Page:United States Statutes at Large Volume 120.djvu/1024

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 993

to an employees’ trust or annuity plan and compensation under a deferred payment plan) is amended— (1) in subsection (a)(1)(A), by inserting ‘‘in the case of a defined benefit plan other than a multiemployer plan, in an amount determined under subsection (o), and in the case of any other plan’’ after ‘‘section 501(a),’’, and (2) by inserting at the end the following new subsection: ‘‘(o) DEDUCTION LIMIT FOR SINGLE-EMPLOYER PLANS.—For purposes of subsection (a)(1)(A)— ‘‘(1) IN GENERAL.—In the case of a defined benefit plan to which subsection (a)(1)(A) applies (other than a multiemployer plan), the amount determined under this subsection for any taxable year shall be equal to the greater of— ‘‘(A) the sum of the amounts determined under paragraph (2) with respect to each plan year ending with or within the taxable year, or ‘‘(B) the sum of the minimum required contributions under section 430 for such plan years. ‘‘(2) DETERMINATION OF AMOUNT.— ‘‘(A) IN GENERAL.—The amount determined under this paragraph for any plan year shall be equal to the excess (if any) of— ‘‘(i) the sum of— ‘‘(I) the funding target for the plan year, ‘‘(II) the target normal cost for the plan year, and ‘‘(III) the cushion amount for the plan year, over ‘‘(ii) the value (determined under section 430(g)(2)) of the assets of the plan which are held by the plan as of the valuation date for the plan year. ‘‘(B) SPECIAL RULE FOR CERTAIN EMPLOYERS.—If section 430(i) does not apply to a plan for a plan year, the amount determined under subparagraph (A)(i) for the plan year shall in no event be less than the sum of— ‘‘(i) the funding target for the plan year (determined as if section 430(i) applied to the plan), plus ‘‘(ii) the target normal cost for the plan year (as so determined). ‘‘(3) CUSHION AMOUNT.—For purposes of paragraph (2)(A)(i)(III)— ‘‘(A) IN GENERAL.—The cushion amount for any plan year is the sum of— ‘‘(i) 50 percent of the funding target for the plan year, and ‘‘(ii) the amount by which the funding target for the plan year would increase if the plan were to take into account— ‘‘(I) increases in compensation which are expected to occur in succeeding plan years, or ‘‘(II) if the plan does not base benefits for service to date on compensation, increases in benefits which are expected to occur in succeeding plan years (determined on the basis of the average annual increase in benefits over the 6 immediately preceding plan years). ‘‘(B) LIMITATIONS.—

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