164
‘‘(B) the at-risk target normal cost be less 
than the target normal cost, as determined 
without regard to this subsection. 
‘‘(4) DETERMINATION OF AT-RISK STATUS.—
For purposes of this subsection—
‘‘(A) IN GENERAL.—A plan is in at-risk 
status for a plan year if—
‘‘(i) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section without regard 
to this subsection) is less than 80 percent, 
and 
‘‘(ii) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section by using the 
additional actuarial assumptions described 
in paragraph (1)(B) in computing the 
funding target) is less than 70 percent. 
‘‘(B) TRANSITION RULE.—In the case of 
plan years beginning in 2008, 2009, and 2010, 
subparagraph (A)(i) shall be applied by sub-
stituting the following percentages for ‘80 per-
cent’: 
‘‘(i) 65 percent in the case of 2008. 
‘‘(ii) 70 percent in the case of 2009.
165
‘‘(iii) 75 percent in the case of 2010. 
In the case of plan years beginning in 2008, the 
funding target attainment percentage for the 
preceding plan year under subparagraph (A)(ii) 
may be determined using such methods of esti-
mation as the Secretary may provide. 
‘‘(C) SPECIAL RULE FOR EMPLOYEES OF-
FERED EARLY RETIREMENT IN 2006.—
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(ii), the additional actu-
arial assumptions described in paragraph 
(1)(B) shall not be taken into account with 
respect to any employee if—
‘‘(I) such employee is employed 
by a specified automobile manufac-
turer, 
‘‘(II) such employee is offered a 
substantial amount of additional cash 
compensation, substantially enhanced 
retirement benefits under the plan, or 
materially reduced employment duties 
on the condition that by a specified 
date (not later than December 31, 
2010) the employee retires (as defined 
under the terms of the plan),
166
‘‘(III) such offer is made during 
2006 and pursuant to a bona fide re-
tirement incentive program and re-
quires, by the terms of the offer, that 
such offer can be accepted not later 
than a specified date (not later than 
December 31, 2006), and 
‘‘(IV) such employee does not 
elect to accept such offer before the 
specified date on which the offer ex-
pires. 
‘‘(ii) SPECIFIED AUTOMOBILE MANU-
FACTURER.—For purposes of clause (i), 
the term ‘specified automobile manufac-
turer’ means—
‘‘(I) any manufacturer of auto-
mobiles, and 
‘‘(II) any manufacturer of auto-
mobile parts which supplies such parts 
directly to a manufacturer of auto-
mobiles and which, after a transaction 
or series of transactions ending in 
1999, ceased to be a member of a 
controlled group which included such 
manufacturer of automobiles.
167
‘‘(5) TRANSITION BETWEEN APPLICABLE FUND-
ING TARGETS AND BETWEEN APPLICABLE TARGET 
NORMAL COSTS.—
‘‘(A) IN GENERAL.—In any case in which 
a plan which is in at-risk status for a plan year 
has been in such status for a consecutive period 
of fewer than 5 plan years, the applicable 
amount of the funding target and of the target 
normal cost shall be, in lieu of the amount de-
termined without regard to this paragraph, the 
sum of—
‘‘(i) the amount determined under this 
section without regard to this subsection, 
plus 
‘‘(ii) the transition percentage for 
such plan year of the excess of the amount 
determined under this subsection (without 
regard to this paragraph) over the amount 
determined under this section without re-
gard to this subsection. 
‘‘(B) 
TRANSITION
PERCENTAGE.—For 
purposes of subparagraph (A), the transition 
percentage shall be determined in accordance 
with the following table:
168
‘‘If the consecutive number of 
years (including the plan year) 
The transition 
the plan is in at-risk status is—
percentage is—
1 .........................................................................................................
2 .........................................................................................................
3 .........................................................................................................
4 .........................................................................................................
80.
‘‘(C) YEARS BEFORE EFFECTIVE DATE.—
For purposes of this paragraph, plan years be-
ginning before 2008 shall not be taken into ac-
count. 
‘‘(6) SMALL PLAN EXCEPTION.—If, on each day 
during the preceding plan year, a plan had 500 or 
fewer participants, the plan shall not be treated as 
in at-risk status for the plan year. For purposes of 
this paragraph, all defined benefit plans (other than 
multiemployer plans) maintained by the same em-
ployer (or any member of such employer’s controlled 
group) shall be treated as 1 plan, but only partici-
pants with respect to such employer or member shall 
be taken into account and the rules of subsection 
(g)(2)(C) shall apply. 
‘‘(j) PAYMENT OF MINIMUM REQUIRED CONTRIBU-
TIONS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the due date for any payment of any minimum 
required contribution for any plan year shall be 81⁄2 
months after the close of the plan year.
169
‘‘(2) INTEREST.—Any payment required under 
paragraph (1) for a plan year that is made on a date 
other than the valuation date for such plan year 
shall be adjusted for interest accruing for the period 
between the valuation date and the payment date, at 
the effective rate of interest for the plan for such 
plan year. 
‘‘(3) ACCELERATED QUARTERLY CONTRIBUTION 
SCHEDULE FOR UNDERFUNDED PLANS.—
‘‘(A) FAILURE
TO
TIMELY
MAKE
RE-
QUIRED INSTALLMENT.—In any case in which 
the plan has a funding shortfall for the pre-
ceding plan year, the employer maintaining the 
plan shall make the required installments under 
this paragraph and if the employer fails to pay 
the full amount of a required installment for 
the plan year, then the amount of interest 
charged under paragraph (2) on the under-
payment for the period of underpayment shall 
be determined by using a rate of interest equal 
to the rate otherwise used under paragraph (2) 
plus 5 percentage points. 
‘‘(B) AMOUNT
OF
UNDERPAYMENT, PE-
RIOD
OF
UNDERPAYMENT.—For purposes of 
subparagraph (A)—
170
‘‘(i) AMOUNT.—The amount of the 
underpayment shall be the excess of—
‘‘(I) the required installment, 
over 
‘‘(II) the amount (if any) of the 
installment contributed to or under 
the plan on or before the due date for 
the installment. 
‘‘(ii) PERIOD OF UNDERPAYMENT.—
The period for which any interest is 
charged under this paragraph with respect 
to any portion of the underpayment shall 
run from the due date for the installment 
to the date on which such portion is con-
tributed to or under the plan. 
‘‘(iii) ORDER
OF
CREDITING
CON-
TRIBUTIONS.—For 
purposes 
of 
clause 
(i)(II), contributions shall be credited 
against unpaid required installments in the 
order in which such installments are re-
quired to be paid. 
‘‘(C) NUMBER
OF
REQUIRED
INSTALL-
MENTS; DUE
DATES.—For purposes of this 
paragraph—
171
‘‘(i) PAYABLE IN 4 INSTALLMENTS.—
There shall be 4 required installments for 
each plan year. 
‘‘(ii) TIME
FOR
PAYMENT
OF
IN-
STALLMENTS.—The due dates for required 
installments are set forth in the following 
table:
In the case of the following 
required installment:
The due date is:
1st ...........................................................................
April 15
2nd .........................................................................
July 15
3rd ..........................................................................
October 15
4th ..........................................................................
January 15 of the fol-
lowing year. 
‘‘(D) AMOUNT
OF
REQUIRED
INSTALL-
MENT.—For purposes of this paragraph—
‘‘(i) IN
GENERAL.—The amount of 
any required installment shall be 25 per-
cent of the required annual payment. 
‘‘(ii) REQUIRED ANNUAL PAYMENT.—
For purposes of clause (i), the term ‘re-
quired annual payment’ means the lesser 
of—
‘‘(I) 90 percent of the minimum 
required 
contribution 
(determined 
without regard to this subsection) to
172
the plan for the plan year under this 
section, or 
‘‘(II) 100 percent of the min-
imum required contribution (deter-
mined without regard to this sub-
section or to any waiver under section 
302(c)) to the plan for the preceding 
plan year. 
Subclause (II) shall not apply if the pre-
ceding plan year referred to in such clause 
was not a year of 12 months. 
‘‘(E) FISCAL YEARS AND SHORT YEARS.—
‘‘(i) FISCAL YEARS.—In applying this 
paragraph to a plan year beginning on any 
date other than January 1, there shall be 
substituted for the months specified in this 
paragraph, the months which correspond 
thereto. 
‘‘(ii) SHORT PLAN YEAR.—This sub-
paragraph shall be applied to plan years of 
less than 12 months in accordance with 
regulations prescribed by the Secretary. 
‘‘(4) LIQUIDITY REQUIREMENT IN CONNECTION 
WITH QUARTERLY CONTRIBUTIONS.—