and such rates which is sufficiently detailed to 
enable plans to make reasonable projections re-
garding the yield curve and such rates for fu-
ture 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 2008 or 2009, 
the first, second, or third segment rate for 
a plan with respect to any month shall be 
equal to the sum of— 
‘‘(I) the product of such rate for 
such month determined without re-
gard to this subparagraph, multiplied 
by the applicable percentage, and 
‘‘(II) the product of the rate de-
termined under the rules of section 
302(b)(5)(B)(ii)(II) (as in effect for 
plan years beginning in 2007), multi-
plied by a percentage equal to 100 
percent minus the applicable percent-
age. 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of clause (i), the applicable per-
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
centage is 331⁄3 percent for plan years be-
ginning in 2008 and 662⁄3 percent for plan 
years beginning in 2009. 
‘‘(iii) 
NEW
PLANS
INELIGIBLE.— 
Clause (i) shall not apply to any plan if the 
first plan year of the plan begins after De-
cember 31, 2007. 
‘‘(iv) ELECTION.—The plan sponsor 
may elect not to have this subparagraph 
apply. Such election, once made, may be 
revoked only with the consent of the Sec-
retary of the Treasury. 
‘‘(3) MORTALITY TABLES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C) or (D), the Secretary of the 
Treasury shall by regulation prescribe mortality 
tables to be used in determining any present 
value or making any computation under this 
section. Such tables shall be based on the actual 
experience of pension plans and projected 
trends in such experience. In prescribing such 
tables, the Secretary of the Treasury shall take 
into account results of available independent 
studies of mortality of individuals covered by 
pension plans. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
‘‘(B) PERIODIC REVISION.—The Secretary 
of the Treasury shall (at least every 10 years) 
make revisions in any table in effect under sub-
paragraph (A) to reflect the actual experience 
of pension plans and projected trends in such 
experience. 
‘‘(C) SUBSTITUTE MORTALITY TABLE.— 
‘‘(i) IN GENERAL.—Upon request by 
the plan sponsor and approval by the Sec-
retary of the Treasury, a mortality table 
which meets the requirements of clause 
(iii) shall be used in determining any 
present value or making any computation 
under this section during the period of 
consecutive plan years (not to exceed 10) 
specified in the request. 
‘‘(ii) EARLY
TERMINATION
OF
PE-
RIOD.—Notwithstanding clause (i), a mor-
tality table described in clause (i) shall 
cease to be in effect as of the earliest of— 
‘‘(I) the date on which there is a 
significant change in the participants 
in the plan by reason of a plan spinoff 
or merger or otherwise, or 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
‘‘(II) the date on which the plan 
actuary determines that such table 
does not meet the requirements of 
clause (iii). 
‘‘(iii) REQUIREMENTS.—A mortality 
table meets the requirements of this clause 
if— 
‘‘(I) there is a sufficient number 
of plan participants, and the pension 
plans have been maintained for a suf-
ficient period of time, to have credible 
information necessary for purposes of 
subclause (II), and 
‘‘(II) such table reflects the ac-
tual experience of the pension plans 
maintained by the sponsor and pro-
jected trends in general mortality ex-
perience. 
‘‘(iv) ALL
PLANS
IN
CONTROLLED 
GROUP MUST USE SEPARATE TABLE.—Ex-
cept as provided by the Secretary of the 
Treasury, a plan sponsor may not use a 
mortality table under this subparagraph 
for any plan maintained by the plan spon-
sor unless— 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
‘‘(I) a separate mortality table is 
established and used under this sub-
paragraph for each other plan main-
tained by the plan sponsor and if the 
plan sponsor is a member of a con-
trolled group, each member of the 
controlled group, and 
‘‘(II) the requirements of clause 
(iii) are met separately with respect to 
the table so established for each such 
plan, determined by only taking into 
account the participants of such plan, 
the time such plan has been in exist-
ence, and the actual experience of 
such plan. 
‘‘(v) DEADLINE FOR SUBMISSION AND 
DISPOSITION OF APPLICATION.— 
‘‘(I) 
SUBMISSION.—The 
plan 
sponsor shall submit a mortality table 
to the Secretary of the Treasury for 
approval under this subparagraph at 
least 7 months before the 1st day of 
the period described in clause (i). 
‘‘(II) DISPOSITION.—Any mor-
tality table submitted to the Secretary 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00054
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
of the Treasury for approval under 
this subparagraph shall be treated as 
in effect as of the 1st day of the pe-
riod described in clause (i) unless the 
Secretary of the Treasury, during the 
180-day period beginning on the date 
of such submission, disapproves of 
such table and provides the reasons 
that such table fails to meet the re-
quirements of clause (iii). The 180- 
day period shall be extended upon mu-
tual agreement of the Secretary of the 
Treasury and the plan sponsor. 
‘‘(D) SEPARATE MORTALITY TABLES FOR 
THE
DISABLED.—Notwithstanding 
subpara-
graph (A)— 
‘‘(i) IN GENERAL.—The Secretary of 
the Treasury shall establish mortality ta-
bles which may be used (in lieu of the ta-
bles under subparagraph (A)) under this 
subsection for individuals who are entitled 
to benefits under the plan on account of 
disability. The Secretary of the Treasury 
shall establish separate tables for individ-
uals whose disabilities occur in plan years 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00055
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
beginning before January 1, 1995, and for 
individuals whose disabilities occur in plan 
years beginning on or after such date. 
‘‘(ii) SPECIAL RULE FOR DISABILITIES 
OCCURRING AFTER 1994.—In the case of 
disabilities occurring in plan years begin-
ning after December 31, 1994, the tables 
under clause (i) shall apply only with re-
spect to individuals described in such sub-
clause who are disabled within the meaning 
of title II of the Social Security Act and 
the regulations thereunder. 
‘‘(iii) PERIODIC REVISION.—The Sec-
retary of the Treasury shall (at least every 
10 years) make revisions in any table in ef-
fect under clause (i) to reflect the actual 
experience of pension plans and projected 
trends in such experience. 
‘‘(4) PROBABILITY OF BENEFIT PAYMENTS IN 
THE FORM OF LUMP SUMS OR OTHER OPTIONAL 
FORMS.—For purposes of determining any present 
value or making any computation under this section, 
there shall be taken into account— 
‘‘(A) the probability that future benefit 
payments under the plan will be made in the 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
form of optional forms of benefits provided 
under the plan (including lump sum distribu-
tions, determined on the basis of the plan’s ex-
perience and other related assumptions), and 
‘‘(B) any difference in the present value of 
such future benefit payments resulting from the 
use of actuarial assumptions, in determining 
benefit payments in any such optional form of 
benefits, which are different from those speci-
fied in this subsection. 
‘‘(5) APPROVAL OF LARGE CHANGES IN ACTU-
ARIAL ASSUMPTIONS.— 
‘‘(A) IN GENERAL.—No actuarial assump-
tion used to determine the funding target for a 
plan to which this paragraph applies may be 
changed without the approval of the Secretary 
of the Treasury. 
‘‘(B) PLANS
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply to a plan 
only if— 
‘‘(i) the plan is a single-employer plan 
to which title IV applies, 
‘‘(ii) the aggregate unfunded vested 
benefits as of the close of the preceding 
plan year (as determined under section 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
4006(a)(3)(E)(iii)) of such plan and all 
other plans maintained by the contributing 
sponsors 
(as 
defined 
in 
section 
4001(a)(13)) and members of such spon-
sors’ controlled groups (as defined in sec-
tion 4001(a)(14)) which are covered by 
title IV (disregarding plans with no un-
funded 
vested 
benefits) 
exceed 
$50,000,000, and 
‘‘(iii) the change in assumptions (de-
termined after taking into account any 
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. 
‘‘(i) SPECIAL RULES FOR AT-RISK PLANS.— 
‘‘(1) FUNDING TARGET FOR PLANS IN AT-RISK 
STATUS.— 
‘‘(A) IN GENERAL.—In the case of a plan 
which is in at-risk status for a plan year, the 
funding target of the plan for the plan year 
shall be equal to the sum of— 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
‘‘(i) the present value of all benefits 
accrued or earned under the plan as of the 
beginning of the plan year, as determined 
by using the additional actuarial assump-
tions described in subparagraph (B), and 
‘‘(ii) in the case of a plan which also 
has been in at-risk status for at least 2 of 
the 4 preceding plan years, a loading fac-
tor determined under subparagraph (C). 
‘‘(B) ADDITIONAL
ACTUARIAL
ASSUMP-
TIONS.—The actuarial assumptions described in 
this subparagraph are as follows: 
‘‘(i) All employees who are not other-
wise assumed to retire as of the valuation 
date but who will be eligible to elect bene-
fits during the plan year and the 10 suc-
ceeding plan years shall be assumed to re-
tire at the earliest retirement date under 
the plan but not before the end of the plan 
year for which the at-risk funding target 
and at-risk target normal cost are being 
determined. 
‘‘(ii) All employees shall be assumed 
to elect the retirement benefit available 
under the plan at the assumed retirement 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
age (determined after application of clause 
(i)) which would result in the highest 
present value of benefits. 
‘‘(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.—In the case of a plan which is in at-risk 
status for a plan year, the target normal cost of the 
plan for such plan year shall be equal to the sum 
of— 
‘‘(A) the present value of all benefits which 
are expected to accrue or be earned under the 
plan during the plan year, determined using the 
additional actuarial assumptions described in 
paragraph (1)(B), plus 
‘‘(B) in the case of a plan which also has 
been in at-risk status for at least 2 of the 4 
preceding plan years, a loading factor equal to 
4 percent of the target normal cost (determined 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS
without regard to this paragraph) of the plan 
for the plan year. 
‘‘(3) MINIMUM AMOUNT.—In no event shall— 
‘‘(A) the at-risk funding target be less 
than the funding target, as determined without 
regard to this subsection, or 
‘‘(B) the at-risk target normal cost be less 
than the target normal cost, as determined 
without regard to this subsection. 
‘‘(4) DETERMINATION OF AT-RISK STATUS.— 
For purposes of this subsection— 
‘‘(A) IN GENERAL.—A plan is in at-risk 
status for a plan year if— 
‘‘(i) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section without regard 
to this subsection) is less than 80 percent, 
and 
‘‘(ii) the funding target attainment 
percentage for the preceding plan year (de-
termined under this section by using the 
additional actuarial assumptions described 
in paragraph (1)(B) in computing the 
funding target) is less than 70 percent. 
VerDate Aug 31 2005 
00:27 Jul 30, 2006
Jkt 049200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H4.CPH
H4
ccoleman on PROD1PC71 with BILLS