†
HR 2830 EAS
which was rated by an organization de-
scribed in such subparagraph, and
‘‘(ii) no such organization has made
an issuer credit rating for such employer,
then such employer shall only be treated as a fi-
nancially-weak employer to the extent provided
in regulations prescribed by the Secretary of the
Treasury.
‘‘(6) 
DETERMINATION
OF
DETERIORATION
YEAR.—For purposes of paragraph (5), the term ‘de-
terioration year’ means any year during the period
described in paragraph (5)(A)(i) for which the rating
described in subclause (I) or (II) of paragraph
(5)(A)(i) by each organization is either—
‘‘(A) lower than the lowest rating of the em-
ployer by such organization for a preceding year
in such period, or
‘‘(B) the lowest rating used by such organi-
zation.
‘‘(7) YEARS
BEFORE
EFFECTIVE
DATE.—For
purposes of paragraphs (5) and (6), plan years begin-
ning before 2007 shall not be taken into account.
‘‘(8) TRANSITION BETWEEN APPLICABLE FUND-
ING
TARGETS
AND
BETWEEN
APPLICABLE
TARGET
NORMAL COSTS.—
†
HR 2830 EAS
‘‘(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 deter-
mined 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 deter-
mined under this subsection (without regard
to this paragraph) over the amount deter-
mined under this section without regard to
this subsection.
‘‘(B) IMPROVEMENT YEARS NOT TAKEN INTO
ACCOUNT.—
‘‘(i) IN
GENERAL.—An improvement
year shall not be taken into account in de-
termining any consecutive period of plan
years for purposes of subparagraph (A).
‘‘(ii) APPLICATION
OF
SUBSECTION
AFTER
IMPROVEMENT
YEAR
ENDS.—Plan
†
HR 2830 EAS
years immediately before and after an im-
provement year (or consecutive period of
improvement years) shall be treated as con-
secutive for purposes of subparagraph (A).
‘‘(iii) IMPROVEMENT YEAR.—For pur-
poses of this subparagraph, the term ‘im-
provement year’ means any plan year for
which any rating described in subclause (I)
or (II) of paragraph (5)(A)(i) is higher
than such rating for the preceding plan
year.
‘‘(C) TRANSITION PERCENTAGE.—For pur-
poses of subparagraph (A), the transition per-
centage shall be determined in accordance with
the following table:
‘‘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.
‘‘(D) YEARS
BEFORE
EFFECTIVE
DATE.—
For purposes of this paragraph, plan years be-
ginning before 2007 shall not be taken into ac-
count.
‘‘(9) PLANS TO WHICH SUBSECTION APPLIES.—
‘‘(A) IN GENERAL.—Except as provided in
this paragraph, this subsection shall apply to
†
HR 2830 EAS
any plan to which this section applies and which
is in at-risk status for the plan year.
‘‘(B) EXCEPTION FOR SMALL PLANS.—This
subsection shall not apply to a plan for a plan
year if the plan was described in subsection
(g)(2)(B) for the preceding plan year, deter-
mined by substituting ‘500’ for ‘100’.
‘‘(C) EXCEPTION
FOR
PLANS
MAINTAINED
BY
CERTAIN
COOPERATIVES.—This subsection
shall not apply to an eligible cooperative plan
described in subparagraph (D).
‘‘(D) ELIGIBLE
COOPERATIVE
PLAN
DE-
FINED.—For purposes of subparagraph (C), a
plan shall be treated as an eligible cooperative
plan for a plan year if the plan is maintained
by more than 1 employer and at least 85 percent
of the employers are—
‘‘(i) rural cooperatives (as defined in
section 401(k)(7)(B) of the Internal Revenue
Code of 1986 without regard to clause (iv)
thereof), or
‘‘(ii) organizations which are—
‘‘(I) cooperative organizations de-
scribed in section 1381(a) of such Code
which are more than 50-percent owned
†
HR 2830 EAS
by agricultural producers or by co-
operatives owned by agricultural pro-
ducers, or
‘‘(II) more than 50-percent owned,
or controlled by, one or more coopera-
tive organizations described in sub-
clause (I).
A plan shall also be treated as an eligible cooper-
ative plan for any plan year for which it is de-
scribed in section 210(a) and is maintained by
a rural telephone cooperative association de-
scribed in section 3(40)(B)(v).
‘‘(E) EXCEPTION FOR PLANS SECURED BY
THIRD PARTIES BOUND BY PBGC AGREEMENTS.—
This subsection shall not apply to any plan if—
‘‘(i) a person other than the employer
obligated to contribute under the plan is,
under the terms of an agreement with the
Pension Benefit Guaranty Corporation, lia-
ble for any failure of the employer to meet
its obligation to pay any minimum re-
quired contribution or termination liability
with respect to the plan; and
‘‘(ii) such person is not a financially-
weak employer under paragraph (5).