such evidences of in-
debtedness, and may be revoked only with the 
consent of such Secretary. 
‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REA-
SONABLE.—For purposes of this section, all costs, li-
abilities, rates of interest, and other factors under the 
plan shall be determined on the basis of actuarial as-
sumptions 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. 
‘‘(4) TREATMENT OF CERTAIN CHANGES AS EX-
PERIENCE GAIN OR LOSS.—For purposes of this sec-
tion, if— 
‘‘(A) a change in benefits under the Social 
Security Act or in other retirement benefits cre-
ated under Federal or State law, or 
‘‘(B) a change in the definition of the term 
‘wages’ under section 3121 of the Internal Rev-
enue Code of 1986, or a change in the amount 
of such wages taken into account under regula-
tions prescribed for purposes of section 401(a)(5) 
of such Code, 
results in an increase or decrease in accrued liability 
under a plan, such increase or decrease shall be treat-
ed as an experience loss or gain. 
‘‘(5) FULL FUNDING.—If, as of the close of a 
plan year, a plan would (without regard to this para-
graph) have an accumulated funding deficiency in ex-
cess of the full funding limitation— 
‘‘(A) the funding standard account shall be 
credited with the amount of such excess, and
‘‘(B) all amounts described in subpara-
graphs (B), (C), and (D) of subsection (b) (2) 
and subparagraph (B) of subsection (b)(3) which 
are required to be amortized shall be considered 
fully amortized for purposes of such subpara-
graphs. 
‘‘(6) FULL-FUNDING LIMITATION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (5), the term ‘full-funding limitation’ 
means the excess (if any) of— 
‘‘(i) the accrued liability (including 
normal cost) under the plan (determined 
under the entry age normal funding method 
if such accrued liability cannot be directly 
calculated under the funding method used 
for the plan), over 
‘‘(ii) the lesser of— 
‘‘(I) the fair market value of the 
plan’s assets, or 
‘‘(II) the value of such assets de-
termined under paragraph (2). 
‘‘(B) MINIMUM AMOUNT.— 
‘‘(i) IN GENERAL.—In no event shall 
the 
full-funding 
limitation 
determined
under subparagraph (A) be less than the ex-
cess (if any) of— 
‘‘(I) 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability due 
to benefits accruing during the plan 
year), over 
‘‘(II) the value of the plan’s assets 
determined under paragraph (2). 
‘‘(ii) ASSETS.—For purposes of clause 
(i), assets shall not be reduced by any credit 
balance in the funding standard account. 
‘‘(C) FULL FUNDING LIMITATION.—For pur-
poses of this paragraph, unless otherwise pro-
vided by the plan, the accrued liability under a 
multiemployer plan shall not include benefits 
which are not nonforfeitable under the plan after 
the termination of the plan (taking into consid-
eration section 411(d)(3) of the Internal Revenue 
Code of 1986). 
‘‘(D) CURRENT LIABILITY.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The term ‘current 
liability’ means all liabilities to employees 
and their beneficiaries under the plan.
100 
‘‘(ii) TREATMENT OF UNPREDICTABLE 
CONTINGENT
EVENT
BENEFITS.—For pur-
poses of clause (i), any benefit contingent on 
an event other than— 
‘‘(I) age, service, compensation, 
death, or disability, or 
‘‘(II) an event which is reasonably 
and reliably predictable (as determined 
by the Secretary of the Treasury), 
shall not be taken into account until the 
event on which the benefit is contingent oc-
curs. 
‘‘(iii) INTEREST
RATE
USED.—The 
rate of interest used to determine current li-
ability under this paragraph shall be the 
rate of interest determined under subpara-
graph (E). 
‘‘(iv) MORTALITY TABLES.— 
‘‘(I) COMMISSIONERS’ STANDARD 
TABLE.—In the case of plan years be-
ginning before the first plan year to 
which the first tables prescribed under 
subclause (II) apply, the mortality 
table used in determining current li-
ability under this paragraph shall be
101 
the table prescribed by the Secretary of 
the Treasury which is based on the 
prevailing 
commissioners’ 
standard 
table (described in section 807(d)(5)(A) 
of the Internal Revenue Code of 1986) 
used to determine reserves for group 
annuity contracts issued on January 
1, 1993. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary of the Treasury 
may by regulation prescribe for plan 
years beginning after December 31, 
1999, mortality tables to be used in de-
termining current liability under this 
subsection. Such tables shall be based 
upon the actual experience of pension 
plans and projected trends in such ex-
perience. In prescribing such tables, 
such Secretary shall take into account 
results of available independent studies 
of mortality of individuals covered by 
pension plans. 
‘‘(v) SEPARATE
MORTALITY
TABLES 
FOR
THE
DISABLED.—Notwithstanding 
clause (iv)—
102 
‘‘(I) IN GENERAL.—In the case of 
plan years beginning after December 
31, 1995, the Secretary of the Treasury 
shall establish mortality tables which 
may be used (in lieu of the tables 
under clause (iv)) to determine current 
liability under this subsection for indi-
viduals who are entitled to benefits 
under the plan on account of dis-
ability. Such Secretary shall establish 
separate tables for individuals whose 
disabilities occur in plan years begin-
ning before January 1, 1995, and for 
individuals whose disabilities occur in 
plan years beginning on or after such 
date. 
‘‘(II) SPECIAL RULE FOR DISABIL-
ITIES OCCURRING AFTER 1994.—In the 
case of disabilities occurring in plan 
years beginning after December 31, 
1994, the tables under subclause (I) 
shall apply only with respect to indi-
viduals described in such subclause 
who are disabled within the meaning
103 
of title II of the Social Security Act 
and the regulations thereunder. 
‘‘(vi) PERIODIC
REVIEW.—The Sec-
retary of the Treasury shall periodically (at 
least every 5 years) review any tables in ef-
fect under this subparagraph and shall, to 
the extent such Secretary determines nec-
essary, by regulation update the tables to 
reflect the actual experience of pension 
plans and projected trends in such experi-
ence. 
‘‘(E) REQUIRED
CHANGE
OF
INTEREST 
RATE.—For purposes of determining a plan’s 
current liability for purposes of this para-
graph— 
‘‘(i) IN GENERAL.—If any rate of in-
terest used under the plan under subsection 
(b)(6) to determine cost is not within the 
permissible range, the plan shall establish a 
new rate of interest within the permissible 
range. 
‘‘(ii) PERMISSIBLE RANGE.—For pur-
poses of this subparagraph— 
‘‘(I) IN GENERAL.—Except as pro-
vided in subclause (II), the term ‘per-
104 
missible 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 interest on 30-year Treasury securi-
ties during the 4-year period ending on 
the last day before the beginning of the 
plan year. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—If the Secretary of the Treasury 
finds that the lowest rate of interest 
permissible under subclause (I) is un-
reasonably high, such Secretary may 
prescribe a lower rate of interest, ex-
cept that such rate may not be less 
than 80 percent of the average rate de-
termined under such subclause. 
‘‘(iii) 
ASSUMPTIONS.—Notwith-
standing paragraph (3)(A), the interest rate 
used under the plan shall be— 
‘‘(I) determined without taking 
into account the experience of the plan 
and reasonable expectations, but 
‘‘(II) consistent with the assump-
tions which reflect the purchase rates
105 
which would be used by insurance com-
panies to satisfy the liabilities under 
the plan. 
‘‘(7) ANNUAL VALUATION.— 
‘‘(A) IN
GENERAL.—For purposes of this 
section, a determination of experience gains and 
losses and a valuation of the plan’s liability 
shall be made not less frequently than once every 
year, except that such determination shall be 
made more frequently to the extent required in 
particular cases under regulations prescribed by 
the Secretary of the Treasury. 
‘‘(B) VALUATION DATE.— 
‘‘(i) CURRENT YEAR.—Except as pro-
vided in clause (ii), the valuation 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 sub-
paragraph (A) may be made as of a date 
within the plan year prior to the year to 
which the valuation refers if, as of such 
date, the value of the assets of the plan are