‘‘(iii) LIMITATION.—Clause (ii) shall 
not apply with respect to any plan year 
after 2008 unless the funding target at-
tainment percentage (determined without 
regard to this subparagraph) of the plan 
for each preceding plan year after 2007 
was not less than the applicable percentage 
with respect to such preceding plan year 
determined under clause (ii). 
‘‘(10) SPECIAL RULE FOR 2008.—For purposes 
of this subsection, in the case of plan years begin-
ning in 2008, the funding target attainment percent-
age for the preceding plan year may be determined 
using such methods of estimation as the Secretary 
of the Treasury may provide.’’. 
(b) NOTICE REQUIREMENT.—
(1) IN GENERAL.—Section 101 of such Act (29 
U.S.C. 1021) is amended—
(A) by redesignating subsection (j) as sub-
section (k); and 
(B) by inserting after subsection (i) the 
following new subsection: 
‘‘(j) NOTICE OF FUNDING-BASED LIMITATION ON 
CERTAIN FORMS OF DISTRIBUTION.—The plan adminis-
trator of a single-employer plan shall provide a written no-
tice to plan participants and beneficiaries within 30 
days—
‘‘(1) after the plan has become subject to a re-
striction described in paragraph (1) or (3) of section 
206(g)), 
‘‘(2) in the case of a plan to which section 
206(g)(4) applies, after the valuation date for the 
plan year described in section 206(g)(4)(B) for 
which the plan’s adjusted funding target attainment 
percentage for the plan year is less than 60 percent 
(or, if earlier, the date such percentage is deemed to 
be less than 60 percent under section 206(g)(7)), 
and 
‘‘(3) at such other time as may be determined 
by the Secretary of the Treasury. 
The notice required to be provided under this subsection 
shall be in writing, except that such notice may be in elec-
tronic or other form to the extent that such form is rea-
sonably accessible to the recipient.’’. 
(2) ENFORCEMENT.—Section 502(c)(4) of such 
Act (29 U.S.C. 1132(c)(4)) is amended by striking 
‘‘section 302(b)(7)(F)(iv)’’ and inserting ‘‘section 
101(j) or 302(b)(7)(F)(iv)’’. 
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2007. 
(2) COLLECTIVE BARGAINING EXCEPTION.—In 
the case of a plan maintained pursuant to 1 or more 
collective bargaining agreements between employee 
representatives and 1 or more employers ratified be-
fore January 1, 2008, the amendments made by this 
section shall not apply to plan years beginning be-
fore the earlier of—
(A) the later of—
(i) the date on which the last collec-
tive bargaining agreement relating to the 
plan terminates (determined without re-
gard to any extension thereof agreed to 
after the date of the enactment of this 
Act), or 
(ii) the first day of the first plan year 
to which the amendments made by this 
subsection would (but for this subpara-
graph) apply, or 
(B) January 1, 2010. 
For purposes of subparagraph (A)(i), any plan 
amendment made pursuant to a collective bargaining 
agreement relating to the plan which amends the
plan solely to conform to any requirement added by 
this section shall not be treated as a termination of 
such collective bargaining agreement. 
SEC. 104. SPECIAL RULES FOR MULTIPLE EMPLOYER 
PLANS OF CERTAIN COOPERATIVES. 
(a) GENERAL RULE.—Except as provided in this sec-
tion, if a plan in existence on July 26, 2005, was an eligi-
ble cooperative plan for its plan year which includes such 
date, the amendments made by this subtitle and subtitle 
B shall not apply to plan years beginning before the earlier 
of—
(1) the first plan year for which the plan ceases 
to be an eligible cooperative plan, or 
(2) January 1, 2017. 
(b) 
INTEREST
RATE.—In 
applying 
section 
302(b)(5)(B) of the Employee Retirement Income Secu-
rity Act of 1974 and section 412(b)(5)(B) of the Internal 
Revenue Code of 1986 (as in effect before the amendments 
made by this subtitle and subtitle B) to an eligible cooper-
ative plan for plan years beginning after December 31, 
2007, and before the first plan year to which such amend-
ments apply, the third segment rate determined under sec-
tion 
303(h)(2)(C)(iii) 
of 
such 
Act 
and 
section 
430(h)(2)(C)(iii) of such Code (as added by such amend-
ments) shall be used in lieu of the interest rate otherwise 
used. 
(c) ELIGIBLE COOPERATIVE PLAN DEFINED.—For 
purposes of this section, a plan shall be treated as an eligi-
ble cooperative plan for a plan year if the plan is main-
tained by more than 1 employer and at least 85 percent 
of the employers are—
(1) rural cooperatives (as defined in section 
401(k)(7)(B) of such Code without regard to clause 
(iv) thereof), or 
(2) organizations which are—
(A) cooperative organizations described in 
section 1381(a) of such Code which are more 
than 50-percent owned by agricultural pro-
ducers or by cooperatives owned by agricultural 
producers, or 
(B) more than 50-percent owned, or con-
trolled by, one or more cooperative organiza-
tions described in subparagraph (A). 
A plan shall also be treated as an eligible cooperative plan 
for any plan year for which it is described in section 
210(a) of the Employee Retirement Income Security Act 
of 1974 and is maintained by a rural telephone cooperative 
association described in section 3(40)(B)(v) of such Act.
100
SEC. 105. TEMPORARY RELIEF FOR CERTAIN PBGC SETTLE-
MENT PLANS. 
(a) GENERAL RULE.—Except as provided in this sec-
tion, if a plan in existence on July 26, 2005, was a PBGC 
settlement plan as of such date, the amendments made 
by this subtitle and subtitle B shall not apply to plan years 
beginning before January 1, 2014. 
(b) 
INTEREST
RATE.—In 
applying 
section 
302(b)(5)(B) of the Employee Retirement Income Secu-
rity Act of 1974 and section 412(b)(5)(B) of the Internal 
Revenue Code of 1986 (as in effect before the amendments 
made by this subtitle and subtitle B), to a PBGC settle-
ment plan for plan years beginning after December 31, 
2007, and before January 1, 2014, the third segment rate 
determined under section 303(h)(2)(C)(iii) of such Act 
and section 430(h)(2)(C)(iii) of such Code (as added by 
such amendments) shall be used in lieu of the interest rate 
otherwise used. 
(c) PBGC SETTLEMENT PLAN.—For purposes of 
this section, the term ‘‘PBGC settlement plan’’ means a 
defined benefit plan (other than a multiemployer plan) to 
which section 302 of such Act and section 412 of such 
Code apply and—
(1) which was sponsored by an employer which 
was in bankruptcy, giving rise to a claim by the 
Pension Benefit Guaranty Corporation of not great-
101
er than $150,000,000, and the sponsorship of which 
was assumed by another employer that was not a 
member of the same controlled group as the bank-
rupt sponsor and the claim of the Pension Benefit 
Guaranty Corporation was settled or withdrawn in 
connection with the assumption of the sponsorship, 
or 
(2) which, by agreement with the Pension Ben-
efit Guaranty Corporation, was spun off from a plan 
subsequently terminated by such Corporation under 
section 4042 of the Employee Retirement Income 
Security Act of 1974. 
SEC. 106. SPECIAL RULES FOR PLANS OF CERTAIN GOV-
ERNMENT CONTRACTORS. 
(a) GENERAL RULE.—Except as provided in this sec-
tion, if a plan is an eligible government contractor plan, 
this subtitle and subtitle B shall not apply to plan years 
beginning before the earliest of—
(1) the first plan year for which the plan ceases 
to be an eligible government contractor plan, 
(2) the effective date of the Cost Accounting 
Standards Pension Harmonization Rule, or 
(3) January 1, 2011. 
(b) 
INTEREST
RATE.—In 
applying 
section 
302(b)(5)(B) of the Employee Retirement Income Secu-
102
rity Act of 1974 and section 412(b)(5)(B) of the Internal 
Revenue Code of 1986 (as in effect before the amendments 
made by this subtitle and subtitle B) to an eligible govern-
ment contractor plan for plan years beginning after De-
cember 31, 2007, and before the first plan year to which 
such amendments apply, the third segment rate deter-
mined under section 303(h)(2)(C)(iii) of such Act and sec-
tion 430(h)(2)(C)(iii) of such Code (as added by such 
amendments) shall be used in lieu of the interest rate oth-
erwise used. 
(c) ELIGIBLE GOVERNMENT CONTRACTOR PLAN DE-
FINED.—For purposes of this section, a plan shall be 
treated as an eligible government contractor plan if it is 
maintained by a corporation or a member of the same af-
filiated group (as defined by section 1504(a) of the Inter-
nal Revenue Code of 1986), whose primary source of rev-
enue is derived from business performed under contracts 
with the United States that are subject to the Federal Ac-
quisition Regulations (Chapter 1 of Title 48, C.F.R.) and 
that are also subject to the Defense Federal Acquisition 
Regulation Supplement (Chapter 2 of Title 48, C.F.R.), 
and whose revenue derived from such business in the pre-
vious fiscal year exceeded $5,000,000,000, and whose pen-
sion plan costs that are assignable under those contracts
103
are subject to sections 412 and 413 of the Cost Account-
ing Standards (48 C.F.R. 9904.412 and 9904.413). 
(d) COST ACCOUNTING STANDARDS PENSION HAR-
MONIZATION RULE.—The Cost Accounting Standards 
Board shall review and revise sections 412 and 413 of the 
Cost Accounting Standards (48 C.F.R. 9904.412 and 
9904.413) to harmonize the minimum required contribu-
tion under the Employee Retirement Income Security Act 
of 1974 of eligible government contractor plans and gov-
ernment reimbursable pension plan costs not later than 
January 1, 2010. Any final rule adopted by the Cost Ac-
counting Standards Board shall be deemed the Cost Ac-
counting Standards Pension Harmonization Rule. 
SEC. 107. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) MISCELLANEOUS AMENDMENTS TO TITLE I.—
Subtitle B of title I of such Act (29 U.S.C. 1021 et seq.) 
is amended—
(1) in section 101(d)(3), by striking ‘‘section 
302(e)’’ and inserting ‘‘section 303(j)’’; 
(2) in section 103(d)(8)(B), by striking ‘‘the re-
quirements of section 302(c)(3)’’ and inserting ‘‘the 
applicable requirements of sections 303(h) and 
304(c)(3)’’; 
(3) in section 103(d), by striking paragraph 
(11) and inserting the following:
104
‘‘(11) If the current value of the assets of the 
plan is less than 70 percent of—
‘‘(A) in the case of a single-employer plan, 
the funding target (as defined in section 
303(d)(1)) of the plan, or 
‘‘(B) in the case of a multiemployer plan, 
the current liability (as defined in section 
304(c)(6)(D)) under the plan, 
the percentage which such value is of the amount 
described in subparagraph (A) or (B).’’; 
(4) in section 203(a)(3)(C), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(5) in section 204(g)(1), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(6) in section 204(i)(2)(B), by striking ‘‘section 
302(c)(8)’’ and inserting ‘‘section 302(d)(2)’’; 
(7) in section 204(i)(3), by striking ‘‘funded 
current liability percentage (within the meaning of 
section 302(d)(8) of this Act)’’ and inserting ‘‘fund-
ing target attainment percentage (as defined in sec-
tion 303(d)(2))’’; 
(8) in section 204(i)(4), by striking ‘‘section 
302(c)(11)(A), 
without 
regard 
to 
section 
302(c)(11)(B)’’ and inserting ‘‘section 302(b)(1), 
without regard to section 302(b)(2)’’;
105
(9) in section 206(e)(1), by striking ‘‘section 
302(d)’’ and inserting ‘‘section 303(j)(4)’’, and by 
striking ‘‘section 302(e)(5)’’ and inserting ‘‘section 
303(j)(4)(E)(i)’’; 
(10) in section 206(e)(3), by striking ‘‘section 
302(e) by reason of paragraph (5)(A) thereof’’ and 
inserting ‘‘section 303(j)(3) by reason of section 
303(j)(4)(A)’’; and 
(11) in sections 101(e)(3), 403(c)(1), and 
408(b)(13), by striking ‘‘American Jobs Creation 
Act of 2004’’ and inserting ‘‘Pension Protection Act 
of 2006’’. 
(b) MISCELLANEOUS AMENDMENTS TO TITLE IV.—
Title IV of such Act is amended—
(1) 
in 
section 
4001(a)(13) 
(29 
U.S.C. 
1301(a)(13)), by striking ‘‘302(c)(11)(A)’’ and in-
serting ‘‘302(b)(1)’’, by striking ‘‘412(c)(11)(A)’’ 
and 
inserting 
‘‘412(b)(1)’’, 
by 
striking 
‘‘302(c)(11)(B)’’ and inserting ‘‘302(b)(2)’’, and by 
striking ‘‘412(c)(11)(B)’’ and inserting ‘‘412(b)(2)’’; 
(2) 
in 
section 
4003(e)(1) 
(29 
U.S.C. 
1303(e)(1)), by striking ‘‘302(f)(1)(A) and (B)’’ and 
inserting ‘‘303(k)(1)(A) and (B)’’, and by striking 
‘‘412(n)(1)(A) 
and 
(B)’’ 
and 
inserting 
‘‘430(k)(1)(A) and (B)’’;
106
(3) 
in 
section 
4010(b)(2) 
(29 
U.S.C. 
1310(b)(2)), by striking ‘‘302(f)(1)(A) and (B)’’ and 
inserting ‘‘303(k)(1)(A) and (B)’’, and by striking 
‘‘412(n)(1)(A) 
and 
(B)’’ 
and 
inserting 
‘‘430(k)(1)(A) and (B)’’; 
(4) in section 4062(c) (29 U.S.C. 1362(c)), by 
striking paragraphs (1), (2), and (3) and inserting 
the following: 
‘‘(1) the sum of the shortfall amortization 
charge (within the meaning of section 303(c)(1) of 
this Act and 430(d)(1) of the Internal Revenue Code 
of 1986) with respect to the plan (if any) for the 
plan year in which the termination date occurs, plus 
the aggregate total of shortfall amortization install-
ments (if any) determined for succeeding plan years 
under section 303(c)(2) of this Act and section 
430(d)(2) of such Code (which, for purposes of this 
subparagraph, shall include any increase in such 
sum which would result if all applications for waiv-
ers of the minimum funding standard under section 
302(c) of this Act and section 412(c) of such Code 
which are pending with respect to such plan were 
denied and if no additional contributions (other than 
those already made by the termination date) were
107
made for the plan year in which the termination 
date occurs or for any previous plan year), and 
‘‘(2) the sum of the waiver amortization charge 
(within the meaning of section 303(e)(1) of this Act 
and 430(e)(1) of the Internal Revenue Code of 
1986) with respect to the plan (if any) for the plan 
year in which the termination date occurs, plus the 
aggregate total of waiver amortization installments 
(if any) determined for succeeding plan years under 
section 303(e)(2) of this Act and section 430(e)(2) 
of such Code,’’; 
(5) in section 4071 (29 U.S.C. 1371), by strik-
ing ‘‘302(f)(4)’’ and inserting ‘‘303(k)(4)’’; 
(6) in section 4243(a)(1)(B) (29 U.S.C. 
1423(a)(1)(B)), by striking ‘‘302(a)’’ and inserting 
‘‘304(a)’’, and, in clause (i), by striking ‘‘302(a)’’ 
and inserting ‘‘304(a)’’; 
(7) 
in 
section 
4243(f)(1) 
(29 
U.S.C. 
1423(f)(1)), by striking ‘‘303(a)’’ and inserting 
‘‘302(c)’’; 
(8) 
in 
section 
4243(f)(2) 
(29 
U.S.C. 
1423(f)(2)), by striking ‘‘303(c)’’ and inserting 
‘‘302(c)(3)’’; and 
(9) in section 4243(g) (29 U.S.C. 1423(g)), by 
striking ‘‘302(c)(3)’’ and inserting ‘‘304(c)(3)’’.
108
(c) AMENDMENTS TO REORGANIZATION PLAN NO. 4 
OF 1978.—Section 106(b)(ii) of Reorganization Plan No. 
4 of 1978 (ratified and affirmed as law by Public Law 
98–532 (98 Stat. 2705)) is amended by striking 
‘‘302(c)(8)’’ and inserting ‘‘302(d)(2)’’, by striking 
‘‘304(a) and (b)(2)(A)’’ and inserting ‘‘304(d)(1), (d)(2), 
and (e)(2)(A)’’, and by striking ‘‘412(c)(8), (e), and 
(f)(2)(A)’’ and inserting ‘‘412(c)(2) and 431(d)(1), (d)(2), 
and (e)(2)(A)’’. 
(d) REPEAL
OF EXPIRED AUTHORITY
FOR TEM-
PORARY VARIANCES.—Section 207 of such Act (29 U.S.C. 
1057) is repealed. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after 2007. 
Subtitle B—Amendments to 
Internal Revenue Code of 1986
SEC. 111. MINIMUM FUNDING STANDARDS. 
(a) NEW MINIMUM FUNDING STANDARDS.—Section 
412 of the Internal Revenue Code of 1986 (relating to 
minimum funding standards) is amended to read as fol-
lows: 
‘‘SEC. 412. MINIMUM FUNDING STANDARDS. 
‘‘(a) REQUIREMENT TO MEET MINIMUM FUNDING 
STANDARD.—
109
‘‘(1) IN GENERAL.—A plan to which this sec-
tion 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 
satisfying the minimum funding standard for a plan 
year if—
‘‘(A) in the case of a defined benefit plan 
which is not a multiemployer 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 430 for the plan for 
the plan year, 
‘‘(B) in the case of a money purchase plan 
which is not a multiemployer 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
110
under section 431 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 
under paragraphs (3) and (4) of section 430(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.—If 
the employer referred to in paragraph (1) is a mem-
ber of a controlled group, each member of such 
group shall be jointly and severally liable for pay-
ment of such contributions. 
‘‘(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
111
without temporary substantial business 
hardship (substantial business hardship in 
the case of a multiemployer plan), and 
‘‘(ii) application of the standard would 
be adverse to the interests of plan partici-
pants in the aggregate, 
the Secretary 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 standard. The Sec-
retary shall not waive the minimum funding 
standard with respect to a plan for more than 
3 of any 15 (5 of any 15 in the case of a multi-
employer 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 defined benefit 
plan which is not a multiemployer plan, 
the minimum required contribution under 
section 430 for the plan year shall be re-
duced by the amount of the waived funding 
deficiency and such amount shall be amor-
tized as required under section 430(e), and
112
‘‘(ii) in the case of a multiemployer 
plan, the funding standard account shall 
be credited under section 431(b)(3)(C) 
with the amount of the waived funding de-
ficiency and such amount shall be amor-
tized 
as 
required 
under 
section 
431(b)(2)(C). 
‘‘(C) WAIVER
OF
AMORTIZED
PORTION 
NOT ALLOWED.—The Secretary 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,
113
‘‘(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 
‘‘(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 section and part III of this subchapter, 
the term ‘waived funding deficiency’ means the por-
tion of the minimum funding standard under sub-
section (a) (determined without regard to the waiv-
er) for a plan year waived by the Secretary and not 
satisfied by employer 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 
may require an employer maintaining a de-
fined benefit plan which is a single-em-
ployer plan (within the meaning of section 
4001(a)(15) of the Employee Retirement 
Income Security Act of 1974) to provide
114
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 
of the Corporation, by a contributing spon-
sor 
(within 
the 
meaning 
of 
section 
4001(a)(13) of the Employee Retirement 
Income Security Act of 1974), or a mem-
ber of such sponsor’s controlled group 
(within the meaning of section 4001(a)(14) 
of such Act). 
‘‘(B) CONSULTATION WITH THE PENSION 
BENEFIT GUARANTY CORPORATION.—Except as 
provided in subparagraph (C), the Secretary 
shall, before granting or modifying a waiver 
under this subsection with respect to a plan de-
scribed 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
115
‘‘(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 
section 3(4) of the Employee Retire-
ment Income Security Act of 1974) 
representing participants in the plan 
which are submitted in writing to the 
Secretary in connection with such ap-
plication. 
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). 
‘‘(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—
116
‘‘(I) the aggregate unpaid min-
imum required contributions (within 
the meaning of section 4971(c)(4)) 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 
430(e)(2), 
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. 
‘‘(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 defined benefit plan 
which is not a multiemployer plan, no waiver
117
may be granted under this subsection with re-
spect to any plan for any plan year unless an 
application therefor is submitted to the Sec-
retary 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 
defined benefit plan which is not a multiem-
ployer plan, if an employer is a member of a 
controlled group, the temporary substantial 
business hardship requirements of paragraph 
(1) shall be treated as met only if such require-
ments are met—
‘‘(i) with respect to such employer, 
and 
‘‘(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 may provide that an analysis of 
a trade or business or industry of a member 
need not be conducted if the Secretary deter-
mines such analysis is not necessary because 
the taking into account of such member would
118
not significantly affect the determination under 
this paragraph. 
‘‘(6) ADVANCE NOTICE.—
‘‘(A) IN GENERAL.—The Secretary shall, 
before granting a waiver under this subsection, 
require each applicant to provide evidence satis-
factory to the Secretary that the applicant has 
provided notice of the filing of the application 
for such waiver to each affected party (as de-
fined in section 4001(a)(21) of the Employee 
Retirement Income Security Act of 1974). Such 
notice shall include a description of the extent 
to which the plan is funded for benefits which 
are guaranteed under title IV of the Employee 
Retirement Income Security Act of 1974 and 
for benefit liabilities. 
‘‘(B) CONSIDERATION
OF
RELEVANT
IN-
FORMATION.—The Secretary 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
119
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 431(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.—Subparagraph 
(A) 
shall not apply to any plan amendment which—
‘‘(i) the Secretary determines to be 
reasonable and which provides 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. 
‘‘(d) MISCELLANEOUS RULES.—
120
‘‘(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. 
‘‘(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), 
‘‘(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-
121
trator files a notice with the Secretary notifying him 
of such amendment and the Secretary has approved 
such amendment, or within 90 days after the date 
on which such notice was filed, failed to disapprove 
such amendment. No amendment described in this 
subsection shall be approved by the Secretary unless 
the Secretary determines that such amendment is 
necessary because of a temporary substantial busi-
ness hardship (as determined under subsection 
(c)(2)) or a substantial business hardship (as so de-
termined) in the case of a multiemployer plan and 
that a waiver under subsection (c) (or, in the case 
of a multiemployer plan, any extension of the amor-
tization period under section 431(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. 
‘‘(e) PLANS TO WHICH SECTION APPLIES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (4), this section applies to a plan if, 
for any plan year beginning on or after the effective 
date of this section for such plan under the Em-
ployee Retirement Income Security Act of 1974—
122
‘‘(A) such plan included a trust which 
qualified (or was determined by the Secretary 
to have qualified) under section 401(a), or 
‘‘(B) such plan satisfied (or was deter-
mined by the Secretary to have satisfied) the 
requirements of section 403(a). 
‘‘(2) EXCEPTIONS.—This section shall not 
apply to—
‘‘(A) any profit-sharing or stock bonus 
plan, 
‘‘(B) any insurance contract plan described 
in paragraph (3), 
‘‘(C) any governmental plan (within the 
meaning of section 414(d)), 
‘‘(D) any church plan (within the meaning 
of section 414(e)) with respect to which the 
election provided by section 410(d) has not been 
made, 
‘‘(E) any plan which has not, at any time 
after September 2, 1974, provided for employer 
contributions, or 
‘‘(F) any plan established and maintained 
by a society, order, or association described in 
section 501(c)(8) or (9), if no part of the con-
123
tributions to or under such plan are made by 
employers of participants in such plan. 
No plan described in subparagraph (C), (D), or (F) 
shall be treated as a qualified plan for purposes of 
section 401(a) unless such plan meets the require-
ments of section 401(a)(7) as in effect on September 
1, 1974. 
‘‘(3) CERTAIN INSURANCE CONTRACT PLANS.—
A plan is described in this paragraph if—
‘‘(A) the plan is funded exclusively by the 
purchase of individual insurance contracts, 
‘‘(B) such contracts provide for level an-
nual premium payments to be paid extending 
not later than the retirement age for each indi-
vidual participating in the plan, and com-
mencing with the date the individual became a 
participant in the plan (or, in the case of an in-
crease in benefits, commencing at the time such 
increase becomes effective), 
‘‘(C) benefits provided by the plan are 
equal to the benefits provided under each con-
tract at normal retirement age under the plan 
and are guaranteed by an insurance carrier (li-
censed under the laws of a State to do business
124
with the plan) to the extent premiums have 
been paid, 
‘‘(D) premiums payable for the plan year, 
and all prior plan years, under such contracts 
have been paid before lapse or there is rein-
statement of the policy, 
‘‘(E) no rights under such contracts have 
been subject to a security interest at any time 
during the plan year, and 
‘‘(F) no policy loans are outstanding at 
any time during the plan year. 
A plan funded exclusively by the purchase of group 
insurance contracts which is determined under regu-
lations prescribed by the Secretary to have the same 
characteristics as contracts described in the pre-
ceding sentence shall be treated as a plan described 
in this paragraph. 
‘‘(4) CERTAIN
TERMINATED
MULTIEMPLOYER 
PLANS.—This section applies with respect to a ter-
minated multiemployer plan to which section 4021 
of the Employee Retirement Income Security Act of 
1974 applies until the last day of the plan year in 
which the plan terminates (within the meaning of 
section 4041A(a)(2) of such Act).’’.
125
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2007. 
SEC. 112. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS. 
(a) IN GENERAL.—Subchapter D of chapter 1 of the 
Internal Revenue Code of 1986 (relating to deferred com-
pensation, etc.) is amended by adding at the end the fol-
lowing new part: 
‘‘PART III—MINIMUM FUNDING STANDARDS FOR 
SINGLE-EMPLOYER DEFINED BENEFIT PEN-
SION PLANS 
‘‘SEC. 430. MINIMUM FUNDING STANDARDS FOR SINGLE-
EMPLOYER 
DEFINED 
BENEFIT 
PENSION 
PLANS. 
‘‘(a) MINIMUM
REQUIRED
CONTRIBUTION.—For 
purposes of this section and section 412(a)(2)(A), except 
as provided in subsection (f), the term ‘minimum required 
contribution’ means, with respect to any plan year of a 
defined benefit plan which is not a multiemployer 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—
126
‘‘(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)) equals or exceeds the funding target of 
the plan for the plan year, the target normal cost of 
the plan for the plan year reduced (but not below 
zero) by such excess. 
‘‘(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 
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.
127
‘‘(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 (not less than 
zero) of the shortfall amortization installments for 
such plan year with respect to the shortfall amorti-
zation bases for such plan year and each of the 6 
preceding plan years. 
‘‘(2) 
SHORTFALL
AMORTIZATION
INSTALL-
MENT.—For purposes of paragraph (1)—
‘‘(A) DETERMINATION.—The shortfall am-
ortization installments are the amounts nec-
essary to amortize the shortfall amortization 
base of the plan for any plan year in level an-
nual installments over the 7-plan-year period 
beginning with such plan year. 
‘‘(B) 
SHORTFALL
INSTALLMENT.—The 
shortfall amortization installment for any plan 
year in the 7-plan-year period under subpara-
graph (A) with respect to any shortfall amorti-
zation base is the annual installment deter-
mined under subparagraph (A) for that year for 
that base. 
‘‘(C) SEGMENT
RATES.—In determining 
any shortfall amortization installment under
128
this paragraph, 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 sub-
section (h)(2). 
‘‘(3) SHORTFALL
AMORTIZATION
BASE.—For 
purposes of this section, the shortfall amortization 
base of a plan for a plan year is—
‘‘(A) the funding shortfall of such plan for 
such plan year, minus 
‘‘(B) the present value (determined using 
the segment rates determined under subpara-
graph (C) of subsection (h)(2), applied under 
rules similar to the rules of subparagraph (B) 
of subsection (h)(2)) of the aggregate total of 
the shortfall amortization installments and 
waiver amortization installments which have 
been determined for such plan year and any 
succeeding plan year with respect to the short-
fall amortization bases and waiver amortization 
bases of the plan for any plan year 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—