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‘‘(1) IN GENERAL.—In the case of a defined ben-
efit plan to which subsection (a)(1)(A) applies (other
than a multiemployer plan), the amount determined
under this subsection for any taxable year shall be
equal to the greater of—
‘‘(A) the sum of the amounts determined
under paragraph (2) with respect to each plan
year ending with or within the taxable year, or
‘‘(B) the sum of the minimum required con-
tributions under section 430 for such plan years.
‘‘(2) DETERMINATION OF AMOUNT.—
‘‘(A) IN GENERAL.—The amount determined
under this paragraph for any plan year shall be
equal to the excess (if any) of—
‘‘(i) the sum of—
‘‘(I) the funding target for the
plan year,
‘‘(II) the target normal cost for
the plan year, and
‘‘(III) the cushion amount for the
plan year, over
‘‘(ii) the value (determined under sec-
tion 430(g)(2)) of the assets of the plan
which are held by the plan as of the valu-
ation date for the plan year.
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‘‘(B) SPECIAL RULE FOR CERTAIN EMPLOY-
ERS.—If section 430(i) does not apply to a plan
for a plan year, the amount determined under
subparagraph (A)(i) for the plan year shall in
no event be less than the sum of—
‘‘(i) the funding target for the plan
year (determined as if section 430(i) ap-
plied to the plan), plus
‘‘(ii) the target normal cost for the
plan year (as so determined).
‘‘(3) CUSHION AMOUNT.—For purposes of para-
graph (2)(A)(i)(III)—
‘‘(A) IN GENERAL.—The cushion amount for
any plan year is the sum of—
‘‘(i) 80 percent of the funding target
for the plan year, and
‘‘(ii) the amount by which the funding
target for the plan year would increase if
the plan were to take into account—
‘‘(I) increases in compensation
which are expected to occur in suc-
ceeding plan years, or
‘‘(II) if the plan does not base
benefits for service to date on com-
pensation, increases in benefits which
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are expected to occur in succeeding
plan years (determined on the basis of
the average annual increase in benefits
over the 6 immediately preceding plan
years).
‘‘(B) LIMITATIONS.—
‘‘(i) IN
GENERAL.—In making the
computation under subparagraph (A)(ii),
the plan’s actuary shall assume that the
limitations under subsection (l) and section
415(b) shall apply.
‘‘(ii) EXPECTED
INCREASES.—In the
case of a plan year during which a plan is
covered under section 4021 of the Employee
Retirement Income Security Act of 1974,
the plan’s actuary may, notwithstanding
subsection (j) or (l), take into account in-
creases in the limitations which are ex-
pected to occur in succeeding plan years.
‘‘(4) SPECIAL RULES FOR PLANS WITH 100 OR
FEWER PARTICIPANTS.—
‘‘(A) IN GENERAL.—For purposes of deter-
mining the amount under paragraph (3) for any
plan year, in the case of a plan which has 100
or fewer participants for the plan year, the li-
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ability of the plan attributable to benefit in-
creases for highly compensated employees (as de-
fined in section 414(q)) resulting from a plan
amendment which is made or becomes effective,
whichever is later, within the last 2 years shall
not be taken into account in determining the tar-
get liability.
‘‘(B) RULE FOR DETERMINING NUMBER OF
PARTICIPANTS.—For purposes of determining the
number of plan participants, all defined benefit
plans maintained by the same employer (or any
member of such employer’s controlled group
(within the meaning of section 412(f)(4))) shall
be treated as one plan, but only participants of
such member or employer shall be taken into ac-
count.
‘‘(5) SPECIAL RULE FOR TERMINATING PLANS.—
In the case of a plan which, subject to section 4041
of the Employee Retirement Income Security Act of
1974, terminates during the plan year, the amount
determined under paragraph (2) shall in no event be
less than the amount required to make the plan suffi-
cient for benefit liabilities (within the meaning of sec-
tion 4041(d) of such Act).
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‘‘(6) ACTUARIAL ASSUMPTIONS.—Any computa-
tion under this subsection for any plan year shall use
the same actuarial assumptions which are used for
the plan year under section 430.
‘‘(7) DEFINITIONS.—Any term used in this sub-
section which is also used in section 430 shall have
the same meaning given such term by section 430.’’.
(b) EXCEPTION FROM LIMITATION
ON DEDUCTION
WHERE COMBINATION OF DEFINED CONTRIBUTION AND
DEFINED BENEFIT PLANS.—Section 404(a)(7)(C) of such
Code, as amended by this Act, is amended by adding at
the end the following new clause:
‘‘(iv) GUARANTEED PLANS.—In apply-
ing this paragraph, any single-employer
plan covered under section 4021 of the Em-
ployee Retirement Income Security Act of
1974 shall not be taken into account.’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) The last sentence of section 404(a)(1)(A) of
such Code is amended by striking ‘‘section 412’’ each
place it appears and inserting ‘‘section 431’’.
(2) Section 404(a)(1)(B) of such Code is
amended—
(A) by striking ‘‘In the case of a plan’’ and
inserting ‘‘In the case of a multiemployer plan’’,