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(B) by striking ‘‘section 412(c)(7)’’ each
place 
it 
appears 
and 
inserting 
‘‘section
431(c)(6)’’,
(C) by striking ‘‘section 412(c)(7)(B)’’ and
inserting ‘‘section 431(c)(6)(A)(ii)’’,
(D) by striking ‘‘section 412(c)(7)(A)’’ and
inserting ‘‘section 431(c)(6)(A)(i)’’, and
(E) by striking ‘‘section 412’’ and inserting
‘‘section 431’’.
(3) Section 404(a)(7)(A) of such Code, as amend-
ed by this Act, is amended—
(A) by adding at the end of subparagraph
(A) the following new sentence: ‘‘In the case of a
defined benefit plan which is a single employer
plan, the amount necessary to satisfy the min-
imum funding standard provided by section 412
shall not be less than the plan’s funding shortfall
determined under section 430.’’, and
(B) by striking subparagraph (D) and in-
serting:
‘‘(D) INSURANCE
CONTRACT
PLANS.—For
purposes of this paragraph, a plan described in
section 412(g)(3) shall be treated as a defined
benefit plan.’’.
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(4) Section 404A(g)(3)(A) of such Code is
amended by striking ‘‘paragraphs (3) and (7) of sec-
tion 412(c)’’ and inserting ‘‘paragraphs (3) and (6)
of section 431(c)’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 2006.
SEC. 115. TECHNICAL AND CONFORMING AMENDMENTS.
(a) AMENDMENTS RELATED TO QUALIFICATION RE-
QUIREMENTS.—
(1) Section 401(a)(29) of the Internal Revenue
Code of 1986 is amended to read as follows:
‘‘(29) BENEFIT LIMITATIONS ON PLANS IN AT-
RISK STATUS.—In the case of a defined benefit plan
(other than a multiemployer plan) to which the re-
quirements of section 412 apply, the trust of which
the plan is a part shall not constitute a qualified
trust under this subsection unless the plan meets the
requirements of section 436.’’.
(2) 
Section 
401(a)(32) 
of 
such 
Code 
is
amended—
(A) in subparagraph (A), by striking
‘‘412(m)(5)’’ each place it appears and inserting
‘‘section 430(j)(4)’’, and
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(B) in subparagraph (C), by striking ‘‘sec-
tion 412(m)’’ and inserting ‘‘section 430(j)’’.
(3) Section 401(a), as amended by this Act, is
amended by striking paragraph (33) and by redesig-
nating paragraphs (34) and (35) as paragraph (33)
and (34).
(b) VESTING RULES.—Section 411 of such Code is
amended—
(1) by striking ‘‘section 412(c)(8)’’ in subsection
(a)(3)(C) and inserting ‘‘section 412(d)(2)’’,
(2) in subsection (b)(1)(F)—
(A) by striking ‘‘paragraphs (2) and (3) of
section 412(i)’’ in clause (ii) and inserting ‘‘sub-
paragraphs (B) and (C) of section 412(e)(3)’’,
and
(B) by striking ‘‘paragraphs (4), (5), and
(6) of section 412(i)’’ and inserting ‘‘subpara-
graphs (D), (E), and (F) of section 412(e)(3)’’,
and
(3) by striking ‘‘section 412(c)(8)’’ in subsection
(d)(6)(A) and inserting ‘‘section 412(e)(2)’’.
(c) MERGERS AND CONSOLIDATIONS OF PLANS.—Sub-
clause (I) of section 414(l)(2)(B)(i) of such Code is amended
to read as follows:
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‘‘(I) the amount determined under
section 431(c)(6)(A)(i) in the case of a
multiemployer plan (and the sum of
the funding shortfall and target normal
cost determined under section 430 in
the case of any other plan), over’’.
(d) TRANSFER OF EXCESS PENSION ASSETS TO RE-
TIREE HEALTH ACCOUNTS.—
(1) Section 420(e)(2) of such Code is amended to
read as follows:
‘‘(2) EXCESS PENSION ASSETS.—The term ‘excess
pension assets’ means the excess (if any) of—
‘‘(A) the lesser of—
‘‘(i) the fair market value of the plan’s
assets (reduced by the prefunding balance
determined under section 430(f)), or
‘‘(ii) the value of plan assets as deter-
mined under section 430(g)(3) after reduc-
tion under section 430(f), over
‘‘(B) 125 percent of the sum of the funding
shortfall and the target normal cost determined
under section 430 for such plan year.’’.
(2) Section 420(e)(4) of such Code is amended to
read as follows:
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‘‘(4) COORDINATION WITH SECTION 430.—In the
case of a qualified transfer, any assets so transferred
shall not, for purposes of this section, be treated as as-
sets in the plan.’’.
(e) EXCISE TAXES.—
(1) IN GENERAL.—Subsections (a) and (b) of sec-
tion 4971 of such Code are amended to read as fol-
lows:
‘‘(a) INITIAL TAX.—If at any time during any taxable
year an employer maintains a plan to which section 412
applies, there is hereby imposed for the taxable year a tax
equal to—
‘‘(1) in the case of a single-employer plan, 10
percent of the aggregate unpaid minimum required
contributions for all plan years remaining unpaid as
of the end of any plan year ending with or within the
taxable year, and
‘‘(2) in the case of a multiemployer plan, 5 per-
cent of the accumulated funding deficiency deter-
mined under section 431 as of the end of any plan
year ending with or within the taxable year.
‘‘(b) ADDITIONAL TAX.—If—
‘‘(1) a tax is imposed under subsection (a)(1) on
any unpaid required minimum contribution and such
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amount remains unpaid as of the close of the taxable
period, or
‘‘(2) a tax is imposed under subsection (a)(2) on
any accumulated funding deficiency and the accumu-
lated funding deficiency is not corrected within the
taxable period,
there is hereby imposed a tax equal to 100 percent of the
unpaid minimum required contribution or accumulated
funding deficiency, whichever is applicable, to the extent not
so paid or corrected.’’.
(2) Section 4971(c) of such Code is amended—
(A) by striking ‘‘the last two sentences of
section 412(a)’’ in paragraph (1) and inserting
‘‘section 431’’, and
(B) by adding at the end the following new
paragraph:
‘‘(4) UNPAID
MINIMUM
REQUIRED
CONTRIBU-
TION.—
‘‘(A) IN GENERAL.—The term ‘unpaid min-
imum required contribution’ means, with respect
to any plan year, any minimum required con-
tribution under section 430 for the plan year
which is not paid on or before the due date (as
determined under section 430(j)(1)) for the plan
year.
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‘‘(B) ORDERING RULE.—Any payment to or
under a plan for any plan year shall be allo-
cated first to unpaid minimum required con-
tributions for all preceding plan years on a first-
in, first-out basis and then to the minimum re-
quired contribution under section 430 for the
plan year.’’.
(3) Section 4971(e)(1) of such Code is amended
by striking ‘‘section 412(b)(3)(A)’’ and inserting ‘‘sec-
tion 412(a)(1)(A)’’.
(4) 
Section 
4971(f)(1) 
of 
such 
Code 
is
amended—
(A) by striking ‘‘section 412(m)(5)’’ and in-
serting ‘‘section 430(j)(4)’’, and
(B) by striking ‘‘section 412(m)’’ and in-
serting ‘‘section 430(j)’’.
(5) Section 4972(c)(7) of such Code is amended
by striking ‘‘except to the extent that such contribu-
tions exceed the full-funding limitation (as defined in
section 412(c)(7), determined without regard to sub-
paragraph (A)(i)(I) thereof)’’ and inserting ‘‘except,
in the case of a multiemployer plan, to the extent that
such contributions exceed the full-funding limitation
(as defined in section 431(c)(6))’’.
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(f) REPORTING REQUIREMENTS.—Section 6059(b) of
such Code is amended—
(1) by striking ‘‘the accumulated funding defi-
ciency (as defined in section 412(a))’’ in paragraph
(2) and inserting ‘‘the minimum required contribu-
tion determined under section 430, or the accumu-
lated funding deficiency determined under section
431,’’, and
(2) by striking paragraph (3)(B) and inserting:
‘‘(B) the requirements for reasonable actu-
arial assumptions under section 430(h)(1) or
431(c)(3), whichever are applicable, have been
complied with.’’.
Subtitle C—Interest Rate Assump-
tions and Deductible Amounts
for 2006
SEC. 121. EXTENSION OF REPLACEMENT OF 30-YEAR TREAS-
URY RATES.
(a) AMENDMENTS OF ERISA.—
(1) DETERMINATION OF RANGE.—Subclause (II)
of section 302(b)(5)(B)(ii) of the Employee Retire-
ment Income Security Act of 1974 is amended—
(A) by striking ‘‘2006’’ and inserting
‘‘2007’’, and
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(B) by striking ‘‘AND 2005’’ in the heading
and inserting ‘‘, 2005, AND 2006’’.
(2) DETERMINATION OF CURRENT LIABILITY.—
Subclause (IV) of section 302(d)(7)(C)(i) of such Act
is amended—
(A) by striking ‘‘or 2005’’ and inserting ‘‘,
2005, or 2006’’, and
(B) by striking ‘‘AND 2005’’ in the heading
and inserting ‘‘, 2005, AND 2006’’.
(3) PBGC PREMIUM
RATE.—Subclause (V) of
section 4006(a)(3)(E)(iii) of such Act is amended by
striking ‘‘2006’’ and inserting ‘‘2007’’.
(b) AMENDMENTS OF INTERNAL REVENUE CODE.—
(1) DETERMINATION OF RANGE.—Subclause (II)
of section 412(b)(5)(B)(ii) of the Internal Revenue
Code of 1986 is amended—
(A) by striking ‘‘2006’’ and inserting
‘‘2007’’, and
(B) by striking ‘‘AND 2005’’ in the heading
and inserting ‘‘, 2005, AND 2006’’.
(2) DETERMINATION OF CURRENT LIABILITY.—
Subclause (IV) of section 412(l)(7)(C)(i) of such Code
is amended—
(A) by striking ‘‘or 2005’’ and inserting ‘‘,
2005, or 2006’’, and
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(B) by striking ‘‘AND 2005’’ in the heading
and inserting ‘‘, 2005, AND 2006’’.
(c) PLAN
AMENDMENTS.—Clause (ii) of section
101(c)(2)(A) of the Pension Funding Equity Act of 2004
is amended by striking ‘‘2006’’ and inserting ‘‘2007’’.
SEC. 122. DEDUCTION LIMITS FOR PLAN CONTRIBUTIONS.
(a) IN GENERAL.—Clause (i) of section 404(a)(1)(D)
of the Internal Revenue Code of 1986 (relating to special
rule in case of certain plans) is amended by striking ‘‘sec-
tion 412(l)’’ and inserting ‘‘section 412(l)(8)(A), except that
section 412(l)(8)(A) shall be applied for purposes of this
clause by substituting ‘180 percent (130 percent in the case
of a multiemployer plan) of current liability’ for ‘the cur-
rent liability’ in clause (i).’’
(b) CONFORMING AMENDMENT.—Section 404(a)(1) of
the Internal Revenue Code of 1986 is amended by striking
subparagraph (F).
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
2005.
SEC. 123. UPDATING DEDUCTION RULES FOR COMBINATION
OF PLANS.
(a) IN
GENERAL.—Subparagraph (C) of section
404(a)(7) of the Internal Revenue Code of 1986 (relating
to limitation on deductions where combination of defined
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contribution plan and defined benefit plan) is amended by
adding after clause (ii) the following new clause:
‘‘(iii) LIMITATION.—In the case of em-
ployer contributions to 1 or more defined
contribution plans, this paragraph shall
only apply to the extent that such contribu-
tions exceed 6 percent of the compensation
otherwise paid or accrued during the tax-
able year to the beneficiaries under such
plans. For purposes of this clause, amounts
carried over from preceding taxable years
under subparagraph (B) shall be treated as
employer contributions to 1 or more defined
contributions to the extent attributable to
employer contributions to such plans in
such preceding taxable years.’’
(b) CONFORMING AMENDMENT.—Subparagraph (A) of
section 4972(c)(6) of such Code (relating to nondeductible
contributions) is amended to read as follows:
‘‘(A) so much of the contributions to 1 or
more defined contribution plans which are not
deductible when contributed solely because of sec-
tion 404(a)(7) as does not exceed the amount of
contributions described in section 401(m)(4)(A),
or’’.
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(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to contributions for taxable years begin-
ning after December 31, 2005.
TITLE II—FUNDING AND DEDUC-
TION RULES FOR MULTIEM-
PLOYER 
DEFINED 
BENEFIT
PLANS AND RELATED PROVI-
SIONS
Subtitle A—Funding Rules
PART I—AMENDMENTS TO EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974
SEC. 201. FUNDING RULES FOR MULTIEMPLOYER DEFINED
BENEFIT PLANS.
(a) IN GENERAL.—Part 3 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (as
amended by this Act) is amended by inserting after section
303 the following new section:
‘‘MINIMUM FUNDING STANDARDS FOR MULTIEMPLOYER
PLANS
‘‘SEC. 304. (a) IN GENERAL.—For purposes of section
302, the accumulated funding deficiency of a multiemployer
plan for any plan year is—
‘‘(1) except as provided in paragraph (2), the
amount, determined as of the end of the plan year,
equal to the excess (if any) of the total charges to the
funding standard account of the plan for all plan
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years (beginning with the first plan year for which
this part applies to the plan) over the total credits to
such account for such years, and
‘‘(2) if the multiemployer plan is in reorganiza-
tion for any plan year, the accumulated funding defi-
ciency of the plan determined under section 4243.
‘‘(b) FUNDING STANDARD ACCOUNT.—
‘‘(1) ACCOUNT REQUIRED.—Each multiemployer
plan to which this part applies shall establish and
maintain a funding standard account. Such account
shall be credited and charged solely as provided in
this section.
‘‘(2) CHARGES TO ACCOUNT.—For a plan year,
the funding standard account shall be charged with
the sum of—
‘‘(A) the normal cost of the plan for the
plan year,
‘‘(B) the amounts necessary to amortize in
equal annual installments (until fully amor-
tized)—
‘‘(i) separately, with respect to each
plan year, the net increase (if any) in un-
funded past service liability under the plan
arising from plan amendments adopted in
such year, over a period of 15 plan years,
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‘‘(ii) separately, with respect to each
plan year, the net experience loss (if any)
under the plan, over a period of 15 plan
years, and
‘‘(iii) separately, with respect to each
plan year, the net loss (if any) resulting
from changes in actuarial assumptions used
under the plan, over a period of 15 plan
years,
‘‘(C) the amount necessary to amortize each
waived funding deficiency (within the meaning
of section 302(c)(3)) for each prior plan year in
equal annual installments (until fully amor-
tized) over a period of 15 plan years,
‘‘(D) the amount necessary to amortize in
equal annual installments (until fully amor-
tized) over a period of 5 plan years any amount
credited to the funding standard account under
section 302(b)(3)(D) (as in effect on the day be-
fore the date of the enactment of the Pension Se-
curity and Transparency Act of 2005), and
‘‘(E) the amount necessary to amortize in
equal annual installments (until fully amor-
tized) over a period of 20 years the contributions
which would be required to be made under the
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plan 
but 
for 
the 
provisions 
of 
section
302(c)(7)(A)(i)(I) (as in effect on the day before
the date of the enactment of the Pension Security
and Transparency Act of 2005).
‘‘(3) CREDITS TO ACCOUNT.—For a plan year,
the funding standard account shall be credited with
the sum of—
‘‘(A) the amount considered contributed by
the employer to or under the plan for the plan
year,
‘‘(B) the amount necessary to amortize in
equal annual installments (until fully amor-
tized)—
‘‘(i) separately, with respect to each
plan year, the net decrease (if any) in un-
funded past service liability under the plan
arising from plan amendments adopted in
such year, over a period of 15 plan years,
‘‘(ii) separately, with respect to each
plan year, the net experience gain (if any)
under the plan, over a period of 15 plan
years, and
‘‘(iii) separately, with respect to each
plan year, the net gain (if any) resulting
from changes in actuarial assumptions used
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under the plan, over a period of 15 plan
years,
‘‘(C) the amount of the waived funding defi-
ciency (within the meaning of section 302(c)(3))
for the plan year, and
‘‘(D) in the case of a plan year for which
the accumulated funding deficiency is deter-
mined under the funding standard account if
such plan year follows a plan year for which
such deficiency was determined under the alter-
native minimum funding standard under section
305 (as in effect on the day before the date of the
enactment of the Pension Security and Trans-
parency Act of 2005), the excess (if any) of any
debit balance in the funding standard account
(determined without regard to this subpara-
graph) over any debit balance in the alternative
minimum funding standard account.
‘‘(4) SPECIAL RULE FOR AMOUNTS FIRST AMOR-
TIZED TO PLAN YEARS BEFORE 2007.—In the case of
any amount amortized under section 302(b) (as in ef-
fect on the day before the date of the enactment of the
Pension Security and Transparency Act of 2005) over
any period beginning with a plan year beginning be-
fore 2007, in lieu of the amortization described in