173 
‘‘(ii) has a liquidity shortfall for any 
quarter during such plan year. 
‘‘(C) PERIOD
OF
UNDERPAYMENT.—For 
purposes of paragraph (3)(A), any portion of an 
installment that is treated as not paid under 
subparagraph (A) shall continue to be treated 
as unpaid until the close of the quarter in 
which the due date for such installment occurs. 
‘‘(D) LIMITATION
ON
INCREASE.—If the 
amount of any required installment is increased 
by reason of subparagraph (A), in no event 
shall such increase exceed the amount which, 
when added to prior installments for the plan 
year, is necessary to increase the funding target 
attainment percentage of the plan for the plan 
year (taking into account the expected increase 
in funding target due to benefits accruing or 
earned during the plan year) to 100 percent. 
‘‘(E) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) 
LIQUIDITY
SHORTFALL.—The 
term ‘liquidity shortfall’ means, with re-
spect to any required installment, an 
amount equal to the excess (as of the last 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00173
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
174 
day of the quarter for which such install-
ment is made) of— 
‘‘(I) the base amount with re-
spect to such quarter, over 
‘‘(II) the value (as of such last 
day) of the plan’s liquid assets. 
‘‘(ii) BASE AMOUNT.— 
‘‘(I) IN
GENERAL.—The term 
‘base amount’ means, with respect to 
any quarter, an amount equal to 3 
times the sum of the adjusted dis-
bursements from the plan for the 12 
months ending on the last day of such 
quarter. 
‘‘(II) SPECIAL
RULE.—If the 
amount determined under subclause 
(I) exceeds an amount equal to 2 
times the sum of the adjusted dis-
bursements from the plan for the 36 
months ending on the last day of the 
quarter and an enrolled actuary cer-
tifies to the satisfaction of the Sec-
retary that such excess is the result of 
nonrecurring circumstances, the base 
amount with respect to such quarter 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00174
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
175 
shall be determined without regard to 
amounts related to those nonrecurring 
circumstances. 
‘‘(iii) DISBURSEMENTS
FROM
THE 
PLAN.—The term ‘disbursements from the 
plan’ means all disbursements from the 
trust, including purchases of annuities, 
payments of single sums and other bene-
fits, and administrative expenses. 
‘‘(iv) ADJUSTED
DISBURSEMENTS.— 
The term ‘adjusted disbursements’ means 
disbursements from the plan reduced by 
the product of— 
‘‘(I) the plan’s funding target at-
tainment percentage for the plan year, 
and 
‘‘(II) the sum of the purchases of 
annuities, payments of single sums, 
and such other disbursements as the 
Secretary shall provide in regulations. 
‘‘(v) LIQUID ASSETS.—The term ‘liq-
uid assets’ means cash, marketable securi-
ties, and such other assets as specified by 
the Secretary in regulations. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00175
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
176 
‘‘(vi) QUARTER.—The term ‘quarter’ 
means, with respect to any required install-
ment, the 3-month period preceding the 
month in which the due date for such in-
stallment occurs. 
‘‘(F) REGULATIONS.—The Secretary may 
prescribe such regulations as are necessary to 
carry out this paragraph. 
‘‘(k) IMPOSITION
OF LIEN WHERE FAILURE
TO 
MAKE REQUIRED CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—In the case of a plan to 
which this subsection applies, if— 
‘‘(A) any person fails to make a contribu-
tion payment required by section 412 and this 
section before the due date for such payment, 
and 
‘‘(B) the unpaid balance of such payment 
(including interest), when added to the aggre-
gate unpaid balance of all preceding such pay-
ments for which payment was not made before 
the due date (including interest), exceeds 
$1,000,000, 
then there shall be a lien in favor of the plan in the 
amount determined under paragraph (3) upon all 
property and rights to property, whether real or per-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00176
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
177 
sonal, belonging to such person and any other per-
son who is a member of the same controlled group 
of which such person is a member. 
‘‘(2) PLANS TO WHICH SUBSECTION APPLIES.— 
This subsection shall apply to a defined benefit plan 
(other than a multiemployer plan) covered under 
section 4021 of the Employee Retirement Income 
Security Act of 1974 for any plan year for which the 
funding target attainment percentage (as defined in 
subsection (d)(2)) of such plan is less than 100 per-
cent. 
‘‘(3) AMOUNT OF LIEN.—For purposes of para-
graph (1), the amount of the lien shall be equal to 
the aggregate unpaid balance of contribution pay-
ments required under this section and section 412 
for which payment has not been made before the due 
date. 
‘‘(4) NOTICE OF FAILURE; LIEN.— 
‘‘(A) NOTICE
OF
FAILURE.—A person 
committing a failure described in paragraph (1) 
shall notify the Pension Benefit Guaranty Cor-
poration of such failure within 10 days of the 
due date for the required contribution payment. 
‘‘(B) PERIOD OF LIEN.—The lien imposed 
by paragraph (1) shall arise on the due date for 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00177
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
178 
the required contribution payment and shall 
continue until the last day of the first plan year 
in which the plan ceases to be described in 
paragraph (1)(B). Such lien shall continue to 
run without regard to whether such plan con-
tinues to be described in paragraph (2) during 
the period referred to in the preceding sentence. 
‘‘(C) CERTAIN
RULES
TO
APPLY.—Any 
amount with respect to which a lien is imposed 
under paragraph (1) shall be treated as taxes 
due and owing the United States and rules 
similar to the rules of subsections (c), (d), and 
(e) of section 4068 of the Employee Retirement 
Income Security Act of 1974 shall apply with 
respect to a lien imposed by subsection (a) and 
the amount with respect to such lien. 
‘‘(5) ENFORCEMENT.—Any lien created under 
paragraph (1) may be perfected and enforced only 
by the Pension Benefit Guaranty Corporation, or at 
the direction of the Pension Benefit Guaranty Cor-
poration, by the contributing sponsor (or any mem-
ber of the controlled group of the contributing spon-
sor). 
‘‘(6) DEFINITIONS.—For purposes of this sub-
section— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00178
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
179 
‘‘(A) CONTRIBUTION PAYMENT.—The term 
‘contribution payment’ means, in connection 
with a plan, a contribution payment required to 
be made to the plan, including any required in-
stallment under paragraphs (3) and (4) of sub-
section (j). 
‘‘(B) DUE
DATE; 
REQUIRED
INSTALL-
MENT.—The terms ‘due date’ and ‘required in-
stallment’ have the meanings given such terms 
by subsection (j), except that in the case of a 
payment other than a required installment, the 
due date shall be the date such payment is re-
quired to be made under section 430. 
‘‘(C) CONTROLLED
GROUP.—The term 
‘controlled group’ means any group treated as 
a single employer under subsections (b), (c), 
(m), and (o) of section 414. 
‘‘(l) QUALIFIED TRANSFERS TO HEALTH BENEFIT 
ACCOUNTS.—In the case of a qualified transfer (as de-
fined in section 420), any assets so transferred shall not, 
for purposes of this section, be treated as assets in the 
plan.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning after December 31, 2007. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00179
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
180 
SEC. 
113. 
BENEFIT 
LIMITATIONS 
UNDER 
SINGLE-EM-
PLOYER PLANS. 
(a) PROHIBITION
OF SHUTDOWN BENEFITS
AND 
OTHER UNPREDICTABLE CONTINGENT EVENT BENEFITS 
UNDER SINGLE-EMPLOYER PLANS.— 
(1) IN GENERAL.—Part III of subchapter D of 
chapter 1 of the Internal Revenue Code of 1986 (re-
lating to deferred compensation, etc.) is amended— 
(A) by striking the heading and inserting 
the following: 
‘‘PART III—RULES RELATING TO MINIMUM FUND-
ING STANDARDS AND BENEFIT LIMITATIONS 
‘‘SUBPART A. MINIMUM FUNDING STANDARDS FOR PENSION PLANS. 
‘‘SUBPART B. BENEFIT LIMITATIONS UNDER SINGLE-EMPLOYER PLANS. 
‘‘Subpart A—Minimum Funding Standards for 
Pension Plans 
‘‘Sec. 430. Minimum funding standards for single-employer defined benefit pen-
sion plans.’’, and 
(B) by adding at the end the following new 
subpart: 
‘‘Subpart B—Benefit Limitations Under Single- 
Employer Plans 
‘‘Sec. 436. Funding-based limitation on shutdown benefits and other unpredict-
able contingent event benefits under single-employer plans. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00180
Fmt 6652
Sfmt 6211
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
181 
‘‘SEC. 436. FUNDING-BASED LIMITS ON BENEFITS AND BEN-
EFIT ACCRUALS UNDER SINGLE-EMPLOYER 
PLANS. 
‘‘(a) GENERAL RULE.—For purposes of section 
401(a)(29), a defined benefit plan which is a single-em-
ployer plan shall be treated as meeting the requirements 
of this section if the plan meets the requirements of sub-
sections (b), (c), (d), and (e). 
‘‘(b) FUNDING-BASED LIMITATION ON SHUTDOWN 
BENEFITS
AND OTHER UNPREDICTABLE CONTINGENT 
EVENT BENEFITS UNDER SINGLE-EMPLOYER PLANS.— 
‘‘(1) IN GENERAL.—If a participant of a de-
fined benefit plan which is a single-employer plan is 
entitled to an unpredictable contingent event benefit 
payable with respect to any event occurring during 
any plan year, the plan shall provide that such ben-
efit may not be provided if the adjusted funding tar-
get attainment percentage for such plan year— 
‘‘(A) is less than 60 percent, or 
‘‘(B) would be less than 60 percent taking 
into account such occurrence. 
‘‘(2) EXEMPTION.—Paragraph (1) shall cease 
to apply with respect to any plan year, effective as 
of the first day of the plan year, upon payment by 
the plan sponsor of a contribution (in addition to 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00181
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
182 
any minimum required contribution under section 
303) equal to— 
‘‘(A) in the case of paragraph (1)(A), the 
amount of the increase in the funding target of 
the plan (under section 430) for the plan year 
attributable to the occurrence referred to in 
paragraph (1), and 
‘‘(B) in the case of paragraph (1)(B), the 
amount sufficient to result in a funding target 
attainment percentage of 60 percent. 
‘‘(3) UNPREDICTABLE CONTINGENT EVENT.— 
For purposes of this subsection, the term ‘unpredict-
able contingent event benefit’ means any benefit 
payable solely by reason of— 
‘‘(A) a plant shutdown (or similar event, as 
determined by the Secretary), or 
‘‘(B) any event other than the attainment 
of any age, performance of any service, receipt 
or derivation of any compensation, or occur-
rence of death or disability. 
‘‘(c) LIMITATIONS ON PLAN AMENDMENTS INCREAS-
ING LIABILITY FOR BENEFITS.— 
‘‘(1) IN GENERAL.—No amendment to a de-
fined benefit plan which is a single-employer plan 
which has the effect of increasing liabilities of the 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00182
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
183 
plan by reason of increases in benefits, establish-
ment of new benefits, changing the rate of benefit 
accrual, or changing the rate at which benefits be-
come nonforfeitable may take effect during any plan 
year if the adjusted funding target attainment per-
centage for such plan year is— 
‘‘(A) less than 80 percent, or 
‘‘(B) would be less than 80 percent taking 
into account such amendment. 
‘‘(2) EXEMPTION.—Paragraph (1) shall cease 
to apply with respect to any plan year, effective as 
of the first day of the plan year (or if later, the ef-
fective date of the amendment), upon payment by 
the plan sponsor of a contribution (in addition to 
any minimum required contribution under section 
430) equal to— 
‘‘(A) in the case of paragraph (1)(A), the 
amount of the increase in the funding target of 
the plan (under section 430) for the plan year 
attributable to the amendment, and 
‘‘(B) in the case of paragraph (1)(B), the 
amount sufficient to result in an adjusted fund-
ing target attainment percentage of 80 percent. 
‘‘(3) EXCEPTION
FOR
CERTAIN
BENEFIT
IN-
CREASES.—Paragraph (1) shall not apply to any 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00183
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS