of title II of the Social Security Act and 
the regulations thereunder. 
‘‘(iii) PERIODIC REVISION.—The Sec-
retary of the Treasury shall (at least every 
10 years) make revisions in any table in ef-
fect under clause (i) to reflect the actual 
experience of pension plans and projected 
trends in such experience. 
‘‘(4) PROBABILITY OF BENEFIT PAYMENTS IN 
THE FORM OF LUMP SUMS OR OTHER OPTIONAL 
FORMS.—For purposes of determining any present 
value or making any computation under this section, 
there shall be taken into account— 
‘‘(A) the probability that future benefit 
payments under the plan will be made in the 
form of optional forms of benefits provided 
under the plan (including lump sum distribu-
tions, determined on the basis of the plan’s ex-
perience and other related assumptions), and 
‘‘(B) any difference in the present value of 
such future benefit payments resulting from the 
use of actuarial assumptions, in determining 
benefit payments in any such optional form of 
benefits, which are different from those speci-
fied in this subsection. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
‘‘(5) APPROVAL OF LARGE CHANGES IN ACTU-
ARIAL ASSUMPTIONS.— 
‘‘(A) IN GENERAL.—No actuarial assump-
tion used to determine the funding target for a 
plan to which this paragraph applies may be 
changed without the approval of the Secretary 
of the Treasury. 
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a plan 
only if— 
‘‘(i) the plan is a single-employer plan 
to which title IV applies, 
‘‘(ii) the aggregate unfunded vested 
benefits as of the close of the preceding 
plan year (as determined under section 
4006(a)(3)(E)(iii)) of such plan and all 
other plans maintained by the contributing 
sponsors 
(as 
defined 
in 
section 
4001(a)(13)) and members of such spon-
sors’ controlled groups (as defined in sec-
tion 4001(a)(14)) which are covered by 
title IV (disregarding plans with no un-
funded 
vested 
benefits) 
exceed 
$50,000,000, and 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
‘‘(iii) the change in assumptions (de-
termined after taking into account any 
changes in interest rate and mortality 
table) results in a decrease in the funding 
shortfall of the plan for the current plan 
year that exceeds $50,000,000, or that ex-
ceeds $5,000,000 and that is 5 percent or 
more of the funding target of the plan be-
fore such change. 
‘‘(i) SPECIAL RULES FOR AT-RISK PLANS.— 
‘‘(1) FUNDING TARGET FOR PLANS IN AT-RISK 
STATUS.— 
‘‘(A) IN GENERAL.—In the case of a plan 
which is in at-risk status for a plan year, the 
funding target of the plan for the plan year 
shall be equal to the sum of— 
‘‘(i) the present value of all benefits 
accrued or earned under the plan as of the 
beginning of the plan year, as determined 
by using the additional actuarial assump-
tions described in subparagraph (B), and 
‘‘(ii) in the case of a plan which also 
has been in at-risk status for at least 2 of 
the 4 preceding plan years, a loading fac-
tor determined under subparagraph (C). 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
‘‘(B) ADDITIONAL
ACTUARIAL
ASSUMP-
TIONS.—The actuarial assumptions described in 
this subparagraph are as follows: 
‘‘(i) All employees who are not other-
wise assumed to retire as of the valuation 
date but who will be eligible to elect bene-
fits during the plan year and the 10 suc-
ceeding plan years shall be assumed to re-
tire at the earliest retirement date under 
the plan but not before the end of the plan 
year for which the at-risk funding target 
and at-risk target normal cost are being 
determined. 
‘‘(ii) All employees shall be assumed 
to elect the retirement benefit available 
under the plan at the assumed retirement 
age (determined after application of clause 
(i)) which would result in the highest 
present value of benefits. 
‘‘(C) LOADING FACTOR.—The loading fac-
tor applied with respect to a plan under this 
paragraph for any plan year is the sum of— 
‘‘(i) $700, times the number of par-
ticipants in the plan, plus 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
‘‘(ii) 4 percent of the funding target 
(determined without regard to this para-
graph) of the plan for the plan year. 
‘‘(2) TARGET
NORMAL
COST
OF
AT-RISK 
PLANS.—In the case of a plan which is in at-risk 
status for a plan year, the target normal cost of the 
plan for such plan year shall be equal to the sum 
of— 
‘‘(A) the present value of all benefits which 
are expected to accrue or be earned under the 
plan during the plan year, determined using the 
additional actuarial assumptions described in 
paragraph (1)(B), plus 
‘‘(B) in the case of a plan which also has 
been in at-risk status for at least 2 of the 4 
preceding plan years, a loading factor equal to 
4 percent of the target normal cost (determined 
without regard to this paragraph) of the plan 
for the plan year. 
‘‘(3) MINIMUM AMOUNT.—In no event shall— 
‘‘(A) the at-risk funding target be less 
than the funding target, as determined without 
regard to this subsection, or 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
‘‘(B) the at-risk target normal cost be less 
than the target normal cost, as determined 
without regard to this subsection. 
‘‘(4) DETERMINATION OF AT-RISK STATUS.— 
For purposes of this subsection— 
‘‘(A) IN GENERAL.—A plan is in at-risk 
status for a plan year if— 
‘‘(i) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section without regard 
to this subsection) is less than 80 percent, 
and 
‘‘(ii) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section by using the 
additional actuarial assumptions described 
in paragraph (1)(B) in computing the 
funding target) is less than 70 percent. 
‘‘(B) TRANSITION RULE.—In the case of 
plan years beginning in 2008, 2009, and 2010, 
subparagraph (A)(i) shall be applied by sub-
stituting the following percentages for ‘80 per-
cent’: 
‘‘(i) 65 percent in the case of 2008. 
‘‘(ii) 70 percent in the case of 2009. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS