AMENDMENTS RELATED TO TITLE I.

SEC. 101. AMENDMENTS RELATED TO TITLE I.(a) Amendments Related to Sections 101 and 111.—(1) Amendments to erisa.—(A) Clause (i) of section 302(c)(1)(A) of ERISA is amended by striking “the plan is” and inserting “the plan are”.(B) Section 302(c)(7) of ERISA is amended by inserting “which reduces the accrued benefit of any participant” after “subsection (d)(2)” in subparagraph (A).(C) Section 302(d)(1) of ERISA is amended by striking “, the valuation date,”.(2) Amendments to 1986 code.—(A) Clause (i) of section 412(c)(1)(A) of the 1986 Code is amended by striking “the plan is” and inserting “the plan are”.(B) Section 412(c)(7) of the 1986 Code is amended by inserting “which reduces the accrued benefit of any participant” after “subsection (d)(2)” in subparagraph (A).(C) Section 412(d)(1) of the 1986 Code is amended by striking “, the valuation date,”.(b) Amendments Related to Sections 102 and 112.—(1) Amendments to erisa.—(A) Section 303(b) of ERISA is amended to read as follows:“(b) Target Normal Cost.—For purposes of this section:“(1) In general.—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 excess of—“(A) the sum of—“(i) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, plus122 STAT. 5094“(ii) the amount of plan-related expenses expected to be paid from plan assets during the plan year, over“(B) the amount of mandatory employee contributions expected to be made during the plan year.“(2) Special rule for increase in compensation.—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.”.(B) Section 303(c)(5)(B)(iii) of ERISA is amended by inserting “beginning” before “after 2008”.(C) Section 303(c)(5)(B)(iv)(II) of ERISA is amended by inserting “for such year” after “beginning in 2007)”.(D) Section 303(f)(4)(A) of ERISA is amended by striking “paragraph (2)” and inserting “paragraph (3)”.(E) Section 303(h)(2)(F) of ERISA is amended—(i) by striking “section 205(g)(3)(B)(iii)(I)) for such month” and inserting “section 205(g)(3)(B)(iii)(I) for such month)”, and(ii) by striking “subparagraph (B)” and inserting “subparagraph (C)”.(F) Section 303(i) of ERISA is amended—(i) in paragraph (2)—(I) by striking subparagraph (A) and inserting the following new subparagraph:“(A) the excess of—“(i) the sum of—“(I) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, determined using the additional actuarial assumptions described in paragraph (1)(B), plus“(II) the amount of plan-related expenses expected to be paid from plan assets during the plan year, over“(ii) the amount of mandatory employee contributions expected to be made during the plan year, plus”, and(II) in subparagraph (B), by striking “the target normal cost (determined without regard to this paragraph) of the plan for the plan year” and inserting “the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year”, and(ii) by striking “subparagraph (A)(ii)” in the last sentence of paragraph (4)(B) and inserting “subparagraph (A)”.(G) Section 303(j)(3) of ERISA—(i) is amended by adding at the end of subparagraph (A) the following new sentence: “In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary of the Treasury may provide.”,122 STAT. 5095(ii) by adding at the end of subparagraph (E) the following new clause:“(iii) Plan with alternate valuation date.—The Secretary of the Treasury shall prescribe regulations for the application of this paragraph in the case of a plan which has a valuation date other than the first day of the plan year.”, and(iii) by striking “and short years” in the heading of subparagraph (E) and inserting “, short years, and years with alternate valuation date”.(H) Section 303(k)(6)(B) of ERISA is amended by striking “, except” and all that follows and inserting a period.(2) Amendments to 1986 code.—(A) Section 430(b) of the 1986 Code is amended to read as follows:“(b) Target Normal Cost.—For purposes of this section:“(1) In general.—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 excess of—“(A) the sum of—“(i) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, plus“(ii) the amount of plan-related expenses expected to be paid from plan assets during the plan year, over“(B) the amount of mandatory employee contributions expected to be made during the plan year.“(2) Special rule for increase in compensation.—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.”.(B) Section 430(c)(5)(B)(iii) of the 1986 Code is amended by inserting “beginning” before “after 2008”.(C) Section 430(c)(5)(B)(iv)(II) of the 1986 Code is amended by inserting “for such year” after “beginning in 2007)”.(D) Section 430(f) of the 1986 Code is amended—(i) by striking “as of the first day of the plan year” the second place it appears in the first sentence of paragraph (3)(A),(ii) by striking “paragraph (2)” in paragraph (4)(A) and inserting “paragraph (3)”,(iii) by striking “paragraph (1), (2), or (4) of section 206(g)” in paragraph (6)(B)(iii) and inserting “subsection (b), (c), or (e) of section 436”,(iv) by striking “the sum of” in paragraph (6)(C), and(v) by striking “of the Treasury” in paragraph (8).(E) Section 430(h)(2) of the 1986 Code is amended—(i) by inserting “and target normal cost” after “funding target” in subparagraph (B),(ii) by striking “liabilities” and inserting “benefits” in subparagraph (B),122 STAT. 5096(iii) by striking “section 417(e)(3)(D)(i)) for such month” in subparagraph (F) and inserting “section 417(e)(3)(D)(i) for such month)”, and(iv) by striking “subparagraph (B)” in subparagraph (F) and inserting “subparagraph (C)”.(F) Section 430(i) of the 1986 Code is amended—(i) in paragraph (2)—(I) by striking subparagraph (A) and inserting the following new subparagraph:“(A) the excess of—“(i) the sum of—“(I) the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year, determined using the additional actuarial assumptions described in paragraph (1)(B), plus“(II) the amount of plan-related expenses expected to be paid from plan assets during the plan year, over“(ii) the amount of mandatory employee contributions expected to be made during the plan year, plus”, and(II) in subparagraph (B), by striking “the target normal cost (determined without regard to this paragraph) of the plan for the plan year” and inserting “the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year”, and(ii) by striking “subparagraph (A)(ii)” in the last sentence of paragraph (4)(B) and inserting “subparagraph (A)”.(G) Section 430(j)(3) of the 1986 Code is amended—(i) by adding at the end of subparagraph (A) the following new sentence: “In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary may provide.”,(ii) by striking “section 302(c)” in subparagraph (D)(ii)(II) and inserting “section 412(c)”,(iii) by adding at the end of subparagraph (E) the following new clause:“(iii) Plan with alternate valuation date.—The Secretary shall prescribe regulations for the application of this paragraph in the case of a plan which has a valuation date other than the first day of the plan year.”, and(iv) by striking “and short years” in the heading of subparagraph (E) and inserting “, short years, and years with alternate valuation date”.(H) Section 430(k) of the 1986 Code is amended—(i) by inserting “(as provided under paragraph (2))” after “applies” in paragraph (1), and(ii) by striking “, except” and all that follows in paragraph (6)(B) and inserting a period.(3) Effective dates.—(A) In general.—Except as provided in subparagraph (B), the amendments made by paragraphs (1)(A), (1)(F)(i), 122 STAT. 5097 (2)(A), and (2)(F)(i) shall apply to plan years beginning after December 31, 2008.(B) Election for earlier application.—The amendments made by such paragraphs shall apply to a plan for the first plan year beginning after December 31, 2007, if the plan sponsor makes the election under this subparagraph. An election under this subparagraph shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe, and, once made, may be revoked only with the consent of the Secretary.(c) Amendments Related to Sections 103 and 113.—(1) Amendments to erisa.—(A) Section 101(j) of ERISA is amended—(i) in paragraph (2), by striking “section 206(g)(4)(B)” and inserting “section 206(g)(4)(A)”; and(ii) by adding at the end the following: “The Secretary of the Treasury, in consultation with the Secretary, shall have the authority to prescribe rules applicable to the notices required under this subsection.”.(B) Section 206(g)(1)(B)(ii) of ERISA is amended by striking “a funding” and inserting “an adjusted funding”.(C) The heading for section 206(g)(1)(C) of ERISA is amended by inserting “benefit” after “event”.(D) Section 206(g)(3)(E) of ERISA is amended by adding at the end the following new flush sentence:“Such term shall not include the payment of a benefit which under section 203(e) may be immediately distributed without the consent of the participant.”.(E) Section 206(g)(5)(A)(iv) of ERISA is amended by inserting “adjusted” before “funding”.(F) Section 206(g)(9)(C) of ERISA is amended—(i) by striking “without regard to this subparagraph and” in clause (i), and(ii) in clause (iii)—(I) by striking “without regard to this subparagraph” and inserting “without regard to the reduction in the value of assets under section 303(f)(4)”, and(II) by inserting “beginning” before “after” each place it appears.(G) Section 206(g) of ERISA is amended by redesignating paragraph (10) as paragraph (11) and by inserting after paragraph (9) the following new paragraph:“(10) Secretarial authority for plans with alternate valuation date.—In the case of a plan which has designated a valuation date other than the first day of the plan year, the Secretary of the Treasury may prescribe rules for the application of this subsection which are necessary to reflect the alternate valuation date.”.(H) Section 502(c)(4) of ERISA is amended by striking “by any person” and all that follows through the period and inserting “by any person of subsection (j), (k), or (l) of section 101 or section 514(e)(3).”.(2) Amendments to 1986 code.—(A) Section 436(b)(2) of the 1986 Code is amended—122 STAT. 5098 (i) by striking “section 303” and inserting “section 430” in the matter preceding subparagraph (A), and(ii) by striking “a funding” and inserting “an adjusted funding” in subparagraph (B).(B) Section 436(b)(3) of the 1986 Code is amended—(i) by inserting “benefit” after “event” in the heading, and(ii) by striking “any event” in subparagraph (B) and inserting “an event”.(C) Section 436(d)(5) of the 1986 Code is amended by adding at the end the following new flush sentence:“Such term shall not include the payment of a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant.”.(D) Section 436(f) of the 1986 Code is amended—(i) by inserting “adjusted” before “funding” in paragraph (1)(D), and(ii) by striking “prefunding balance under section 430(f) or funding standard carryover balance” in paragraph (2) and inserting “prefunding balance or funding standard carryover balance under section 430(f)”.(E) Section 436(j)(3) of the 1986 Code is amended—(i) in subparagraph (A)—(I) by striking “without regard to this paragraph and”,(II) by striking “section 430(f)(4)(A)” and inserting “section 430(f)(4)”, and(III) by striking “paragraph (1)” and inserting “paragraphs (1) and (2)”, and(ii) in subparagraph (C)—(I) by striking “without regard to this paragraph” and inserting “without regard to the reduction in the value of assets under section 430(f)(4)”, and(II) by inserting “beginning” before “after” each place it appears.(F) Section 436 of the 1986 Code is amended by redesignating subsection (k) as subsection (m) and by inserting after subsection (j) the following new subsections:“(k) Secretarial Authority for Plans With Alternate Valuation Date.—In the case of a plan which has designated a valuation date other than the first day of the plan year, the Secretary may prescribe rules for the application of this section which are necessary to reflect the alternate valuation date.“(l) Single-Employer Plan.—For purposes of this section, the term ‘single-employer plan’ means a plan which is not a multiemployer plan.”.(3) Amendments to 2006 act.—Sections 103(c)(2)(A)(ii) and 113(b)(2)(A)(ii) of the 2006 Act are each amended—(A) by striking “subsection” and inserting “section”, and(B) by striking “subparagraph” and inserting “paragraph”.(d) Amendments Related to Sections 107 and 114.—(1) Amendments to erisa.—(A) Section 103(d) of ERISA is amended—122 STAT. 5099 (i) in paragraph (3), by striking “the normal costs, the accrued liabilities” and inserting “the normal costs or target normal costs, the accrued liabilities or funding target”, and(ii) by striking paragraph (7) and inserting the following new paragraph:“(7) A certification of the contribution necessary to reduce the minimum required contribution determined under section 303, or the accumulated funding deficiency determined under section 304, to zero.”.(B) Section 4071 of ERISA is amended by striking “as section 303(k)(4) or 307(e)” and inserting “or section 303(k)(4),”.(2) Amendments to 1986 code.—(A) Section 401(a)(29) of the 1986 Code is amended by striking “on plans in at-risk status” in the heading.(B) Section 401(a)(32)(C) of the 1986 Code is amended—(i) by striking “section 430(j)” and inserting “section 430(j)(3)”, and(ii) by striking “paragraph (5)(A)” and inserting “section 430(j)(4)(A)”.(C) Section 401(a)(33) of the 1986 Code is amended—(i) by striking “section 412(c)(2)” in subparagraph (B)(iii) and inserting “section 412(d)(2)”, and(ii) by striking “section 412(b)(2) (without regard to subparagraph (B) thereof)” in subparagraph (D) and inserting “section 412(b)(1), without regard to section 412(b)(2)”.(D) Section 411 of the 1986 Code is amended—(i) by striking “section 412(c)(2)” in subsection (a)(3)(C) and inserting “section 412(d)(2)”, and(ii) by striking “section 412(e)(2)” in subsection (d)(6)(A) and inserting “section 412(d)(2)”.(E) Section 414(l)(2)(B)(i)(I) of the 1986 Code is amended to read as follows:“(I) the sum of the funding target and target normal cost determined under section 430, over”.(F) Section 4971 of the 1986 Code is amended—(i) by striking “required minimum” in subsection (b)(1) and inserting “minimum required”,(ii) by inserting “or unpaid minimum required contribution, whichever is applicable” after “accumulated funding deficiency” each place it appears in subsections (c)(3) and (d)(1), and(iii) by striking “section 412(a)(1)(A)” in subsection (e)(1) and inserting “section 412(a)(2)”.(3) Amendment to 2006 act.—Section 114 of the 2006 Act is amended by adding at the end the following new subsection:“(g) Effective Dates.—“(1) In general.—The amendments made by this section shall apply to plan years beginning after 2007.“(2) Excise tax.—The amendments made by subsection (e) shall apply to taxable years beginning after 2007, but only with respect to plan years described in paragraph (1) which end with or within any such taxable year.”.122 STAT. 5100(e) Amendment Related to Section 116.—Section 409A(b)(3)(A)(ii) of the 1986 Code is amended by inserting “to an applicable covered employee” after “under the plan”.