202
‘‘(ii) in the case of a plan which comes 
into existence after January 1, 1974, the 
unfunded past service liability under the 
plan on the first day of the first plan year 
to which this section applies, over a period 
of 15 plan years, 
‘‘(iii) 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, 
‘‘(iv) separately, with respect to each 
plan year, the net experience loss (if any) 
under the plan, over a period of 15 plan 
years, and 
‘‘(v) 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 412(c)(3)) for each prior 
plan year in equal annual installments (until 
fully amortized) over a period of 15 plan years,
203
‘‘(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 412(b)(3)(D) (as in effect on the day 
before the date of the enactment of this sec-
tion), and 
‘‘(E) the amount necessary to amortize in 
equal annual installments (until fully amor-
tized) over a period of 20 years the contribu-
tions which would be required to be made under 
the plan but for the provisions of section 
412(c)(7)(A)(i)(I) (as in effect on the day be-
fore the date of the enactment of this section). 
‘‘(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-
204
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 under the plan, over a period of 15 
plan years, 
‘‘(C) the amount of the waived funding de-
ficiency 
(within 
the 
meaning 
of 
section 
412(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 
412(g) (as in effect on the day before the date 
of the enactment of this section), the excess (if 
any) of any debit balance in the funding stand-
ard account (determined without regard to this
205
subparagraph) over any debit balance in the al-
ternative minimum funding standard account. 
‘‘(4) SPECIAL RULE FOR AMOUNTS FIRST AM-
ORTIZED TO PLAN YEARS BEFORE 2006.—In the case 
of any amount amortized under section 412(b) (as 
in effect before the date of the enactment of Pension 
Protection Act of 2005) over any period beginning 
with a plan year beginning before 2006, in lieu of 
the amortization described in paragraphs (2)(B) and 
(3)(B), such amount shall continue to be amortized 
under such section as so in effect. 
‘‘(5) COMBINING
AND
OFFSETTING
AMOUNTS 
TO BE AMORTIZED.—Under regulations prescribed 
by the Secretary, amounts required to be amortized 
under paragraph (2) or paragraph (3), as the case 
may be—
‘‘(A) may be combined into one amount 
under such paragraph to be amortized over a 
period determined on the basis of the remaining 
amortization period for all items entering into 
such combined amount, and 
‘‘(B) may be offset against amounts re-
quired to be amortized under the other such 
paragraph, with the resulting amount to be am-
ortized over a period determined on the basis of
206
the remaining amortization periods for all items 
entering into whichever of the two amounts 
being offset is the greater. 
‘‘(6) INTEREST.—The funding standard ac-
count (and items therein) shall be charged or cred-
ited (as determined under regulations prescribed by 
the Secretary) with interest at the appropriate rate 
consistent with the rate or rates of interest used 
under the plan to determine costs. 
‘‘(7) CERTAIN
AMORTIZATION
CHARGES
AND 
CREDITS.—In the case of a plan which, immediately 
before the date of the enactment of the Multiem-
ployer Pension Plan Amendments Act of 1980, was 
a multiemployer plan (within the meaning of section 
414(f) as in effect immediately before such date)—
‘‘(A) any amount described in paragraph 
(2)(B)(ii), (2)(B)(iii), or (3)(B)(i) of this sub-
section which arose in a plan year beginning be-
fore such date shall be amortized in equal an-
nual installments (until fully amortized) over 40 
plan years, beginning with the plan year in 
which the amount arose; 
‘‘(B) any amount described in paragraph 
(2)(B)(iv) or (3)(B)(ii) of this subsection which 
arose in a plan year beginning before such date
207
shall be amortized in equal annual installments 
(until fully amortized) over 20 plan years, be-
ginning with the plan year in which the amount 
arose; 
‘‘(C) any change in past service liability 
which arises during the period of 3 plan years 
beginning on or after such date, and results 
from a plan amendment adopted before such 
date, shall be amortized in equal annual install-
ments (until fully amortized) over 40 plan 
years, beginning with the plan year in which the 
change arises; and 
‘‘(D) any change in past service liability 
which arises during the period of 2 plan years 
beginning on or after such date, and results 
from the changing of a group of participants 
from one benefit level to another benefit level 
under a schedule of plan benefits which—
‘‘(i) was adopted before such date, 
and 
‘‘(ii) was effective for any plan partici-
pant before the beginning of the first plan 
year beginning on or after such date, 
shall be amortized in equal annual installments 
(until fully amortized) over 40 plan years, be-
208
ginning with the plan year in which the change 
arises. 
‘‘(8) SPECIAL RULES RELATING TO CHARGES 
AND CREDITS TO FUNDING STANDARD ACCOUNT.—
For purposes of this part—
‘‘(A) 
WITHDRAWAL
LIABILITY.—Any 
amount received by a multiemployer plan in 
payment of all or part of an employer’s with-
drawal liability under part 1 of subtitle E of 
title IV shall be considered an amount contrib-
uted by the employer to or under the plan. The 
Secretary may prescribe by regulation addi-
tional charges and credits to a multiemployer 
plan’s funding standard account to the extent 
necessary to prevent withdrawal liability pay-
ments from being unduly reflected as advance 
funding for plan liabilities. 
‘‘(B) ADJUSTMENTS
WHEN
A
MULTIEM-
PLOYER PLAN LEAVES REORGANIZATION.—If a 
multiemployer plan is not in reorganization in 
the plan year but was in reorganization in the 
immediately preceding plan year, any balance in 
the funding standard account at the close of 
such immediately preceding plan year—
209
‘‘(i) shall be eliminated by an offset-
ting credit or charge (as the case may be), 
but 
‘‘(ii) shall be taken into account in 
subsequent plan years by being amortized 
in equal annual installments (until fully 
amortized) over 30 plan years. 
The preceding sentence shall not apply to the 
extent of any accumulated funding deficiency 
under section 418B(a) as of the end of the last 
plan year that the plan was in reorganization. 
‘‘(C) PLAN PAYMENTS TO SUPPLEMENTAL 
PROGRAM OR WITHDRAWAL LIABILITY PAYMENT 
FUND.—Any amount paid by a plan during a 
plan year to the Pension Benefit Guaranty Cor-
poration pursuant to section 4222 of the Em-
ployee Retirement Income Security Act of 1974 
or to a fund exempt under section 501(c)(22) 
pursuant to section 4223 of such Act shall re-
duce the amount of contributions considered re-
ceived by the plan for the plan year. 
‘‘(D) INTERIM
WITHDRAWAL
LIABILITY 
PAYMENTS.—Any amount paid by an employer 
pending a final determination of the employer’s 
withdrawal liability under part 1 of subtitle E
210
of title IV and subsequently refunded to the 
employer by the plan shall be charged to the 
funding standard account in accordance with 
regulations prescribed by the Secretary. 
‘‘(E) 
ELECTION
FOR
DEFERRAL
OF 
CHARGE
FOR
PORTION
OF
NET
EXPERIENCE 
LOSS.—If an election is in effect under section 
412(b)(7)(F) (as in effect on the day before the 
date of the enactment of this section) for any 
plan year, the funding standard account shall 
be charged in the plan year to which the por-
tion of the net experience loss deferred by such 
election was deferred with the amount so de-
ferred (and paragraph (2)(B)(iv) shall not 
apply to the amount so charged). 
‘‘(F) 
FINANCIAL
ASSISTANCE.—Any 
amount of any financial assistance from the 
Pension Benefit Guaranty Corporation to any 
plan, and any repayment of such amount, shall 
be taken into account under this section and 
section 412 in such manner as is determined by 
the Secretary. 
‘‘(G) SHORT-TERM BENEFITS.—To the ex-
tent that any plan amendment increases the un-
funded past service liability under the plan by
211
reason of an increase in benefits which are pay-
able under the plan during a period that does 
not exceed 14 years, paragraph (2)(B)(iii) shall 
be applied separately with respect to such in-
crease in unfunded past service liability by sub-
stituting the number of years of the period dur-
ing which such benefits are payable for ‘15’. 
‘‘(c) ADDITIONAL RULES.—
‘‘(1) DETERMINATIONS
TO
BE
MADE
UNDER 
FUNDING METHOD.—For purposes of this part, nor-
mal costs, accrued liability, past service liabilities, 
and experience gains and losses shall be determined 
under the funding method used to determine costs 
under the plan. 
‘‘(2) VALUATION OF ASSETS.—
‘‘(A) IN GENERAL.—For purposes of this 
part, the value of the plan’s assets shall be de-
termined on the basis of any reasonable actu-
arial method of valuation which takes into ac-
count fair market value and which is permitted 
under regulations prescribed by the Secretary. 
‘‘(B) 
ELECTION
WITH
RESPECT
TO 
BONDS.—The value of a bond or other evidence 
of indebtedness which is not in default as to 
principal or interest may, at the election of the
212
plan administrator, be determined on an amor-
tized basis running from initial cost at purchase 
to par value at maturity or earliest call date. 
Any election under this subparagraph shall be 
made at such time and in such manner as the 
Secretary shall by regulations provide, shall 
apply to all such evidences of indebtedness, and 
may be revoked only with the consent of the 
Secretary. 
‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REA-
SONABLE.—For purposes of this section, all costs, li-
abilities, rates of interest, and other factors under 
the plan shall be determined on the basis of actu-
arial assumptions and methods—
‘‘(A) which, in the aggregate, are reason-
able (taking into account the experience of the 
plan and reasonable expectations), and 
‘‘(B) which, in combination, offer the actu-
ary’s best estimate of anticipated experience 
under the plan. 
‘‘(4) TREATMENT OF CERTAIN CHANGES AS EX-
PERIENCE GAIN OR LOSS.—For purposes of this sec-
tion, if—
213
‘‘(A) a change in benefits under the Social 
Security Act or in other retirement benefits cre-
ated under Federal or State law, or 
‘‘(B) a change in the definition of the term 
‘wages’ under section 3121, or a change in the 
amount of such wages taken into account under 
regulations prescribed for purposes of section 
401(a)(5), 
results in an increase or decrease in accrued liability 
under a plan, such increase or decrease shall be 
treated as an experience loss or gain. 
‘‘(5) FULL FUNDING.—If, as of the close of a 
plan year, a plan would (without regard to this para-
graph) have an accumulated funding deficiency in 
excess of the full funding limitation—
‘‘(A) the funding standard account shall be 
credited with the amount of such excess, and 
‘‘(B) all amounts described in subpara-
graphs (B), (C), and (D) of paragraph (2) and 
subparagraph (B) of subsection (b)(3) which 
are required to be amortized shall be considered 
fully amortized for purposes of such subpara-
graphs. 
‘‘(6) FULL-FUNDING LIMITATION.—
214
‘‘(A) IN GENERAL.—For purposes of para-
graph (5), the term ‘full-funding limitation’ 
means the excess (if any) of—
‘‘(i) the accrued liability (including 
normal cost) under the plan (determined 
under the entry age normal funding meth-
od if such accrued liability cannot be di-
rectly calculated under the funding method 
used for the plan), over 
‘‘(ii) the lesser of—
‘‘(I) the fair market value of the 
plan’s assets, or 
‘‘(II) the value of such assets de-
termined under paragraph (2). 
‘‘(B) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall 
the 
full-funding 
limitation 
determined 
under subparagraph (A) be less than the 
excess (if any) of—
‘‘(I) 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability due 
to benefits accruing during the plan 
year), over
215
‘‘(II) the value of the plan’s as-
sets determined under paragraph (2). 
‘‘(ii) ASSETS.—For purposes of clause 
(i), assets shall not be reduced by any 
credit balance in the funding standard ac-
count. 
‘‘(C) CURRENT LIABILITY.—For purposes 
of this paragraph—
‘‘(i) IN GENERAL.—The term ‘current 
liability’ means all liabilities to employees 
and their beneficiaries under the plan. 
‘‘(ii) TREATMENT OF UNPREDICTABLE 
CONTINGENT EVENT BENEFITS.—For pur-
poses of clause (i), any benefit contingent 
on an event other than—
‘‘(I) age, service, compensation, 
death, or disability, or 
‘‘(II) an event which is reason-
ably and reliably predictable (as deter-
mined by the Secretary), 
shall not be taken into account until the 
event on which the benefit is contingent oc-
curs. 
‘‘(iii) INTEREST
RATE
USED.—The 
rate of interest used to determine current
216
liability under this paragraph shall be the 
rate of interest determined under subpara-
graph (D). 
‘‘(iv) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD 
TABLE.—In the case of plan years be-
ginning before the first plan year to 
which the first tables prescribed under 
subclause (II) apply, the mortality 
table used in determining current li-
ability under this paragraph shall be 
the table prescribed by the Secretary 
which is based on the prevailing com-
missioners’ standard table (described 
in section 807(d)(5)(A)) used to de-
termine reserves for group annuity 
contracts issued on January 1, 1993. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary may by regula-
tion prescribe for plan years beginning 
after December 31, 1999, mortality 
tables to be used in determining cur-
rent liability under this subsection. 
Such tables shall be based upon the 
actual experience of pension plans and
217
projected trends in such experience. 
In prescribing such tables, the Sec-
retary shall take into account results 
of available independent studies of 
mortality of individuals covered by 
pension plans. 
‘‘(v) SEPARATE
MORTALITY
TABLES 
FOR
THE
DISABLED.—Notwithstanding 
clause (iv)—
‘‘(I) IN GENERAL.—In the case 
of plan years beginning after Decem-
ber 31, 1995, the Secretary shall es-
tablish mortality tables which may be 
used (in lieu of the tables under 
clause (ii)) to determine current liabil-
ity under this subsection for individ-
uals who are entitled to benefits under 
the plan on account of disability. The 
Secretary shall establish separate ta-
bles for individuals whose disabilities 
occur in plan years beginning before 
January 1, 1995, and for individuals 
whose disabilities occur in plan years 
beginning on or after such date.
218
‘‘(II) SPECIAL
RULE
FOR
DIS-
ABILITIES OCCURRING AFTER 1994.—
In the case of disabilities occurring in 
plan years beginning after December 
31, 1994, the tables under subclause 
(I) shall apply only with respect to in-
dividuals described in such subclause 
who are disabled within the meaning 
of title II of the Social Security Act 
and the regulations thereunder. 
‘‘(vi) PERIODIC
REVIEW.—The Sec-
retary shall periodically (at least every 5 
years) review any tables in effect under 
this subparagraph and shall, to the extent 
the Secretary determines necessary, by 
regulation update the tables to reflect the 
actual experience of pension plans and pro-
jected trends in such experience. 
‘‘(D) REQUIRED
CHANGE
OF
INTEREST 
RATE.—For purposes of determining a plan’s 
current liability for purposes of this para-
graph—
‘‘(i) IN GENERAL.—If any rate of in-
terest used under the plan under sub-
section (b)(5) to determine cost is not