II 
Calendar No. 357 
109TH CONGRESS 
2D SESSION 
H. R. 2830 
IN THE SENATE OF THE UNITED STATES 
DECEMBER 16, 2005 
Received 
JANUARY 27, 2006 
Read twice and placed on the calendar 
AN ACT 
To amend the Employee Retirement Income Security Act 
of 1974 and the Internal Revenue Code of 1986 to 
reform the pension funding rules, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Pension Protection Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—REFORM OF FUNDING RULES FOR SINGLE-EMPLOYER 
DEFINED BENEFIT PENSION PLANS
HR 2830 PCS 
Subtitle A—Amendments to Employee Retirement Income Security Act of 
1974 
Sec. 101. Minimum funding standards. 
Sec. 102. Funding rules for single-employer defined benefit pension plans. 
Sec. 103. Benefit limitations under single-employer plans. 
Sec. 104. Technical and conforming amendments. 
Subtitle B—Amendments to Internal Revenue Code of 1986 
Sec. 111. Minimum funding standards. 
Sec. 112. Funding rules for single-employer defined benefit pension plans. 
Sec. 113. Benefit limitations under single-employer plans. 
Sec. 114. Technical and conforming amendments. 
Subtitle C—Other Provisions 
Sec. 121. Modification of transition rule to pension funding requirements. 
Sec. 122. Treatment of nonqualified deferred compensation plans when em-
ployer defined benefit plan in at-risk status. 
TITLE II—FUNDING RULES FOR MULTIEMPLOYER DEFINED 
BENEFIT PLANS 
Subtitle A—Amendments to Employee Retirement Income Security Act of 
1974 
Sec. 201. Funding rules for multiemployer defined benefit plans. 
Sec. 202. Additional funding rules for multiemployer plans in endangered or 
critical status. 
Sec. 203. Measures to forestall insolvency of multiemployer plans. 
Sec. 204. Withdrawal liability reforms. 
Sec. 205. Removal of restrictions with respect to procedures applicable to dis-
putes involving withdrawal liability. 
Subtitle B—Amendments to Internal Revenue Code of 1986 
Sec. 211. Funding rules for multiemployer defined benefit plans. 
Sec. 212. Additional funding rules for multiemployer plans in endangered or 
critical status. 
Sec. 213. Measures to forestall insolvency of multiemployer plans. 
TITLE III—OTHER PROVISIONS 
Sec. 301. Interest rate for 2006 funding requirements. 
Sec. 302. Interest rate assumption for determination of lump sum distributions. 
Sec. 303. Interest rate assumption for applying benefit limitations to lump sum 
distributions. 
Sec. 304. Distributions during working retirement. 
Sec. 305. Other amendments relating to prohibited transactions. 
Sec. 306. Correction period for certain transactions involving securities and 
commodities. 
Sec. 307. Recovery by reimbursement or subrogation with respect to provided 
benefits. 
Sec. 308. Exercise of control over plan assets in connection with qualified 
changes in investment options. 
Sec. 309. Clarification of fiduciary rules. 
Sec. 310. Government Accountability Office pension funding report.
HR 2830 PCS 
TITLE IV—IMPROVEMENTS IN PBGC GUARANTEE PROVISIONS 
Sec. 401. Increases in PBGC premiums. 
TITLE V—DISCLOSURE 
Sec. 501. Defined benefit plan funding notices. 
Sec. 502. Additional disclosure requirements. 
Sec. 503. Section 4010 filings with the PBGC. 
TITLE VI—INVESTMENT ADVICE 
Sec. 601. Amendments to Employee Retirement Income Security Act of 1974 
providing prohibited transaction exemption for provision of in-
vestment advice. 
Sec. 602. Amendments to Internal Revenue Code of 1986 providing prohibited 
transaction exemption for provision of investment advice. 
TITLE VII—BENEFIT ACCRUAL STANDARDS 
Sec. 701. Benefit accrual standards. 
TITLE VIII—DEDUCTION LIMITATIONS 
Sec. 801. Increase in deduction limits. 
Sec. 802. Updating deduction rules for combination of plans. 
TITLE IX—ENHANCED RETIREMENTS SAVINGS AND DEFINED 
CONTRIBUTION PLANS 
Sec. 901. Pensions and individual retirement arrangement provisions of Eco-
nomic Growth and Tax Relief Reconciliation Act of 2001 made 
permanent. 
Sec. 902. Saver’s credit. 
Sec. 903. Increasing participation through automatic contribution arrange-
ments. 
Sec. 904. Penalty-free withdrawals from retirement plans for individuals called 
to active duty for at least 179 days. 
Sec. 905. Waiver of 10 percent early withdrawal penalty tax on certain dis-
tributions of pension plans for public safety employees. 
Sec. 906. Combat zone compensation taken into account for purposes of deter-
mining limitation and deductibility of contributions to indi-
vidual retirement plans. 
Sec. 907. Direct payment of tax refunds to individual retirement plans. 
Sec. 908. IRA eligibility for the disabled. 
Sec. 909. Allow rollovers by nonspouse beneficiaries of certain retirement plan 
distributions. 
TITLE X—PROVISIONS TO ENHANCE HEALTH CARE 
AFFORDABILITY 
Sec. 1001. Treatment of annuity and life insurance contracts with a long-term 
care insurance feature. 
Sec. 1002. Disposition of unused health and dependent care benefits in cafe-
teria plans and flexible spending arrangements. 
Sec. 1003. Distributions from governmental retirement plans for health and 
long-term care insurance for public safety officers.
HR 2830 PCS 
TITLE XI—GENERAL PROVISIONS 
Sec. 1101. Provisions relating to plan amendments. 
TITLE I—REFORM OF FUNDING 
RULES 
FOR 
SINGLE-EM-
PLOYER 
DEFINED 
BENEFIT 
PENSION PLANS 
Subtitle A—Amendments to Em-
ployee Retirement Income Secu-
rity Act of 1974 
SEC. 101. MINIMUM FUNDING STANDARDS. 
(a) REPEAL OF EXISTING FUNDING RULES.—Sec-
tions 302 through 308 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1082 through 
1086) are repealed. 
(b) NEW MINIMUM FUNDING STANDARDS.—Part 3 
of subtitle B of title I of such Act (as amended by sub-
section (a)) is amended further by inserting after section 
301 the following new section: 
‘‘MINIMUM FUNDING STANDARDS 
‘‘SEC. 302. (a) REQUIREMENT TO MEET MINIMUM 
FUNDING STANDARD.— 
‘‘(1) IN GENERAL.—A plan to which this part 
applies shall satisfy the minimum funding standard 
applicable to the plan for any plan year. 
‘‘(2) MINIMUM FUNDING STANDARD.—For pur-
poses of paragraph (1), a plan shall be treated as
HR 2830 PCS 
satisfying the minimum funding standard for a plan 
year if— 
‘‘(A) in the case of a defined benefit plan 
which is a single-employer plan, the employer 
makes contributions to or under the plan for 
the plan year which, in the aggregate, are not 
less than the minimum required contribution 
determined under section 303 for the plan for 
the plan year, 
‘‘(B) in the case of a money purchase plan 
which is a single-employer plan, the employer 
makes contributions to or under the plan for 
the plan year which are required under the 
terms of the plan, and 
‘‘(C) in the case of a multiemployer plan, 
the employers make contributions to or under 
the plan for any plan year which, in the aggre-
gate, are sufficient to ensure that the plan does 
not have an accumulated funding deficiency 
under section 304 as of the end of the plan 
year. 
‘‘(b) LIABILITY FOR CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of any contribution required 
by this section (including any required installments
HR 2830 PCS 
under paragraphs (3) and (4) of section 303(j)) 
shall be paid by the employer responsible for making 
contributions to or under the plan. 
‘‘(2) JOINT
AND
SEVERAL
LIABILITY
WHERE 
EMPLOYER MEMBER OF CONTROLLED GROUP.—In 
the case of a single-employer plan, if the employer 
referred to in paragraph (1) is a member of a con-
trolled group, each member of such group shall be 
jointly and severally liable for payment of such con-
tributions. 
‘‘(c) VARIANCE FROM MINIMUM FUNDING STAND-
ARDS.— 
‘‘(1) WAIVER
IN
CASE
OF
BUSINESS
HARD-
SHIP.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) an employer is (or in the case of 
a multiemployer plan, 10 percent or more 
of the number of employers contributing to 
or under the plan is) unable to satisfy the 
minimum funding standard for a plan year 
without temporary substantial business 
hardship (substantial business hardship in 
the case of a multiemployer plan), and
HR 2830 PCS 
‘‘(ii) application of the standard would 
be adverse to the interests of plan partici-
pants in the aggregate, 
the Secretary of the Treasury may, subject to 
subparagraph (C), waive the requirements of 
subsection (a) for such year with respect to all 
or any portion of the minimum funding stand-
ard. The Secretary of the Treasury shall not 
waive the minimum funding standard with re-
spect to a plan for more than 3 of any 15 (5 
of any 15 in the case of a multiemployer plan) 
consecutive plan years. 
‘‘(B) EFFECTS OF WAIVER.—If a waiver is 
granted under subparagraph (A) for any plan 
year— 
‘‘(i) in the case of a single-employer 
plan, the minimum required contribution 
under section 303 for the plan year shall 
be reduced by the amount of the waived 
funding deficiency and such amount shall 
be amortized as required under section 
303(e), and 
‘‘(ii) in the case of a multiemployer 
plan, the funding standard account shall 
be credited under section 304(b)(3)(C)
HR 2830 PCS 
with the amount of the waived funding de-
ficiency and such amount shall be amor-
tized 
as 
required 
under 
section 
304(b)(2)(C). 
‘‘(C) WAIVER
OF
AMORTIZED
PORTION 
NOT ALLOWED.—The Secretary of the Treasury 
may not waive under subparagraph (A) any 
portion of the minimum funding standard 
under subsection (a) for a plan year which is 
attributable to any waived funding deficiency 
for any preceding plan year. 
‘‘(2) DETERMINATION
OF
BUSINESS
HARD-
SHIP.—For purposes of this subsection, the factors 
taken into account in determining temporary sub-
stantial business hardship (substantial business 
hardship in the case of a multiemployer plan) shall 
include (but shall not be limited to) whether or 
not— 
‘‘(A) the employer is operating at an eco-
nomic loss, 
‘‘(B) there is substantial unemployment or 
underemployment in the trade or business and 
in the industry concerned, 
‘‘(C) the sales and profits of the industry 
concerned are depressed or declining, and
HR 2830 PCS 
‘‘(D) it is reasonable to expect that the 
plan will be continued only if the waiver is 
granted. 
‘‘(3) WAIVED FUNDING DEFICIENCY.—For pur-
poses of this part, the term ‘waived funding defi-
ciency’ means the portion of the minimum funding 
standard under subsection (a) (determined without 
regard to the waiver) for a plan year waived by the 
Secretary of the Treasury and not satisfied by em-
ployer contributions. 
‘‘(4) SECURITY FOR WAIVERS FOR SINGLE-EM-
PLOYER PLANS, CONSULTATIONS.— 
‘‘(A) SECURITY MAY BE REQUIRED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraph (C), the Secretary 
of the Treasury may require an employer 
maintaining a defined benefit plan which is 
a single-employer plan (within the meaning 
of section 4001(a)(15)) to provide security 
to such plan as a condition for granting or 
modifying a waiver under paragraph (1). 
‘‘(ii) SPECIAL
RULES.—Any security 
provided under clause (i) may be perfected 
and enforced only by the Pension Benefit 
Guaranty Corporation, or at the direction
HR 2830 PCS 
of the Corporation, by a contributing spon-
sor 
(within 
the 
meaning 
of 
section 
4001(a)(13)), or a member of such spon-
sor’s controlled group (within the meaning 
of section 4001(a)(14)). 
‘‘(B) CONSULTATION WITH THE PENSION 
BENEFIT GUARANTY CORPORATION.—Except as 
provided in subparagraph (C), the Secretary of 
the Treasury shall, before granting or modi-
fying a waiver under this subsection with re-
spect to a plan described in subparagraph 
(A)(i)— 
‘‘(i) provide the Pension Benefit 
Guaranty Corporation with— 
‘‘(I) notice of the completed ap-
plication for any waiver or modifica-
tion, and 
‘‘(II) an opportunity to comment 
on such application within 30 days 
after receipt of such notice, and 
‘‘(ii) consider— 
‘‘(I) any comments of the Cor-
poration under clause (i)(II), and 
‘‘(II) any views of any employee 
organization (within the meaning of
HR 2830 PCS 
section 3(4)) representing participants 
in the plan which are submitted in 
writing to the Secretary of the Treas-
ury in connection with such applica-
tion. 
Information provided to the Corporation under 
this subparagraph shall be considered tax re-
turn information and subject to the safe-
guarding and reporting requirements of section 
6103(p) of the Internal Revenue Code of 1986. 
‘‘(C) EXCEPTION
FOR
CERTAIN
WAIV-
ERS.— 
‘‘(i) IN
GENERAL.—The preceding 
provisions of this paragraph shall not 
apply to any plan with respect to which the 
sum of— 
‘‘(I) the aggregate unpaid min-
imum required contribution for the 
plan year and all preceding plan 
years, and 
‘‘(II) the present value of all 
waiver amortization installments de-
termined for the plan year and suc-
ceeding plan years under section 
303(e)(2),
HR 2830 PCS 
is less than $1,000,000. 
‘‘(ii) TREATMENT
OF
WAIVERS
FOR 
WHICH APPLICATIONS ARE PENDING.—The 
amount described in clause (i)(I) shall in-
clude any increase in such amount which 
would result if all applications for waivers 
of the minimum funding standard under 
this subsection which are pending with re-
spect to such plan were denied. 
‘‘(iii) UNPAID
MINIMUM
REQUIRED 
CONTRIBUTION.—For purposes of this sub-
paragraph— 
‘‘(I) IN
GENERAL.—The term 
‘unpaid minimum required contribu-
tion’ means, with respect to any plan 
year, any minimum required contribu-
tion under section 303 for the plan 
year which is not paid on or before 
the due date (as determined under 
section 303(j)(1)) for the plan year. 
‘‘(II) 
ORDERING
RULE.—For 
purposes of subclause (I), any pay-
ment to or under a plan for any plan 
year shall be allocated first to unpaid 
minimum required contributions for
HR 2830 PCS 
all preceding plan years on a first-in, 
first-out basis and then to the min-
imum required contribution under sec-
tion 303 for the plan year. 
‘‘(5) SPECIAL
RULES
FOR
SINGLE-EMPLOYER 
PLANS.— 
‘‘(A) APPLICATION MUST BE SUBMITTED 
BEFORE DATE 21⁄2 MONTHS AFTER CLOSE OF 
YEAR.—In the case of a single-employer plan, 
no waiver may be granted under this subsection 
with respect to any plan for any plan year un-
less an application therefor is submitted to the 
Secretary of the Treasury not later than the 
15th day of the 3rd month beginning after the 
close of such plan year. 
‘‘(B) SPECIAL RULE IF EMPLOYER IS MEM-
BER OF CONTROLLED GROUP.—In the case of a 
single-employer plan, if an employer is a mem-
ber of a controlled group, the temporary sub-
stantial business hardship requirements of 
paragraph (1) shall be treated as met only if 
such requirements are met— 
‘‘(i) with respect to such employer, 
and
HR 2830 PCS 
‘‘(ii) with respect to the controlled 
group of which such employer is a member 
(determined by treating all members of 
such group as a single employer). 
The Secretary of the Treasury may provide that 
an analysis of a trade or business or industry 
of a member need not be conducted if such Sec-
retary determines such analysis is not necessary 
because the taking into account of such member 
would not significantly affect the determination 
under this paragraph. 
‘‘(6) ADVANCE NOTICE.— 
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury shall, before granting a waiver under 
this subsection, require each applicant to pro-
vide evidence satisfactory to such Secretary that 
the applicant has provided notice of the filing of 
the application for such waiver to each affected 
party (as defined in section 4001(a)(21)). Such 
notice shall include a description of the extent 
to which the plan is funded for benefits which 
are guaranteed under title IV and for benefit li-
abilities. 
‘‘(B) CONSIDERATION
OF
RELEVANT
IN-
FORMATION.—The Secretary of the Treasury
HR 2830 PCS 
shall consider any relevant information provided 
by a person to whom notice was given under 
subparagraph (A). 
‘‘(7) RESTRICTION ON PLAN AMENDMENTS.— 
‘‘(A) IN GENERAL.—No amendment of a 
plan which increases the liabilities of the plan 
by reason of any increase in benefits, any 
change in the accrual of benefits, or any change 
in the rate at which benefits become nonforfeit-
able under the plan shall be adopted if a waiver 
under this subsection or an extension of time 
under section 304(d) is in effect with respect to 
the plan, or if a plan amendment described in 
subsection (d)(2) has been made at any time in 
the preceding 12 months (24 months in the 
case of a multiemployer plan). If a plan is 
amended in violation of the preceding sentence, 
any such waiver, or extension of time, shall not 
apply to any plan year ending on or after the 
date on which such amendment is adopted. 
‘‘(B) EXCEPTION.—Paragraph (1) shall 
not apply to any plan amendment which— 
‘‘(i) the Secretary of the Treasury de-
termines to be reasonable and which pro-
HR 2830 PCS 
vides for only de minimis increases in the 
liabilities of the plan, 
‘‘(ii) only repeals an amendment de-
scribed in subsection (d)(2), or 
‘‘(iii) is required as a condition of 
qualification under part I of subchapter D 
of chapter 1 of the Internal Revenue Code 
of 1986. 
‘‘(8) CROSS
REFERENCE.—For corresponding 
duties of the Secretary of the Treasury with regard 
to implementation of the Internal Revenue Code of 
1986, see section 412(c) of such Code. 
‘‘(d) MISCELLANEOUS RULES.— 
‘‘(1) CHANGE
IN
METHOD
OR
YEAR.—If the 
funding method, the valuation date, or a plan year 
for a plan is changed, the change shall take effect 
only if approved by the Secretary of the Treasury. 
‘‘(2) CERTAIN
RETROACTIVE
PLAN
AMEND-
MENTS.—For purposes of this section, any amend-
ment applying to a plan year which— 
‘‘(A) is adopted after the close of such plan 
year but no later than 21⁄2 months after the 
close of the plan year (or, in the case of a mul-
tiemployer plan, no later than 2 years after the 
close of such plan year),
HR 2830 PCS 
‘‘(B) does not reduce the accrued benefit 
of any participant determined as of the begin-
ning of the first plan year to which the amend-
ment applies, and 
‘‘(C) does not reduce the accrued benefit of 
any participant determined as of the time of 
adoption except to the extent required by the 
circumstances, 
shall, at the election of the plan administrator, be 
deemed to have been made on the first day of such 
plan year. No amendment described in this para-
graph which reduces the accrued benefits of any par-
ticipant shall take effect unless the plan adminis-
trator files a notice with the Secretary of the Treas-
ury notifying him of such amendment and such Sec-
retary has approved such amendment, or within 90 
days after the date on which such notice was filed, 
failed to disapprove such amendment. No amend-
ment described in this subsection shall be approved 
by the Secretary of the Treasury unless such Sec-
retary determines that such amendment is necessary 
because of a substantial business hardship (as deter-
mined under subsection (c)(2)) and that a waiver 
under subsection (c) (or, in the case of a multiem-
HR 2830 PCS 
ployer plan, any extension of the amortization period 
under section 304(d)) is unavailable or inadequate. 
‘‘(3) CONTROLLED
GROUP.—For purposes of 
this section, the term ‘controlled group’ means any 
group treated as a single employer under subsection 
(b), (c), (m), or (o) of section 414 of the Internal 
Revenue Code of 1986.’’. 
(c) CLERICAL AMENDMENT.—The table of contents 
in section 1 of such Act is amended by striking the items 
relating to sections 302 through 308 and inserting the fol-
lowing new item: 
‘‘Sec. 302. Minimum funding standards.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after 2006. 
SEC. 102. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Part 3 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (as 
amended by section 101 of this Act) is amended further 
by inserting after section 302 the following new section: 
‘‘MINIMUM FUNDING STANDARDS FOR SINGLE-EMPLOYER 
DEFINED BENEFIT PENSION PLANS 
‘‘SEC. 303. (a) MINIMUM REQUIRED CONTRIBU-
TION.—For purposes of this section and section 
302(a)(2)(A), except as provided in subsection (f), the
HR 2830 PCS 
term ‘minimum required contribution’ means, with respect 
to any plan year of a single-employer plan— 
‘‘(1) in any case in which the value of plan as-
sets of the plan (as reduced under subsection 
(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
HR 2830 PCS 
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 
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-
HR 2830 PCS 
mining any shortfall amortization installment under 
this paragraph, the plan sponsor shall use the seg-
ment rates determined under subparagraph (C) of 
subsection (h)(2), applied under rules similar to the 
rules of subparagraph (B) of subsection (h)(2). 
‘‘(3) SHORTFALL
AMORTIZATION
BASE.—For 
purposes of this section, the shortfall amortization 
base of a plan for a plan year is the excess (if any) 
of— 
‘‘(A) the funding shortfall of such plan for 
such plan year, over 
‘‘(B) the sum of— 
‘‘(i) the present value (determined 
using the segment rates determined under 
subparagraph (C) of subsection (h)(2), ap-
plied under rules similar to the rules of 
subparagraph (B) of subsection (h)(2)) of 
the aggregate total of the shortfall amorti-
zation installments, for such plan year and 
the 5 succeeding plan years, which have 
been determined with respect to the short-
fall amortization bases of the plan for each 
of the 6 plan years preceding such plan 
year, and
HR 2830 PCS 
‘‘(ii) the present value (as so deter-
mined) of the aggregate total of the waiver 
amortization installments for such plan 
year and the 5 succeeding plan years, 
which have been determined with respect 
to the waiver amortization bases of the 
plan for each of the 5 plan years preceding 
such plan year. 
‘‘(4) FUNDING SHORTFALL.—For purposes of 
this section, the funding shortfall of a plan for any 
plan year is the excess (if any) of— 
‘‘(A) the funding target of the plan for the 
plan year, over 
‘‘(B) the value of plan assets of the plan 
(as reduced under subsection (f)(4)(B)) for the 
plan year which are held by the plan on the 
valuation date. 
‘‘(5) EXEMPTION FROM NEW SHORTFALL AM-
ORTIZATION BASE.— 
‘‘(A) IN GENERAL.—In any case in which 
the value of plan assets of the plan (as reduced 
under subsection (f)(4)(A)) is equal to or great-
er than the funding target of the plan for the 
plan year, the shortfall amortization base of the 
plan for such plan year shall be zero.
HR 2830 PCS 
‘‘(B) TRANSITION RULE.— 
‘‘(i) IN GENERAL.—In the case of a 
non-deficit reduction plan, subparagraph 
(A) shall be applied to plan years begin-
ning after 2006 and before 2011 by sub-
stituting, for the funding target of the plan 
for the plan year, the applicable percentage 
of such funding target determined under 
the following table: 
‘‘In the case of a plan year beginning in calendar 
year: 
The appli-
cable per-
centage is: 
2007 ..............................................................................................
92 percent
2008 ..............................................................................................
94 percent
2009 ..............................................................................................
96 percent
2010 ..............................................................................................
98 percent. 
‘‘(ii) LIMITATION.—Clause (i) shall 
not apply with respect to any plan year 
after 2007 unless the ratio (expressed as a 
percentage) which— 
‘‘(I) the value of plan assets for 
each preceding plan year after 2006 
(as 
reduced 
under 
subsection 
(f)(4)(A)), bears to 
‘‘(II) the funding target of the 
plan for such preceding plan year (de-
termined without regard to subsection 
(i)(1)),
HR 2830 PCS 
is not less than the applicable percentage 
with respect to such preceding plan deter-
mined under clause (i). 
‘‘(iii) 
NON-DEFICIT
REDUCTION 
PLAN.—For purposes of clause (i), the 
term ‘non-deficit reduction plan’ means 
any plan— 
‘‘(I) to which this part (as in ef-
fect on the day before the date of the 
enactment of the Pension Protection 
Act of 2005) applied for the plan year 
beginning in 2006, and 
‘‘(II) to which section 302(d) (as 
so in effect) did not apply for such 
plan year. 
‘‘(6) 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 bases for all 
preceding plan years (and all shortfall amortization 
installments determined with respect to such bases) 
shall be reduced to zero.
HR 2830 PCS 
‘‘(d) RULES RELATING TO FUNDING TARGET.—For 
purposes of this section— 
‘‘(1) FUNDING TARGET.—Except as provided in 
subsection (i)(1) with respect to plans in at-risk sta-
tus, the funding target of a plan for a plan year is 
the present value of all liabilities to participants 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 (as reduced under subsection (f)(4)(B)), 
bears to 
‘‘(B) the funding target of the plan for the 
plan year (determined without regard to sub-
section (i)(1)). 
‘‘(e) WAIVER AMORTIZATION CHARGE.— 
‘‘(1) DETERMINATION
OF
WAIVER
AMORTIZA-
TION CHARGE.—The waiver amortization charge (if 
any) for a plan for any plan year is the aggregate 
total of the waiver amortization installments for 
such plan year with respect to the waiver amortiza-
tion bases for each of the 5 preceding plan years.
HR 2830 PCS 
‘‘(2) WAIVER AMORTIZATION INSTALLMENT.— 
The plan sponsor shall determine, with respect to 
the waiver amortization base of the plan for any 
plan year, the amounts necessary to amortize such 
waiver amortization base, in level annual install-
ments over a period of 5 plan years beginning with 
the succeeding plan year. For purposes of paragraph 
(1), the annual installment of such amortization for 
each plan year in such 5-plan year period is the 
waiver amortization installment for such plan year 
with respect to such waiver amortization base. 
‘‘(3) INTEREST
RATE.—In determining any 
waiver amortization installment under this sub-
section, the plan sponsor shall use the segment rates 
determined under subparagraph (C) of subsection 
(h)(2), applied under rules similar to the rules of 
subparagraph (B) of subsection (h)(2). 
‘‘(4) WAIVER AMORTIZATION BASE.—The waiv-
er amortization base of a plan for a plan year is the 
amount of the waived funding deficiency (if any) for 
such plan year under section 302(c). 
‘‘(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 waiver am-