239
(5) USE OF SHORTFALL METHOD NOT TO PRE-
CLUDE OTHER OPTIONS.—Nothing in this subsection 
shall be construed to affect a multiemployer plan’s 
ability to adopt the shortfall funding method with 
the Secretary’s permission under otherwise applica-
ble regulations or to affect a multiemployer plan’s 
right to change funding methods, with or without 
the Secretary’s consent, as provided in applicable 
rules and regulations. 
(c) CONFORMING AMENDMENTS.—
(1) Section 301 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1081) is 
amended by striking subsection (d). 
(2) The table of contents in section 1 of such 
Act (as amended by this Act) is amended by insert-
ing after the item relating to section 303 the fol-
lowing new item:
‘‘Sec. 304. Minimum funding standards for multiemployer plans.’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
2007. 
(2) SPECIAL RULE FOR CERTAIN AMORTIZATION 
EXTENSIONS.—If the Secretary of the Treasury 
grants an extension under section 304 of the Em-
ployee Retirement Income Security Act of 1974 and
240
section 412(e) of the Internal Revenue Code of 1986 
with respect to any application filed with the Sec-
retary of the Treasury on or before June 30, 2005, 
the extension (and any modification thereof) shall be 
applied and administered under the rules of such 
sections as in effect before the enactment of this 
Act, including the use of the rate of interest deter-
mined under section 6621(b) of such Code. 
SEC. 202. ADDITIONAL FUNDING RULES FOR MULTIEM-
PLOYER PLANS IN ENDANGERED OR CRIT-
ICAL STATUS. 
(a) IN GENERAL.—Part 3 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as 
amended by the preceding provisions of this Act) is 
amended by inserting after section 304 the following new 
section: 
‘‘ADDITIONAL FUNDING RULES FOR MULTIEMPLOYER 
PLANS IN ENDANGERED STATUS OR CRITICAL STATUS 
‘‘SEC. 305. (a) GENERAL RULE.—For purposes of 
this part, in the case of a multiemployer plan in effect 
on July 16, 2006—
‘‘(1) if the plan is in endangered status—
‘‘(A) the plan sponsor shall adopt and im-
plement a funding improvement plan in accord-
ance with the requirements of subsection (c), 
and
241
‘‘(B) the requirements of subsection (d) 
shall apply during the funding plan adoption 
period and the funding improvement period, 
and 
‘‘(2) if the plan is in critical status—
‘‘(A) the plan sponsor shall adopt and im-
plement a rehabilitation plan in accordance with 
the requirements of subsection (e), and 
‘‘(B) the requirements of subsection (f) 
shall apply during the rehabilitation plan adop-
tion period and the rehabilitation period. 
‘‘(b) DETERMINATION OF ENDANGERED AND CRIT-
ICAL STATUS.—For purposes of this section—
‘‘(1) ENDANGERED STATUS.—A multiemployer 
plan is in endangered status for a plan year if, as 
determined by the plan actuary under paragraph 
(3), the plan is not in critical status for the plan 
year and, as of the beginning of the plan year, ei-
ther—
‘‘(A) the plan’s funded percentage for such 
plan year is less than 80 percent, or 
‘‘(B) the plan has an accumulated funding 
deficiency for such plan year, or is projected to 
have such an accumulated funding deficiency 
for any of the 6 succeeding plan years, taking
242
into account any extension of amortization peri-
ods under section 304(d). 
For purposes of this section, a plan shall be treated 
as in seriously endangered status for a plan year if 
the plan is described in both subparagraphs (A) and 
(B). 
‘‘(2) CRITICAL STATUS.—A multiemployer plan 
is in critical status for a plan year if, as determined 
by the plan actuary under paragraph (3), the plan 
is described in 1 or more of the following subpara-
graphs as of the beginning of the plan year: 
‘‘(A) A plan is described in this subpara-
graph if—
‘‘(i) the funded percentage of the plan 
is less than 65 percent, and 
‘‘(ii) the sum of—
‘‘(I) the fair market value of plan 
assets, plus 
‘‘(II) the present value of the 
reasonably anticipated employer con-
tributions for the current plan year 
and each of the 6 succeeding plan 
years, assuming that the terms of all 
collective bargaining agreements pur-
suant to which the plan is maintained