The Pension Protection Act of 2006 contained provisions requiring underfunded defined benefit plans to restrict the payment and accrual of certain benefits as well as restrict plan amendments increasing benefits. Generally, a plan is underfunded and subject to the new benefit restrictions if its funded level is less than 80%, with additional restrictions applying if the funded percentage is less than 60%. The IRS issued proposed regulations explaining how the funded percentage is to be calculated for 2007, the timing of an election to apply credit balances, the steps underfunded plans must follow to make partial lump-sum or other accelerated distributions and additional transition advice. In addition, under the new rules, sponsors of calendar year plans may make additional contributions by September 15, 2007 (just a few days away!) to improve their plans’ funded status in 2008. See Prop. Treas. Regs. Sections 1.430(f)-1 and 1.436-1.