329
‘‘(iii) the plan has an accumulated 
funding deficiency for the current plan 
year, or is projected to have such a defi-
ciency for any of the 4 succeeding plan 
years, not taking into account any exten-
sion of amortization periods under section 
431(d). 
‘‘(D) A plan is described in this subpara-
graph if the sum of—
‘‘(i) the fair market value of plan as-
sets, plus 
‘‘(ii) the present value of the reason-
ably anticipated employer contributions for 
the current plan year and each of the 4 
succeeding plan years, assuming that the 
terms of all collective bargaining agree-
ments pursuant to which the plan is main-
tained for the current plan year continue 
in effect for succeeding plan years, 
is less than the present value of all benefits pro-
jected to be payable under the plan during the 
current plan year and each of the 4 succeeding 
plan years (plus administrative expenses for 
such plan years).
330
‘‘(3) ANNUAL CERTIFICATION BY PLAN ACTU-
ARY.—
‘‘(A) IN
GENERAL.—Not later than the 
90th day of each plan year of a multiemployer 
plan, the plan actuary shall certify to the Sec-
retary and to the plan sponsor—
‘‘(i) whether or not the plan is in en-
dangered status for such plan year and 
whether or not the plan is or will be in 
critical status for such plan year, and 
‘‘(ii) in the case of a plan which is in 
a funding improvement or rehabilitation 
period, whether or not the plan is making 
the scheduled progress in meeting the re-
quirements of its funding improvement or 
rehabilitation plan. 
‘‘(B) ACTUARIAL PROJECTIONS OF ASSETS 
AND LIABILITIES.—
‘‘(i) IN GENERAL.—In making the de-
terminations and projections under this 
subsection, the plan actuary shall make 
projections required for the current and 
succeeding plan years of the current value 
of the assets of the plan and the present 
value of all liabilities to participants and
331
beneficiaries under the plan for the current 
plan year as of the beginning of such year. 
The actuary’s projections shall be based on 
reasonable actuarial estimates, assump-
tions, and methods that, except as pro-
vided in clause (iii), offer the actuary’s 
best estimate of anticipated experience 
under the plan. The projected present 
value of liabilities as of the beginning of 
such year shall be determined based on the 
most recent of either—
‘‘(I) the actuarial statement re-
quired under section 103(d) of the 
Employee Retirement Income Security 
Act of 1974 with respect to the most 
recently filed annual report, or 
‘‘(II) the actuarial valuation for 
the preceding plan year. 
‘‘(ii) DETERMINATIONS
OF
FUTURE 
CONTRIBUTIONS.—Any actuarial projection 
of plan assets shall assume—
‘‘(I) reasonably anticipated em-
ployer contributions for the current 
and succeeding plan years, assuming 
that the terms of the one or more col-
332
lective bargaining agreements pursu-
ant to which the plan is maintained 
for the current plan year continue in 
effect for succeeding plan years, or 
‘‘(II) that employer contributions 
for the most recent plan year will con-
tinue indefinitely, but only if the plan 
actuary determines there have been no 
significant demographic changes that 
would make such assumption unrea-
sonable. 
‘‘(iii) PROJECTED
INDUSTRY
ACTIV-
ITY.—Any projection of activity in the in-
dustry or industries covered by the plan, 
including future covered employment and 
contribution levels, shall be based on infor-
mation provided by the plan sponsor, 
which shall act reasonably and in good 
faith. 
‘‘(C) PENALTY FOR FAILURE TO SECURE 
TIMELY ACTUARIAL CERTIFICATION.—Any fail-
ure of the plan’s actuary to certify the plan’s 
status under this subsection by the date speci-
fied in subparagraph (A) shall be treated for 
purposes of section 502(c)(2) of the Employee
333
Retirement Income Security Act of 1974 as a 
failure or refusal by the plan administrator to 
file the annual report required to be filed with 
the Secretary under section 101(b)(4) of such 
Act. 
‘‘(D) NOTICE.—
‘‘(i) IN
GENERAL.—In any case in 
which it is certified under subparagraph 
(A) that a multiemployer plan is or will be 
in endangered or critical status for a plan 
year, the plan sponsor shall, not later than 
30 days after the date of the certification, 
provide notification of the endangered or 
critical status to the participants and bene-
ficiaries, the bargaining parties, the Pen-
sion Benefit Guaranty Corporation, and 
the Secretary of Labor. 
‘‘(ii) PLANS IN CRITICAL STATUS.—If 
it is certified under subparagraph (A) that 
a multiemployer plan is or will be in crit-
ical status, the plan sponsor shall include 
in the notice under clause (i) an expla-
nation of the possibility that—
334
‘‘(I) adjustable benefits (as de-
fined in subsection (e)(8)) may be re-
duced, and 
‘‘(II) such reductions may apply 
to 
participants 
and 
beneficiaries 
whose benefit commencement date is 
on or after the date such notice is 
provided for the first plan year in 
which the plan is in critical status. 
‘‘(iii) MODEL NOTICE.—The Secretary 
of Labor shall prescribe a model notice 
that a multiemployer plan may use to sat-
isfy the requirements under clause (ii). 
‘‘(c) FUNDING
IMPROVEMENT
PLAN
MUST
BE 
ADOPTED FOR MULTIEMPLOYER PLANS IN ENDANGERED 
STATUS.—
‘‘(1) IN
GENERAL.—In any case in which a 
multiemployer plan is in endangered status for a 
plan year, the plan sponsor, in accordance with this 
subsection—
‘‘(A) shall adopt a funding improvement 
plan not later than 240 days following the re-
quired date for the actuarial certification of en-
dangered status under subsection (b)(3)(A), 
and
335
‘‘(B) within 30 days after the adoption of 
the funding improvement plan—
‘‘(i) shall provide to the bargaining 
parties 1 or more schedules showing re-
vised benefit structures, revised contribu-
tion structures, or both, which, if adopted, 
may reasonably be expected to enable the 
multiemployer plan to meet the applicable 
benchmarks in accordance with the fund-
ing improvement plan, including—
‘‘(I) one proposal for reductions 
in the amount of future benefit accru-
als necessary to achieve the applicable 
benchmarks, assuming no amend-
ments increasing contributions under 
the plan (other than amendments in-
creasing contributions necessary to 
achieve the applicable benchmarks 
after amendments have reduced fu-
ture benefit accruals to the maximum 
extent permitted by law), and 
‘‘(II) one proposal for increases 
in contributions under the plan nec-
essary to achieve the applicable bench-
marks, assuming no amendments re-
336
ducing future benefit accruals under 
the plan, and 
‘‘(ii) may, if the plan sponsor deems 
appropriate, prepare and provide the bar-
gaining parties with additional information 
relating to contribution rates or benefit re-
ductions, alternative schedules, or other in-
formation relevant to achieving the appli-
cable benchmarks in accordance with the 
funding improvement plan. 
For purposes of this section, the term ‘applica-
ble benchmarks’ means the requirements appli-
cable to the multiemployer plan under para-
graph (3) (as modified by paragraph (5)). 
‘‘(2) EXCEPTION FOR YEARS AFTER PROCESS 
BEGINS.—Paragraph (1) shall not apply to a plan 
year if such year is in a funding plan adoption pe-
riod or funding improvement period by reason of the 
plan being in endangered status for a preceding plan 
year. For purposes of this section, such preceding 
plan year shall be the initial determination year with 
respect to the funding improvement plan to which it 
relates. 
‘‘(3) FUNDING IMPROVEMENT PLAN.—For pur-
poses of this section—
337
‘‘(A) IN
GENERAL.—A funding improve-
ment plan is a plan which consists of the ac-
tions, including options or a range of options to 
be proposed to the bargaining parties, formu-
lated to provide, based on reasonably antici-
pated experience and reasonable actuarial as-
sumptions, for the attainment by the plan dur-
ing the funding improvement period of the fol-
lowing requirements: 
‘‘(i) INCREASE
IN
PLAN’S
FUNDING 
PERCENTAGE.—The plan’s funded percent-
age as of the close of the funding improve-
ment period equals or exceeds a percentage 
equal to the sum of—
‘‘(I) such percentage as of the 
beginning of such period, plus 
‘‘(II) 33 percent of the difference 
between 100 percent and the percent-
age under subclause (I). 
‘‘(ii) AVOIDANCE
OF
ACCUMULATED 
FUNDING DEFICIENCIES.—No accumulated 
funding deficiency for any plan year during 
the funding improvement period (taking 
into account any extension of amortization 
periods under section 304(d)).
338
‘‘(B) SERIOUSLY ENDANGERED PLANS.—
In the case of a plan in seriously endangered 
status, except as provided in paragraph (5), 
subparagraph (A)(i)(II) shall be applied by sub-
stituting ‘20 percent’ for ‘33 percent’. 
‘‘(4) FUNDING
IMPROVEMENT
PERIOD.—For 
purposes of this section—
‘‘(A) IN GENERAL.—The funding improve-
ment period for any funding improvement plan 
adopted pursuant to this subsection is the 10-
year period beginning on the first day of the 
first plan year of the multiemployer plan begin-
ning after the earlier of—
‘‘(i) the second anniversary of the 
date of the adoption of the funding im-
provement plan, or 
‘‘(ii) the expiration of the collective 
bargaining agreements in effect on the due 
date for the actuarial certification of en-
dangered status for the initial determina-
tion year under subsection (b)(3)(A) and 
covering, as of such due date, at least 75 
percent of the active participants in such 
multiemployer plan.