‘‘(h) FUNDING-BASED LIMITS ON BENEFITS AND 
BENEFIT
ACCRUALS
UNDER
SINGLE-EMPLOYER 
PLANS.—
‘‘(1) LIMITATIONS ON PLAN AMENDMENTS IN-
CREASING LIABILITY FOR BENEFITS.—
‘‘(A) IN GENERAL.—No amendment to a 
defined benefit plan which is a single-employer 
plan which has the effect of increasing liabilities 
of the plan by reason of increases in benefits, 
establishment of new benefits, changing the 
rate of benefit accrual, or changing the rate at 
which benefits become nonforfeitable to the plan 
may take effect during any plan year if the 
funding target attainment percentage as of the 
valuation date of the plan for such plan year 
is—
‘‘(i) less than 80 percent, or 
‘‘(ii) would be less than 80 percent 
taking into account such amendment. 
For purposes of this subparagraph, any in-
crease in benefits under the plan by reason of 
an increase in the benefit rate provided under 
the plan or on the basis of an increase in com-
pensation shall be treated as effected by plan 
amendment.
‘‘(B) 
EXEMPTION.—Subparagraph 
(A) 
shall cease to apply with respect to any plan 
year, effective as of the first date of the plan 
year (or if later, the effective date of the 
amendment), upon payment by the plan sponsor 
of a contribution (in addition to any minimum 
required contribution under section 303) equal 
to—
‘‘(i) in the case of subparagraph 
(A)(i), the amount of the increase in the 
funding target of the plan (under section 
303) for the plan year attributable to the 
amendment, and 
‘‘(ii) in the case of subparagraph 
(A)(ii), the amount sufficient to result in a 
funding target attainment percentage of 80 
percent. 
‘‘(2) FUNDING-BASED LIMITATION ON CERTAIN 
FORMS OF DISTRIBUTION.—
‘‘(A) IN GENERAL.—A defined benefit plan 
which is a single-employer plan shall provide 
that, in any case in which the plan’s funding 
target attainment percentage as of the valu-
ation date of the plan for a plan year is less 
than 80 percent, the plan may not after such
date pay any prohibited payment (as defined in 
section 206(e)). 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply to any plan for any plan year 
if the terms of such plan (as in effect for the 
period beginning on June 29, 2005, and ending 
with such plan year) provide for no benefit ac-
cruals with respect to any participant during 
such period. 
‘‘(3) LIMITATIONS ON BENEFIT ACCRUALS FOR 
PLANS WITH SEVERE FUNDING SHORTFALLS.—A de-
fined benefit plan which is a single-employer plan 
shall provide that, in any case in which the plan’s 
funding target attainment percentage as of the valu-
ation date of the plan for a plan year is less than 
60 percent, all future benefit accruals under the 
plan shall cease as of such date. 
‘‘(4) NEW
PLANS.—Paragraphs (1) and (3) 
shall not apply to a plan for the first 5 plan years 
of the plan. For purposes of this subsection, the ref-
erence in this subsection to a plan shall include a 
reference to any predecessor plan. 
‘‘(5) PRESUMED
UNDERFUNDING
FOR
PUR-
POSES OF BENEFIT LIMITATIONS BASED ON PRIOR 
YEAR’S FUNDING STATUS.—
‘‘(A) 
PRESUMPTION
OF
CONTINUED 
UNDERFUNDING.—In any case in which a ben-
efit limitation under paragraph (1), (2), or (3) 
has been applied to a plan with respect to the 
plan year preceding the current plan year, the 
funding target attainment percentage of the 
plan as of the valuation date of the plan for the 
current plan year shall be presumed to be equal 
to the funding target attainment percentage of 
the plan as of the valuation date of the plan for 
the preceding plan year until the enrolled actu-
ary of the plan certifies the actual funding tar-
get attainment percentage of the plan as of the 
valuation date of the plan for the current plan 
year. 
‘‘(B) PRESUMPTION
OF
UNDERFUNDING 
AFTER 10TH MONTH.—In any case in which no 
such certification is made with respect to the 
plan before the first day of the 10th month of 
the current plan year, for purposes of para-
graphs (1), (2), and (3), the plan’s funding tar-
get attainment percentage shall be conclusively 
presumed to be less than 60 percent as of the 
first day of such 10th month, and such day 
shall be deemed, for purposes of such sub-