administrative and investment expenses. (2) Supplement to report with prescribed valuation and interest rates (A) In general In the case of an annual report under which— (i) plan assets are not valued at fair market value, (ii) any interest rate used to determine the value of plan liabilities under subparagraph (A) or (I) of paragraph (1) is not an interest rate described in subparagraph (B), or (iii) the present value of an accrued benefit is not determined as described in subparagraph (C), the requirements of this subsection shall not be treated as met unless the plan sponsor also includes in such annual report the information described in subparagraphs (A) and (I) of paragraph (1), determined as of the last day of such plan year by valuing plan assets at fair market value, by using the interest rates described in subparagraph (B) to value liabilities, and by determining the present value of accrued benefits as described in subparagraph (C). (B) Interest rates based on Treasury spot rate yield curve (i) In general The interest rates described in this subparagraph are, with respect to any day, the rates of interest which shall be determined by the Secretary for such day on the basis of the Treasury spot rate yield curve for such day. (ii) Treasury spot rate yield curve For purposes of this subparagraph, the term Treasury spot rate yield curve means, with respect to any day, the spot rate for such day on interest-bearing obligations of the United States. (C) Determining present value of accrued benefits The present value of an accrued benefit is determined as described in this subparagraph if— (i) it is determined by discounting its future cash flows in accordance with subparagraph (B), and (ii) the present value of all benefits accrued for each participant is calculated as of the last day of such plan year using the unit credit funding method. (d) Definitions and special rules For purposes of this section— (1) State or local government applicable retirement plan The term State or local government applicable