221
LOSS.—If an election is in effect under section 
302(b)(7)(F) (as in effect on the day before the 
date of the enactment of the Pension Protection 
Act of 2006) for any plan year, the funding 
standard account shall be charged in the plan 
year to which the portion of the net experience 
loss deferred by such election was deferred with 
the amount so deferred (and paragraph 
(2)(B)(iii) shall not apply to the amount so 
charged). 
‘‘(F) 
FINANCIAL
ASSISTANCE.—Any 
amount of any financial assistance from the 
Pension Benefit Guaranty Corporation to any 
plan, and any repayment of such amount, shall 
be taken into account under this section and 
section 302 in such manner as is determined by 
the Secretary of the Treasury. 
‘‘(G) SHORT-TERM BENEFITS.—To the ex-
tent that any plan amendment increases the un-
funded past service liability under the plan by 
reason of an increase in benefits which are not 
payable as a life annuity but are payable under 
the terms of the plan for a period that does not 
exceed 14 years from the effective date of the 
amendment, paragraph (2)(B)(ii) shall be ap-
222
plied separately with respect to such increase in 
unfunded past service liability by substituting 
the number of years of the period during which 
such benefits are payable for ‘15’. 
‘‘(c) ADDITIONAL RULES.—
‘‘(1) DETERMINATIONS
TO
BE
MADE
UNDER 
FUNDING METHOD.—For purposes of this part, nor-
mal costs, accrued liability, past service liabilities, 
and experience gains and losses shall be determined 
under the funding method used to determine costs 
under the plan. 
‘‘(2) VALUATION OF ASSETS.—
‘‘(A) IN GENERAL.—For purposes of this 
part, the value of the plan’s assets shall be de-
termined on the basis of any reasonable actu-
arial method of valuation which takes into ac-
count fair market value and which is permitted 
under regulations prescribed by the Secretary of 
the Treasury. 
‘‘(B) 
ELECTION
WITH
RESPECT
TO 
BONDS.—The value of a bond or other evidence 
of indebtedness which is not in default as to 
principal or interest may, at the election of the 
plan administrator, be determined on an amor-
tized basis running from initial cost at purchase
223
to par value at maturity or earliest call date. 
Any election under this subparagraph shall be 
made at such time and in such manner as the 
Secretary of the Treasury shall by regulations 
provide, shall apply to all such evidences of in-
debtedness, and may be revoked only with the 
consent of such Secretary. 
‘‘(3) ACTUARIAL ASSUMPTIONS MUST BE REA-
SONABLE.—For purposes of this section, all costs, li-
abilities, rates of interest, and other factors under 
the plan shall be determined on the basis of actu-
arial 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. 
‘‘(4) TREATMENT OF CERTAIN CHANGES AS EX-
PERIENCE GAIN OR LOSS.—For purposes of this sec-
tion, if—
‘‘(A) a change in benefits under the Social 
Security Act or in other retirement benefits cre-
ated under Federal or State law, or
224
‘‘(B) a change in the definition of the term 
‘wages’ under section 3121 of the Internal Rev-
enue Code of 1986, or a change in the amount 
of such wages taken into account under regula-
tions 
prescribed 
for 
purposes 
of 
section 
401(a)(5) of such Code, 
results in an increase or decrease in accrued liability 
under a plan, such increase or decrease shall be 
treated as an experience loss or gain. 
‘‘(5) FULL FUNDING.—If, as of the close of a 
plan year, a plan would (without regard to this para-
graph) have an accumulated funding deficiency in 
excess of the full funding limitation—
‘‘(A) the funding standard account shall be 
credited with the amount of such excess, and 
‘‘(B) all amounts described in subpara-
graphs (B), (C), and (D) of subsection (b) (2) 
and subparagraph (B) of subsection (b)(3) 
which are required to be amortized shall be con-
sidered fully amortized for purposes of such 
subparagraphs. 
‘‘(6) FULL-FUNDING LIMITATION.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (5), the term ‘full-funding limitation’ 
means the excess (if any) of—
225
‘‘(i) the accrued liability (including 
normal cost) under the plan (determined 
under the entry age normal funding meth-
od if such accrued liability cannot be di-
rectly calculated under the funding method 
used for the plan), over 
‘‘(ii) the lesser of—
‘‘(I) the fair market value of the 
plan’s assets, or 
‘‘(II) the value of such assets de-
termined under paragraph (2). 
‘‘(B) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—In no event shall 
the 
full-funding 
limitation 
determined 
under subparagraph (A) be less than the 
excess (if any) of—
‘‘(I) 90 percent of the current li-
ability of the plan (including the ex-
pected increase in current liability due 
to benefits accruing during the plan 
year), over 
‘‘(II) the value of the plan’s as-
sets determined under paragraph (2). 
‘‘(ii) ASSETS.—For purposes of clause 
(i), assets shall not be reduced by any
226
credit balance in the funding standard ac-
count. 
‘‘(C) FULL
FUNDING
LIMITATION.—For 
purposes of this paragraph, unless otherwise 
provided by the plan, the accrued liability under 
a multiemployer plan shall not include benefits 
which are not nonforfeitable under the plan 
after the termination of the plan (taking into 
consideration section 411(d)(3) of the Internal 
Revenue Code of 1986). 
‘‘(D) CURRENT LIABILITY.—For purposes 
of this paragraph—
‘‘(i) IN GENERAL.—The term ‘current 
liability’ means all liabilities to employees 
and their beneficiaries under the plan. 
‘‘(ii) TREATMENT OF UNPREDICTABLE 
CONTINGENT EVENT BENEFITS.—For pur-
poses of clause (i), any benefit contingent 
on an event other than—
‘‘(I) age, service, compensation, 
death, or disability, or 
‘‘(II) an event which is reason-
ably and reliably predictable (as deter-
mined by the Secretary of the Treas-
ury),
227
shall not be taken into account until the 
event on which the benefit is contingent oc-
curs. 
‘‘(iii) INTEREST
RATE
USED.—The 
rate of interest used to determine current 
liability under this paragraph shall be the 
rate of interest determined under subpara-
graph (E). 
‘‘(iv) MORTALITY TABLES.—
‘‘(I) COMMISSIONERS’ STANDARD 
TABLE.—In the case of plan years be-
ginning before the first plan year to 
which the first tables prescribed under 
subclause (II) apply, the mortality 
table used in determining current li-
ability under this paragraph shall be 
the table prescribed by the Secretary 
of the Treasury which is based on the 
prevailing 
commissioners’ 
standard 
table 
(described 
in 
section 
807(d)(5)(A) of the Internal Revenue 
Code of 1986) used to determine re-
serves for group annuity contracts 
issued on January 1, 1993.
228
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—The Secretary of the Treasury 
may by regulation prescribe for plan 
years beginning after December 31, 
1999, mortality tables to be used in 
determining current liability under 
this subsection. Such tables shall be 
based upon the actual experience of 
pension plans and projected trends in 
such experience. In prescribing such 
tables, such Secretary shall take into 
account results of available inde-
pendent studies of mortality of indi-
viduals covered by pension plans. 
‘‘(v) SEPARATE
MORTALITY
TABLES 
FOR
THE
DISABLED.—Notwithstanding 
clause (iv)—
‘‘(I) IN
GENERAL.—The Sec-
retary of the Treasury shall establish 
mortality tables which may be used 
(in lieu of the tables under clause (iv)) 
to determine current liability under 
this subsection for individuals who are 
entitled to benefits under the plan on 
account of disability. Such Secretary
229
shall establish separate tables for indi-
viduals whose disabilities occur in 
plan years beginning before January 
1, 1995, and for individuals whose 
disabilities occur in plan years begin-
ning on or after such date. 
‘‘(II) SPECIAL
RULE
FOR
DIS-
ABILITIES OCCURRING AFTER 1994.—
In the case of disabilities occurring in 
plan years beginning after December 
31, 1994, the tables under subclause 
(I) shall apply only with respect to in-
dividuals described in such subclause 
who are disabled within the meaning 
of title II of the Social Security Act 
and the regulations thereunder. 
‘‘(vi) PERIODIC
REVIEW.—The Sec-
retary of the Treasury shall periodically (at 
least every 5 years) review any tables in ef-
fect under this subparagraph and shall, to 
the extent such Secretary determines nec-
essary, by regulation update the tables to 
reflect the actual experience of pension 
plans and projected trends in such experi-
ence.
230
‘‘(E) REQUIRED
CHANGE
OF
INTEREST 
RATE.—For purposes of determining a plan’s 
current liability for purposes of this para-
graph—
‘‘(i) IN GENERAL.—If any rate of in-
terest used under the plan under sub-
section (b)(6) to determine cost is not 
within the permissible range, the plan shall 
establish a new rate of interest within the 
permissible range. 
‘‘(ii) PERMISSIBLE RANGE.—For pur-
poses of this subparagraph—
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), the term 
‘permissible range’ means a rate of in-
terest which is not more than 5 per-
cent above, and not more than 10 per-
cent below, the weighted average of 
the rates of interest on 30-year Treas-
ury securities during the 4-year period 
ending on the last day before the be-
ginning of the plan year. 
‘‘(II) 
SECRETARIAL
AUTHOR-
ITY.—If the Secretary of the Treasury 
finds that the lowest rate of interest
231
permissible under subclause (I) is un-
reasonably high, such Secretary may 
prescribe a lower rate of interest, ex-
cept that such rate may not be less 
than 80 percent of the average rate 
determined under such subclause. 
‘‘(iii) 
ASSUMPTIONS.—Notwith-
standing paragraph (3)(A), the interest 
rate used under the plan shall be—
‘‘(I) determined without taking 
into account the experience of the 
plan and reasonable expectations, but 
‘‘(II) consistent with the assump-
tions which reflect the purchase rates 
which would be used by insurance 
companies to satisfy the liabilities 
under the plan. 
‘‘(7) ANNUAL VALUATION.—
‘‘(A) IN GENERAL.—For purposes of this 
section, a determination of experience gains and 
losses and a valuation of the plan’s liability 
shall be made not less frequently than once 
every year, except that such determination shall 
be made more frequently to the extent required
232
in particular cases under regulations prescribed 
by the Secretary of the Treasury. 
‘‘(B) VALUATION DATE.—
‘‘(i) CURRENT YEAR.—Except as pro-
vided in clause (ii), the valuation referred 
to in subparagraph (A) shall be made as of 
a date within the plan year to which the 
valuation refers or within one month prior 
to the beginning of such year. 
‘‘(ii) USE
OF
PRIOR
YEAR
VALU-
ATION.—The valuation referred to in sub-
paragraph (A) may be made as of a date 
within the plan year prior to the year to 
which the valuation refers if, as of such 
date, the value of the assets of the plan are 
not less than 100 percent of the plan’s cur-
rent liability (as defined in paragraph 
(6)(D) without regard to clause (iv) there-
of). 
‘‘(iii) 
ADJUSTMENTS.—Information 
under clause (ii) shall, in accordance with 
regulations, be actuarially adjusted to re-
flect significant differences in participants. 
‘‘(iv) LIMITATION.—A change in fund-
ing method to use a prior year valuation,
233
as provided in clause (ii), may not be made 
unless as of the valuation date within the 
prior plan year, the value of the assets of 
the plan are not less than 125 percent of 
the plan’s current liability (as defined in 
paragraph (6)(D) without regard to clause 
(iv) thereof). 
‘‘(8) TIME
WHEN
CERTAIN
CONTRIBUTIONS 
DEEMED MADE.—For purposes of this section, any 
contributions for a plan year made by an employer 
after the last day of such plan year, but not later 
than two and one-half months after such day, shall 
be deemed to have been made on such last day. For 
purposes of this subparagraph, such two and one-
half month period may be extended for not more 
than six months under regulations prescribed by the 
Secretary of the Treasury. 
‘‘(d) EXTENSION OF AMORTIZATION PERIODS FOR 
MULTIEMPLOYER PLANS.—
‘‘(1) AUTOMATIC
EXTENSION
UPON
APPLICA-
TION BY CERTAIN PLANS.—
‘‘(A) IN GENERAL.—If the plan sponsor of 
a multiemployer plan—
‘‘(i) submits to the Secretary of the 
Treasury an application for an extension of
234
the period of years required to amortize 
any unfunded liability described in any 
clause of subsection (b)(2)(B) or described 
in subsection (b)(4), and 
‘‘(ii) includes with the application a 
certification by the plan’s actuary de-
scribed in subparagraph (B), 
the Secretary of the Treasury shall extend the 
amortization period for the period of time (not 
in excess of 5 years) specified in the applica-
tion. Such extension shall be in addition to any 
extension under paragraph (2). 
‘‘(B) CRITERIA.—A certification with re-
spect to a multiemployer plan is described in 
this subparagraph if the plan’s actuary certifies 
that, based on reasonable assumptions—
‘‘(i) absent the extension under sub-
paragraph (A), the plan would have an ac-
cumulated funding deficiency in the cur-
rent plan year or any of the 9 succeeding 
plan years, 
‘‘(ii) the plan sponsor has adopted a 
plan to improve the plan’s funding status, 
‘‘(iii) the plan is projected to have suf-
ficient assets to timely pay expected bene-
235
fits and anticipated expenditures over the 
amortization period as extended, and 
‘‘(iv) the notice required under para-
graph (3)(A) has been provided. 
‘‘(C) TERMINATION.—The preceding provi-
sions of this paragraph shall not apply with re-
spect to any application submitted after Decem-
ber 31, 2014. 
‘‘(2) ALTERNATIVE EXTENSION.—
‘‘(A) IN GENERAL.—If the plan sponsor of 
a multiemployer plan submits to the Secretary 
of the Treasury an application for an extension 
of the period of years required to amortize any 
unfunded liability described in any clause of 
subsection (b)(2)(B) or described in subsection 
(b)(4), the Secretary of the Treasury may ex-
tend the amortization period for a period of 
time (not in excess of 10 years reduced by the 
number of years of any extension under para-
graph (1) with respect to such unfunded liabil-
ity) if the Secretary of the Treasury makes the 
determination described in subparagraph (B). 
Such extension shall be in addition to any ex-
tension under paragraph (1).
236
‘‘(B) DETERMINATION.—The Secretary of 
the Treasury may grant an extension under 
subparagraph (A) if such Secretary determines 
that—
‘‘(i) such extension would carry out 
the purposes of this Act and would provide 
adequate protection for participants under 
the plan and their beneficiaries, and 
‘‘(ii) the failure to permit such exten-
sion would—
‘‘(I) result in a substantial risk 
to the voluntary continuation of the 
plan, or a substantial curtailment of 
pension benefit levels or employee 
compensation, and 
‘‘(II) be adverse to the interests 
of plan participants in the aggregate. 
‘‘(C) ACTION
BY
SECRETARY
OF
THE 
TREASURY.—The Secretary of the Treasury 
shall act upon any application for an extension 
under this paragraph within 180 days of the 
submission of such application. If such Sec-
retary rejects the application for an extension 
under this paragraph, such Secretary shall pro-
vide notice to the plan detailing the specific rea-
237
sons for the rejection, including references to 
the criteria set forth above. 
‘‘(3) ADVANCE NOTICE.—
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury shall, before granting an extension 
under this subsection, require each applicant to 
provide evidence satisfactory to such Secretary 
that the applicant has provided notice of the fil-
ing of the application for such extension to each 
affected 
party 
(as 
defined 
in 
section 
4001(a)(21)) with respect to the affected plan. 
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 liabilities. 
‘‘(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 
paragraph (1).’’. 
(b) SHORTFALL FUNDING METHOD.—
(1) IN GENERAL.—A multiemployer plan meet-
ing the criteria of paragraph (2) may adopt, use, or 
cease using, the shortfall funding method and such 
adoption, use, or cessation of use of such method,
238
shall be deemed approved by the Secretary of the 
Treasury under section 302(d)(1) of the Employee 
Retirement Income Security Act of 1974 and section 
412(d)(1) of the Internal Revenue Code of 1986. 
(2) CRITERIA.—A multiemployer pension plan 
meets the criteria of this clause if—
(A) the plan has not used the shortfall 
funding method during the 5-year period ending 
on the day before the date the plan is to use 
the method under paragraph (1); and 
(B) the plan is not operating under an am-
ortization period extension under section 304(d) 
of such Act and did not operate under such an 
extension during such 5-year period. 
(3) SHORTFALL FUNDING METHOD DEFINED.—
For purposes of this subsection, the term ‘‘shortfall 
funding method’’ means the shortfall funding meth-
od described in Treasury Regulations section 
1.412(c)(1)–2 (26 C.F.R. 1.412(c)(1)–2). 
(4) BENEFIT
RESTRICTIONS
TO
APPLY.—The 
benefit restrictions under section 302(c)(7) of such 
Act and section 412(c)(7) of such Code shall apply 
during any period a multiemployer plan is on the 
shortfall funding method pursuant to this sub-
section.