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are made to or under the plan during the plan
year but before the valuation date for the plan
year, the assets of the plan as of the valuation
date shall not include—
‘‘(i) such contributions, and
‘‘(ii) interest on such contributions for
the period between the date of the contribu-
tions and the valuation date, determined by
using the effective interest rate for the plan
year.
‘‘(h) ACTUARIAL ASSUMPTIONS AND METHODS.—
‘‘(1) IN GENERAL.—Subject to this subsection,
the determination of any present value or other com-
putation under this section shall be made on the basis
of actuarial assumptions and methods—
‘‘(A) each of which is reasonable (taking
into account the experience of the plan and rea-
sonable expectations), and
‘‘(B) which, in combination, offer the actu-
ary’s best estimate of anticipated experience
under the plan.
‘‘(2) INTEREST RATES.—
‘‘(A) EFFECTIVE
INTEREST
RATE.—For
purposes of this section, the term ‘effective inter-
est rate’ means, with respect to any plan for any
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plan year, the single rate of interest which, if
used to determine the present value of the plan’s
accrued or earned benefits referred to in sub-
section (d)(1), would result in an amount equal
to the funding target of the plan for such plan
year.
‘‘(B) INTEREST RATES FOR DETERMINING
FUNDING TARGET.—For purposes of determining
the funding target of a plan for any plan year,
the interest rate used in determining the present
value of the benefits of the plan shall be—
‘‘(i) in the case of benefits reasonably
determined to be payable during the 5-year
period beginning on the first day of the
plan year, the first segment rate with re-
spect to the applicable month,
‘‘(ii) in the case of benefits reasonably
determined to be payable during the 15-year
period beginning at the end of the period
described in clause (i), the second segment
rate with respect to the applicable month,
and
‘‘(iii) in the case of benefits reasonably
determined to be payable after the period
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described in clause (ii), the third segment
rate with respect to the applicable month.
‘‘(C) SEGMENT
RATES.—For purposes of
this paragraph—
‘‘(i) FIRST SEGMENT RATE.—The term
‘first segment rate’ means, with respect to
any month, the single rate of interest which
shall be determined by the Secretary of the
Treasury for such month on the basis of the
corporate bond yield curve for such month,
taking into account only that portion of
such yield curve which is based on bonds
maturing during the 5-year period com-
mencing with such month.
‘‘(ii) SECOND
SEGMENT
RATE.—The
term ‘second segment rate’ means, with re-
spect to any month, the single rate of inter-
est which shall be determined by the Sec-
retary of the Treasury for such month on
the basis of the corporate bond yield curve
for such month, taking into account only
that portion of such yield curve which is
based on bonds maturing during each of the
years in the 15-year period beginning at the
end of the period described in clause (i).
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‘‘(iii) THIRD
SEGMENT
RATE.—The
term ‘third segment rate’ means, with re-
spect to any month, the single rate of inter-
est which shall be determined by the Sec-
retary of the Treasury for such month on
the basis of the corporate bond yield curve
for such month, taking into account only
that portion of such yield curve which is
based on bonds maturing during periods be-
ginning after the period described in clause
(ii).
‘‘(D) CORPORATE BOND YIELD CURVE.—The
term ‘corporate bond yield curve’ means, with re-
spect to any month, a yield curve which is pre-
scribed by the Secretary of the Treasury for such
month and which reflects the average, for the 12-
month period ending with the month preceding
such month, of yields on investment grade cor-
porate bonds with varying maturities.
‘‘(E) APPLICABLE MONTH.—For purposes of
this paragraph, the term ‘applicable month’
means, with respect to any plan for any plan
year, the month which includes the valuation
date of such plan for such plan year or, at the
election of the plan administrator, any of the 4
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months which precede such month. Any election
made under this subparagraph shall apply to the
plan year for which the election is made and all
succeeding plan years, unless the election is re-
voked with the consent of the Secretary of the
Treasury.
‘‘(F) PUBLICATION
REQUIREMENTS.—The
Secretary of the Treasury shall publish for each
month the corporate bond yield curve for such
month and each of the rates determined under
this paragraph for such month. The Secretary of
the Treasury shall also publish a description of
the methodology used to determine such yield
curve and such rates which is sufficiently de-
tailed to enable plans to make reasonable projec-
tions regarding the yield curve and such rates
for future months based on the plan’s projection
of future interest rates.
‘‘(G) TRANSITION RULE.—
‘‘(i) IN
GENERAL.—Notwithstanding
the preceding provisions of this paragraph,
for plan years beginning in 2007 or 2008,
the first, second, or third segment rate for a
plan with respect to any month shall be
equal to the sum of—