103
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. 
‘‘(g) SPECIAL RULES FOR AT-RISK PLANS.—
‘‘(1) FUNDING TARGET FOR PLANS IN AT-RISK 
STATUS.—
‘‘(A) IN GENERAL.—In any case in which 
a plan is in at-risk status for a plan year, the 
funding target of the plan for the plan year is 
the sum of—
‘‘(i) the present value of all liabilities 
to participants and their beneficiaries 
under the plan for the plan year, as deter-
mined by using, in addition to the actu-
arial assumptions described in subsection 
(f), the supplemental actuarial assumptions 
described in subparagraph (B), plus 
‘‘(ii) a loading factor determined 
under subparagraph (C). 
‘‘(B) SUPPLEMENTAL ACTUARIAL ASSUMP-
TIONS.—The actuarial assumptions used in de-
104
termining the valuation of the funding target 
shall include, in addition to the actuarial as-
sumptions described in subsection (f), an as-
sumption that all participants will elect benefits 
at such times and in such forms as will result 
in the highest present value of liabilities under 
subparagraph (A)(i). 
‘‘(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 
‘‘(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.—
‘‘(A) IN GENERAL.—In any case in which 
a plan is in at-risk status for a plan year, the 
target normal cost of the plan for such plan 
year shall be the sum of—
‘‘(i) the present value of all benefits 
which are expected to accrue under the 
plan during the plan year, determined
105
under the actuarial assumptions used 
under paragraph (1), plus 
‘‘(ii) the loading factor under para-
graph (1)(C), excluding the portion of the 
loading factor described in paragraph 
(1)(C)(i). 
‘‘(B) MINIMUM
AMOUNT.—In no event 
shall the target normal cost of a plan deter-
mined under this paragraph be less than the 
target normal cost of such plan as determined 
without regard to this paragraph. 
‘‘(3) DETERMINATION OF AT-RISK STATUS.—
For purposes of this subsection, a plan is in ‘at-risk 
status’ for a plan year if the funding target attain-
ment percentage of the plan for the preceding plan 
year was less than 60 percent. 
‘‘(4) TRANSITION BETWEEN APPLICABLE FUND-
ING TARGETS AND BETWEEN APPLICABLE TARGET 
NORMAL COST.—
‘‘(A) IN GENERAL.—In any case in which 
a plan which is in at-risk status for a plan year 
has been in such status for a consecutive period 
of fewer than 5 plan years, the applicable 
amount of the funding target and of the target 
normal cost shall be, in lieu of the amount de-
106
termined without regard to this paragraph, the 
sum of—
‘‘(i) the amount determined under this 
section without regard to this subsection, 
plus 
‘‘(ii) the transition percentage for 
such plan year of the excess of the amount 
determined under this subsection (without 
regard to this paragraph) over the amount 
determined under this section without re-
gard to this subsection. 
‘‘(B) 
TRANSITION
PERCENTAGE.—For 
purposes of this paragraph, the ‘transition per-
centage’ for a plan year is the product derived 
by multiplying—
‘‘(i) 20 percent, by 
‘‘(ii) the number of plan years during 
the period described in subparagraph (A). 
‘‘(h) PRE-FUNDING AND FUNDING STANDARD CAR-
RYOVER BALANCES.—
‘‘(1) PRE-FUNDING BALANCE.—
‘‘(A) IN GENERAL.—The plan sponsor of a 
pension plan which is a single-employer plan 
shall maintain a pre-funding balance for pur-
poses of this subsection. Such balance shall con-