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
‘‘(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
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.—Subparagraph 
(A) 
shall not apply to any plan amendment which—
‘‘(i) the Secretary of the Treasury de-
termines to be reasonable and which pro-
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),
‘‘(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 temporary substantial business hard-
ship (as determined under subsection (c)(2)) or a 
substantial business hardship (as so determined) in 
the case of a multiemployer plan and that a waiver
under subsection (c) (or, in the case of a multiem-
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 2007. 
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 by insert-
ing after section 302 the following new section: 
‘‘SEC. 303. MINIMUM FUNDING STANDARDS FOR SINGLE-
EMPLOYER 
DEFINED 
BENEFIT 
PENSION 
PLANS. 
‘‘(a) MINIMUM
REQUIRED
CONTRIBUTION.—For 
purposes of this section and section 302(a)(2)(A), except
as provided in subsection (f), the 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); or 
‘‘(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. 
‘‘(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 
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—
‘‘(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. 
‘‘(B) TRANSITION RULE.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (iii) and (iv), in the case 
of plan years beginning after 2007 and be-
fore 2011, only the applicable percentage 
of the funding target shall be taken into 
account under paragraph (3)(A) in deter-
mining the funding shortfall for the plan 
year for purposes of subparagraph (A). 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of subparagraph (A), the applica-
ble percentage shall be determined in ac-
cordance with the following table:
‘‘In the case of a plan year 
The applicable 
beginning in calendar year: 
percentage is 
2008 ...................................................................................................
2009 ...................................................................................................
2010 ...................................................................................................
96.
‘‘(iii) LIMITATION.—Clause (i) shall 
not apply with respect to any plan year 
after 2008 unless the shortfall amortiza-
tion base for each of the preceding years 
beginning after 2007 was zero (determined 
after application of this subparagraph). 
‘‘(iv) TRANSITION RELIEF NOT AVAIL-
ABLE FOR NEW OR DEFICIT REDUCTION 
PLANS.—Clause (i) shall not apply to a 
plan—
‘‘(I) which was not in effect for a 
plan year beginning in 2007, or 
‘‘(II) which was in effect for a 
plan year beginning in 2007 and
which was subject to section 302(d) 
(as in effect for plan years beginning 
in 2007), determined after the appli-
cation of paragraphs (6) and (9) 
thereof. 
‘‘(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. 
‘‘(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 benefits accrued or earned 
under the plan as of the beginning of 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. 
‘‘(2) WAIVER AMORTIZATION INSTALLMENT.—
For purposes of paragraph (1)—
‘‘(A) DETERMINATION.—The waiver amor-
tization installments are the amounts necessary 
to amortize the waiver amortization base of the 
plan for any plan year in level annual install-
ments over a period of 5 plan years beginning 
with the succeeding plan year. 
‘‘(B) WAIVER INSTALLMENT.—The waiver 
amortization installment for any plan year in 
the 5-year period under subparagraph (A) with 
respect to any waiver amortization base is the
annual installment determined under subpara-
graph (A) for that year for that 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-
ortization charge for such plan year and succeeding 
plan years, the waiver amortization bases for all pre-
ceding plan years (and all waiver amortization in-
stallments determined with respect to such bases) 
shall be reduced to zero. 
‘‘(f) REDUCTION OF MINIMUM REQUIRED CONTRIBU-
TION BY PREFUNDING BALANCE AND FUNDING STAND-
ARD CARRYOVER BALANCE.—
‘‘(1) ELECTION TO MAINTAIN BALANCES.—
‘‘(A) PREFUNDING
BALANCE.—The plan 
sponsor of a single-employer plan may elect to 
maintain a prefunding balance. 
‘‘(B) FUNDING
STANDARD
CARRYOVER 
BALANCE.—
‘‘(i) IN GENERAL.—In the case of a 
single-employer plan described in clause 
(ii), the plan sponsor may elect to maintain 
a funding standard carryover balance, until 
such balance is reduced to zero. 
‘‘(ii) PLANS
MAINTAINING
FUNDING 
STANDARD ACCOUNT IN 2007.—A plan is 
described in this clause if the plan—
‘‘(I) was in effect for a plan year 
beginning in 2007, and 
‘‘(II) 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. 
‘‘(2) 
APPLICATION
OF
BALANCES.—A 
prefunding balance and a funding standard carry-
over balance maintained pursuant to this para-
graph—