309
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 de-
termined on the basis of any reasonable actu-
arial method of valuation which takes into ac-
count fair market value and which is permitted 
under regulations prescribed by the Secretary. 
‘‘(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 shall by regulations provide, shall 
apply to all such evidences of indebtedness, and 
may be revoked only with the consent of the 
Secretary. 
‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REA-
SONABLE.—For purposes of this section, all costs, li-
abilities, rates of interest, and other factors under
310
the plan shall be determined on the basis of actu-
arial assumptions 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, or a change in the 
amount of such wages taken into account under 
regulations prescribed for purposes of section 
401(a)(5), 
results in an increase or decrease in accrued liability 
under a plan, such increase or decrease shall be 
treated 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-
311
graph) have an accumulated funding deficiency in 
excess 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 con-
sidered fully amortized for purposes of such 
subparagraphs. 
‘‘(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 meth-
od if such accrued liability cannot be di-
rectly 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).
312
‘‘(B) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall 
the 
full-funding 
limitation 
determined 
under subparagraph (A) be less than the 
excess (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 as-
sets determined under paragraph (2). 
‘‘(ii) ASSETS.—For purposes of clause 
(i), assets shall not be reduced by any 
credit balance in the funding standard ac-
count. 
‘‘(C) FULL
FUNDING
LIMITATION.—For 
purposes of this paragraph, unless otherwise 
provided 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 
consideration section 411(d)(3)). 
‘‘(D) CURRENT LIABILITY.—For purposes 
of this paragraph—
313
‘‘(i) IN GENERAL.—The term ‘current 
liability’ means all liabilities to employees 
and their beneficiaries under the plan. 
‘‘(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 reason-
ably and reliably predictable (as deter-
mined by the Secretary), 
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 
liability 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
314
subclause (II) apply, the mortality 
table used in determining current li-
ability under this paragraph shall be 
the table prescribed by the Secretary 
which is based on the prevailing com-
missioners’ standard table (described 
in section 807(d)(5)(A)) used to de-
termine reserves for group annuity 
contracts issued on January 1, 1993. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary may by regula-
tion prescribe for plan years beginning 
after December 31, 1999, mortality 
tables to be used in determining cur-
rent liability under this subsection. 
Such tables shall be based upon the 
actual experience of pension plans and 
projected trends in such experience. 
In prescribing such tables, the Sec-
retary shall take into account results 
of available independent studies of 
mortality of individuals covered by 
pension plans.
315
‘‘(v) SEPARATE
MORTALITY
TABLES 
FOR
THE
DISABLED.—Notwithstanding 
clause (iv)—
‘‘(I) IN
GENERAL.—The Sec-
retary shall establish mortality tables 
which may be used (in lieu of the ta-
bles under clause (iv)) to determine 
current liability under this subsection 
for individuals who are entitled to 
benefits under the plan on account of 
disability. The Secretary shall estab-
lish separate tables 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
DIS-
ABILITIES 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 in-
dividuals described in such subclause 
who are disabled within the meaning
316
of title II of the Social Security Act 
and the regulations thereunder. 
‘‘(vi) PERIODIC
REVIEW.—The Sec-
retary shall periodically (at least every 5 
years) review any tables in effect under 
this subparagraph and shall, to the extent 
such Secretary determines necessary, by 
regulation update the tables to reflect the 
actual experience of pension plans and pro-
jected trends in such experience. 
‘‘(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 sub-
section (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 
provided in subclause (II), the term 
‘permissible range’ means a rate of in-
317
terest which is not more than 5 per-
cent above, and not more than 10 per-
cent below, the weighted average of 
the rates of interest on 30-year Treas-
ury securities during the 4-year period 
ending on the last day before the be-
ginning of the plan year. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—If the Secretary finds that the 
lowest rate of interest permissible 
under subclause (I) is unreasonably 
high, the Secretary may prescribe a 
lower rate of interest, except that 
such rate may not be less than 80 
percent of the average rate deter-
mined 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 
which would be used by insurance
318
companies 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. 
‘‘(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 
not less than 100 percent of the plan’s cur-
319
rent liability (as defined in paragraph 
(6)(D) without regard to clause (iv) there-
of). 
‘‘(iii) 
ADJUSTMENTS.—Information 
under clause (ii) shall, in accordance with 
regulations, be actuarially adjusted to re-
flect significant differences in participants. 
‘‘(iv) LIMITATION.—A change in fund-
ing method to use a prior year valuation, 
as provided in clause (ii), may not be made 
unless as of the valuation date within 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
CONTRIBUTIONS 
DEEMED MADE.—For purposes of this 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 subparagraph, such two and one-
half month period may be extended for not more