isfied section 417(e)(3) as in effect at such
time.’’
(b) MAXIMUM BENEFITS.—Section 415(b)(2)(E) of
the Code is amended—
(1) by redesignating clauses (ii) and (iii) as
clauses (iii) and (iv), respectively,
(2) by revising clause (i) and adding a new
clause (ii) to read as follows:
‘‘(i) For purposes of adjusting any
benefit or limitation under subparagraph
(B), the interest rate assumption shall not
be less than the greater of 5 percent or the
rate specified in the plan; provided that for
purposes of adjusting the benefit or limita-
tion of any form of benefit subject to sec-
tion 417(e)(3), the ‘applicable interest rate
under section 417(e)(3)’ shall be sub-
stituted for ‘5 percent’.
‘‘(ii) For purposes of adjusting any
benefit or limitation under subparagraph
(C), the interest rate assumption shall not
be less than the greater of 5 percent or the
rate specified in the plan.’’
and (3) by adding a new clause (v) to read as
follows:
‘‘(v) For purposes of adjusting any
benefit or limitation under subparagraphs
(B), (C), or (D), the prevailing Commis-
sioner’s standard table (described in sec-
tion 807(d)(5)(A)) that would be used to
determined reserves for group annuity con-
tracts issued on the date as of which the
determination is being made (without re-
gard to any other subparagraph of section
807(d)(5)) shall be applied.’’
(c)(1) Section 203(e) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1053(e)) is amend-
ed by revising paragraph (2) to read as follows:
‘‘(2) For purposes of paragraph (1), the present
value shall be calculated in accordance with section
205(g)(3).’’
(2) Section 205(g) of such Act (29 U.S.C. 1055(g))
is amended by revising paragraph (3) to read as follows:
‘‘(3) DETERMINATION OF PRESENT VALUE.—
‘‘(A) IN GENERAL.—
‘‘(i) PRESENT
VALUE.—Except as
provided in subparagraph (B), for pur-
poses of paragraphs (1) and (2), the
present value shall not be less than the
present value calculated by using the appli-
cable mortality table and the applicable in-
terest rate.
‘‘(ii) DEFINITIONS.—For purposes of
clause (i), the term ‘applicable mortality
table’ means the prevailing Commissioner’s
standard 
table 
(described 
in 
section
807(d)(5)(A) of the Internal Revenue Code
of 1986) that would be used to determine
reserves for group annuity contracts issued
on the date as of which present value is
being determined (without regard to any
other subparagraph of section 807(d)(5) of
the Internal Revenue Code of 1986), and
the term ‘applicable interest rate’ means
the rate of interest on a 30-year Treasury
security (as of the date of distribution).
‘‘(B) EXCEPTION.—In the case of a dis-
tribution from a plan that was adopted and in
effect prior to the enactment of the Retirement
Protection Act of 1993, the present value of
any distribution made before the earlier of (i)
the later of when a plan amendment applying
subparagraph (A) is adopted or made effective
or (ii) the first day of the first plan year begin-
ning after December 31, 1999 shall be cal-
culated, for purposes of paragraphs (1) and (2),
using the interest rate determined under the
regulations of the Pension Benefit Guaranty
Corporation for determining the present value
of a lump sum distribution on plan termination
that were in effect on September 1, 1993 and
under the provisions of the plan and this Act
that were in effect immediately before such en-
actment, provided that such plan provisions sat-
isfied section 205(g)(3) as in effect at such
time.’’
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan years and limitation
years beginning after December 31, 1994, except
that an employer may elect to treat the amendments
made by this section as being effective on or after
the date of enactment.
(2) NO REDUCTION IN ACCRUED BENEFITS.—A
participant’s accrued benefit shall not be considered
to be reduced in violation 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 merely because (A) the benefit is determined
in accordance with section 417(e)(3)(A) of such
Code, as amended by this Act, or section 205(g)(3)
of the Employee Retirement Income Security Act of
1974, as amended by this Act, or (B) the plan ap-
plies section 415(b)(2)(E) of such Code, as amended
by this Act.
(3) SECTION 415.—
(A) NO
REDUCTION
REQUIRED.—An ac-
crued benefit shall not be required to be re-
duced below the accrued benefit as of the last
day of the last plan year beginning before Jan-
uary 1, 1995 merely because of the amend-
ments made by subsection (b).
(B) TIMING
OF
PLAN
AMENDMENT.—A
plan that operates in accordance with the
amendments made by subsection (b) shall not
be treated as failing to satisfy section 401(a) of
the Internal Revenue Code of 1986 or as not
being operated in accordance with the provi-
sions of the plan until such date as the Sec-
retary provides merely because the plan has not
been amended to include the amendments made
by subsection (b).