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‘‘(D) any church plan (within the meaning 
of section 414(e)) with respect to which the 
election provided by section 410(d) has not been 
made, 
‘‘(E) any plan which has not, at any time 
after September 2, 1974, provided for employer 
contributions, or 
‘‘(F) any plan established and maintained 
by a society, order, or association described in 
section 501(c)(8) or (9), if no part of the con-
tributions to or under such plan are made by 
employers of participants in such plan. 
No plan described in subparagraph (C), (D), or (F) 
shall be treated as a qualified plan for purposes of 
section 401(a) unless such plan meets the require-
ments of section 401(a)(7) as in effect on September 
1, 1974. 
‘‘(3) CERTAIN INSURANCE CONTRACT PLANS.— 
A plan is described in this paragraph if— 
‘‘(A) the plan is funded exclusively by the 
purchase of individual insurance contracts, 
‘‘(B) such contracts provide for level an-
nual premium payments to be paid extending 
not later than the retirement age for each indi-
vidual participating in the plan, and com-
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mencing with the date the individual became a 
participant in the plan (or, in the case of an in-
crease in benefits, commencing at the time such 
increase becomes effective), 
‘‘(C) benefits provided by the plan are 
equal to the benefits provided under each con-
tract at normal retirement age under the plan 
and are guaranteed by an insurance carrier (li-
censed under the laws of a State to do business 
with the plan) to the extent premiums have 
been paid, 
‘‘(D) premiums payable for the plan year, 
and all prior plan years, under such contracts 
have been paid before lapse or there is rein-
statement of the policy, 
‘‘(E) no rights under such contracts have 
been subject to a security interest at any time 
during the plan year, and 
‘‘(F) no policy loans are outstanding at 
any time during the plan year. 
A plan funded exclusively by the purchase of group 
insurance contracts which is determined under regu-
lations prescribed by the Secretary to have the same 
characteristics as contracts described in the pre-
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ceding sentence shall be treated as a plan described 
in this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2006. 
SEC. 112. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Subchapter D of chapter 1 of the 
Internal Revenue Code of 1986 (relating to deferred com-
pensation, etc.) is amended by adding at the end the fol-
lowing new part: 
‘‘PART III—MINIMUM FUNDING STANDARDS FOR 
SINGLE-EMPLOYER DEFINED BENEFIT PEN-
SION PLANS 
‘‘SEC. 430. MINIMUM FUNDING STANDARDS FOR SINGLE- 
EMPLOYER 
DEFINED 
BENEFIT 
PENSION 
PLANS. 
‘‘(a) MINIMUM
REQUIRED
CONTRIBUTION.—For 
purposes of this section and section 412(a)(2)(A), except 
as provided in subsection (f), the term ‘minimum required 
contribution’ means, with respect to any plan year of a 
defined benefit plan which is not a multiemployer plan— 
‘‘(1) in any case in which the value of plan as-
sets of the plan (as reduced under subsection
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(f)(4)(B)) is less than the funding target of the plan 
for the plan year, the sum of— 
‘‘(A) the target normal cost of the plan for 
the plan year, 
‘‘(B) the shortfall amortization charge (if 
any) for the plan for the plan year determined 
under subsection (c), and 
‘‘(C) the waiver amortization charge (if 
any) for the plan for the plan year as deter-
mined under subsection (e); 
‘‘(2) in any case in which the value of plan as-
sets of the plan (as reduced under subsection 
(f)(4)(B)) exceeds the funding target of the plan for 
the plan year, the target normal cost of the plan for 
the plan year reduced by such excess; or 
‘‘(3) in any other case, the target normal cost 
of the plan for the plan year. 
‘‘(b) TARGET NORMAL COST.—For purposes of this 
section, except as provided in subsection (i)(2) with re-
spect to plans in at-risk status, the term ‘target normal 
cost’ means, for any plan year, the present value of all 
benefits which are expected to accrue or to be earned 
under the plan during the plan year. For purposes of this 
subsection, if any benefit attributable to services per-
formed in a preceding plan year is increased by reason
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of any increase in compensation during the current plan 
year, the increase in such benefit shall be treated as hav-
ing accrued during the current plan year. 
‘‘(c) SHORTFALL AMORTIZATION CHARGE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the shortfall amortization charge for a plan for 
any plan year is the aggregate total of the shortfall 
amortization installments for such plan year with re-
spect to the shortfall amortization bases for such 
plan year and each of the 6 preceding plan years. 
‘‘(2) 
SHORTFALL
AMORTIZATION
INSTALL-
MENT.—The plan sponsor shall determine, with re-
spect to the shortfall amortization base of the plan 
for any plan year, the amounts necessary to amor-
tize such shortfall amortization base, in level annual 
installments over a period of 7 plan years beginning 
with such plan year. For purposes of paragraph (1), 
the annual installment of such amortization for each 
plan year in such 7-plan-year period is the shortfall 
amortization installment for such plan year with re-
spect to such shortfall amortization base. In deter-
mining any shortfall amortization installment under 
this paragraph, the plan sponsor shall use the seg-
ment rates determined under subparagraph (C) of