‘‘(A) the funding target of the plan for the 
plan year, over 
‘‘(B) the value of plan assets of the plan 
for the plan year which are held by the plan im-
mediately before the valuation date. 
‘‘(5) EARLY DEEMED AMORTIZATION UPON AT-
TAINMENT OF FUNDING TARGET.—In any case in 
which the funding shortfall of a plan for a plan year 
is zero, for purposes of determining the shortfall am-
ortization charge for such plan year and succeeding 
plan years, the shortfall amortization base for all 
preceding plan years shall be reduced to zero. 
‘‘(d) RULES RELATING TO FUNDING TARGET.—For 
purposes of this section—
‘‘(1) FUNDING TARGET.—Except as provided in 
subsection (g)(1), the funding target of a plan for a 
plan year is the present value of all liabilities to par-
ticipants and their beneficiaries under the plan for 
the plan year. 
‘‘(2) FUNDING TARGET ATTAINMENT PERCENT-
AGE.—The ‘funding target attainment percentage’ of 
a plan for a plan year is the ratio (expressed as a 
percentage) which—
‘‘(A) the value of plan assets for the plan 
year, bears to
‘‘(B) the funding target of the plan for the 
plan year (determined without regard to sub-
section (g)(1)). 
‘‘(e) VALUATION
OF PLAN ASSETS
AND LIABIL-
ITIES.—
‘‘(1) VALUE OF PLAN ASSETS.—For purposes 
of this section (other than paragraph (4) and sub-
sections (a)(2) and (h)(3)), the term ‘value of plan 
assets’ means the excess of the value of plan assets 
(determined without regard to this paragraph) over 
the sum of—
‘‘(A) the pre-funding balance of the plan 
maintained under subsection (h)(1), and 
‘‘(B) the funding standard carryover bal-
ance of the plan maintained under subsection 
(h)(2). 
‘‘(2) TIMING OF DETERMINATIONS.—Except as 
otherwise provided under this subsection, all deter-
minations under this section for a plan year shall be 
made as of the valuation date of the plan for such 
plan year. 
‘‘(3) VALUATION DATE.—For purposes of this 
section—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the valuation date of a plan
for any plan year shall be the first day of the 
plan year. 
‘‘(B) EXCEPTION FOR SMALL PLANS.—If, 
on each day during the preceding plan year, a 
plan had 500 or fewer participants, the plan 
may designate any day during the plan year as 
its valuation date for such plan year. For pur-
poses of this subparagraph, all defined benefit 
plans (other than multiemployer plans) main-
tained by the same employer (or any member of 
such employer’s controlled group) shall be treat-
ed as 1 plan, but only employees of such em-
ployer or member shall be taken into account. 
‘‘(C) APPLICATION OF CERTAIN RULES IN 
DETERMINATION OF PLAN SIZE.—For purposes 
of this paragraph—
‘‘(i) PLANS
NOT
IN
EXISTENCE
IN 
PRECEDING YEAR.—In the case of the first 
plan year of any plan, subparagraph (B) 
shall apply to such plan by taking into ac-
count the number of participants that the 
plan is reasonably expected to have on 
days during such first plan year. 
‘‘(ii) PREDECESSORS.—Any reference 
in subparagraph (B) to an employer shall
include a reference to any predecessor of 
such employer. 
‘‘(4) AUTHORIZATION OF USE OF ACTUARIAL 
VALUE.—For purposes of this section, the value of 
plan assets (determined without regard to paragraph 
(1)) shall be determined on the basis of any reason-
able actuarial method of valuation which takes into 
account fair market value and which is permitted 
under regulations prescribed by the Secretary, ex-
cept that—
‘‘(A) any such method providing for aver-
aging of fair market values may not provide for 
averaging of such values over more than the 
current plan year and the 2 preceding plan 
years, and 
‘‘(B) any such method may not result in a 
determination of the value of plan assets which, 
at any time, is lower than 90 percent or greater 
than 110 percent of the fair market value of 
such assets at such time. 
‘‘(5) ACCOUNTING
FOR
CONTRIBUTION
RE-
CEIPTS.—For purposes of this section—
‘‘(A) CONTRIBUTIONS
FOR
PRIOR
PLAN 
YEARS TAKEN INTO ACCOUNT.—For purposes 
of determining the value of plan assets for any