‘‘(A) IN GENERAL.—The plan sponsor of a 
pension plan to which this paragraph applies 
shall maintain a funding standard carryover 
balance for purposes of this subsection. Such 
balance shall consist of a beginning balance de-
termined under subparagraph (C), decreased to 
the extent provided in subparagraph (D), and 
adjusted further as provided in paragraph (3). 
‘‘(B) PLANS TO WHICH THIS PARAGRAPH 
APPLIES.—This paragraph applies to any plan 
which—
‘‘(i) is a single-employer plan subject 
to this part, 
‘‘(ii) was in effect for a plan year be-
ginning in 2005, and 
‘‘(iii) had a positive balance in the 
funding standard account under section 
302(b) as in effect for such plan year and 
determined as of the end of such plan year. 
‘‘(C) BEGINNING
BALANCE.—The begin-
ning balance of the funding standard carryover 
balance shall be the positive balance described 
in subparagraph (B)(iii). 
‘‘(D) DECREASES.—As of the valuation 
date for each plan year after 2006, the funding
standard carryover balance of a plan shall be 
decreased (but not below zero) by the sum of—
‘‘(i) the amount credited under sub-
section (a)(4) (if any) in reducing the min-
imum required contribution of the plan for 
the preceding plan year, and 
‘‘(ii) the amount elected by the plan 
sponsor as a reduction in the funding 
standard carryover balance (for purposes 
of the determination under subsection 
(e)(1) and any other purpose under this 
section). 
‘‘(3) ADJUSTMENTS.—In determining the pre-
funding balance or the funding standard carryover 
balance of a plan as of the valuation date of the plan 
(before applying any increase or decrease under 
paragraph (1) or (2)), the plan sponsor shall, in ac-
cordance with regulations which shall be prescribed 
by the Secretary of the Treasury, adjust such bal-
ance of the plan so as to reflect the rate of net gain 
or loss (determined, notwithstanding subsection 
(e)(4), on the basis of fair market value) experienced 
by all plan assets for the period beginning with the 
valuation date for the preceding plan year and end-
ing with the date preceding the valuation date for
the current plan year, properly taking into account, 
in accordance with such regulations, all contribu-
tions, distributions, and other plan payments made 
during such period. 
‘‘(4) ELECTIONS.—Except as otherwise pro-
vided in this subsection, any election made under 
this subsection shall be made at such time and in 
such form and manner as the Secretary of the 
Treasury may provide. 
‘‘(5) COORDINATION WITH WAIVERS.—For pur-
poses of this subsection, the term ‘minimum re-
quired contribution’ means for any plan year the 
minimum required contribution for such plan year 
determined without regard to this subsection and by 
taking into account any waiver under section 302(c) 
and any waiver amortization charge under sub-
section (j) for such plan year. 
‘‘(i) PAYMENT OF MINIMUM REQUIRED CONTRIBU-
TIONS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the due date for any payment of any minimum 
required contribution for any plan year shall be 81⁄2 
months after the close of the plan year. 
‘‘(2) INTEREST.—Any payment required under 
paragraph (1) for a plan year made after the valu-
ation date for such plan year shall be increased by 
interest, for the period from the valuation date to 
the payment date, at the effective rate of interest for 
the plan for such plan year. 
‘‘(3) ACCELERATED QUARTERLY CONTRIBUTION 
SCHEDULE FOR UNDERFUNDED PLANS.—
‘‘(A) INTEREST PENALTY FOR FAILURE TO 
MEET
ACCELERATED
QUARTERLY
PAYMENT 
SCHEDULE.—In any case in which the plan has 
a funding shortfall for the preceding plan year, 
if the required installment is not paid in full, 
then the minimum required contribution for the 
plan year (as increased under paragraph (2)) 
shall be further increased by an amount equal 
to the interest on the amount of the under-
payment for the period of the underpayment, 
using an interest rate equal to the excess of—
‘‘(i) 175 percent of the Federal mid-
term rate (as in effect under section 1274 
of the Internal Revenue Code of 1986 for 
the 1st month of such plan year), over 
‘‘(ii) the effective rate of interest for 
the plan for the plan year.
‘‘(B) AMOUNT
OF
UNDERPAYMENT, PE-
RIOD
OF
UNDERPAYMENT.—For purposes of 
subparagraph (A)—
‘‘(i) AMOUNT.—The amount of the 
underpayment shall be the excess of—
‘‘(I) the required installment, 
over 
‘‘(II) the amount (if any) of the 
installment contributed to or under 
the plan on or before the due date for 
the installment. 
‘‘(ii) PERIOD OF UNDERPAYMENT.—
The period for which any interest is 
charged under this paragraph with respect 
to any portion of the underpayment shall 
run from the due date for the installment 
to the date on which such portion is con-
tributed to or under the plan. 
‘‘(iii) ORDER
OF
CREDITING
CON-
TRIBUTIONS.—For 
purposes 
of 
clause 
(i)(II), contributions shall be credited 
against unpaid required installments in the 
order in which such installments are re-
quired to be paid.