[From the U.S. Government Printing Office via GPO Access]
[Enrolled Bill]
[DOCID: f:h4enr.txt]

        H.R.4

                       One Hundred Ninth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the third day of January, two thousand and six


                                 An Act


 
 To provide economic security for all Americans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Pension Protection 
Act of 2006''.
    (b) Table of Contents.--The table of contents for this Act (other 
than so much of title XIV as follows section 1401) is as follows:
Sec. 1. Short title and table of contents.

  TITLE I--REFORM OF FUNDING RULES FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                              PENSION PLANS

  Subtitle A--Amendments to Employee Retirement Income Security Act of 
                                  1974

Sec. 101. Minimum funding standards.
Sec. 102. Funding rules for single-employer defined benefit pension 
          plans.
Sec. 103. Benefit limitations under single-employer plans.
Sec. 104. Special rules for multiple employer plans of certain 
          cooperatives.
Sec. 105. Temporary relief for certain PBGC settlement plans.
Sec. 106. Special rules for plans of certain government contractors.
Sec. 107. Technical and conforming amendments.

         Subtitle B--Amendments to Internal Revenue Code of 1986

Sec. 111. Minimum funding standards.
Sec. 112. Funding rules for single-employer defined benefit pension 
          plans.
Sec. 113. Benefit limitations under single-employer plans.
Sec. 114. Technical and conforming amendments.
Sec. 115. Modification of transition rule to pension funding 
          requirements.
Sec. 116. Restrictions on funding of nonqualified deferred compensation 
          plans by employers maintaining underfunded or terminated 
          single-employer plans.

  TITLE II--FUNDING RULES FOR MULTIEMPLOYER DEFINED BENEFIT PLANS AND 
                           RELATED PROVISIONS

  Subtitle A--Amendments to Employee Retirement Income Security Act of 
                                  1974

Sec. 201. Funding rules for multiemployer defined benefit plans.
Sec. 202. Additional funding rules for multiemployer plans in endangered 
          or critical status.
Sec. 203. Measures to forestall insolvency of multiemployer plans.
Sec. 204. Withdrawal liability reforms.
Sec. 205. Prohibition on retaliation against employers exercising their 
          rights to 
          petition the Federal Government.
Sec. 206. Special rule for certain benefits funded under an agreement 
          approved by the Pension Benefit Guaranty Corporation.

         Subtitle B--Amendments to Internal Revenue Code of 1986

Sec. 211. Funding rules for multiemployer defined benefit plans.
Sec. 212. Additional funding rules for multiemployer plans in endangered 
          or critical status.
Sec. 213. Measures to forestall insolvency of multiemployer plans.
Sec. 214. Exemption from excise taxes for certain multiemployer pension 
          plans.

             Subtitle C--Sunset of Additional Funding Rules

Sec. 221. Sunset of additional funding rules.

                  TITLE III--INTEREST RATE ASSUMPTIONS

Sec. 301. Extension of replacement of 30-year Treasury rates.
Sec. 302. Interest rate assumption for determination of lump sum 
          distributions.
Sec. 303. Interest rate assumption for applying benefit limitations to 
          lump sum distributions.

             TITLE IV--PBGC GUARANTEE AND RELATED PROVISIONS

Sec. 401. PBGC premiums.
Sec. 402. Special funding rules for certain plans maintained by 
          commercial airlines.
Sec. 403. Limitation on PBGC guarantee of shutdown and other benefits.
Sec. 404. Rules relating to bankruptcy of employer.
Sec. 405. PBGC premiums for small plans.
Sec. 406. Authorization for PBGC to pay interest on premium overpayment 
          refunds.
Sec. 407. Rules for substantial owner benefits in terminated plans.
Sec. 408. Acceleration of PBGC computation of benefits attributable to 
          recoveries from employers.
Sec. 409. Treatment of certain plans where cessation or change in 
          membership of a controlled group.
Sec. 410. Missing participants.
Sec. 411. Director of the Pension Benefit Guaranty Corporation.
Sec. 412. Inclusion of information in the PBGC annual report.

                           TITLE V--DISCLOSURE

Sec. 501. Defined benefit plan funding notice.
Sec. 502. Access to multiemployer pension plan information.
Sec. 503. Additional annual reporting requirements.
Sec. 504. Electronic display of annual report information.
Sec. 505. Section 4010 filings with the PBGC.
Sec. 506. Disclosure of termination information to plan participants.
Sec. 507. Notice of freedom to divest employer securities.
Sec. 508. Periodic pension benefit statements.
Sec. 509. Notice to participants or beneficiaries of blackout periods.

  TITLE VI--INVESTMENT ADVICE, PROHIBITED TRANSACTIONS, AND FIDUCIARY 
                                  RULES

                      Subtitle A--Investment Advice

Sec. 601. Prohibited transaction exemption for provision of investment 
          advice.

                   Subtitle B--Prohibited Transactions

Sec. 611. Prohibited transaction rules relating to financial 
          investments.
Sec. 612. Correction period for certain transactions involving 
          securities and commodities.

                  Subtitle C--Fiduciary and Other Rules

Sec. 621. Inapplicability of relief from fiduciary liability during 
          suspension of ability of participant or beneficiary to direct 
          investments.
Sec. 622. Increase in maximum bond amount.
Sec. 623. Increase in penalties for coercive interference with exercise 
          of ERISA rights.
Sec. 624. Treatment of investment of assets by plan where participant 
          fails to exercise investment election.
Sec. 625. Clarification of fiduciary rules.

                  TITLE VII--BENEFIT ACCRUAL STANDARDS

Sec. 701. Benefit accrual standards.
Sec. 702. Regulations relating to mergers and acquisitions.

             TITLE VIII--PENSION RELATED REVENUE PROVISIONS

                    Subtitle A--Deduction Limitations

Sec. 801. Increase in deduction limit for single-employer plans.
Sec. 802. Deduction limits for multiemployer plans.
Sec. 803. Updating deduction rules for combination of plans.

          Subtitle B--Certain Pension Provisions Made Permanent

Sec. 811. Pensions and individual retirement arrangement provisions of 
          Economic Growth and Tax Relief Reconciliation Act of 2001 made 
          permanent.
Sec. 812. Saver's credit.

Subtitle C--Improvements in Portability, Distribution, and Contribution 
                                  Rules

Sec. 821. Clarifications regarding purchase of permissive service 
          credit.
Sec. 822. Allow rollover of after-tax amounts in annuity contracts.
Sec. 823. Clarification of minimum distribution rules for governmental 
          plans.
Sec. 824. Allow direct rollovers from retirement plans to Roth IRAs.
Sec. 825. Eligibility for participation in retirement plans.
Sec. 826. Modifications of rules governing hardships and unforseen 
          financial emergencies.
Sec. 827. Penalty-free withdrawals from retirement plans for individuals 
          called to active duty for at least 179 days.
Sec. 828. Waiver of 10 percent early withdrawal penalty tax on certain 
          distributions of pension plans for public safety employees.
Sec. 829. Allow rollovers by nonspouse beneficiaries of certain 
          retirement plan distributions.
Sec. 830. Direct payment of tax refunds to individual retirement plans.
Sec. 831. Allowance of additional IRA payments in certain bankruptcy 
          cases.
Sec. 832. Determination of average compensation for section 415 limits.
Sec. 833. Inflation indexing of gross income limitations on certain 
          retirement savings incentives.

                 Subtitle D--Health and Medical Benefits

Sec. 841. Use of excess pension assets for future retiree health 
          benefits and collectively bargained retiree health benefits.
Sec. 842. Transfer of excess pension assets to multiemployer health 
          plan.
Sec. 843. Allowance of reserve for medical benefits of plans sponsored 
          by bona fide associations.
Sec. 844. Treatment of annuity and life insurance contracts with a long-
          term care insurance feature.
Sec. 845. Distributions from governmental retirement plans for health 
          and long-term care insurance for public safety officers.

            Subtitle E--United States Tax Court Modernization

Sec. 851. Cost-of-living adjustments for Tax Court judicial survivor 
          annuities.
Sec. 852. Cost of life insurance coverage for Tax Court judges age 65 or 
          over.
Sec. 853. Participation of Tax Court judges in the Thrift Savings Plan.
Sec. 854. Annuities to surviving spouses and dependent children of 
          special trial judges of the Tax Court.
Sec. 855. Jurisdiction of Tax Court over collection due process cases.
Sec. 856. Provisions for recall.
Sec. 857. Authority for special trial judges to hear and decide certain 
          employment status cases.
Sec. 858. Confirmation of authority of Tax Court to apply doctrine of 
          equitable recoupment.
Sec. 859. Tax Court filing fee in all cases commenced by filing 
          petition.
Sec. 860. Expanded use of Tax Court practice fee for pro se taxpayers.

                      Subtitle F--Other Provisions

Sec. 861. Extension to all governmental plans of current moratorium on 
          application of certain nondiscrimination rules applicable to 
          State and local plans.
Sec. 862. Elimination of aggregate limit for usage of excess funds from 
          black lung disability trusts.
Sec. 863. Treatment of death benefits from corporate-owned life 
          insurance.
Sec. 864. Treatment of test room supervisors and proctors who assist in 
          the administration of college entrance and placement exams.
Sec. 865. Grandfather rule for church plans which self-annuitize.
Sec. 866. Exemption for income from leveraged real estate held by church 
          plans.
Sec. 867. Church plan rule.
Sec. 868. Gratuitous transfer for benefits of employees.

TITLE IX--INCREASE IN PENSION PLAN DIVERSIFICATION AND PARTICIPATION AND 
                        OTHER PENSION PROVISIONS

Sec. 901. Defined contribution plans required to provide employees with 
          freedom to invest their plan assets.
Sec. 902. Increasing participation through automatic contribution 
          arrangements.
Sec. 903. Treatment of eligible combined defined benefit plans and 
          qualified cash or deferred arrangements.
Sec. 904. Faster vesting of employer nonelective contributions.
Sec. 905. Distributions during working retirement.
Sec. 906. Treatment of certain pension plans of Indian tribal 
          governments.

       TITLE X--PROVISIONS RELATING TO SPOUSAL PENSION PROTECTION

Sec. 1001. Regulations on time and order of issuance of domestic 
          relations orders.
Sec. 1002. Entitlement of divorced spouses to railroad retirement 
          annuities independent of actual entitlement of employee.
Sec. 1003. Extension of tier II railroad retirement benefits to 
          surviving former spouses pursuant to divorce agreements.
Sec. 1004. Requirement for additional survivor annuity option.

                   TITLE XI--ADMINISTRATIVE PROVISIONS

Sec. 1101. Employee plans compliance resolution system.
Sec. 1102. Notice and consent period regarding distributions.
Sec. 1103. Reporting simplification.
Sec. 1104. Voluntary early retirement incentive and employment retention 
          plans maintained by local educational agencies and other 
          entities.
Sec. 1105. No reduction in unemployment compensation as a result of 
          pension rollovers.
Sec. 1106. Revocation of election relating to treatment as multiemployer 
          plan.
Sec. 1107. Provisions relating to plan amendments.

         TITLE XII--PROVISIONS RELATING TO EXEMPT ORGANIZATIONS

                Subtitle A--Charitable Giving Incentives

Sec. 1201. Tax-free distributions from individual retirement plans for 
          charitable purposes.
Sec. 1202. Extension of modification of charitable deduction for 
          contributions of food inventory.
Sec. 1203. Basis adjustment to stock of S corporation contributing 
          property.
Sec. 1204. Extension of modification of charitable deduction for 
          contributions of book inventory.
Sec. 1205. Modification of tax treatment of certain payments to 
          controlling exempt organizations.
Sec. 1206. Encouragement of contributions of capital gain real property 
          made for conservation purposes.
Sec. 1207. Excise taxes exemption for blood collector organizations.

               Subtitle B--Reforming Exempt Organizations

                         Part 1--General Reforms

Sec. 1211. Reporting on certain acquisitions of interests in insurance 
          contracts in which certain exempt organizations hold an 
          interest.
Sec. 1212. Increase in penalty excise taxes relating to public 
          charities, social welfare organizations, and private 
          foundations.
Sec. 1213. Reform of charitable contributions of certain easements in 
          registered historic districts and reduced deduction for 
          portion of qualified conservation contribution attributable to 
          rehabilitation credit.
Sec. 1214. Charitable contributions of taxidermy property.
Sec. 1215. Recapture of tax benefit for charitable contributions of 
          exempt use property not used for an exempt use.
Sec. 1216. Limitation of deduction for charitable contributions of 
          clothing and household items.
Sec. 1217. Modification of recordkeeping requirements for certain 
          charitable contributions.
Sec. 1218. Contributions of fractional interests in tangible personal 
          property.
Sec. 1219. Provisions relating to substantial and gross overstatements 
          of valuations.
Sec. 1220. Additional standards for credit counseling organizations.
Sec. 1221. Expansion of the base of tax on private foundation net 
          investment income.
Sec. 1222. Definition of convention or association of churches.
Sec. 1223. Notification requirement for entities not currently required 
          to file.
Sec. 1224. Disclosure to State officials relating to exempt 
          organizations.
Sec. 1225. Public disclosure of information relating to unrelated 
          business income tax returns.
Sec. 1226. Study on donor advised funds and supporting organizations.

         Part 2--Improved Accountability of Donor Advised Funds

Sec. 1231. Excise taxes relating to donor advised funds.
Sec. 1232. Excess benefit transactions involving donor advised funds and 
          sponsoring organizations.
Sec. 1233. Excess business holdings of donor advised funds.
Sec. 1234. Treatment of charitable contribution deductions to donor 
          advised funds.
Sec. 1235. Returns of, and applications for recognition by, sponsoring 
          organizations.

       Part 3--Improved Accountability of Supporting Organizations

Sec. 1241. Requirements for supporting organizations.
Sec. 1242. Excess benefit transactions involving supporting 
          organizations.
Sec. 1243. Excess business holdings of supporting organizations.
Sec. 1244. Treatment of amounts paid to supporting organizations by 
          private foundations.
Sec. 1245. Returns of supporting organizations.

                      TITLE XIII--OTHER PROVISIONS

Sec. 1301. Technical corrections relating to mine safety.
Sec. 1302. Going-to-the-sun road.
Sec. 1303. Exception to the local furnishing requirement of the tax-
          exempt bond rules.
Sec. 1304. Qualified tuition programs.

                      TITLE XIV--TARIFF PROVISIONS

Sec. 1401. Short title; table of contents.

 TITLE I--REFORM OF FUNDING RULES FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                             PENSION PLANS
 Subtitle A--Amendments to Employee Retirement Income Security Act of 
                                  1974

SEC. 101. MINIMUM FUNDING STANDARDS.

    (a) Repeal of Existing Funding Rules.--Sections 302 through 308 of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082 
through 1086) are repealed.
    (b) New Minimum Funding Standards.--Part 3 of subtitle B of title I 
of such Act (as amended by subsection (a)) is amended by inserting 
after section 301 the following new section:

``SEC. 302. MINIMUM FUNDING STANDARDS.

    ``(a) Requirement To Meet Minimum Funding Standard.--
        ``(1) In general.--A plan to which this part applies shall 
    satisfy the minimum funding standard applicable to the plan for any 
    plan year.
        ``(2) Minimum funding standard.--For purposes of paragraph (1), 
    a plan shall be treated as satisfying the minimum funding standard 
    for a plan year if--
            ``(A) in the case of a defined benefit plan which is a 
        single-employer plan, the employer makes contributions to or 
        under the plan for the plan year which, in the aggregate, are 
        not less than the minimum required contribution determined 
        under section 303 for the plan for the plan year,
            ``(B) in the case of a money purchase plan which is a 
        single-employer plan, the employer makes contributions to or 
        under the plan for the plan year which are required under the 
        terms of the plan, and
            ``(C) in the case of a multiemployer plan, the employers 
        make contributions to or under the plan for any plan year 
        which, in the aggregate, are sufficient to ensure that the plan 
        does not have an accumulated funding deficiency under section 
        304 as of the end of the plan year.
    ``(b) Liability for Contributions.--
        ``(1) In general.--Except as provided in paragraph (2), the 
    amount of any contribution required by this section (including any 
    required installments under paragraphs (3) and (4) of section 
    303(j)) shall be paid by the employer responsible for making 
    contributions to or under the plan.
        ``(2) Joint and several liability where employer member of 
    controlled group.--If the employer referred to in paragraph (1) is 
    a member of a controlled group, each member of such group shall be 
    jointly and severally liable for payment of such contributions.
    ``(c) Variance From Minimum Funding Standards.--
        ``(1) Waiver in case of business hardship.--
            ``(A) In general.--If--
                ``(i) an employer is (or in the case of a multiemployer 
            plan, 10 percent or more of the number of employers 
            contributing to or under the plan is) unable to satisfy the 
            minimum funding standard for a plan year without temporary 
            substantial business hardship (substantial business 
            hardship in the case of a multiemployer plan), and
                ``(ii) application of the standard would be adverse to 
            the interests of plan participants in the aggregate,
        the Secretary of the Treasury may, subject to subparagraph (C), 
        waive the requirements of subsection (a) for such year with 
        respect to all or any portion of the minimum funding standard. 
        The Secretary of the Treasury shall not waive the minimum 
        funding standard with respect to a plan for more than 3 of any 
        15 (5 of any 15 in the case of a multiemployer plan) 
        consecutive plan years.
            ``(B) Effects of waiver.--If a waiver is granted under 
        subparagraph (A) for any plan year--
                ``(i) in the case of a single-employer plan, the 
            minimum required contribution under section 303 for the 
            plan year shall be reduced by the amount of the waived 
            funding deficiency and such amount shall be amortized as 
            required under section 303(e), and
                ``(ii) in the case of a multiemployer plan, the funding 
            standard account shall be credited under section 
            304(b)(3)(C) with the amount of the waived funding 
            deficiency and such amount shall be amortized as required 
            under section 304(b)(2)(C).
            ``(C) Waiver of amortized portion not allowed.--The 
        Secretary of the Treasury may not waive under subparagraph (A) 
        any portion of the minimum funding standard under subsection 
        (a) for a plan year which is attributable to any waived funding 
        deficiency for any preceding plan year.
        ``(2) Determination of business hardship.--For purposes of this 
    subsection, the factors taken into account in determining temporary 
    substantial business hardship (substantial business hardship in the 
    case of a multiemployer plan) shall include (but shall not be 
    limited to) whether or not--
            ``(A) the employer is operating at an economic loss,
            ``(B) there is substantial unemployment or underemployment 
        in the trade or business and in the industry concerned,
            ``(C) the sales and profits of the industry concerned are 
        depressed or declining, and
            ``(D) it is reasonable to expect that the plan will be 
        continued only if the waiver is granted.
        ``(3) Waived funding deficiency.--For purposes of this part, 
    the term `waived funding deficiency' means the portion of the 
    minimum funding standard under subsection (a) (determined without 
    regard to the waiver) for a plan year waived by the Secretary of 
    the Treasury and not satisfied by employer contributions.
        ``(4) Security for waivers for single-employer plans, 
    consultations.--
            ``(A) Security may be required.--
                ``(i) In general.--Except as provided in subparagraph 
            (C), the Secretary of the Treasury may require an employer 
            maintaining a defined benefit plan which is a single-
            employer plan (within the meaning of section 4001(a)(15)) 
            to provide security to such plan as a condition for 
            granting or modifying a waiver under paragraph (1).
                ``(ii) Special rules.--Any security provided under 
            clause (i) may be perfected and enforced only by the 
            Pension Benefit Guaranty Corporation, or at the direction 
            of the Corporation, by a contributing sponsor (within the 
            meaning of section 4001(a)(13)), or a member of such 
            sponsor's controlled group (within the meaning of section 
            4001(a)(14)).
            ``(B) Consultation with the pension benefit guaranty 
        corporation.--Except as provided in subparagraph (C), the 
        Secretary of the Treasury shall, before granting or modifying a 
        waiver under this subsection with respect to a plan described 
        in subparagraph (A)(i)--
                ``(i) provide the Pension Benefit Guaranty Corporation 
            with--

                    ``(I) notice of the completed application for any 
                waiver or modification, and
                    ``(II) an opportunity to comment on such 
                application within 30 days after receipt of such 
                notice, and

                ``(ii) consider--

                    ``(I) any comments of the Corporation under clause 
                (i)(II), and
                    ``(II) any views of any employee organization 
                (within the meaning of section 3(4)) representing 
                participants in the plan which are submitted in writing 
                to the Secretary of the Treasury in connection with 
                such application.

        Information provided to the Corporation under this subparagraph 
        shall be considered tax return information and subject to the 
        safeguarding and reporting requirements of section 6103(p) of 
        the Internal Revenue Code of 1986.
            ``(C) Exception for certain waivers.--
                ``(i) In general.--The preceding provisions of this 
            paragraph shall not apply to any plan with respect to which 
            the sum of--

                    ``(I) the aggregate unpaid minimum required 
                contributions for the plan year and all preceding plan 
                years, and
                    ``(II) the present value of all waiver amortization 
                installments determined for the plan year and 
                succeeding plan years under section 303(e)(2),

            is less than $1,000,000.
                ``(ii) Treatment of waivers for which applications are 
            pending.--The amount described in clause (i)(I) shall 
            include any increase in such amount which would result if 
            all applications for waivers of the minimum funding 
            standard under this subsection which are pending with 
            respect to such plan were denied.
                ``(iii) Unpaid minimum required contribution.--For 
            purposes of this subparagraph--

                    ``(I) In general.--The term `unpaid minimum 
                required contribution' means, with respect to any plan 
                year, any minimum required contribution under section 
                303 for the plan year which is not paid on or before 
                the due date (as determined under section 303(j)(1)) 
                for the plan year.
                    ``(II) Ordering rule.--For purposes of subclause 
                (I), any payment to or under a plan for any plan year 
                shall be allocated first to unpaid minimum required 
                contributions for all preceding plan years on a first-
                in, first-out basis and then to the minimum required 
                contribution under section 303 for the plan year.

        ``(5) Special rules for single-employer plans.--
            ``(A) Application must be submitted before date 2\1/2\ 
        months after close of year.--In the case of a single-employer 
        plan, no waiver may be granted under this subsection with 
        respect to any plan for any plan year unless an application 
        therefor is submitted to the Secretary of the Treasury not 
        later than the 15th day of the 3rd month beginning after the 
        close of such plan year.
            ``(B) Special rule if employer is member of controlled 
        group.--In the case of a single-employer plan, if an employer 
        is a member of a controlled group, the temporary substantial 
        business hardship requirements of paragraph (1) shall be 
        treated as met only if such requirements are met--
                ``(i) with respect to such employer, and
                ``(ii) with respect to the controlled group of which 
            such employer is a member (determined by treating all 
            members of such group as a single employer).
        The Secretary of the Treasury may provide that an analysis of a 
        trade or business or industry of a member need not be conducted 
        if such Secretary determines such analysis is not necessary 
        because the taking into account of such member would not 
        significantly affect the determination under this paragraph.
        ``(6) Advance notice.--
            ``(A) In general.--The Secretary of the Treasury shall, 
        before granting a waiver under this subsection, require each 
        applicant to provide evidence satisfactory to such Secretary 
        that the applicant has provided notice of the filing of the 
        application for such waiver to each affected party (as defined 
        in section 4001(a)(21)). Such notice shall include a 
        description of the extent to which the plan is funded for 
        benefits which are guaranteed under title IV and for benefit 
        liabilities.
            ``(B) Consideration of relevant information.--The Secretary 
        of the Treasury shall consider any relevant information 
        provided by a person to whom notice was given under 
        subparagraph (A).
        ``(7) Restriction on plan amendments.--
            ``(A) In general.--No amendment of a plan which increases 
        the liabilities of the plan by reason of any increase in 
        benefits, any change in the accrual of benefits, or any change 
        in the rate at which benefits become nonforfeitable under the 
        plan shall be adopted if a waiver under this subsection or an 
        extension of time under section 304(d) is in effect with 
        respect to the plan, or if a plan amendment described in 
        subsection (d)(2) has been made at any time in the preceding 12 
        months (24 months in the case of a multiemployer plan). If a 
        plan is amended in violation of the preceding sentence, any 
        such waiver, or extension of time, shall not apply to any plan 
        year ending on or after the date on which such amendment is 
        adopted.
            ``(B) Exception.--Subparagraph (A) shall not apply to any 
        plan amendment which--
                ``(i) the Secretary of the Treasury determines to be 
            reasonable and which provides for only de minimis increases 
            in the liabilities of the plan,
                ``(ii) only repeals an amendment described in 
            subsection (d)(2), or
                ``(iii) is required as a condition of qualification 
            under part I of subchapter D of chapter 1 of the Internal 
            Revenue Code of 1986.
        ``(8) Cross reference.--For corresponding duties of the 
    Secretary of the Treasury with regard to implementation of the 
    Internal Revenue Code of 1986, see section 412(c) of such Code.
    ``(d) Miscellaneous Rules.--
        ``(1) Change in method or year.--If the funding method, the 
    valuation date, or a plan year for a plan is changed, the change 
    shall take effect only if approved by the Secretary of the 
    Treasury.
        ``(2) Certain retroactive plan amendments.--For purposes of 
    this section, any amendment applying to a plan year which--
            ``(A) is adopted after the close of such plan year but no 
        later than 2\1/2\ months after the close of the plan year (or, 
        in the case of a multiemployer plan, no later than 2 years 
        after the close of such plan year),
            ``(B) does not reduce the accrued benefit of any 
        participant determined as of the beginning of the first plan 
        year to which the amendment applies, and
            ``(C) does not reduce the accrued benefit of any 
        participant determined as of the time of adoption except to the 
        extent required by the circumstances,
    shall, at the election of the plan administrator, be deemed to have 
    been made on the first day of such plan year. No amendment 
    described in this paragraph which reduces the accrued benefits of 
    any participant shall take effect unless the plan administrator 
    files a notice with the Secretary of the Treasury notifying him of 
    such amendment and such Secretary has approved such amendment, or 
    within 90 days after the date on which such notice was filed, 
    failed to disapprove such amendment. No amendment described in this 
    subsection shall be approved by the Secretary of the Treasury 
    unless such Secretary determines that such amendment is necessary 
    because of a temporary substantial business hardship (as determined 
    under subsection (c)(2)) or a substantial business hardship (as so 
    determined) in the case of a multiemployer plan and that a waiver 
    under subsection (c) (or, in the case of a multiemployer plan, any 
    extension of the amortization period under section 304(d)) is 
    unavailable or inadequate.
        ``(3) Controlled group.--For purposes of this section, the term 
    `controlled group' means any group treated as a single employer 
    under subsection (b), (c), (m), or (o) of section 414 of the 
    Internal Revenue Code of 1986.''.
    (c) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended by striking the items relating to sections 302 through 
308 and inserting the following new item:

``Sec. 302. Minimum funding standards.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after 2007.

SEC. 102. FUNDING RULES FOR SINGLE-EMPLOYER DEFINED BENEFIT PENSION 
              PLANS.

    (a) In General.--Part 3 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (as amended by section 101 of 
this Act) is amended by inserting after section 302 the following new 
section:

``SEC. 303. MINIMUM FUNDING STANDARDS FOR SINGLE-EMPLOYER DEFINED 
              BENEFIT PENSION PLANS.

    ``(a) Minimum Required Contribution.--For purposes of this section 
and section 302(a)(2)(A), except as provided in subsection (f), the 
term `minimum required contribution' means, with respect to any plan 
year of a single-employer plan--
        ``(1) in any case in which the value of plan assets of the plan 
    (as reduced under subsection (f)(4)(B)) is less than the funding 
    target of the plan for the plan year, the sum of--
            ``(A) the target normal cost of the plan for the plan year,
            ``(B) the shortfall amortization charge (if any) for the 
        plan for the plan year determined under subsection (c), and
            ``(C) the waiver amortization charge (if any) for the plan 
        for the plan year as determined under subsection (e); or
        ``(2) in any case in which the value of plan assets of the plan 
    (as reduced under subsection (f)(4)(B)) equals or exceeds the 
    funding target of the plan for the plan year, the target normal 
    cost of the plan for the plan year reduced (but not below zero) by 
    such excess.
    ``(b) Target Normal Cost.--For purposes of this section, except as 
provided in subsection (i)(2) with respect to plans in at-risk status, 
the term `target normal cost' means, for any plan year, the present 
value of all benefits which are expected to accrue or to be earned 
under the plan during the plan year. For purposes of this subsection, 
if any benefit attributable to services performed in a preceding plan 
year is increased by reason of any increase in compensation during the 
current plan year, the increase in such benefit shall be treated as 
having accrued during the current plan year.
    ``(c) Shortfall Amortization Charge.--
        ``(1) In general.--For purposes of this section, the shortfall 
    amortization charge for a plan for any plan year is the aggregate 
    total (not less than zero) of the shortfall amortization 
    installments for such plan year with respect to the shortfall 
    amortization bases for such plan year and each of the 6 preceding 
    plan years.
        ``(2) Shortfall amortization installment.--For purposes of 
    paragraph (1)--
            ``(A) Determination.--The shortfall amortization 
        installments are the amounts necessary to amortize the 
        shortfall amortization base of the plan for any plan year in 
        level annual installments over the 7-plan-year period beginning 
        with such plan year.
            ``(B) Shortfall installment.--The shortfall amortization 
        installment for any plan year in the 7-plan-year period under 
        subparagraph (A) with respect to any shortfall amortization 
        base is the annual installment determined under subparagraph 
        (A) for that year for that base.
            ``(C) Segment rates.--In determining any shortfall 
        amortization installment under this paragraph, the plan sponsor 
        shall use the segment rates determined under subparagraph (C) 
        of subsection (h)(2), applied under rules similar to the rules 
        of subparagraph (B) of subsection (h)(2).
        ``(3) Shortfall amortization base.--For purposes of this 
    section, the shortfall amortization base of a plan for a plan year 
    is--
            ``(A) the funding shortfall of such plan for such plan 
        year, minus
            ``(B) the present value (determined using the segment rates 
        determined under subparagraph (C) of subsection (h)(2), applied 
        under rules similar to the rules of subparagraph (B) of 
        subsection (h)(2)) of the aggregate total of the shortfall 
        amortization installments and waiver amortization installments 
        which have been determined for such plan year and any 
        succeeding plan year with respect to the shortfall amortization 
        bases and waiver amortization bases of the plan for any plan 
        year preceding such plan year.
        ``(4) Funding shortfall.--For purposes of this section, the 
    funding shortfall of a plan for any plan year is the excess (if 
    any) of--
            ``(A) the funding target of the plan for the plan year, 
        over
            ``(B) the value of plan assets of the plan (as reduced 
        under subsection (f)(4)(B)) for the plan year which are held by 
        the plan on the valuation date.
        ``(5) Exemption from new shortfall amortization base.--
            ``(A) In general.--In any case in which the value of plan 
        assets of the plan (as reduced under subsection (f)(4)(A)) is 
        equal to or greater than the funding target of the plan for the 
        plan year, the shortfall amortization base of the plan for such 
        plan year shall be zero.
            ``(B) Transition rule.--
                ``(i) In general.--Except as provided in clauses (iii) 
            and (iv), in the case of plan years beginning after 2007 
            and before 2011, only the applicable percentage of the 
            funding target shall be taken into account under paragraph 
            (3)(A) in determining the funding shortfall for the plan 
            year for purposes of subparagraph (A).
                ``(ii) Applicable percentage.--For purposes of 
            subparagraph (A), the applicable percentage shall be 
            determined in accordance with the following table:

              ``In the case of a plan year
                                                          The applicable
                beginning in calendar year:
                                                           percentage is
                    2008..........................................
                                                                     92 
                    2009..........................................
                                                                     94 
                    2010..........................................
                                                                     96.

                ``(iii) Limitation.--Clause (i) shall not apply with 
            respect to any plan year after 2008 unless the shortfall 
            amortization base for each of the preceding years beginning 
            after 2007 was zero (determined after application of this 
            subparagraph).
                ``(iv) Transition relief not available for new or 
            deficit reduction plans.--Clause (i) shall not apply to a 
            plan--

                    ``(I) which was not in effect for a plan year 
                beginning in 2007, or
                    ``(II) which was in effect for a plan year 
                beginning in 2007 and which was subject to section 
                302(d) (as in effect for plan years beginning in 2007), 
                determined after the application of paragraphs (6) and 
                (9) thereof.

        ``(6) Early deemed amortization upon attainment of funding 
    target.--In any case in which the funding shortfall of a plan for a 
    plan year is zero, for purposes of determining the shortfall 
    amortization charge for such plan year and succeeding plan years, 
    the shortfall amortization bases for all preceding plan years (and 
    all shortfall amortization installments determined with respect to 
    such bases) shall be reduced to zero.
    ``(d) Rules Relating to Funding Target.--For purposes of this 
section--
        ``(1) Funding target.--Except as provided in subsection (i)(1) 
    with respect to plans in at-risk status, the funding target of a 
    plan for a plan year is the present value of all benefits accrued 
    or earned under the plan as of the beginning of the plan year.
        ``(2) Funding target attainment percentage.--The `funding 
    target attainment percentage' of a plan for a plan year is the 
    ratio (expressed as a percentage) which--
            ``(A) the value of plan assets for the plan year (as 
        reduced under subsection (f)(4)(B)), bears to
            ``(B) the funding target of the plan for the plan year 
        (determined without regard to subsection (i)(1)).
    ``(e) Waiver Amortization Charge.--
        ``(1) Determination of waiver amortization charge.--The waiver 
    amortization charge (if any) for a plan for any plan year is the 
    aggregate total of the waiver amortization installments for such 
    plan year with respect to the waiver amortization bases for each of 
    the 5 preceding plan years.
        ``(2) Waiver amortization installment.--For purposes of 
    paragraph (1)--
            ``(A) Determination.--The waiver amortization installments 
        are the amounts necessary to amortize the waiver amortization 
        base of the plan for any plan year in level annual installments 
        over a period of 5 plan years beginning with the succeeding 
        plan year.
            ``(B) Waiver installment.--The waiver amortization 
        installment for any plan year in the 5-year period under 
        subparagraph (A) with respect to any waiver amortization base 
        is the annual installment determined under subparagraph (A) for 
        that year for that base.
        ``(3) Interest rate.--In determining any waiver amortization 
    installment under this subsection, the plan sponsor shall use the 
    segment rates determined under subparagraph (C) of subsection 
    (h)(2), applied under rules similar to the rules of subparagraph 
    (B) of subsection (h)(2).
        ``(4) Waiver amortization base.--The waiver amortization base 
    of a plan for a plan year is the amount of the waived funding 
    deficiency (if any) for such plan year under section 302(c).
        ``(5) Early deemed amortization upon attainment of funding 
    target.--In any case in which the funding shortfall of a plan for a 
    plan year is zero, for purposes of determining the waiver 
    amortization charge for such plan year and succeeding plan years, 
    the waiver amortization bases for all preceding plan years (and all 
    waiver amortization installments determined with respect to such 
    bases) shall be reduced to zero.
    ``(f) Reduction of Minimum Required Contribution by Prefunding 
Balance and Funding Standard Carryover Balance.--
        ``(1) Election to maintain balances.--
            ``(A) Prefunding balance.--The plan sponsor of a single-
        employer plan may elect to maintain a prefunding balance.
            ``(B) Funding standard carryover balance.--
                ``(i) In general.--In the case of a single-employer 
            plan described in clause (ii), the plan sponsor may elect 
            to maintain a funding standard carryover balance, until 
            such balance is reduced to zero.
                ``(ii) Plans maintaining funding standard account in 
            2007.--A plan is described in this clause if the plan--

                    ``(I) was in effect for a plan year beginning in 
                2007, and
                    ``(II) had a positive balance in the funding 
                standard account under section 302(b) as in effect for 
                such plan year and determined as of the end of such 
                plan year.

        ``(2) Application of balances.--A prefunding balance and a 
    funding standard carryover balance maintained pursuant to this 
    paragraph--
            ``(A) shall be available for crediting against the minimum 
        required contribution, pursuant to an election under paragraph 
        (3),
            ``(B) shall be applied as a reduction in the amount treated 
        as the value of plan assets for purposes of this section, to 
        the extent provided in paragraph (4), and
            ``(C) may be reduced at any time, pursuant to an election 
        under paragraph (5).
        ``(3) Election to apply balances against minimum required 
    contribution.--
            ``(A) In general.--Except as provided in subparagraphs (B) 
        and (C), in the case of any plan year in which the plan sponsor 
        elects to credit against the minimum required contribution for 
        the current plan year all or a portion of the prefunding 
        balance or the funding standard carryover balance for the 
        current plan year (not in excess of such minimum required 
        contribution), the minimum required contribution for the plan 
        year shall be reduced as of the first day of the plan year by 
        the amount so credited by the plan sponsor. For purposes of the 
        preceding sentence, the minimum required contribution shall be 
        determined after taking into account any waiver under section 
        302(c).
            ``(B) Coordination with funding standard carryover 
        balance.--To the extent that any plan has a funding standard 
        carryover balance greater than zero, no amount of the 
        prefunding balance of such plan may be credited under this 
        paragraph in reducing the minimum required contribution.
            ``(C) Limitation for underfunded plans.--The preceding 
        provisions of this paragraph shall not apply for any plan year 
        if the ratio (expressed as a percentage) which--
                ``(i) the value of plan assets for the preceding plan 
            year (as reduced under paragraph (4)(C)), bears to
                ``(ii) the funding target of the plan for the preceding 
            plan year (determined without regard to subsection (i)(1)),
        is less than 80 percent. In the case of plan years beginning in 
        2008, the ratio under this subparagraph may be determined using 
        such methods of estimation as the Secretary of the Treasury may 
        prescribe.
        ``(4) Effect of balances on amounts treated as value of plan 
    assets.--In the case of any plan maintaining a prefunding balance 
    or a funding standard carryover balance pursuant to this 
    subsection, the amount treated as the value of plan assets shall be 
    deemed to be such amount, reduced as provided in the following 
    subparagraphs:
            ``(A) Applicability of shortfall amortization base.--For 
        purposes of subsection (c)(5), the value of plan assets is 
        deemed to be such amount, reduced by the amount of the 
        prefunding balance, but only if an election under paragraph (2) 
        applying any portion of the prefunding balance in reducing the 
        minimum required contribution is in effect for the plan year.
            ``(B) Determination of excess assets, funding shortfall, 
        and funding target attainment percentage.--
                ``(i) In general.--For purposes of subsections (a), 
            (c)(4)(B), and (d)(2)(A), the value of plan assets is 
            deemed to be such amount, reduced by the amount of the 
            prefunding balance and the funding standard carryover 
            balance.
                ``(ii) Special rule for certain binding agreements with 
            pbgc.--For purposes of subsection (c)(4)(B), the value of 
            plan assets shall not be deemed to be reduced for a plan 
            year by the amount of the specified balance if, with 
            respect to such balance, there is in effect for a plan year 
            a binding written agreement with the Pension Benefit 
            Guaranty Corporation which provides that such balance is 
            not available to reduce the minimum required contribution 
            for the plan year. For purposes of the preceding sentence, 
            the term `specified balance' means the prefunding balance 
            or the funding standard carryover balance, as the case may 
            be.
            ``(C) Availability of balances in plan year for crediting 
        against minimum required contribution.--For purposes of 
        paragraph (3)(C)(i) of this subsection, the value of plan 
        assets is deemed to be such amount, reduced by the amount of 
        the prefunding balance.
        ``(5) Election to reduce balance prior to determinations of 
    value of plan assets and crediting against minimum required 
    contribution.--
            ``(A) In general.--The plan sponsor may elect to reduce by 
        any amount the balance of the prefunding balance and the 
        funding standard carryover balance for any plan year (but not 
        below zero). Such reduction shall be effective prior to any 
        determination of the value of plan assets for such plan year 
        under this section and application of the balance in reducing 
        the minimum required contribution for such plan for such plan 
        year pursuant to an election under paragraph (2).
            ``(B) Coordination between prefunding balance and funding 
        standard carryover balance.--To the extent that any plan has a 
        funding standard carryover balance greater than zero, no 
        election may be made under subparagraph (A) with respect to the 
        prefunding balance.
        ``(6) Prefunding balance.--
            ``(A) In general.--A prefunding balance maintained by a 
        plan shall consist of a beginning balance of zero, increased 
        and decreased to the extent provided in subparagraphs (B) and 
        (C), and adjusted further as provided in paragraph (8).
            ``(B) Increases.--
                ``(i) In general.--As of the first day of each plan 
            year beginning after 2008, the prefunding balance of a plan 
            shall be increased by the amount elected by the plan 
            sponsor for the plan year. Such amount shall not exceed the 
            excess (if any) of--

                    ``(I) the aggregate total of employer contributions 
                to the plan for the preceding plan year, over--
                    ``(II) the minimum required contribution for such 
                preceding plan year.

                ``(ii) Adjustments for interest.--Any excess 
            contributions under clause (i) shall be properly adjusted 
            for interest accruing for the periods between the first day 
            of the current plan year and the dates on which the excess 
            contributions were made, determined by using the effective 
            interest rate for the preceding plan year and by treating 
            contributions as being first used to satisfy the minimum 
            required contribution.
                ``(iii) Certain contributions necessary to avoid 
            benefit limitations disregarded.--The excess described in 
            clause (i) with respect to any preceding plan year shall be 
            reduced (but not below zero) by the amount of contributions 
            an employer would be required to make under paragraph (1), 
            (2), or (4) of section 206(g) to avoid a benefit limitation 
            which would otherwise be imposed under such paragraph for 
            the preceding plan year. Any contribution which may be 
            taken into account in satisfying the requirements of more 
            than 1 of such paragraphs shall be taken into account only 
            once for purposes of this clause.
            ``(C) Decrease.--The prefunding balance of a plan shall be 
        decreased (but not below zero) by--
                ``(i) as of the first day of each plan year after 2008, 
            the amount of such balance credited under paragraph (2) (if 
            any) in reducing the minimum required contribution of the 
            plan for the preceding plan year, and
                ``(ii) as of the time specified in paragraph (5)(A), 
            any reduction in such balance elected under paragraph (5).
        ``(7) Funding standard carryover balance.--
            ``(A) In general.--A funding standard carryover balance 
        maintained by a plan shall consist of a beginning balance 
        determined under subparagraph (B), decreased to the extent 
        provided in subparagraph (C), and adjusted further as provided 
        in paragraph (8).
            ``(B) Beginning balance.--The beginning balance of the 
        funding standard carryover balance shall be the positive 
        balance described in paragraph (1)(B)(ii)(II).
            ``(C) Decreases.--The funding standard carryover balance of 
        a plan shall be decreased (but not below zero) by--
                ``(i) as of the first day of each plan year after 2008, 
            the amount of such balance credited under paragraph (2) (if 
            any) in reducing the minimum required contribution of the 
            plan for the preceding plan year, and
                ``(ii) as of the time specified in paragraph (5)(A), 
            any reduction in such balance elected under paragraph (5).
        ``(8) Adjustments for investment experience.--In determining 
    the prefunding balance or the funding standard carryover balance of 
    a plan as of the first day of the plan year, the plan sponsor 
    shall, in accordance with regulations prescribed by the Secretary 
    of the Treasury, adjust such balance to reflect the rate of return 
    on plan assets for the preceding plan year. Notwithstanding 
    subsection (g)(3), such rate of return shall be determined on the 
    basis of fair market value and shall properly take into account, in 
    accordance with such regulations, all contributions, distributions, 
    and other plan payments made during such period.
        ``(9) Elections.--Elections under this subsection shall be made 
    at such times, and in such form and manner, as shall be prescribed 
    in regulations of the Secretary of the Treasury.
    ``(g) Valuation of Plan Assets and Liabilities.--
        ``(1) Timing of determinations.--Except as otherwise provided 
    under this subsection, all determinations under this section for a 
    plan year shall be made as of the valuation date of the plan for 
    such plan year.
        ``(2) Valuation date.--For purposes of this section--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the valuation date of a plan for any plan year shall be the 
        first day of the plan year.
            ``(B) Exception for small plans.--If, on each day during 
        the preceding plan year, a plan had 100 or fewer participants, 
        the plan may designate any day during the plan year as its 
        valuation date for such plan year and succeeding plan years. 
        For purposes of this subparagraph, all defined benefit plans 
        which are single-employer plans and are maintained by the same 
        employer (or any member of such employer's controlled group) 
        shall be treated as 1 plan, but only participants with respect 
        to such employer or member shall be taken into account.
            ``(C) Application of certain rules in determination of plan 
        size.--For purposes of this paragraph--
                ``(i) Plans not in existence in preceding year.--In the 
            case of the first plan year of any plan, subparagraph (B) 
            shall apply to such plan by taking into account the number 
            of participants that the plan is reasonably expected to 
            have on days during such first plan year.
                ``(ii) Predecessors.--Any reference in subparagraph (B) 
            to an employer shall include a reference to any predecessor 
            of such employer.
        ``(3) Determination of value of plan assets.--For purposes of 
    this section--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the value of plan assets shall be the fair market value of the 
        assets.
            ``(B) Averaging allowed.--A plan may determine the value of 
        plan assets on the basis of the averaging of fair market 
        values, but only if such method--
                ``(i) is permitted under regulations prescribed by the 
            Secretary of the Treasury,
                ``(ii) does not provide for averaging of such values 
            over more than the period beginning on the last day of the 
            25th month preceding the month in which the valuation date 
            occurs and ending on the valuation date (or a similar 
            period in the case of a valuation date which is not the 1st 
            day of a month), and
                ``(iii) does not result in a determination of the value 
            of plan assets which, at any time, is lower than 90 percent 
            or greater than 110 percent of the fair market value of 
            such assets at such time.
        Any such averaging shall be adjusted for contributions and 
        distributions (as provided by the Secretary of the Treasury).
        ``(4) Accounting for contribution receipts.--For purposes of 
    determining the value of assets under paragraph (3)--
            ``(A) Prior year contributions.--If--
                ``(i) an employer makes any contribution to the plan 
            after the valuation date for the plan year in which the 
            contribution is made, and
                ``(ii) the contribution is for a preceding plan year,
        the contribution shall be taken into account as an asset of the 
        plan as of the valuation date, except that in the case of any 
        plan year beginning after 2008, only the present value 
        (determined as of the valuation date) of such contribution may 
        be taken into account. For purposes of the preceding sentence, 
        present value shall be determined using the effective interest 
        rate for the preceding plan year to which the contribution is 
        properly allocable.
            ``(B) Special rule for current year contributions made 
        before valuation date.--If any contributions for any plan year 
        are made to or under the plan during the plan year but before 
        the valuation date for the plan year, the assets of the plan as 
        of the valuation date shall not include--
                ``(i) such contributions, and
                ``(ii) interest on such contributions for the period 
            between the date of the contributions and the valuation 
            date, determined by using the effective interest rate for 
            the plan year.
    ``(h) Actuarial Assumptions and Methods.--
        ``(1) In general.--Subject to this subsection, the 
    determination of any present value or other computation under this 
    section shall be made on the basis of actuarial assumptions and 
    methods--
            ``(A) each of which is reasonable (taking into account the 
        experience of the plan and reasonable expectations), and
            ``(B) which, in combination, offer the actuary's best 
        estimate of anticipated experience under the plan.
        ``(2) Interest rates.--
            ``(A) Effective interest rate.--For purposes of this 
        section, the term `effective interest rate' means, with respect 
        to any plan for any plan year, the single rate of interest 
        which, if used to determine the present value of the plan's 
        accrued or earned benefits referred to in subsection (d)(1), 
        would result in an amount equal to the funding target of the 
        plan for such plan year.
            ``(B) Interest rates for determining funding target.--For 
        purposes of determining the funding target and normal cost of a 
        plan for any plan year, the interest rate used in determining 
        the present value of the benefits of the plan shall be--
                ``(i) in the case of benefits reasonably determined to 
            be payable during the 5-year period beginning on the first 
            day of the plan year, the first segment rate with respect 
            to the applicable month,
                ``(ii) in the case of benefits reasonably determined to 
            be payable during the 15-year period beginning at the end 
            of the period described in clause (i), the second segment 
            rate with respect to the applicable month, and
                ``(iii) in the case of benefits reasonably determined 
            to be payable after the period described in clause (ii), 
            the third segment rate with respect to the applicable 
            month.
            ``(C) Segment rates.--For purposes of this paragraph--
                ``(i) First segment rate.--The term `first segment 
            rate' means, with respect to any month, the single rate of 
            interest which shall be determined by the Secretary of the 
            Treasury for such month on the basis of the corporate bond 
            yield curve for such month, taking into account only that 
            portion of such yield curve which is based on bonds 
            maturing during the 5-year period commencing with such 
            month.
                ``(ii) Second segment rate.--The term `second segment 
            rate' means, with respect to any month, the single rate of 
            interest which shall be determined by the Secretary of the 
            Treasury for such month on the basis of the corporate bond 
            yield curve for such month, taking into account only that 
            portion of such yield curve which is based on bonds 
            maturing during the 15-year period beginning at the end of 
            the period described in clause (i).
                ``(iii) Third segment rate.--The term `third segment 
            rate' means, with respect to any month, the single rate of 
            interest which shall be determined by the Secretary of the 
            Treasury for such month on the basis of the corporate bond 
            yield curve for such month, taking into account only that 
            portion of such yield curve which is based on bonds 
            maturing during periods beginning after the period 
            described in clause (ii).
            ``(D) Corporate bond yield curve.--For purposes of this 
        paragraph--
                ``(i) In general.--The term `corporate bond yield 
            curve' means, with respect to any month, a yield curve 
            which is prescribed by the Secretary of the Treasury for 
            such month and which reflects the average, for the 24-month 
            period ending with the month preceding such month, of 
            monthly yields on investment grade corporate bonds with 
            varying maturities and that are in the top 3 quality levels 
            available.
                ``(ii) Election to use yield curve.--Solely for 
            purposes of determining the minimum required contribution 
            under this section, the plan sponsor may, in lieu of the 
            segment rates determined under subparagraph (C), elect to 
            use interest rates under the corporate bond yield curve. 
            For purposes of the preceding sentence such curve shall be 
            determined without regard to the 24-month averaging 
            described in clause (i). Such election, once made, may be 
            revoked only with the consent of the Secretary of the 
            Treasury.
            ``(E) Applicable month.--For purposes of this paragraph, 
        the term `applicable month' means, with respect to any plan for 
        any plan year, the month which includes the valuation date of 
        such plan for such plan year or, at the election of the plan 
        sponsor, any of the 4 months which precede such month. Any 
        election made under this subparagraph shall apply to the plan 
        year for which the election is made and all succeeding plan 
        years, unless the election is revoked with the consent of the 
        Secretary of the Treasury.
            ``(F) Publication requirements.--The Secretary of the 
        Treasury shall publish for each month the corporate bond yield 
        curve (and the corporate bond yield curve reflecting the 
        modification described in section 205(g)(3)(B)(iii)(I)) for 
        such month and each of the rates determined under subparagraph 
        (B) for such month. The Secretary of the Treasury shall also 
        publish a description of the methodology used to determine such 
        yield curve and such rates which is sufficiently detailed to 
        enable plans to make reasonable projections regarding the yield 
        curve and such rates for future 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 regard to this subparagraph, 
                multiplied by the applicable percentage, and
                    ``(II) the product of the rate determined under the 
                rules of section 302(b)(5)(B)(ii)(II) (as in effect for 
                plan years beginning in 2007), multiplied by a 
                percentage equal to 100 percent minus the applicable 
                percentage.

                ``(ii) Applicable percentage.--For purposes of clause 
            (i), the applicable percentage is 33\1/3\ percent for plan 
            years beginning in 2008 and 66\2/3\ 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 December 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 Secretary 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.
            ``(B) Periodic revision.--The Secretary of the Treasury 
        shall (at least every 10 years) make revisions in any table in 
        effect under subparagraph (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 Secretary 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 period.--Notwithstanding 
            clause (i), a mortality 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
                    ``(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 sufficient period of time, to have 
                credible information necessary for purposes of 
                subclause (II), and
                    ``(II) such table reflects the actual experience of 
                the pension plans maintained by the sponsor and 
                projected trends in general mortality experience.

                ``(iv) All plans in controlled group must use separate 
            table.--Except 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 
            sponsor unless--

                    ``(I) a separate mortality table is established and 
                used under this subparagraph for each other plan 
                maintained by the plan sponsor and if the plan sponsor 
                is a member of a controlled 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 existence, 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 mortality table submitted 
                to the Secretary of the Treasury for approval under 
                this subparagraph shall be treated as in effect as of 
                the 1st day of the period 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 requirements of clause 
                (iii). The 180-day period shall be extended upon mutual 
                agreement of the Secretary of the Treasury and the plan 
                sponsor.

            ``(D) Separate mortality tables for the disabled.--
        Notwithstanding subparagraph (A)--
                ``(i) In general.--The Secretary of the Treasury shall 
            establish mortality tables which may be used (in lieu of 
            the tables 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 individuals whose 
            disabilities occur in plan years 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 
            beginning after December 31, 1994, the tables under clause 
            (i) shall apply only with respect to individuals described 
            in such subclause who are disabled within the meaning of 
            title II of the Social Security Act and the regulations 
            thereunder.
                ``(iii) Periodic revision.--The Secretary of the 
            Treasury shall (at least every 10 years) make revisions in 
            any table in effect 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 form of optional forms of benefits 
        provided under the plan (including lump sum distributions, 
        determined on the basis of the plan's experience 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 
        specified in this subsection.
        ``(5) Approval of large changes in actuarial assumptions.--
            ``(A) In general.--No actuarial assumption 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 applies.--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 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 sponsors' 
            controlled groups (as defined in section 4001(a)(14)) which 
            are covered by title IV (disregarding plans with no 
            unfunded vested benefits) exceed $50,000,000, and
                ``(iii) the change in assumptions (determined 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 exceeds $5,000,000 and that is 
            5 percent or more of the funding target of the plan before 
            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--
                ``(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 assumptions 
            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 factor determined under subparagraph (C).
            ``(B) Additional actuarial assumptions.--The actuarial 
        assumptions described in this subparagraph are as follows:
                ``(i) All employees who are not otherwise assumed to 
            retire as of the valuation date but who will be eligible to 
            elect benefits during the plan year and the 10 succeeding 
            plan years shall be assumed to retire 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 age (determined after application of clause (i)) 
            which would result in the highest present value of 
            benefits.
            ``(C) Loading factor.--The loading factor applied with 
        respect to a plan under this paragraph for any plan year is the 
        sum of--
                ``(i) $700, times the number of participants in the 
            plan, plus
                ``(ii) 4 percent of the funding target (determined 
            without regard to this paragraph) 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 
        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 (determined 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 (determined under this section by using 
            the additional actuarial assumptions described in paragraph 
            (1)(B) in computing the funding target) is less than 70 
            percent.
            ``(B) Transition rule.--In the case of plan years beginning 
        in 2008, 2009, and 2010, subparagraph (A)(i) shall be applied 
        by substituting the following percentages for `80 percent':
                ``(i) 65 percent in the case of 2008.
                ``(ii) 70 percent in the case of 2009.
                ``(iii) 75 percent in the case of 2010.
        In the case of plan years beginning in 2008, the funding target 
        attainment percentage for the preceding plan year under 
        subparagraph (A)(ii) may be determined using such methods of 
        estimation as the Secretary of the Treasury may provide.
            ``(C) Special rule for employees offered early retirement 
        in 2006.--
                ``(i) In general.--For purposes of subparagraph 
            (A)(ii), the additional actuarial assumptions described in 
            paragraph (1)(B) shall not be taken into account with 
            respect to any employee if--

                    ``(I) such employee is employed by a specified 
                automobile manufacturer,
                    ``(II) such employee is offered a substantial 
                amount of additional cash compensation, substantially 
                enhanced retirement benefits under the plan, or 
                materially reduced employment duties on the condition 
                that by a specified date (not later than December 31, 
                2010) the employee retires (as defined under the terms 
                of the plan),
                    ``(III) such offer is made during 2006 and pursuant 
                to a bona fide retirement incentive program and 
                requires, by the terms of the offer, that such offer 
                can be accepted not later than a specified date (not 
                later than December 31, 2006), and
                    ``(IV) such employee does not elect to accept such 
                offer before the specified date on which the offer 
                expires.

                ``(ii) Specified automobile manufacturer.--For purposes 
            of clause (i), the term `specified automobile manufacturer' 
            means--

                    ``(I) any manufacturer of automobiles, and
                    ``(II) any manufacturer of automobile parts which 
                supplies such parts directly to a manufacturer of 
                automobiles and which, after a transaction or series of 
                transactions ending in 1999, ceased to be a member of a 
                controlled group which included such manufacturer of 
                automobiles.

        ``(5) Transition between applicable funding targets and between 
    applicable target normal costs.--
            ``(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 determined 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 regard to this 
            subsection.
            ``(B) Transition percentage.--For purposes of subparagraph 
        (A), the transition percentage shall be determined in 
        accordance with the following table:

            ``If the consecutive number of

              years (including the plan year)
                                                          The transition
            the plan is in at-risk status is--
                                                         percentage is--
                  1...............................................
                                                                     20 
                  2...............................................
                                                                     40 
                  3...............................................
                                                                     60 
                  4...............................................
                                                                     80.

            ``(C) Years before effective date.--For purposes of this 
        paragraph, plan years beginning before 2008 shall not be taken 
        into account.
        ``(6) Small plan exception.--If, on each day during the 
    preceding plan year, a plan had 500 or fewer participants, the plan 
    shall not be treated as in at-risk status for the plan year. For 
    purposes of this paragraph, all defined benefit plans (other than 
    multiemployer plans) maintained by the same employer (or any member 
    of such employer's controlled group) shall be treated as 1 plan, 
    but only participants with respect to such employer or member shall 
    be taken into account and the rules of subsection (g)(2)(C) shall 
    apply.
    ``(j) Payment of Minimum Required Contributions.--
        ``(1) In general.--For purposes of this section, the due date 
    for any payment of any minimum required contribution for any plan 
    year shall be 8\1/2\ months after the close of the plan year.
        ``(2) Interest.--Any payment required under paragraph (1) for a 
    plan year that is made on a date other than the valuation date for 
    such plan year shall be adjusted for interest accruing for the 
    period between the valuation date and the payment date, at the 
    effective rate of interest for the plan for such plan year.
        ``(3) Accelerated quarterly contribution schedule for 
    underfunded plans.--
            ``(A) Failure to timely make required installment.--In any 
        case in which the plan has a funding shortfall for the 
        preceding plan year, the employer maintaining the plan shall 
        make the required installments under this paragraph and if the 
        employer fails to pay the full amount of a required installment 
        for the plan year, then the amount of interest charged under 
        paragraph (2) on the underpayment for the period of 
        underpayment shall be determined by using a rate of interest 
        equal to the rate otherwise used under paragraph (2) plus 5 
        percentage points.
            ``(B) Amount of underpayment, period of underpayment.--For 
        purposes of subparagraph (A)--
                ``(i) Amount.--The amount of the underpayment shall be 
            the excess of--

                    ``(I) the required installment, over
                    ``(II) the amount (if any) of the installment 
                contributed to or under the plan on or before the due 
                date for the installment.

                ``(ii) Period of underpayment.--The period for which 
            any interest is charged under this paragraph with respect 
            to any portion of the underpayment shall run from the due 
            date for the installment to the date on which such portion 
            is contributed to or under the plan.
                ``(iii) Order of crediting contributions.--For purposes 
            of clause (i)(II), contributions shall be credited against 
            unpaid required installments in the order in which such 
            installments are required to be paid.
            ``(C) Number of required installments; due dates.--For 
        purposes of this paragraph--
                ``(i) Payable in 4 installments.--There shall be 4 
            required installments for each plan year.
                ``(ii) Time for payment of installments.--The due dates 
            for required installments are set forth in the following 
            table:

 
 
 
``In the case of the following
 required installment:
                                    The due date is:
  1st.............................  April 15
  2nd.............................  July 15
  3rd.............................  October 15
  4th.............................  January 15 of the  following year.


            ``(D) Amount of required installment.--For purposes of this 
        paragraph--
                ``(i) In general.--The amount of any required 
            installment shall be 25 percent of the required annual 
            payment.
                ``(ii) Required annual payment.--For purposes of clause 
            (i), the term `required annual payment' means the lesser 
            of--

                    ``(I) 90 percent of the minimum required 
                contribution (determined without regard to this 
                subsection) to the plan for the plan year under this 
                section, or
                    ``(II) 100 percent of the minimum required 
                contribution (determined without regard to this 
                subsection or to any waiver under section 302(c)) to 
                the plan for the preceding plan year.

            Subclause (II) shall not apply if the preceding plan year 
            referred to in such clause was not a year of 12 months.
            ``(E) Fiscal years and short years.--
                ``(i) Fiscal years.--In applying this paragraph to a 
            plan year beginning on any date other than January 1, there 
            shall be substituted for the months specified in this 
            paragraph, the months which correspond thereto.
                ``(ii) Short plan year.--This subparagraph shall be 
            applied to plan years of less than 12 months in accordance 
            with regulations prescribed by the Secretary of the 
            Treasury.
        ``(4) Liquidity requirement in connection with quarterly 
    contributions.--
            ``(A) In general.--A plan to which this paragraph applies 
        shall be treated as failing to pay the full amount of any 
        required installment under paragraph (3) to the extent that the 
        value of the liquid assets paid in such installment is less 
        than the liquidity shortfall (whether or not such liquidity 
        shortfall exceeds the amount of such installment required to be 
        paid but for this paragraph).
            ``(B) Plans to which paragraph applies.--This paragraph 
        shall apply to a plan (other than a plan described in 
        subsection (g)(2)(B)) which--
                ``(i) is required to pay installments under paragraph 
            (3) for a plan year, and
                ``(ii) has a liquidity shortfall for any quarter during 
            such plan year.
            ``(C) Period of underpayment.--For purposes of paragraph 
        (3)(A), any portion of an installment that is treated as not 
        paid under subparagraph (A) shall continue to be treated as 
        unpaid until the close of the quarter in which the due date for 
        such installment occurs.
            ``(D) Limitation on increase.--If the amount of any 
        required installment is increased by reason of subparagraph 
        (A), in no event shall such increase exceed the amount which, 
        when added to prior installments for the plan year, is 
        necessary to increase the funding target attainment percentage 
        of the plan for the plan year (taking into account the expected 
        increase in funding target due to benefits accruing or earned 
        during the plan year) to 100 percent.
            ``(E) Definitions.--For purposes of this paragraph--
                ``(i) Liquidity shortfall.--The term `liquidity 
            shortfall' means, with respect to any required installment, 
            an amount equal to the excess (as of the last day of the 
            quarter for which such installment is made) of--

                    ``(I) the base amount with respect to such quarter, 
                over
                    ``(II) the value (as of such last day) of the 
                plan's liquid assets.

                ``(ii) Base amount.--

                    ``(I) In general.--The term `base amount' means, 
                with respect to any quarter, an amount equal to 3 times 
                the sum of the adjusted disbursements from the plan for 
                the 12 months ending on the last day of such quarter.
                    ``(II) Special rule.--If the amount determined 
                under subclause (I) exceeds an amount equal to 2 times 
                the sum of the adjusted disbursements from the plan for 
                the 36 months ending on the last day of the quarter and 
                an enrolled actuary certifies to the satisfaction of 
                the Secretary of the Treasury that such excess is the 
                result of nonrecurring circumstances, the base amount 
                with respect to such quarter shall be determined 
                without regard to amounts related to those nonrecurring 
                circumstances.

                ``(iii) Disbursements from the plan.--The term 
            `disbursements from the plan' means all disbursements from 
            the trust, including purchases of annuities, payments of 
            single sums and other benefits, and administrative 
            expenses.
                ``(iv) Adjusted disbursements.--The term `adjusted 
            disbursements' means disbursements from the plan reduced by 
            the product of--

                    ``(I) the plan's funding target attainment 
                percentage for the plan year, and
                    ``(II) the sum of the purchases of annuities, 
                payments of single sums, and such other disbursements 
                as the Secretary of the Treasury shall provide in 
                regulations.

                ``(v) Liquid assets.--The term `liquid assets' means 
            cash, marketable securities, and such other assets as 
            specified by the Secretary of the Treasury in regulations.
                ``(vi) Quarter.--The term `quarter' means, with respect 
            to any required installment, the 3-month period preceding 
            the month in which the due date for such installment 
            occurs.
            ``(F) Regulations.--The Secretary of the Treasury may 
        prescribe such regulations as are necessary to carry out this 
        paragraph.
    ``(k) Imposition of Lien Where Failure to Make Required 
Contributions.--
        ``(1) In general.--In the case of a plan to which this 
    subsection applies (as provided under paragraph (2)), if--
            ``(A) any person fails to make a contribution payment 
        required by section 302 and this section before the due date 
        for such payment, and
            ``(B) the unpaid balance of such payment (including 
        interest), when added to the aggregate unpaid balance of all 
        preceding such payments for which payment was not made before 
        the due date (including interest), exceeds $1,000,000,
    then there shall be a lien in favor of the plan in the amount 
    determined under paragraph (3) upon all property and rights to 
    property, whether real or personal, belonging to such person and 
    any other person who is a member of the same controlled group of 
    which such person is a member.
        ``(2) Plans to which subsection applies.--This subsection shall 
    apply to a single-employer plan covered under section 4021 for any 
    plan year for which the funding target attainment percentage (as 
    defined in subsection (d)(2)) of such plan is less than 100 
    percent.
        ``(3) Amount of lien.--For purposes of paragraph (1), the 
    amount of the lien shall be equal to the aggregate unpaid balance 
    of contribution payments required under this section and section 
    302 for which payment has not been made before the due date.
        ``(4) Notice of failure; lien.--
            ``(A) Notice of failure.--A person committing a failure 
        described in paragraph (1) shall notify the Pension Benefit 
        Guaranty Corporation of such failure within 10 days of the due 
        date for the required contribution payment.
            ``(B) Period of lien.--The lien imposed by paragraph (1) 
        shall arise on the due date for the required contribution 
        payment and shall continue until the last day of the first plan 
        year in which the plan ceases to be described in paragraph 
        (1)(B). Such lien shall continue to run without regard to 
        whether such plan continues to be described in paragraph (2) 
        during the period referred to in the preceding sentence.
            ``(C) Certain rules to apply.--Any amount with respect to 
        which a lien is imposed under paragraph (1) shall be treated as 
        taxes due and owing the United States and rules similar to the 
        rules of subsections (c), (d), and (e) of section 4068 shall 
        apply with respect to a lien imposed by subsection (a) and the 
        amount with respect to such lien.
        ``(5) Enforcement.--Any lien created under paragraph (1) may be 
    perfected and enforced only by the Pension Benefit Guaranty 
    Corporation, or at the direction of the Pension Benefit Guaranty 
    Corporation, by the contributing sponsor (or any member of the 
    controlled group of the contributing sponsor).
        ``(6) Definitions.--For purposes of this subsection--
            ``(A) Contribution payment.--The term `contribution 
        payment' means, in connection with a plan, a contribution 
        payment required to be made to the plan, including any required 
        installment under paragraphs (3) and (4) of subsection (j).
            ``(B) Due date; required installment.--The terms `due date' 
        and `required installment' have the meanings given such terms 
        by subsection (j), except that in the case of a payment other 
        than a required installment, the due date shall be the date 
        such payment is required to be made under section 303.
            ``(C) Controlled group.--The term `controlled group' means 
        any group treated as a single employer under subsections (b), 
        (c), (m), and (o) of section 414 of the Internal Revenue Code 
        of 1986.
    ``(l) Qualified Transfers to Health Benefit Accounts.--In the case 
of a qualified transfer (as defined in section 420 of the Internal 
Revenue Code of 1986), any assets so transferred shall not, for 
purposes of this section, be treated as assets in the plan.''.
    (b) Clerical Amendment.--The table of sections in section 1 of such 
Act (as amended by section 101) is amended by inserting after the item 
relating to section 302 the following new item:

``Sec. 303. Minimum funding standards for single-employer defined 
          benefit pension plans.''.

    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning after 2007.

SEC. 103. BENEFIT LIMITATIONS UNDER SINGLE-EMPLOYER PLANS.

    (a) Funding-Based Limits on Benefits and Benefit Accruals Under 
Single-Employer Plans.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end 
the following new subsection:
    ``(g) Funding-Based Limits on Benefits and Benefit Accruals Under 
Single-Employer Plans.--
        ``(1) Funding-based limitation on shutdown benefits and other 
    unpredictable contingent event benefits under single-employer 
    plans.--
            ``(A) In general.--If a participant of a defined benefit 
        plan which is a single-employer plan is entitled to an 
        unpredictable contingent event benefit payable with respect to 
        any event occurring during any plan year, the plan shall 
        provide that such benefit may not be provided if the adjusted 
        funding target attainment percentage for such plan year--
                ``(i) is less than 60 percent, or
                ``(ii) would be less than 60 percent taking into 
            account such occurrence.
            ``(B) Exemption.--Subparagraph (A) shall cease to apply 
        with respect to any plan year, effective as of the first day of 
        the plan year, 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 
            occurrence referred to in subparagraph (A), and
                ``(ii) in the case of subparagraph (A)(ii), the amount 
            sufficient to result in a funding target attainment 
            percentage of 60 percent.
            ``(C) Unpredictable contingent event.--For purposes of this 
        paragraph, the term `unpredictable contingent event benefit' 
        means any benefit payable solely by reason of--
                ``(i) a plant shutdown (or similar event, as determined 
            by the Secretary of the Treasury), or
                ``(ii) an event other than the attainment of any age, 
            performance of any service, receipt or derivation of any 
            compensation, or occurrence of death or disability.
        ``(2) Limitations on plan amendments increasing 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 may take effect during any plan year if the 
        adjusted funding target attainment percentage for such plan 
        year is--
                ``(i) less than 80 percent, or
                ``(ii) would be less than 80 percent taking into 
            account such amendment.
            ``(B) Exemption.--Subparagraph (A) shall cease to apply 
        with respect to any plan year, effective as of the first day 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 an adjusted funding target 
            attainment percentage of 80 percent.
            ``(C) Exception for certain benefit increases.--
        Subparagraph (A) shall not apply to any amendment which 
        provides for an increase in benefits under a formula which is 
        not based on a participant's compensation, but only if the rate 
        of such increase is not in excess of the contemporaneous rate 
        of increase in average wages of participants covered by the 
        amendment.
        ``(3) Limitations on accelerated benefit distributions.--
            ``(A) Funding percentage less than 60 percent.--A defined 
        benefit plan which is a single-employer plan shall provide 
        that, in any case in which the plan's adjusted funding target 
        attainment percentage for a plan year is less than 60 percent, 
        the plan may not pay any prohibited payment after the valuation 
        date for the plan year.
            ``(B) Bankruptcy.--A defined benefit plan which is a 
        single-employer plan shall provide that, during any period in 
        which the plan sponsor is a debtor in a case under title 11, 
        United States Code, or similar Federal or State law, the plan 
        may not pay any prohibited payment. The preceding sentence 
        shall not apply on or after the date on which the enrolled 
        actuary of the plan certifies that the adjusted funding target 
        attainment percentage of such plan is not less than 100 
        percent.
            ``(C) Limited payment if percentage at least 60 percent but 
        less than 80 percent.--
                ``(i) In general.--A defined benefit plan which is a 
            single-employer plan shall provide that, in any case in 
            which the plan's adjusted funding target attainment 
            percentage for a plan year is 60 percent or greater but 
            less than 80 percent, the plan may not pay any prohibited 
            payment after the valuation date for the plan year to the 
            extent the amount of the payment exceeds the lesser of--

                    ``(I) 50 percent of the amount of the payment which 
                could be made without regard to this subsection, or
                    ``(II) the present value (determined under guidance 
                prescribed by the Pension Benefit Guaranty Corporation, 
                using the interest and mortality assumptions under 
                section 205(g)) of the maximum guarantee with respect 
                to the participant under section 4022.

                ``(ii) One-time application.--

                    ``(I) In general.--The plan shall also provide that 
                only 1 prohibited payment meeting the requirements of 
                clause (i) may be made with respect to any participant 
                during any period of consecutive plan years to which 
                the limitations under either subparagraph (A) or (B) or 
                this subparagraph applies.
                    ``(II) Treatment of beneficiaries.--For purposes of 
                this clause, a participant and any beneficiary on his 
                behalf (including an alternate payee, as defined in 
                section 206(d)(3)(K)) shall be treated as 1 
                participant. If the accrued benefit of a participant is 
                allocated to such an alternate payee and 1 or more 
                other persons, the amount under clause (i) shall be 
                allocated among such persons in the same manner as the 
                accrued benefit is allocated unless the qualified 
                domestic relations order (as defined in section 
                206(d)(3)(B)(i)) provides otherwise.

            ``(D) Exception.--This paragraph shall not apply to any 
        plan for any plan year if the terms of such plan (as in effect 
        for the period beginning on September 1, 2005, and ending with 
        such plan year) provide for no benefit accruals with respect to 
        any participant during such period.
            ``(E) Prohibited payment.--For purpose of this paragraph, 
        the term `prohibited payment' means--
                ``(i) any payment, in excess of the monthly amount paid 
            under a single life annuity (plus any social security 
            supplements described in the last sentence of section 
            204(b)(1)(G)), to a participant or beneficiary whose 
            annuity starting date (as defined in section 205(h)(2)) 
            occurs during any period a limitation under subparagraph 
            (A) or (B) is in effect,
                ``(ii) any payment for the purchase of an irrevocable 
            commitment from an insurer to pay benefits, and
                ``(iii) any other payment specified by the Secretary of 
            the Treasury by regulations.
        ``(4) Limitation on benefit accruals for plans with severe 
    funding shortfalls.--
            ``(A) In general.--A defined benefit plan which is a 
        single-employer plan shall provide that, in any case in which 
        the plan's adjusted funding target attainment percentage for a 
        plan year is less than 60 percent, benefit accruals under the 
        plan shall cease as of the valuation date for the plan year.
            ``(B) Exemption.--Subparagraph (A) shall cease to apply 
        with respect to any plan year, effective as of the first day of 
        the plan year, upon payment by the plan sponsor of a 
        contribution (in addition to any minimum required contribution 
        under section 303) equal to the amount sufficient to result in 
        an adjusted funding target attainment percentage of 60 percent.
        ``(5) Rules relating to contributions required to avoid benefit 
    limitations.--
            ``(A) Security may be provided.--
                ``(i) In general.--For purposes of this subsection, the 
            adjusted funding target attainment percentage shall be 
            determined by treating as an asset of the plan any security 
            provided by a plan sponsor in a form meeting the 
            requirements of clause (ii).
                ``(ii) Form of security.--The security required under 
            clause (i) shall consist of--

                    ``(I) a bond issued by a corporate surety company 
                that is an acceptable surety for purposes of section 
                412 of this Act,
                    ``(II) cash, or United States obligations which 
                mature in 3 years or less, held in escrow by a bank or 
                similar financial institution, or
                    ``(III) such other form of security as is 
                satisfactory to the Secretary of the Treasury and the 
                parties involved.

                ``(iii) Enforcement.--Any security provided under 
            clause (i) may be perfected and enforced at any time after 
            the earlier of--

                    ``(I) the date on which the plan terminates,
                    ``(II) if there is a failure to make a payment of 
                the minimum required contribution for any plan year 
                beginning after the security is provided, the due date 
                for the payment under section 303(j), or
                    ``(III) if the adjusted funding target attainment 
                percentage is less than 60 percent for a consecutive 
                period of 7 years, the valuation date for the last year 
                in the period.

                ``(iv) Release of security.--The security shall be 
            released (and any amounts thereunder shall be refunded 
            together with any interest accrued thereon) at such time as 
            the Secretary of the Treasury may prescribe in regulations, 
            including regulations for partial releases of the security 
            by reason of increases in the funding target attainment 
            percentage.
            ``(B) Prefunding balance or funding standard carryover 
        balance may not be used.--No prefunding balance or funding 
        standard carryover balance under section 303(f) may be used 
        under paragraph (1), (2), or (4) to satisfy any payment an 
        employer may make under any such paragraph to avoid or 
        terminate the application of any limitation under such 
        paragraph.
            ``(C) Deemed reduction of funding balances.--
                ``(i) In general.--Subject to clause (iii), in any case 
            in which a benefit limitation under paragraph (1), (2), 
            (3), or (4) would (but for this subparagraph and determined 
            without regard to paragraph (1)(B), (2)(B), or (4)(B)) 
            apply to such plan for the plan year, the plan sponsor of 
            such plan shall be treated for purposes of this Act as 
            having made an election under section 303(f) to reduce the 
            prefunding balance or funding standard carryover balance by 
            such amount as is necessary for such benefit limitation to 
            not apply to the plan for such plan year.
                ``(ii) Exception for insufficient funding balances.--
            Clause (i) shall not apply with respect to a benefit 
            limitation for any plan year if the application of clause 
            (i) would not result in the benefit limitation not applying 
            for such plan year.
                ``(iii) Restrictions of certain rules to collectively 
            bargained plans.--With respect to any benefit limitation 
            under paragraph (1), (2), or (4), clause (i) shall only 
            apply in the case of a plan maintained pursuant to 1 or 
            more collective bargaining agreements between employee 
            representatives and 1 or more employers.
        ``(6) New plans.--Paragraphs (1), (2), and (4) shall not apply 
    to a plan for the first 5 plan years of the plan. For purposes of 
    this paragraph, the reference in this paragraph to a plan shall 
    include a reference to any predecessor plan.
        ``(7) Presumed underfunding for purposes of benefit 
    limitations.--
            ``(A) Presumption of continued underfunding.--In any case 
        in which a benefit limitation under paragraph (1), (2), (3), or 
        (4) has been applied to a plan with respect to the plan year 
        preceding the current plan year, the adjusted funding target 
        attainment percentage of the plan for the current plan year 
        shall be presumed to be equal to the adjusted funding target 
        attainment percentage of the plan for the preceding plan year 
        until the enrolled actuary of the plan certifies the actual 
        adjusted funding target attainment percentage of the plan for 
        the current plan year.
            ``(B) Presumption of underfunding after 10th month.--In any 
        case in which no certification of the adjusted funding target 
        attainment percentage for the current plan year is made with 
        respect to the plan before the first day of the 10th month of 
        such year, for purposes of paragraphs (1), (2), (3), and (4), 
        such first day shall be deemed, for purposes of such paragraph, 
        to be the valuation date of the plan for the current plan year 
        and the plan's adjusted funding target attainment percentage 
        shall be conclusively presumed to be less than 60 percent as of 
        such first day.
            ``(C) Presumption of underfunding after 4th month for 
        nearly underfunded plans.--In any case in which--
                ``(i) a benefit limitation under paragraph (1), (2), 
            (3), or (4) did not apply to a plan with respect to the 
            plan year preceding the current plan year, but the adjusted 
            funding target attainment percentage of the plan for such 
            preceding plan year was not more than 10 percentage points 
            greater than the percentage which would have caused such 
            paragraph to apply to the plan with respect to such 
            preceding plan year, and
                ``(ii) as of the first day of the 4th month of the 
            current plan year, the enrolled actuary of the plan has not 
            certified the actual adjusted funding target attainment 
            percentage of the plan for the current plan year,
        until the enrolled actuary so certifies, such first day shall 
        be deemed, for purposes of such paragraph, to be the valuation 
        date of the plan for the current plan year and the adjusted 
        funding target attainment percentage of the plan as of such 
        first day shall, for purposes of such paragraph, be presumed to 
        be equal to 10 percentage points less than the adjusted funding 
        target attainment percentage of the plan for such preceding 
        plan year.
        ``(8) Treatment of plan as of close of prohibited or cessation 
    period.--For purposes of applying this part--
            ``(A) Operation of plan after period.--Unless the plan 
        provides otherwise, payments and accruals will resume effective 
        as of the day following the close of the period for which any 
        limitation of payment or accrual of benefits under paragraph 
        (3) or (4) applies.
            ``(B) Treatment of affected benefits.--Nothing in this 
        paragraph shall be construed as affecting the plan's treatment 
        of benefits which would have been paid or accrued but for this 
        subsection.
        ``(9) Terms relating to funding target attainment percentage.--
    For purposes of this subsection--
            ``(A) In general.--The term `funding target attainment 
        percentage' has the same meaning given such term by section 
        303(d)(2).
            ``(B) Adjusted funding target attainment percentage.--The 
        term `adjusted funding target attainment percentage' means the 
        funding target attainment percentage which is determined under 
        subparagraph (A) by increasing each of the amounts under 
        subparagraphs (A) and (B) of section 303(d)(2) by the aggregate 
        amount of purchases of annuities for employees other than 
        highly compensated employees (as defined in section 414(q) of 
        the Internal Revenue Code of 1986) which were made by the plan 
        during the preceding 2 plan years.
            ``(C) Application to plans which are fully funded without 
        regard to reductions for funding balances.--
                ``(i) In general.--In the case of a plan for any plan 
            year, if the funding target attainment percentage is 100 
            percent or more (determined without regard to this 
            subparagraph and without regard to the reduction in the 
            value of assets under section 303(f)(4)), the funding 
            target attainment percentage for purposes of subparagraphs 
            (A) and (B) shall be determined without regard to such 
            reduction.
                ``(ii) Transition rule.--Clause (i) shall be applied to 
            plan years beginning after 2007 and before 2011 by 
            substituting for `100 percent' the applicable percentage 
            determined in accordance with the following table:

                ``In the case of a plan year
                                                          The applicable
                  beginning in calendar year:
                                                           percentage is
                      2008........................................
                                                                     92 
                      2009........................................
                                                                     94 
                      2010........................................
                                                                     96.

                ``(iii) Limitation.--Clause (ii) shall not apply with 
            respect to any plan year after 2008 unless the funding 
            target attainment percentage (determined without regard to 
            this subparagraph) of the plan for each preceding plan year 
            after 2007 was not less than the applicable percentage with 
            respect to such preceding plan year determined under clause 
            (ii).
        ``(10) Special rule for 2008.--For purposes of this subsection, 
    in the case of plan years beginning in 2008, the funding target 
    attainment percentage for the preceding plan year may be determined 
    using such methods of estimation as the Secretary of the Treasury 
    may provide.''.
    (b) Notice Requirement.--
        (1) In general.--Section 101 of such Act (29 U.S.C. 1021) is 
    amended--
            (A) by redesignating subsection (j) as subsection (k); and
            (B) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Notice of Funding-Based Limitation on Certain Forms of 
Distribution.--The plan administrator of a single-employer plan shall 
provide a written notice to plan participants and beneficiaries within 
30 days--
        ``(1) after the plan has become subject to a restriction 
    described in paragraph (1) or (3) of section 206(g)),
        ``(2) in the case of a plan to which section 206(g)(4) applies, 
    after the valuation date for the plan year described in section 
    206(g)(4)(B) for which the plan's adjusted funding target 
    attainment percentage for the plan year is less than 60 percent 
    (or, if earlier, the date such percentage is deemed to be less than 
    60 percent under section 206(g)(7)), and
        ``(3) at such other time as may be determined by the Secretary 
    of the Treasury.
The notice required to be provided under this subsection shall be in 
writing, except that such notice may be in electronic or other form to 
the extent that such form is reasonably accessible to the recipient.''.
        (2) Enforcement.--Section 502(c)(4) of such Act (29 U.S.C. 
    1132(c)(4)) is amended by striking ``section 302(b)(7)(F)(iv)'' and 
    inserting ``section 101(j) or 302(b)(7)(F)(iv)''.
    (c) Effective Dates.--
        (1) In general.--The amendments made by this section shall 
    apply to plan years beginning after December 31, 2007.
        (2) Collective bargaining exception.--In the case of a plan 
    maintained pursuant to 1 or more collective bargaining agreements 
    between employee representatives and 1 or more employers ratified 
    before January 1, 2008, the amendments made by this section shall 
    not apply to plan years beginning before the earlier of--
            (A) the later of--
                (i) the date on which the last collective bargaining 
            agreement relating to the plan terminates (determined 
            without regard to any extension thereof agreed to after the 
            date of the enactment of this Act), or
                (ii) the first day of the first plan year to which the 
            amendments made by this subsection would (but for this 
            subparagraph) apply, or
            (B) January 1, 2010.
    For purposes of subparagraph (A)(i), any plan amendment made 
    pursuant to a collective bargaining agreement relating to the plan 
    which amends the plan solely to conform to any requirement added by 
    this section shall not be treated as a termination of such 
    collective bargaining agreement.

SEC. 104. SPECIAL RULES FOR MULTIPLE EMPLOYER PLANS OF CERTAIN 
              COOPERATIVES.

    (a) General Rule.--Except as provided in this section, if a plan in 
existence on July 26, 2005, was an eligible cooperative plan for its 
plan year which includes such date, the amendments made by this 
subtitle and subtitle B shall not apply to plan years beginning before 
the earlier of--
        (1) the first plan year for which the plan ceases to be an 
    eligible cooperative plan, or
        (2) January 1, 2017.
    (b) Interest Rate.--In applying section 302(b)(5)(B) of the 
Employee Retirement Income Security Act of 1974 and section 
412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before 
the amendments made by this subtitle and subtitle B) to an eligible 
cooperative plan for plan years beginning after December 31, 2007, and 
before the first plan year to which such amendments apply, the third 
segment rate determined under section 303(h)(2)(C)(iii) of such Act and 
section 430(h)(2)(C)(iii) of such Code (as added by such amendments) 
shall be used in lieu of the interest rate otherwise used.
    (c) Eligible Cooperative Plan Defined.--For purposes of this 
section, a plan shall be treated as an eligible cooperative plan for a 
plan year if the plan is maintained by more than 1 employer and at 
least 85 percent of the employers are--
        (1) rural cooperatives (as defined in section 401(k)(7)(B) of 
    such Code without regard to clause (iv) thereof), or
        (2) organizations which are--
            (A) cooperative organizations described in section 1381(a) 
        of such Code which are more than 50-percent owned by 
        agricultural producers or by cooperatives owned by agricultural 
        producers, or
            (B) more than 50-percent owned, or controlled by, one or 
        more cooperative organizations described in subparagraph (A).
A plan shall also be treated as an eligible cooperative plan for any 
plan year for which it is described in section 210(a) of the Employee 
Retirement Income Security Act of 1974 and is maintained by a rural 
telephone cooperative association described in section 3(40)(B)(v) of 
such Act.

SEC. 105. TEMPORARY RELIEF FOR CERTAIN PBGC SETTLEMENT PLANS.

    (a) General Rule.--Except as provided in this section, if a plan in 
existence on July 26, 2005, was a PBGC settlement plan as of such date, 
the amendments made by this subtitle and subtitle B shall not apply to 
plan years beginning before January 1, 2014.
    (b) Interest Rate.--In applying section 302(b)(5)(B) of the 
Employee Retirement Income Security Act of 1974 and section 
412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before 
the amendments made by this subtitle and subtitle B), to a PBGC 
settlement plan for plan years beginning after December 31, 2007, and 
before January 1, 2014, the third segment rate determined under section 
303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such 
Code (as added by such amendments) shall be used in lieu of the 
interest rate otherwise used.
    (c) PBGC Settlement Plan.--For purposes of this section, the term 
``PBGC settlement plan'' means a defined benefit plan (other than a 
multiemployer plan) to which section 302 of such Act and section 412 of 
such Code apply and--
        (1) which was sponsored by an employer which was in bankruptcy, 
    giving rise to a claim by the Pension Benefit Guaranty Corporation 
    of not greater than $150,000,000, and the sponsorship of which was 
    assumed by another employer that was not a member of the same 
    controlled group as the bankrupt sponsor and the claim of the 
    Pension Benefit Guaranty Corporation was settled or withdrawn in 
    connection with the assumption of the sponsorship, or
        (2) which, by agreement with the Pension Benefit Guaranty 
    Corporation, was spun off from a plan subsequently terminated by 
    such Corporation under section 4042 of the Employee Retirement 
    Income Security Act of 1974.

SEC. 106. SPECIAL RULES FOR PLANS OF CERTAIN GOVERNMENT CONTRACTORS.

    (a) General Rule.--Except as provided in this section, if a plan is 
an eligible government contractor plan, this subtitle and subtitle B 
shall not apply to plan years beginning before the earliest of--
        (1) the first plan year for which the plan ceases to be an 
    eligible government contractor plan,
        (2) the effective date of the Cost Accounting Standards Pension 
    Harmonization Rule, or
        (3) January 1, 2011.
    (b) Interest Rate.--In applying section 302(b)(5)(B) of the 
Employee Retirement Income Security Act of 1974 and section 
412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before 
the amendments made by this subtitle and subtitle B) to an eligible 
government contractor plan for plan years beginning after December 31, 
2007, and before the first plan year to which such amendments apply, 
the third segment rate determined under section 303(h)(2)(C)(iii) of 
such Act and section 430(h)(2)(C)(iii) of such Code (as added by such 
amendments) shall be used in lieu of the interest rate otherwise used.
    (c) Eligible Government Contractor Plan Defined.--For purposes of 
this section, a plan shall be treated as an eligible government 
contractor plan if it is maintained by a corporation or a member of the 
same affiliated group (as defined by section 1504(a) of the Internal 
Revenue Code of 1986), whose primary source of revenue is derived from 
business performed under contracts with the United States that are 
subject to the Federal Acquisition Regulations (chapter 1 of title 48, 
CFR) and that are also subject to the Defense Federal Acquisition 
Regulation Supplement (chapter 2 of title 48, CFR), and whose revenue 
derived from such business in the previous fiscal year exceeded 
$5,000,000,000, and whose pension plan costs that are assignable under 
those contracts are subject to sections 412 and 413 of the Cost 
Accounting Standards (48 CFR 9904.412 and 9904.413).
    (d) Cost Accounting Standards Pension Harmonization Rule.--The Cost 
Accounting Standards Board shall review and revise sections 412 and 413 
of the Cost Accounting Standards (48 CFR 9904.412 and 9904.413) to 
harmonize the minimum required contribution under the Employee 
Retirement Income Security Act of 1974 of eligible government 
contractor plans and government reimbursable pension plan costs not 
later than January 1, 2010. Any final rule adopted by the Cost 
Accounting Standards Board shall be deemed the Cost Accounting 
Standards Pension Harmonization Rule.

SEC. 107. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Miscellaneous Amendments to Title I.--Subtitle B of title I of 
such Act (29 U.S.C. 1021 et seq.) is amended--
        (1) in section 101(d)(3), by striking ``section 302(e)'' and 
    inserting ``section 303(j)'';
        (2) in section 103(d)(8)(B), by striking ``the requirements of 
    section 302(c)(3)'' and inserting ``the applicable requirements of 
    sections 303(h) and 304(c)(3)'';
        (3) in section 103(d), by striking paragraph (11) and inserting 
    the following:
        ``(11) If the current value of the assets of the plan is less 
    than 70 percent of--
            ``(A) in the case of a single-employer plan, the funding 
        target (as defined in section 303(d)(1)) of the plan, or
            ``(B) in the case of a multiemployer plan, the current 
        liability (as defined in section 304(c)(6)(D)) under the plan,
    the percentage which such value is of the amount described in 
    subparagraph (A) or (B).'';