AMENDMENTS. Clause (ii) of section 101(c)(2)(A) of the Pension Funding Equity Act of 2004 is amended by striking 2006 and inserting 2008.

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1 (1) DETERMINATION OF RANGE. Subclause (II) of section 41(b)(5)(B)(ii) of the Internal Revenue Code of 6 is amended (A) by striking 06 and inserting 0, and (B) by striking AND 05 in the heading and inserting, 05, 06, AND 0. () DETERMINATION OF CURRENT LIABILITY. Subclause (IV) of section 41(l)()(C)(i) of such Code is amended (A) by striking or 05 and inserting, 05, 06, or 0, and (B) by striking AND 05 in the heading and inserting, 05, 06, AND 0. (c) PLAN AMENDMENTS. Clause (ii) of section 101(c)()(A) of the Pension Funding Equity Act of 04 is amended by striking 06 and inserting 0. SEC. 0. INTEREST RATE ASSUMPTION FOR DETERMINA- TION OF LUMP SUM DISTRIBUTIONS. (a) AMENDMENT TO EMPLOYEE RETIREMENT IN- COME SECURITY ACT OF 4. Paragraph () of section 5(g) of the Employee Retirement Income Security Act of 4 (9 U.S.C. 1055(g)()) is amended to read as follows: VerDate Aug : Jul 0, 06 Jkt 0490 PO Frm 00 Fmt 665 Sfmt 61 E:\BILLS\H4.CPH H4

2 4 1 ()(A) For purposes of paragraphs (1) and (), the present value shall not be less than the present value cal- culated by using the applicable mortality table and the ap- 4 plicable interest rate. 5 (B) For purposes of subparagraph (A) 6 (i) The term applicable mortality table means a mortality table, modified as appropriate by the Secretary of the Treasury, based on the mortality 9 table specified for the plan year under subparagraph 10 (A) of section 0(h)() (without regard to subpara- graph (C) or (D) of such section). 1 (ii) The term applicable interest rate means 1 the adjusted first, second, and third segment rates applied under rules similar to the rules of section 0(h)()(C) for the month before the date of the distribution or such other time as the Secretary of the Treasury may by regulations prescribe. (iii) For purposes of clause (ii), the adjusted first, second, and third segment rates are the first, second, and third segment rates which would be de- termined under section 0(h)()(C) if (I) section 0(h)()(D) were applied by substituting the average yields for the month 4 described in clause (ii) for the average yields for 5 the 4-month period described in such section, VerDate Aug : Jul 0, 06 Jkt 0490 PO Frm 004 Fmt 665 Sfmt 61 E:\BILLS\H4.CPH H4

3 (II) section 0(h)()(G)(i)(II) were ap- plied by substituting section 5(g)()(B)(iii)(II) for section 0(b)(5)(B)(ii)(II), and (III) the applicable percentage under sec- tion 0(h)()(G) were determined in accord- ance with the following table: The applicable In the case of plan years beginning in: percentage is: 0... percent percent percent... 0 percent.. (b) AMENDMENT TO INTERNAL REVENUE CODE OF 9 6. Paragraph () of section 4(e) of the Internal 10 Revenue Code of 6 is amended to read as follows: 1 1 () DETERMINATION OF PRESENT VALUE. (A) IN GENERAL. For purposes of paragraphs (1) and (), the present value shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate. (B) APPLICABLE MORTALITY TABLE. For purposes of subparagraph (A), the term applicable mortality table means a mortality table, modified as appropriate by the Secretary, based on the mortality table specified for the plan year under subparagraph (A) of section VerDate Aug : Jul 0, 06 Jkt 0490 PO Frm 005 Fmt 665 Sfmt 61 E:\BILLS\H4.CPH H4

4 6 1 40(h)() (without regard to subparagraph (C) or (D) of such section). (C) APPLICABLE INTEREST RATE. For 4 purposes of subparagraph (A), the term appli- 5 cable interest rate means the adjusted first, 6 second, and third segment rates applied under rules similar to the rules of section 40(h)()(C) for the month before the date of 9 the distribution or such other time as the Sec- 10 retary may by regulations prescribe. (D) APPLICABLE SEGMENT RATES. For 1 purposes of subparagraph (C), the adjusted 1 first, second, and third segment rates are the first, second, and third segment rates which would be determined under section 40(h)()(C) if (i) section 40(h)()(D) were applied by substituting the average yields for the month described in clause (ii) for the aver- age yields for the 4-month period de- scribed in such section, (ii) section 40(h)()(G)(i)(II) were applied by substituting section 4 4(e)()(A)(ii)(II) for section 5 41(b)(5)(B)(ii)(II), and VerDate Aug : Jul 0, 06 Jkt 0490 PO Frm 006 Fmt 665 Sfmt 61 E:\BILLS\H4.CPH H4

5 (iii) the applicable percentage under section 40(h)()(G) were determined in accordance with the following table: The applicable In the case of plan years beginning in: percentage is: 0... percent percent percent... 0 percent.. 4 (c) EFFECTIVE DATE. The amendments made by 5 this section shall apply with respect to plan years begin- 6 ning after December 1, SEC. 0. INTEREST RATE ASSUMPTION FOR APPLYING BENEFIT LIMITATIONS TO LUMP SUM DIS- TRIBUTIONS. (a) IN GENERAL. Clause (ii) of section 4(b)()(E) of the Internal Revenue Code of 6 is amended to read as follows: (ii) For purposes of adjusting any benefit under subparagraph (B) for any form of benefit subject to section 4(e)(), the interest rate assumption shall not be less than the greatest of (I) 5.5 percent, (II) the rate that provides a benefit of not more than 105 percent of the benefit that would be provided if the applicable interest rate (as de- VerDate Aug : Jul 0, 06 Jkt 0490 PO Frm 00 Fmt 665 Sfmt 61 E:\BILLS\H4.CPH H4