376 
years, the plan sponsor shall make the 
comparison under this paragraph at least 
annually until the plan sponsor makes a 
determination that the plan will not be 
insolvent in any of the next 5 plan 
years.’’. 
(b) EFFECTIVE
DATE.—The amendments 
made by this section shall apply with respect 
to determinations made in plan years begin-
ning after December 31, 2005. 
TITLE III—OTHER PROVISIONS 
SEC. 301. INTEREST RATE FOR 2006 FUNDING REQUIRE-
MENTS. 
(a) IN GENERAL.—Subclause (II) of section 
412(b)(5)(B)(ii) of the Internal Revenue Code 
of 1986 is amended— 
(1) by striking ‘‘January 1, 2006’’ and 
inserting ‘‘January 1, 2007’’, and 
(2) by striking ‘‘AND 2005’’ in the head-
ing and inserting ‘‘, 2005, AND 2006’’. 
(b) CURRENT LIABILITY.—Subclause (IV) of 
section 412(l)(7)(C)(i) of such Code is amend-
ed— 
(1) by striking ‘‘or 2005’’ and inserting 
‘‘, 2005, or 2006’’, and
377 
(2) by striking ‘‘AND 2005’’ in the head-
ing and inserting ‘‘, 2005, AND 2006’’. 
(c) EFFECTIVE
DATE.—The amendments 
made by this section shall apply to plan years 
beginning after December 31, 2005. 
SEC. 302. INTEREST RATE ASSUMPTION FOR DETERMINA-
TION OF LUMP SUM DISTRIBUTIONS. 
(a) AMENDMENTS TO EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—[See section 
301(a) of the bill as reported by the Com-
mittee on Education and the Workforce.] 
(b) AMENDMENTS
TO
INTERNAL
REVENUE 
CODE OF 1986.—Section 417(e)(3)(A) of the In-
ternal Revenue Code of 1986 is amended by 
striking clause (ii) and inserting the fol-
lowing: 
‘‘(ii) For purposes of clause (i), 
the 
term 
‘applicable 
mortality 
table’ means a mortality table, 
modified as appropriate by the 
Secretary, based on the mortality 
table specified for the plan year 
under section 430(h)(3). 
‘‘(iii) For purposes of clause 
(i), the term ‘applicable interest
378 
rate’ means the adjusted first, sec-
ond, and third segment rates ap-
plied under rules similar to the 
rules of section 430(h)(2)(C) for 
the month before the date of the 
distribution or such other time as 
the Secretary may by regulations 
prescribe. 
‘‘(iv) For purposes of clause 
(iii), the adjusted first, second, 
and third segment rates are the 
first, second, and third segment 
rates which would be determined 
under section 430(h)(2)(C) if— 
‘‘(I) section 430(h)(2)(D)(i) 
were applied by substituting 
‘the 
yields’ 
for 
‘a 
3-year 
weighted average of yields’, 
‘‘(II) 
section 
430(h)(2)(G)(i)(II) 
were 
ap-
plied by substituting ‘section 
417(e)(3)(A)(ii)(II)’ for ‘section 
412(b)(5)(B)(ii)(II)’, and 
‘‘(III) the applicable per-
centage 
under 
section
379 
430(h)(2)(G) were determined 
in accordance with the fol-
lowing table: 
‘‘In the case of plan years beginning in: 
The applicable 
percentage is:
2007 ..................................................................
20 percent
2008 ..................................................................
40 percent
2009 ..................................................................
60 percent
2010 ..................................................................
80 percent.’’. 
(c) SPECIAL RULE FOR PLAN AMENDMENTS.— 
A plan shall not fail to meet the requirements 
of section 411(d)(6) of the Internal Revenue 
Code of 1986 or section 204(g) of the Employee 
Retirement Income Security Act of 1974 solely 
by reason of the adoption by the plan of an 
amendment necessary to meet the require-
ments of the amendments made by this sec-
tion. 
(d) EFFECTIVE
DATE.—The amendments 
made by this section shall apply with respect 
to plan years beginning after December 31, 
2006.
380 
SEC. 303. INTEREST RATE ASSUMPTION FOR APPLYING 
BENEFIT LIMITATIONS TO LUMP SUM DIS-
TRIBUTIONS. 
(a) IN GENERAL.—Clause (ii) of section 
415(b)(2)(E) of the Internal Revenue Code of 
1986 is amended to read as follows: 
‘‘(ii) For purposes of adjusting 
any benefit under subparagraph 
(B) for any form of benefit subject 
to section 417(e)(3), the interest 
rate assumption shall not be less 
than the greater of— 
‘‘(I) 5.5 percent, 
‘‘(II) the rate that provides 
a benefit of not more than 105 
percent of the benefit that 
would be provided if the ap-
plicable interest rate (as de-
fined 
in 
section 
417(e)(3)) 
were the interest rate as-
sumption, or 
‘‘(III) the rate specified 
under the plan.’’. 
(b) EFFECTIVE
DATE.—The amendment 
made by subsection (a) shall apply to distribu-
381 
tions made in years beginning after December 
31, 2005. 
SEC. 304. DISTRIBUTIONS DURING WORKING RETIREMENT. 
(a) AMENDMENT TO THE EMPLOYEE RETIRE-
MENT INCOME SECURITY ACT OF 1974.—[See sec-
tion 303(a) of the bill as reported by the Com-
mittee on Education and the Workforce.] 
(b) AMENDMENT TO THE INTERNAL REVENUE 
CODE OF 1986.—Subsection (a) of section 401 
of the Internal Revenue Code of 1986 is 
amended by inserting after paragraph (34) 
the following new paragraph: 
‘‘(35) DISTRIBUTIONS
DURING
WORKING 
RETIREMENT.—A trust forming part of a 
pension plan shall not be treated as fail-
ing to constitute a qualified trust under 
this section solely because a distribution 
is made from such trust to an employee 
who has attained age 62 and who is not 
separated from employment at the time 
of such distribution.’’. 
(c) EFFECTIVE
DATE.—The amendments 
made by this section shall apply to distribu-
tions in plan years beginning after December 
31, 2005.
382 
SEC. 305. OTHER AMENDMENTS RELATING TO PROHIBITED 
TRANSACTIONS. 
[See section 304 of the bill as reported by 
the Committee on Education and the Work-
force.] 
SEC. 306. CORRECTION PERIOD FOR CERTAIN TRANS-
ACTIONS INVOLVING SECURITIES AND COM-
MODITIES. 
[See section 305 of the bill as reported by 
the Committee on Education and the Work-
force.] 
SEC. 307. GOVERNMENT ACCOUNTABILITY OFFICE PEN-
SION FUNDING REPORT. 
[See section 306 of the bill as reported by 
the Committee on Education and the Work-
force.] 
TITLE IV—IMPROVEMENTS IN 
PBGC GUARANTEE PROVISIONS 
SEC. 401. INCREASES IN PBGC PREMIUMS. 
(a) 
FLAT-RATE
PREMIUMS.—Section 
4006(a)(3) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1306(a)(3)) is 
amended— 
(1) by striking clause (i) of subpara-
graph (A) and inserting the following:
383 
‘‘(i) in the case of a single-employer 
plan, an amount equal to— 
‘‘(I) for plan years beginning after 
December 31, 1990, and before Janu-
ary 1, 2006, $19, or 
‘‘(II) for plan years beginning 
after December 31, 2005, the amount 
determined under subparagraph (F), 
plus the additional premium (if any) de-
termined under subparagraph (E) for 
each individual who is a participant in 
such plan during the plan year;’’; and 
(2) by adding at the end the following 
new subparagraph: 
‘‘(F)(i) Except as otherwise provided in 
this subparagraph, for purposes of deter-
mining the annual premium rate payable to 
the corporation by a single-employer plan for 
basic benefits guaranteed under this title, the 
amount determined under this subparagraph 
is the greater of $30 or the adjusted amount 
determined under clause (ii). 
‘‘(ii) For plan years beginning after 2006, 
the adjusted amount determined under this
384 
clause is the product derived by multiplying 
$30 by the ratio of— 
‘‘(I) the national average wage index 
(as defined in section 209(k)(1) of the So-
cial Security Act) for the first of the 2 cal-
endar years preceding the calendar year 
in which the plan year begins, to 
‘‘(II) the national average wage index 
(as so defined) for 2004, 
with such product, if not a multiple of $1, 
being rounded to the next higher multiple of 
$1 where such product is a multiple of $0.50 
but not of $1, and to the nearest multiple of 
$1 in any other case. 
‘‘(iii) For purposes of determining the an-
nual premium rate payable to the corporation 
by a single-employer plan for basic benefits 
guaranteed under this title for any plan year 
beginning after 2005 and before 2010— 
‘‘(I) except as provided in subclause 
(II), the premium amount referred to in 
subparagraph (A)(i)(II) for any such plan 
year is the amount set forth in connec-
tion with such plan year in the following 
table:
385 
‘‘If the plan year begins in: 
The amount is: 
2006 ..................................................................
$21.20 
2007 ..................................................................
$23.40 
2008 ..................................................................
$25.60 
2009 ..................................................................
$27.80; or 
‘‘(II) if the plan’s funding target at-
tainment percentage for the plan year 
preceding the current plan year was less 
than 80 percent, the premium amount re-
ferred to in subparagraph (A)(i)(II) for 
such current plan year is the amount set 
forth in connection with such current 
plan year in the following table: 
‘‘If the plan year begins in: 
The amount is:
2006 ..................................................................
$22.67
2007 ..................................................................
$26.33
2008 or 2009 ...................................................
the amount pro-
vided under 
clause (i). 
‘‘(iv) For purposes of this subparagraph, 
the term ‘funding target attainment percent-
age’ has the meaning provided such term in 
section 303(d)(2).’’. 
(b) PREMIUM RATE
FOR CERTAIN TERMI-
NATED
SINGLE-EMPLOYER
PLANS.—Subsection 
(a) of section 4006 of such Act (29 U.S.C. 1306) 
is amended by adding at the end the fol-
lowing:
386 
‘‘(7) PREMIUM RATE
FOR CERTAIN TERMI-
NATED SINGLE-EMPLOYER PLANS.— 
‘‘(A) IN GENERAL.—If there is a termi-
nation of a single-employer plan under 
clause (ii) or (iii) of section 4041(c)(2)(B) 
or section 4042, there shall be payable to 
the corporation, with respect to each ap-
plicable 12-month period, a premium at a 
rate equal to $1,250 multiplied by the 
number of individuals who were partici-
pants in the plan immediately before the 
termination date. Such premium shall be 
in addition to any other premium under 
this section. 
‘‘(B) SPECIAL
RULE
FOR
PLANS
TERMI-
NATED IN BANKRUPTCY REORGANIZATION.—If 
the 
plan 
is 
terminated 
under 
4041(c)(2)(B)(ii) or under section 4042 
and, as of the termination date, a person 
who is (as of such date) a contributing 
sponsor of the plan or a member of such 
sponsor’s controlled group has filed or 
has had filed against such person a peti-
tion seeking reorganization in a case 
under title 11 of the United States Code,