I.R.C. § 401(a) Requirements For Qualification —
A trust created or organized in the United States and
forming part of a stock bonus, pension, or profit-sharing plan of
an employer for the exclusive benefit of his employees or their beneficiaries
shall constitute a qualified trust under this section—
I.R.C. § 401(a)(1) —
if contributions are made to the
trust by such employer, or employees, or both, or by another employer
who is entitled to deduct his contributions under section 404(a)(3)(B) (relating
to deduction for contributions to profit-sharing and stock bonus
plans), or by a charitable remainder trust pursuant to a qualified
gratuitous transfer (as defined in section 664(g)(1)), for the purpose
of distributing to such employees or their beneficiaries the corpus
and income of the fund accumulated by the trust in accordance with
such plan;
I.R.C. § 401(a)(2) —
if under the trust instrument it
is impossible, at any time prior to the satisfaction of all liabilities
with respect to employees and their beneficiaries under the trust,
for any part of the corpus or income to be (within the taxable year
or thereafter) used for, or diverted to, purposes other than for
the exclusive benefit of his employees or their beneficiaries (but
this paragraph shall not be construed, in the case of a multi-employer
plan, to prohibit the return of a contribution within 6 months after
the plan administrator determines that the contribution was made
by a mistake of fact or law ( other than a mistake relating to whether
the plan is described in section 401(a) or
the trust which is part of such plan is exempt from taxation under
section 501(a),
or the return of any withdrawal liability payment determined to be
an overpayment within 6 months of such determination));
I.R.C. § 401(a)(3) —
if the plan of which such trust
is a part satisfies the requirements of section 410 (relating to minimum participation
standards); and
I.R.C. § 401(a)(4) —
if the contributions or benefits
provided under the plan do not discriminate in favor of highly compensated
employees (within the meaning of section 414(q)). For purposes of this
paragraph, there shall be excluded from consideration employees described
in section 410(b)(3)(A)
and (C).
I.R.C. § 401(a)(5) Special Rules Relating To Nondiscrimination Requirements
I.R.C. § 401(a)(5)(A) Salaried Or Clerical Employees —
A classification shall not be considered discriminatory
within the meaning of paragraph (4) or
section 410(b)(2)(A)(i) merely
because it is limited to salaried or clerical employees.
I.R.C. § 401(a)(5)(B) Contributions And Benefits May Bear Uniform Relationship To
Compensation —
A plan shall not be considered discriminatory within
the meaning of paragraph (4) merely
because the contributions or benefits of, or on behalf of, the employees
under the plan bear a uniform relationship to the compensation (within
the meaning of section 414(s))
of such employees.
I.R.C. § 401(a)(5)(C) Certain Disparity Permitted —
A plan shall not be considered discriminatory within
the meaning of paragraph (4) merely
because the contributions or benefits of, or on behalf of, the employees
under the plan favor highly compensated employees (as defined in
section 414(q))
in the manner permitted under subsection (l).
I.R.C. § 401(a)(5)(D) Integrated Defined Benefit Plan
I.R.C. § 401(a)(5)(D)(i) In General —
A defined benefit plan shall not be considered discriminatory
within the meaning of paragraph (4) merely
because the plan provides that the employer-derived accrued retirement
benefit for any participant under the plan may not exceed the excess
(if any) of—
I.R.C. § 401(a)(5)(D)(i)(I) —
the participant's final pay with
the employer, over
I.R.C. § 401(a)(5)(D)(i)(II) —
the employer-derived retirement
benefit created under Federal law attributable to service by the
participant with the employer.
For purposes of this clause, the
employer-derived retirement benefit created under Federal law shall
be treated as accruing ratably over 35 years.
I.R.C. § 401(a)(5)(D)(ii) Final Pay —
For purposes of this subparagraph, the participant's
final pay is the compensation (as defined in section 414(q)(4)) paid to the participant
by the employer for any year—
I.R.C. § 401(a)(5)(D)(ii)(I) —
which ends during the 5-year period
ending with the year in which the participant separated from service
for the employer, and
I.R.C. § 401(a)(5)(D)(ii)(II) —
for which the participant's total
compensation from the employer was highest.
I.R.C. § 401(a)(5)(E) 2 Or More Plans Treated As Single Plan —
For purposes of determining whether 2 or more plans
of an employer satisfy the requirements of paragraph (4) when considered as a single
plan—
I.R.C. § 401(a)(5)(E)(i) Contributions —
If the amount of contributions on behalf of the employees
allowed as a deduction under section 404 for
the taxable year with respect to such plans, taken together, bears
a uniform relationship to the compensation (within the meaning of
section 414(s))
of such employees, the plans shall not be considered discriminatory
merely because the rights of employees to, or derived from, the employer
contributions under the separate plans do not become nonforfeitable
at the same rate.
I.R.C. § 401(a)(5)(E)(ii) Benefits —
If the employees' rights to benefits under the separate
plans do not become nonforfeitable at the same rate, but the levels
of benefits provided by the separate plans satisfy the requirements
of regulations prescribed by the Secretary to take account of the
differences in such rates, the plans shall not be considered discriminatory
merely because of the difference in such rates.
I.R.C. § 401(a)(5)(F) Social Security Retirement Age —
For purposes of testing for discrimination under paragraph (4)—
I.R.C. § 401(a)(5)(F)(i) —
the social security retirement age
(as defined in section 415(b)(8))
shall be treated as a uniform retirement age, and
I.R.C. § 401(a)(5)(F)(ii) —
subsidized early retirement benefits
and joint and survivor annuities shall not be treated as being unavailable
to employees on the same terms merely because such benefits or annuities
are based in whole or in part on an employee's social security retirement
age (as so defined).
I.R.C. § 401(a)(5)(G) Governmental Plans —
Paragraphs (3) and (4) shall not apply to a governmental
plan (within the meaning of section 414(d)).
I.R.C. § 401(a)(6) —
A plan shall be considered as meeting
the requirements of paragraph (3) during
the whole of any taxable year of the plan if on one day in each quarter
it satisfied such requirements.
I.R.C. § 401(a)(7) —
A trust shall not constitute a qualified
trust under this section unless the plan of which such trust is a
part satisfies the requirements of section 411 (relating to minimum vesting
standards).
I.R.C. § 401(a)(8) —
A trust forming part of a defined
benefit plan shall not constitute a qualified trust under this section
unless the plan provides that forfeitures must not be applied to
increase the benefits any employee would otherwise receive under
the plan.
I.R.C. § 401(a)(9) Required Distributions
I.R.C. § 401(a)(9)(A) In General —
A trust shall not constitute a qualified trust under
this subsection unless the plan provides that the entire interest
of each employee—
I.R.C. § 401(a)(9)(A)(i) —
will be distributed to such employee
not later than the required beginning date, or
I.R.C. § 401(a)(9)(A)(ii) —
will be distributed, beginning not
later than the required beginning date, in accordance with regulations,
over the life of such employee or over the lives of such employee
and a designated beneficiary (or over a period not extending beyond
the life expectancy of such employee or the life expectancy of such
employee and a designated beneficiary).
I.R.C. § 401(a)(9)(B) Required Distribution Where Employee Dies Before Entire Interest
Is Distributed —
I.R.C. § 401(a)(9)(B)(i) Where Distributions Have Begun Under Subparagraph (A)(ii) —
A trust shall not constitute a qualified trust under
this section unless the plan provides that if—
I.R.C. § 401(a)(9)(B)(i)(I) —
the distribution of the employee's
interest has begun in accordance with subparagraph (A)(ii), and
I.R.C. § 401(a)(9)(B)(i)(II) —
the employee dies before his entire
interest has been distributed to him, the remaining portion of such
interest will be distributed at least as rapidly as under the method
of distributions being used under subparagraph (A)(ii) as of the date of
his death.
I.R.C. § 401(a)(9)(B)(ii) 5-Year Rule For Other Cases —
A trust shall not constitute a qualified trust under
this section unless the plan provides that, if an employee dies before
the distribution of the employee's interest has begun in accordance
with subparagraph (A)(ii),
the entire interest of the employee will be distributed within 5
years after the death of such employee.
I.R.C. § 401(a)(9)(B)(iii) Exception To 5-Year Rule For Certain Amounts Payable Over Life
Of Beneficiary —
If—
I.R.C. § 401(a)(9)(B)(iii)(I) —
any portion of the employee's interest
is payable to (or for the benefit of) a designated beneficiary,
I.R.C. § 401(a)(9)(B)(iii)(II) —
such portion will be distributed
(in accordance with regulations) over the life of such designated
beneficiary (or over a period not extending beyond the life expectancy
of such beneficiary), and
I.R.C. § 401(a)(9)(B)(iii)(III) —
such distributions begin not later
than 1 year after the date of the employee's death or such later
date as the Secretary may by regulations prescribe, for purposes
of clause (ii), the portion referred to in subclause (I) shall be treated
as distributed on the date on which such distributions begin.
Editor's Note: Sec. 401(a)(9)(B)(iv),
below, before amendments by Pub. L. 117-328,
Div. T, Sec. 327(a), shall apply to calendar years beginning before
December 31, 2023.
I.R.C. § 401(a)(9)(B)(iv) Special Rule For Surviving Spouse Of Employee —
If the designated beneficiary referred to in clause (iii)(I) is the surviving
spouse of the employee—
I.R.C. § 401(a)(9)(B)(iv)(I) —
the date on which the distributions
are required to begin under clause (iii)(III) shall not
be earlier than the date on which the employee would have attained
the applicable age, and
I.R.C. § 401(a)(9)(B)(iv)(II) —
if the surviving spouse dies before
the distributions to such spouse begin, this subparagraph shall be
applied as if the surviving spouse were the employee.
Editor's Note: Sec. 401(a)(9)(B)(iv),
below, after amendments by Pub. L. 117-328,
Div. T, Sec. 327(a), shall apply to calendar years beginning after
December 31, 2023.
I.R.C. § 401(a)(9)(B)(iv) Special Rule for Surviving Spouse of Employee —
If the designated beneficiary referred to in clause (iii)(I) is the surviving
spouse of the employee and the surviving spouse elects the treatment
in this clause—
I.R.C. § 401(a)(9)(B)(iv)(I) —
the regulations referred to in clause (iii)(III) shall treat
the surviving spouse as if the surviving spouse were the employee,
I.R.C. § 401(a)(9)(B)(iv)(II) —
the date on which the distributions
are required to begin under clause (iii)(III) shall not
be earlier than the date on which the employee would have attained
the applicable age, and
I.R.C. § 401(a)(9)(B)(iv)(III) —
if the surviving spouse dies before
the distributions to such spouse begin, this subparagraph shall be
applied as if the surviving spouse is the employee.
An election
described in this clause shall be made at such time and in such manner
as prescribed by the Secretary, shall include a timely notice to the
plan administrator, and once made may not be revoked except with the
consent of the Secretary.
I.R.C. § 401(a)(9)(C) Required Beginning Date —
For purposes of this paragraph—
I.R.C. § 401(a)(9)(C)(i) In General —
The term “required beginning date” means April 1 of
the calendar year following the later of—
I.R.C. § 401(a)(9)(C)(i)(I) —
the calendar year in which the employee
attains applicable age, or
I.R.C. § 401(a)(9)(C)(i)(II) —
the calendar year in which the employee
retires.
I.R.C. § 401(a)(9)(C)(ii) Exception —
Subclause (II) of
clause (i) shall
not apply—
I.R.C. § 401(a)(9)(C)(ii)(I) —
except as provided in section 409(d), in the case of an employee
who is a 5-percent owner (as defined in section 416) with respect to the plan
year ending in the calendar year in which the employee attains the
applicable age, or
I.R.C. § 401(a)(9)(C)(ii)(II) —
for purposes of section 408(a)(6) or (b)(3).
I.R.C. § 401(a)(9)(C)(iii) Actuarial Adjustment —
In the case of an employee to whom clause (i)(II) applies who retires
in a calendar year after the calendar year in which the employee
attains age 70 1/2, the employee's accrued benefit shall be actuarially
increased to take into account the period after age 70 1/2 in which
the employee was not receiving any benefits under the plan.
I.R.C. § 401(a)(9)(C)(iv) Exception For Governmental And Church Plans —
Clauses (ii) and (iii) shall not apply in
the case of a governmental plan or church plan. For purposes of this
clause, the term “church plan” means a plan maintained by a church
for church employees, and the term “church” means any church (as
defined in section 3121(w)(3)(A))
or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).
I.R.C. § 401(a)(9)(C)(v) Applicable Age
I.R.C. § 401(a)(9)(C)(v)(I) —
In the case of an individual who attains
age 72 after December 31, 2022, and age 73 before January 1, 2033,
the applicable age is 73.
I.R.C. § 401(a)(9)(C)(v)(II) —
In the case of an individual who attains
age 74 after December 31, 2032, the applicable age is 75.
I.R.C. § 401(a)(9)(D) Life Expectancy —
For purposes of this paragraph, the life expectancy
of an employee and the employee's spouse (other than in the case
of a life annuity) may be redetermined but not more frequently than
annually.
I.R.C. § 401(a)(9)(E) Definitions And Rules Relating To Designated Beneficiaries —
For purposes of this paragraph—
I.R.C. § 401(a)(9)(E)(i) Designated Beneficiary —
The term “designated beneficiary” means any
individual designated as a beneficiary by the employee.
I.R.C. § 401(a)(9)(E)(ii) Eligible Designated Beneficiary —
The term “eligible designated beneficiary”
means, with respect to any employee, any designated beneficiary who
is—
I.R.C. § 401(a)(9)(E)(ii)(I) —
the surviving spouse of the employee,
I.R.C. § 401(a)(9)(E)(ii)(II) —
subject to clause (iii), a child of
the employee who has not reached majority (within the meaning of subparagraph
(F)),
I.R.C. § 401(a)(9)(E)(ii)(III) —
disabled (within the meaning of section
72(m)(7)),
I.R.C. § 401(a)(9)(E)(ii)(IV) —
a chronically ill individual (within
the meaning of section 7702B(c)(2), except that the requirements of
subparagraph (A)(i) thereof shall only be treated as met if there
is a certification that, as of such date, the period of inability
described in such subparagraph with respect to the individual is an
indefinite one which is reasonably expected to be lengthy in nature),
or
I.R.C. § 401(a)(9)(E)(ii)(V) —
an individual not described in any of
the preceding subclauses who is not more than 10 years younger than
the employee.
The determination of whether a designated
beneficiary is an eligible designated beneficiary shall be made as
of the date of death of the employee.
I.R.C. § 401(a)(9)(E)(iii) Special Rule For Children —
Subject to subparagraph (F), an individual described
in clause (ii)(II) shall cease to be an eligible designated beneficiary
as of the date the individual reaches majority and any remainder of
the portion of the individual's interest to which subparagraph
(H)(ii) applies shall be distributed within 10 years after such date.
I.R.C. § 401(a)(9)(F) Treatment Of Payments To Children —
Under regulations prescribed by the Secretary, for
purposes of this paragraph, any amount paid to a child shall be treated
as if it had been paid to the surviving spouse if such amount will
become payable to the surviving spouse upon such child reaching majority
(or other designated event permitted under regulations).
I.R.C. § 401(a)(9)(G) Treatment Of Incidental Death Benefit Distributions —
For purposes of this title, any distribution required
under the incidental death benefit requirements of this subsection
shall be treated as a distribution required under this paragraph.
I.R.C. § 401(a)(9)(H) Special Rules For Certain Defined Contribution Plans —
In the case of a defined contribution plan, if an employee
dies before the distribution of the employee's entire interest—
I.R.C. § 401(a)(9)(H)(i) In General —
Except in the case of a beneficiary who is not a designated
beneficiary, subparagraph (B)(ii)—
I.R.C. § 401(a)(9)(H)(i)(I) —
shall be applied
by substituting ‘10 years’ for ‘5 years’,
and
I.R.C. § 401(a)(9)(H)(i)(II) —
shall apply
whether or not distributions of the employee's interests have
begun in accordance with subparagraph (A).
I.R.C. § 401(a)(9)(H)(ii) Exception For Eligible Designated Beneficiaries —
Subparagraph (B)(iii) shall apply only in the case of
an eligible designated beneficiary.
I.R.C. § 401(a)(9)(H)(iii) Rules Upon Death Of Eligible Designated Beneficiary —
If an eligible designated beneficiary dies before the
portion of the employee's interest to which this subparagraph
applies is entirely distributed, the exception under clause (ii) shall
not apply to any beneficiary of such eligible designated beneficiary
and the remainder of such portion shall be distributed within 10 years
after the death of such eligible designated beneficiary.
I.R.C. § 401(a)(9)(H)(iv) Special Rule In Case Of Certain Trusts For Disabled Or Chronically
Ill Beneficiaries —
In the case of an applicable multi-beneficiary trust,
if under the terms of the trust—
I.R.C. § 401(a)(9)(H)(iv)(I) —
it is to be
divided immediately upon the death of the employee into separate trusts
for each beneficiary, or
I.R.C. § 401(a)(9)(H)(iv)(II) —
no beneficiary
(other than a eligible designated beneficiary described in subclause
(III) or (IV) of subparagraph (E)(ii)) has any right to the employee's
interest in the plan until the death of all such eligible designated
beneficiaries with respect to the trust,
for purposes
of a trust described in subclause (I), clause (ii) shall be applied
separately with respect to the portion of the employee's interest
that is payable to any eligible designated beneficiary described in
subclause (III) or (IV) of subparagraph (E)(ii); and, for purposes
of a trust described in subclause (II), subparagraph (B)(iii) shall
apply to the distribution of the employee's interest and any
beneficiary who is not such an eligible designated beneficiary shall
be treated as a beneficiary of the eligible designated beneficiary
upon the death of such eligible designated beneficiary.
I.R.C. § 401(a)(9)(H)(v) Applicable Multi-Beneficiary Trust —
For purposes of this subparagraph, the term “applicable
multi-beneficiary trust” means a trust—
I.R.C. § 401(a)(9)(H)(v)(I) —
which has
more than one beneficiary,
I.R.C. § 401(a)(9)(H)(v)(II) —
all of the
beneficiaries of which are treated as designated beneficiaries for
purposes of determining the distribution period pursuant to this paragraph,
and
I.R.C. § 401(a)(9)(H)(v)(III) —
at least one
of the beneficiaries of which is an eligible designated beneficiary
described in subclause (III) or (IV) of subparagraph (E)(ii).
For purposes
of the preceding sentence, in the case of a trust the terms of which
December 19, 2022 are described in clause (iv)(II), any beneficiary
which is an organization described in section 408(d)(8)(B)(i) shall
be treated as a designated beneficiary described in subclause (II).
I.R.C. § 401(a)(9)(H)(vi) Application To Certain Eligible Retirement Plans —
For purposes of applying the provisions of this subparagraph
in determining amounts required to be distributed pursuant to this
paragraph, all eligible retirement plans (as defined in section 402(c)(8)(B),
other than a defined benefit plan described in clause (iv) or (v)
thereof or a qualified trust which is a part of a defined benefit
plan) shall be treated as a defined contribution plan.
I.R.C. § 401(a)(9)(I) Temporary Waiver Of Minimum Required Distribution
I.R.C. § 401(a)(9)(I)(i) In General —
The requirements of this paragraph shall not apply for
calendar year 2020 to —
I.R.C. § 401(a)(9)(I)(i)(I) —
a defined contribution plan which
is described in this subsection or in section 403(a) or 403(b),
I.R.C. § 401(a)(9)(I)(i)(II) —
a defined contribution plan which
is an eligible deferred compensation plan described in section 457(b)
but only if such plan is maintained by an employer described in section
457(e)(1)(A), or
I.R.C. § 401(a)(9)(I)(i)(III) —
an individual retirement plan.
I.R.C. § 401(a)(9)(I)(ii) Special Rule For Required Beginning Dates In 2020 —
Clause (i) shall apply to any distribution which is required
to be made in calendar year 2020 by reason of—
I.R.C. § 401(a)(9)(I)(ii)(I) —
a required beginning date occurring
in such calendar year, and
I.R.C. § 401(a)(9)(I)(ii)(II) —
such distribution not having been
made before January 1, 2020.
I.R.C. § 401(a)(9)(I)(iii) Special Rules Regarding Waiver Period —
For purposes of this paragraph—
I.R.C. § 401(a)(9)(I)(iii)(I) —
the required beginning date with
respect to any individual shall be determined without regard to this
subparagraph for purposes of applying this paragraph for calendar
years after 2020, and
I.R.C. § 401(a)(9)(I)(iii)(II) —
if clause (ii) of subparagraph (B)
applies, the 5-year period described in such clause shall be determined
without regard to calendar year 2020.
I.R.C. § 401(a)(9)(J) Certain Increases in Payments Under A Commercial Annuity —
Nothing in this section shall prohibit a commercial annuity
(within the meaning of section 3405(e)(6)) that is issued in connection
with any eligible retirement plan (within the meaning of section 402(c)(8)(B),
other than a defined benefit plan) from providing one or more of the
following types of payments on or after the annuity starting date:
I.R.C. § 401(a)(9)(J)(i) —
annuity payments that increase by a
constant percentage, applied not less frequently than annually, at
a rate that is less than 5 percent per year,
I.R.C. § 401(a)(9)(J)(ii) —
a lump sum payment that—
I.R.C. § 401(a)(9)(J)(ii)(I) —
results in a shortening of the payment
period with respect to an annuity or a full or partial commutation
of the future annuity payments, provided that such lump sum is determined
using reasonable actuarial methods and assumptions, as determined
in good faith by the issuer of the contract, or
I.R.C. § 401(a)(9)(J)(ii)(II) —
accelerates the receipt of annuity payments
that are scheduled to be received within the ensuing 12 months, regardless
of whether such acceleration shortens the payment period with respect
to the annuity, reduces the dollar amount of benefits to be paid under
the contract, or results in a suspension of annuity payments during
the period being accelerated,
I.R.C. § 401(a)(9)(J)(ii)(iii) —
an amount which is in the nature of
a dividend or similar distribution, provided that the issuer of the
contract determines such amount using reasonable actuarial methods
and assumptions, as determined in good faith by the issuer of the
contract, when calculating the initial annuity payments and the issuer's
experience with respect to those factors, or
I.R.C. § 401(a)(9)(J)(ii)(iv) —
a final payment upon death that does
not exceed the excess of the total amount of the consideration paid
for the annuity payments, less the aggregate amount of prior distributions
or payments from or under the contract.
I.R.C. § 401(a)(10) Other Requirements
I.R.C. § 401(a)(10)(A) Plans Benefiting Owner-Employees —
In the case of any plan which provides contributions
or benefits for employees some or all of whom are owner-employees
(as defined in subsection (c)(3)),
a trust forming part of such plan shall constitute a qualified trust
under this section only if the requirements of subsection (d) are also met.
I.R.C. § 401(a)(10)(B) Top-Heavy Plans
I.R.C. § 401(a)(10)(B)(i) In General —
In the case of any top-heavy plan, a trust forming
part of such plan shall constitute a qualified trust under this section
only if the requirements of section 416 are
met.
I.R.C. § 401(a)(10)(B)(ii) Plans Which May Become Top-Heavy —
Except to the extent provided in regulations, a trust
forming part of a plan (whether or not a top-heavy plan) shall constitute
a qualified trust under this section only if such plan contains provisions—
I.R.C. § 401(a)(10)(B)(ii)(I) —
which will take effect if such plan
becomes a top-heavy plan, and
I.R.C. § 401(a)(10)(B)(ii)(II) —
which meet the requirements of section 416.
I.R.C. § 401(a)(10)(B)(iii) Exemption For Governmental Plans —
This subparagraph shall not apply to any governmental
plan.
I.R.C. § 401(a)(11) Requirement Of Joint And Survivor Annuity And Preretirement
Survivor Annuity
I.R.C. § 401(a)(11)(A) In General —
In the case of any plan to which this paragraph applies,
except as provided in section 417,
a trust forming part of such plan shall not constitute a qualified
trust under this section unless—
I.R.C. § 401(a)(11)(A)(i) —
in the case of a vested participant
who does not die before the annuity starting date, the accrued benefit
payable to such participant is provided in the form of a qualified
joint and survivor annuity, and
I.R.C. § 401(a)(11)(A)(ii) —
in the case of a vested participant
who dies before the annuity starting date and who has a surviving
spouse, a qualified preretirement survivor annuity is provided to
the surviving spouse of such participant.
I.R.C. § 401(a)(11)(B) Plans To Which Paragraph Applies —
This paragraph shall apply to—
I.R.C. § 401(a)(11)(B)(i) —
any defined benefit plan,
I.R.C. § 401(a)(11)(B)(ii) —
any defined contribution plan which
is subject to the funding standards of section 412, and
I.R.C. § 401(a)(11)(B)(iii) —
any participant under any other
defined contribution plan unless—
I.R.C. § 401(a)(11)(B)(iii)(I) —
such plan provides that the participant's
nonforfeitable accrued benefit (reduced by any security interest
held by the plan by reason of a loan outstanding to such participant)
is payable in full, on the death of the participant, to the participant's
surviving spouse (or, if there is no surviving spouse or the surviving
spouse consents in the manner required under section 417(a)(2), to a designated
beneficiary),
I.R.C. § 401(a)(11)(B)(iii)(II) —
such participant does not elect
a payment of benefits in the form of a life annuity, and
I.R.C. § 401(a)(11)(B)(iii)(III) —
with respect to such participant,
such plan is not a direct or indirect transferee (in a transfer after
December 31, 1984) of a plan which is described in clause (i) or
(ii) or to which this clause applied with respect to the participant.
Clause (iii)(III) shall apply only
with respect to the transferred assets (and income therefrom) if
the plan separately accounts for such assets and any income therefrom.
I.R.C. § 401(a)(11)(C) Exception For Certain ESOP Benefits
I.R.C. § 401(a)(11)(C)(i) In General —
In the case of—
I.R.C. § 401(a)(11)(C)(i)(I) —
a tax credit employee stock ownership
plan (as defined in section 409(a)),
or
I.R.C. § 401(a)(11)(C)(i)(II) —
an employee stock ownership plan
(as defined in section 4975(e)(7)),
subparagraph (A) shall
not apply to that portion of the employee's accrued benefit to which
the requirements of section 409(h)
apply.
I.R.C. § 401(a)(11)(C)(ii) Nonforfeitable Benefit Must Be Paid In Full, Etc. —
In the case of any participant, clause (i) shall apply only if the
requirements of subclauses (I), (II), and (III) of subparagraph (B)(iii) are met with
respect to such participant.
I.R.C. § 401(a)(11)(D) Special Rule Where Participant And Spouse Married Less Than
1 Year —
A plan shall not be treated as failing to meet the
requirements of subparagraphs (B)(iii) or (C) merely because the plan
provides that benefits will not be payable to the surviving spouse
of the participant unless the participant and such spouse had been
married throughout the 1-year period ending on the earlier of the
participant's annuity starting date or the date of the participant's
death.
I.R.C. § 401(a)(11)(E) Exception For Plans Described In Section 404(c) —
This paragraph shall not apply to a plan which the
Secretary has determined is a plan described in section 404(c) (or a continuation thereof)
in which participation is substantially limited to individuals who,
before January 1, 1976, ceased employment covered by the plan.
I.R.C. § 401(a)(11)(F) Cross Reference —
For—
I.R.C. § 401(a)(11)(F)(i) —
provisions under which participants
may elect to waive the requirements of this paragraph, and
I.R.C. § 401(a)(11)(F)(ii) —
other definitions and special rules
for purposes of this paragraph, see section 417.
I.R.C. § 401(a)(12) —
A trust shall not constitute a qualified
trust under this section unless the plan of which such trust is a
part provides that in the case of any merger or consolidation with,
or transfer of assets or liabilities to, any other plan after September
2, 1974, each participant in the plan would (if the plan then terminated)
receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation,
or transfer (if the plan had then terminated). The preceding sentence
does not apply to any multiemployer plan with respect to any transaction
to the extent that participants either before or after the transaction
are covered under a multiemployer plan to which title IV of the Employee
Retirement Income Security Act of 1974 applies.
I.R.C. § 401(a)(13) Assignment And Alienation
I.R.C. § 401(a)(13)(A) In General —
A trust shall not constitute a qualified trust under
this section unless the plan of which such trust is a part provides
that benefits provided under the plan may not be assigned or alienated.
For purposes of the preceding sentence, there shall not be taken
into account any voluntary and revocable assignment of not to exceed
10 percent of any benefit payment made by any participant who is
receiving benefits under the plan unless the assignment or alienation
is made for purposes of defraying plan administration costs. For
purposes of this paragraph a loan made to a participant or beneficiary
shall not be treated as an assignment or alienation if such loan
is secured by the participant's accrued nonforfeitable benefit and
is exempt from the tax imposed by section 4975 (relating to tax on prohibited
transactions) by reason of section 4975(d)(1). This paragraph
shall take effect on January 1, 1976 and shall not apply to assignments
which were irrevocable on September 2, 1974.
I.R.C. § 401(a)(13)(B) Special Rules For Domestic Relations Orders —
Subparagraph (A) shall
apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a participant pursuant to a domestic
relations order, except that subparagraph (A) shall not apply if the order
is determined to be a qualified domestic relations order.
I.R.C. § 401(a)(13)(C) Special Rule For Certain Judgments And Settlements —
Subparagraph (A)
shall not apply to any offset of a participant's benefits provided
under a plan against an amount that the participant is ordered or
required to pay to the plan if—
I.R.C. § 401(a)(13)(C)(i) —
the order or requirement to pay
arises—
I.R.C. § 401(a)(13)(C)(i)(I) —
under a judgment of conviction
for a crime involving such plan,
I.R.C. § 401(a)(13)(C)(i)(II) —
under a civil judgment (including
a consent order or decree) entered by a court in an action brought
in connection with a violation (or alleged violation) of part 4
of subtitle B of title I of the Employee Retirement Income Security
Act of 1974, or
I.R.C. § 401(a)(13)(C)(i)(III) —
pursuant to a settlement agreement
between the Secretary of Labor and the participant, or a settlement
agreement between the Pension Benefit Guaranty Corporation and the
participant, in connection with a violation (or alleged violation)
of part 4 of such subtitle by a fiduciary or any other person,
I.R.C. § 401(a)(13)(C)(ii) —
the judgment, order, decree, or
settlement agreement expressly provides for the offset of all or
part of the amount ordered or required to be paid to the plan against
the participant's benefits provided under the plan, and
I.R.C. § 401(a)(13)(C)(iii) —
in a case in which the survivor
annuity requirements of section 401(a)(11) apply with respect
to distributions from the plan to the participant, if the participant
has a spouse at the time at which the offset is to be made—
I.R.C. § 401(a)(13)(C)(iii)(I) —
either such spouse has consented
in writing to such offset and such consent is witnessed by a notary
public or representative of the plan (or it is established to the
satisfaction of a plan representative that such consent may not
be obtained by reason of circumstances described in section 417(a)(2)(B)), or an election
to waive the right of the spouse to either a qualified joint and
survivor annuity or a qualified preretirement survivor annuity is
in effect in accordance with the requirements of section 417(a),
I.R.C. § 401(a)(13)(C)(iii)(II) —
such spouse is ordered or required
in such judgment, order, decree, or settlement to pay an amount
to the plan in connection with a violation of part 4 of such subtitle,
or
I.R.C. § 401(a)(13)(C)(iii)(III) —
in such judgment, order, decree,
or settlement, such spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity provided pursuant
to section 401(a)(11)(A)(i) and
under a qualified preretirement survivor annuity provided pursuant
to section 401(a)(11)(A)(ii),
determined in accordance with subparagraph (D). A plan shall not be treated
as failing to meet the requirements of this subsection, subsection (k), section 403(b), or section 409(d) solely by reason of
an offset described in this subparagraph.
I.R.C. § 401(a)(13)(D) Survivor Annuity
I.R.C. § 401(a)(13)(D)(i) In General —
The survivor annuity described in subparagraph (C)(iii)(III) shall
be determined as if—
I.R.C. § 401(a)(13)(D)(i)(I) —
the participant terminated employment
on the date of the offset,
I.R.C. § 401(a)(13)(D)(i)(II) —
there was no offset,
I.R.C. § 401(a)(13)(D)(i)(III) —
the plan permitted commencement
of benefits only on or after normal retirement age,
I.R.C. § 401(a)(13)(D)(i)(IV) —
the plan provided only the minimum-required
qualified joint and survivor annuity, and
I.R.C. § 401(a)(13)(D)(i)(V) —
the amount of the qualified preretirement
survivor annuity under the plan is equal to the amount of the survivor
annuity payable under the minimum-required qualified joint and survivor
annuity.
I.R.C. § 401(a)(13)(D)(ii) Definition —
For purposes of this subparagraph, the term “minimum-required
qualified joint and survivor annuity” means the qualified
joint and survivor annuity which is the actuarial equivalent of
the participant's accrued benefit (within the meaning of section
411(a)(7))
and under which the survivor annuity is 50 percent of the amount
of the annuity which is payable during the joint lives of the participant
and the spouse.
I.R.C. § 401(a)(14) —
A trust shall not constitute a qualified
trust under this section unless the plan of which such trust is a
part provides that, unless the participant otherwise elects, the
payment of benefits under the plan to the participant will begin
not later than the 60th day after the latest of the close of the
plan year in which—
I.R.C. § 401(a)(14)(A) —
the date on which the participant
attains the earlier of age 65 or the normal retirement age specified
under the plan,
I.R.C. § 401(a)(14)(B) —
occurs the 10th anniversary of the
year in which the participant commenced participation in the plan,
or
I.R.C. § 401(a)(14)(C) —
the participant terminates his service
with the employer.
In the case of a plan which provides for the payment
of an early retirement benefit, a trust forming a part of such plan
shall not constitute a qualified trust under this section unless
a participant who satisfied the service requirements for such early
retirement benefit, but separated from the service (with any nonforfeitable
right to an accrued benefit) before satisfying the age requirement
for such early retirement benefit, is entitled upon satisfaction
of such age requirement to receive a benefit not less than the benefit
to which he would be entitled at the normal retirement age, actuarially,
reduced under regulations prescribed by the Secretary.
I.R.C. § 401(a)(15) —
A trust shall not constitute a qualified
trust under this section unless under the plan of which such trust
is a part—
I.R.C. § 401(a)(15)(A) —
in the case of a participant or
beneficiary who is receiving benefits under such plan, or
I.R.C. § 401(a)(15)(B) —
in the case of a participant who
is separated from the service and who has nonforfeitable rights to
benefits, such benefits are not decreased by reason of any increase
in the benefit levels payable under title II of the Social Security
Act or any increase in the wage base under such title II, if such
increase takes place after September 2, 1974, or (if later) the earlier
of the date of first receipt of such benefits or the date of such
separation, as the case may be.
I.R.C. § 401(a)(16) —
A trust shall not constitute a qualified
trust under this section if the plan of which such trust is a part
provides for benefits or contributions which exceed the limitations
of section 415.
I.R.C. § 401(a)(17) Compensation Limit
I.R.C. § 401(a)(17)(A) In General —
A trust shall not constitute a qualified trust under
this section unless, under the plan of which such trust is a part,
the annual compensation of each employee taken into account under
the plan for any year does not exceed $200,000.
I.R.C. § 401(a)(17)(B) Cost-Of-Living Adjustment —
The Secretary shall adjust annually
the $200,000 amount in subparagraph (A) for increases in the cost-of-living
at the same time and in the same manner as adjustments under section 415(d); except that the base
period shall be the calendar quarter beginning July 1, 2001, and
any increase which is not a multiple of $5,000 shall be rounded to
the next lowest multiple of $5,000.
I.R.C. § 401(a)(18) —
[Repealed. Pub. L. 97-248, title II, 237(b),
Sept. 3, 1982, 96 Stat. 511.]
I.R.C. § 401(a)(19) —
A trust shall not constitute a qualified
trust under this section if under the plan of which such trust is
a part any part of a participant's accrued benefit derived from employer
contributions (whether or not otherwise nonforfeitable), is forfeitable
solely because of withdrawal by such participant of any amount attributable
to the benefit derived from contributions made by such participant.
The preceding sentence shall not apply to the accrued benefit of
any participant unless, at the time of such withdrawal, such participant
has a nonforfeitable right to at least 50 percent of such accrued
benefit (as determined under section 411).
The first sentence of this paragraph shall not apply to the extent
that an accrued benefit is permitted to be forfeited in accordance
with section 411(a)(3)(D)(iii) (relating
to proportional forfeitures of benefits accrued before September
2, 1974, in the event of withdrawal of certain mandatory contributions).
I.R.C. § 401(a)(20) —
A trust forming part of a pension
plan shall not be treated as failing to constitute a qualified trust
under this section merely because the pension plan of which such
trust is a part makes 1 or more distributions within 1 taxable year
to a distributee on account of a termination of the plan of which
the trust is a part, or in the case of a profit-sharing or stock
bonus plan, a complete discontinuance of contributions under such
plan. This paragraph shall not apply to a defined benefit plan unless
the employer maintaining such plan files a notice with the Pension
Benefit Guaranty Corporation (at the time and in the manner prescribed
by the Pension Benefit Guaranty Corporation) notifying the Corporation
of such payment or distribution and the Corporation has approved
such payment or distribution or, within 90 days after the date on
which such notice was filed, has failed to disapprove such payment
or distribution. For purposes of this paragraph, rules similar to
the rules of section 402(a)(6)(B) (as
in effect before its repeal by section 521 of the Unemployment Compensation
Amendments of 1992) shall apply.
I.R.C. § 401(a)(21) —
[Repealed. Pub. L. 99-514, title XI, 1171(b)(5),
Oct. 22, 1986, 100 Stat. 2513.]
I.R.C. § 401(a)(22) —
If a defined contribution plan (other
than a profit-sharing plan)—
I.R.C. § 401(a)(22)(A) —
is established by an employer whose
stock is not readily tradable on an established market, and
I.R.C. § 401(a)(22)(B) —
after acquiring securities of the
employer, more than 10 percent of the total assets of the plan are
securities of the employer, any trust forming part of such plan shall
not constitute a qualified trust under this section unless the plan
meets the requirements of subsection (e) of
section 409. The
requirements of subsection (e) of
section 409 shall
not apply to any employees of an employer who are participants in
any defined contribution plan established and maintained by such
employer if the stock of such employer is not readily tradable on
an established market and the trade or business of such employer
consists of publishing on a regular basis a newspaper for general
circulation. For purposes of the preceding sentence, subsections (b), (c), (m), and (o) of
section 414 shall
not apply except for determining whether stock of the employer is
not readily tradable on an established market.
I.R.C. § 401(a)(23) —
A stock bonus plan shall not be
treated as meeting the requirements of this section unless such plan
meets the requirements of subsections (h) and (o) of section 409, except that in applying section
409(h) for
purposes of this paragraph, the term “employer securities” shall
include any securities of the employer held by the plan.
I.R.C. § 401(a)(24) —
Any group trust which otherwise
meets the requirements of this section shall not be treated as not
meeting such requirements on account of the participation or inclusion
in such trust of the moneys of any plan or governmental unit described
in section 818(a)(6).
I.R.C. § 401(a)(25) Requirement That Actuarial Assumptions Be Specified —
A defined benefit plan shall not be treated as providing
definitely determinable benefits unless, whenever the amount of any
benefit is to be determined on the basis of actuarial assumptions,
such assumptions are specified in the plan in a way which precludes
employer discretion.
I.R.C. § 401(a)(26) Additional Participation Requirements
I.R.C. § 401(a)(26)(A) In General —
In the case of a trust which is a part of a defined
benefit plan, such trust shall not constitute a qualified trust under
this subsection unless on each day of the plan year such trust benefits
at least the lesser of—
I.R.C. § 401(a)(26)(A)(i) —
50 employees of the employer, or
I.R.C. § 401(a)(26)(A)(ii) —
the greater of—
I.R.C. § 401(a)(26)(A)(ii)(I) —
40 percent of all employees of the
employer, or
I.R.C. § 401(a)(26)(A)(ii)(II) —
2 employees (or if there is only
1 employee, such employee).
I.R.C. § 401(a)(26)(B) Treatment Of Excludable Employees
I.R.C. § 401(a)(26)(B)(i) In General —
A plan may exclude from consideration under this paragraph
employees described in paragraphs (3) and (4)(A) of section 410(b).
I.R.C. § 401(a)(26)(B)(ii) Separate Application For Certain Excludable Employees —
If employees described in section 410(b)(4)(B) are covered
under a plan which meets the requirements of subparagraph (A) separately with respect
to such employees, such employees may be excluded from consideration
in determining whether any plan of the employer meets such requirements
if—
I.R.C. § 401(a)(26)(B)(ii)(I) —
the benefits for such employees
are provided under the same plan as benefits for other employees,
I.R.C. § 401(a)(26)(B)(ii)(II) —
the benefits provided to such employees
are not greater than comparable benefits provided to other employees
under the plan, and
I.R.C. § 401(a)(26)(B)(ii)(III) —
no highly compensated employee (within
the meaning of section 414(q))
is included in the group of such employees for more than 1 year.
I.R.C. § 401(a)(26)(C) Special Rule For Collective Bargaining Units —
Except to the extent provided in regulations, a plan
covering only employees described in section 410(b)(3)(A) may exclude
from consideration any employees who are not included in the unit
or units in which the covered employees are included.
I.R.C. § 401(a)(26)(D) Paragraph Not To Apply To Multiemployer Plans —
Except to the extent provided in regulations, this
paragraph shall not apply to employees in a multiemployer plan (within
the meaning of section 414(f))
who are covered by collective bargaining agreements.
I.R.C. § 401(a)(26)(E) Special Rule For Certain Dispositions Or Acquisitions —
Rules similar to the rules of section 410(b)(6)(C) shall apply
for purposes of this paragraph.
I.R.C. § 401(a)(26)(F) Separate Lines Of Business —
At the election of the employer and with the consent
of the Secretary, this paragraph may be applied separately with respect
to each separate line of business of the employer. For purposes of
this paragraph, the term “separate line of business” has the meaning
given such term by section 414(r) (without
regard to paragraph (2)(A) or (7) thereof).
I.R.C. § 401(a)(26)(G) Exception For Governmental Plans —
This paragraph shall not apply
to a governmental plan (within the meaning of section 414(d)).
I.R.C. § 401(a)(26)(H) Regulations —
The Secretary may by regulation provide that any separate
benefit structure, any separate trust, or any other separate arrangement
is to be treated as a separate plan for purposes of applying this
paragraph.
I.R.C. § 401(a)(26)(I) Protected Participants
I.R.C. § 401(a)(26)(I)(i) In General —
A plan shall be deemed to satisfy the requirements of
subparagraph (A) if—
I.R.C. § 401(a)(26)(I)(i)(I) —
the plan is
amended—
I.R.C. § 401(a)(26)(I)(i)(I)(aa) —
to cease all benefit accruals, or
I.R.C. § 401(a)(26)(I)(i)(I)(bb) —
to provide future benefit accruals only
to a closed class of participants,
I.R.C. § 401(a)(26)(I)(i)(II) —
the plan satisfies
subparagraph (A) (without regard to this subparagraph) as of the effective
date of the amendment, and
I.R.C. § 401(a)(26)(I)(i)(III) —
the amendment
was adopted before April 5, 2017, or the plan is described in clause
(ii).
I.R.C. § 401(a)(26)(I)(ii) Plans Described —
A plan is described in this clause if the plan would
be described in subsection (o)(1)(C), as applied for purposes of subsection
(o)(1)(B)(iii)(IV) and by treating the effective date of the amendment
as the date the class was closed for purposes of subsection (o)(1)(C).
I.R.C. § 401(a)(26)(I)(iii) Special Rules —
For purposes of clause (i)(II), in applying section 410(b)(6)(C),
the amendments described in clause (i) shall not be treated as a significant
change in coverage under section 410(b)(6)(C)(i)(II).
I.R.C. § 401(a)(26)(I)(iv) Spun-Off Plans —
For purposes of this subparagraph, if a portion of a
plan described in clause (i) is spun off to another employer, the
treatment under clause (i) of the spun-off plan shall continue with
respect to the other employer.
I.R.C. § 401(a)(27) Determinations As To Profit-Sharing Plans
I.R.C. § 401(a)(27)(A) Contributions Need Not Be Based On Profits —
The determination of whether the plan under which any
contributions are made is a profit-sharing plan shall be made without
regard to current or accumulated profits of the employer and without
regard to whether the employer is a tax-exempt organization.
I.R.C. § 401(a)(27)(B) Plan Must Designate Type —
In the case of a plan which is intended to be a money
purchase pension plan or a profit-sharing plan, a trust forming part
of such plan shall not constitute a qualified trust under this subsection
unless the plan designates such intent at such time and in such manner
as the Secretary may prescribe.
I.R.C. § 401(a)(28) Additional Requirements Relating To Employee Stock Ownership
Plans
I.R.C. § 401(a)(28)(A) In General —
In the case of a trust which is part of an employee
stock ownership plan (within the meaning of section 4975(e)(7)) or a plan which
meets the requirements of section 409(a),
such trust shall not constitute a qualified trust under this section
unless such plan meets the requirements of subparagraphs (B) and (C).
I.R.C. § 401(a)(28)(B) Diversification Of Investments
I.R.C. § 401(a)(28)(B)(i) In General —
A plan meets the requirements of this subparagraph
if each qualified participant in the plan may elect within 90 days
after the close of each plan year in the qualified election period
to direct the plan as to the investment of at least 25 percent of
the participant's account in the plan (to the extent such portion
exceeds the amount to which a prior election under this subparagraph
applies). In the case of the election year in which the participant
can make his last election, the preceding sentence shall be applied
by substituting “50 percent” for “25 percent”.
I.R.C. § 401(a)(28)(B)(ii) Method Of Meeting Requirements —
A plan shall be treated as meeting the requirements
of clause (i) if—
I.R.C. § 401(a)(28)(B)(ii)(I) —
the portion of the participant's
account covered by the election under clause (i) is distributed within
90 days after the period during which the election may be made, or
I.R.C. § 401(a)(28)(B)(ii)(II) —
the plan offers at least 3 investment
options (not inconsistent with regulations prescribed by the Secretary)
to each participant making an election under clause (i) and within 90 days after
the period during which the election may be made, the plan invests
the portion of the participant's account covered by the election
in accordance with such election.
I.R.C. § 401(a)(28)(B)(iii) Qualified Participant —
For purposes of this subparagraph, the term “qualified
participant” means any employee who has completed at least 10 years
of participation under the plan and has attained age 55.
I.R.C. § 401(a)(28)(B)(iv) Qualified Election Period —
For purposes of this subparagraph, the term “qualified
election period” means the 6-plan-year period beginning with the
later of—
I.R.C. § 401(a)(28)(B)(iv)(I) —
the 1st plan year in which the individual
first became a qualified participant, or
I.R.C. § 401(a)(28)(B)(iv)(II) —
the 1st plan year beginning after
December 31, 1986.
For purposes of the preceding sentence, an employer
may elect to treat an individual first becoming a qualified participant
in the 1st plan year beginning in 1987 as having become a participant
in the 1st plan year beginning in 1988.
I.R.C. § 401(a)(28)(B)(v) Exception —
This subparagraph shall not apply to an applicable
defined contribution plan (as defined in paragraph (35)(E)).
I.R.C. § 401(a)(28)(C) Use Of Independent Appraiser —
A plan meets the requirements of this subparagraph
if all valuations of employer securities which are not readily tradable
on an established securities market with respect to activities carried
on by the plan are by an independent appraiser. For purposes of the
preceding sentence, the term “independent appraiser” means any appraiser
meeting requirements similar to the requirements of the regulations
prescribed under section 170(a)(1).
I.R.C. § 401(a)(29) Benefit Limitations —
In the case of a defined benefit
plan (other than a multiemployer plan or a CSEC plan) to which the
requirements of section 412 apply,
the trust of which the plan is a part shall not constitute a qualified
trust under this subsection unless the plan meets the requirements
of section 436.
I.R.C. § 401(a)(30) Limitations On Elective Deferrals —
In the case of a trust which is part of a plan under
which elective deferrals (within the meaning of section 402(g)(3)) may be made with
respect to any individual during a calendar year, such trust shall
not constitute a qualified trust under this subsection unless the
plan provides that the amount of such deferrals under such plan and
all other plans, contracts, or arrangements of an employer maintaining
such plan may not exceed the amount of the limitation in effect under
section 402(g)(1)(A) for
taxable years beginning in such calendar year.
I.R.C. § 401(a)(31) Direct Transfer Of Eligible Rollover Distributions
I.R.C. § 401(a)(31)(A) In General —
A trust shall not constitute a qualified trust under
this section unless the plan of which such trust is a part provides
that if the distributee of any eligible rollover distribution—
I.R.C. § 401(a)(31)(A)(i) —
elects to have such distribution
paid directly to an eligible retirement plan, and
I.R.C. § 401(a)(31)(A)(ii) —
specifies the eligible retirement
plan to which such distribution is to be paid (in such form and at
such time as the plan administrator may prescribe), such distribution
shall be made in the form of a direct trustee-to-trustee transfer
to the eligible retirement plan so specified.
I.R.C. § 401(a)(31)(B) Certain Mandatory Distributions
I.R.C. § 401(a)(31)(B)(i) In General —
In case of a trust which is part of an eligible plan,
such trust shall not constitute a qualified trust under this section
unless the plan of which such trust is a part provides that if—
I.R.C. § 401(a)(31)(B)(i)(I) —
a distribution described in clause (ii) in excess of $1,000
is made, and
I.R.C. § 401(a)(31)(B)(i)(II) —
the distributee does not make an
election under subparagraph (A) and
does not elect to receive the distribution directly,
the plan administrator shall make
such transfer to an individual retirement plan of a designated trustee
or issuer and shall notify the distributee in writing (either separately
or as part of the notice under section 402(f)) that the distribution
may be transferred to another individual retirement plan.
I.R.C. § 401(a)(31)(B)(ii) Eligible Plan —
For purposes of clause (i), the term “eligible plan"
means a plan which provides that any nonforfeitable accrued benefit
for which the present value (as determined under section 411(a)(11)) does not exceed
$5,000 shall be immediately distributed to the participant.
I.R.C. § 401(a)(31)(C) Limitation —
Subparagraphs (A) and (B) shall apply only to the
extent that the eligible rollover distribution would be includible
in gross income if not transferred as provided in subparagraph (A)
(determined without regard to sections 402(c), 403(a)(4), 403(b)(8), and 457(e)(16)). The preceding
sentence shall not apply to such distribution if the plan to which
such distribution is transferred—
I.R.C. § 401(a)(31)(C)(i) —
is a qualified trust which is part
of a plan which is a defined contribution plan and agrees to separately
account for amounts so transferred, including separately accounting
for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible,
or
I.R.C. § 401(a)(31)(C)(ii) —
is an eligible retirement plan described
in clause (i) or (ii) of section 402(c)(8)(B).
I.R.C. § 401(a)(31)(D) Eligible Rollover Distribution —
For purposes of this paragraph, the term “eligible
rollover distribution” has the meaning given such term by section 402(f)(2)(A).
I.R.C. § 401(a)(31)(E) Eligible Retirement Plan —
For purposes of this paragraph, the term “eligible
retirement plan” has the meaning given such term by section 402(c)(8)(B), except that
a qualified trust shall be considered an eligible retirement plan
only if it is a defined contribution plan, the terms of which permit
the acceptance of rollover distributions.
I.R.C. § 401(a)(32) Treatment Of Failure To Make Certain Payments If Plan Has Liquidity
Shortfall
I.R.C. § 401(a)(32)(A) In General —
A trust forming part of a pension
plan to which section 430(j)(4) or 433(f)(5) applies shall not
be treated as failing to constitute a qualified trust under this
section merely because such plan ceases to make any payment described
in subparagraph (B) during
any period that such plan has a liquidity shortfall (as defined in
section 430(j)(4) or 433(f)(5)).
I.R.C. § 401(a)(32)(B) Payments Described —
A payment is described in this subparagraph if such
payment is—
I.R.C. § 401(a)(32)(B)(i) —
any payment, in excess of the monthly
amount paid under a single life annuity (plus any social security
supplements described in the last sentence of section 411(a)(9)), to a participant
or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs during
the period referred to in subparagraph (A),
I.R.C. § 401(a)(32)(B)(ii) —
any payment for the purchase of
an irrevocable commitment from an insurer to pay benefits, and
I.R.C. § 401(a)(32)(B)(iii) —
any other payment specified by the
Secretary by regulations.
I.R.C. § 401(a)(32)(C) Period Of Shortfall —
For purposes of this paragraph,
a plan has a liquidity shortfall during the period that there is
an underpayment of an installment under section 430(j)(3) or 433(f) by reason of section 430(j)(4)(A) or 433(f)(5), respectively.
I.R.C. § 401(a)(33) Prohibition On Benefit Increases While Sponsor Is In Bankruptcy
I.R.C. § 401(a)(33)(A) In General —
A trust which is part of a plan to which this paragraph
applies shall not constitute a qualified trust under this section
if an amendment to such plan is adopted while the employer is a debtor
in a case under title 11, United States Code, or similar Federal
or State law, if such amendment increases liabilities of the plan
by reason of—
I.R.C. § 401(a)(33)(A)(i) —
any increase in benefits,
I.R.C. § 401(a)(33)(A)(ii) —
any change in the accrual of benefits,
or
I.R.C. § 401(a)(33)(A)(iii) —
any change in the rate at which
benefits become nonforfeitable under the plan, with respect to employees
of the debtor, and such amendment is effective prior to the effective
date of such employer's plan of reorganization.
I.R.C. § 401(a)(33)(B) Exceptions —
This paragraph shall not apply to any plan amendment
if—
I.R.C. § 401(a)(33)(B)(i) —
the plan, were such amendment to
take effect, would have a funding target attainment percentage (as
defined in section 430(d)(2))
of 100 percent or more,
I.R.C. § 401(a)(33)(B)(ii) —
the Secretary determines that such
amendment is reasonable and provides for only de minimis increases
in the liabilities of the plan with respect to employees of the
debtor,
I.R.C. § 401(a)(33)(B)(iii) —
such amendment only repeals an amendment
described in section 412(d)(2),
or
I.R.C. § 401(a)(33)(B)(iv) —
such amendment is required as a
condition of qualification under this part.
I.R.C. § 401(a)(33)(C) Plans To Which This Paragraph Applies —
This paragraph shall apply only to plans (other than
multiemployer plans or CSEC plans) covered under section 4021 of
the Employee Retirement Income Security Act of 1974.
I.R.C. § 401(a)(33)(D) Employer —
For purposes of this paragraph,
the term “employer” means the employer referred to in section 412(b)(1), without regard
to section 412(b)(2).
I.R.C. § 401(a)(34) Benefits Of Missing Participants On Plan Termination —
In the case of a plan covered by title IV of the Employee
Retirement Income Security Act of 1974, a trust forming part of
such plan shall not be treated as failing to constitute a qualified
trust under this section merely because the pension plan of which
such trust is a part, upon its termination, transfers benefits of
missing participants to the Pension Benefit Guaranty Corporation
in accordance with section 4050 of such Act.
I.R.C. § 401(a)(35) Diversification Requirements For Certain Defined Contribution
Plans —
I.R.C. § 401(a)(35)(A) In General —
A trust which is part of an applicable defined contribution
plan shall not be treated as a qualified trust unless the plan meets
the diversification requirements of subparagraphs (B), (C), and (D).
I.R.C. § 401(a)(35)(B) Employee Contributions And Elective Deferrals Invested In Employer
Securities —
In the case of the portion of an applicable individual's
account attributable to employee contributions and elective deferrals
which is invested in employer securities, a plan meets the requirements
of this subparagraph if the applicable individual may elect to direct
the plan to divest any such securities and to reinvest an equivalent
amount in other investment options meeting the requirements of subparagraph (D).
I.R.C. § 401(a)(35)(C) Employer Contributions Invested In Employer Securities —
In the case of the portion of the account attributable
to employer contributions other than elective deferrals which is
invested in employer securities, a plan meets the requirements of
this subparagraph if each applicable individual who—
I.R.C. § 401(a)(35)(C)(i) —
is a participant who has completed
at least 3 years of service, or
I.R.C. § 401(a)(35)(C)(ii) —
is a beneficiary of a participant
described in clause (i) or
of a deceased participant,
may elect to
direct the plan to divest any such securities and to reinvest an
equivalent amount in other investment options meeting the requirements
of subparagraph (D).
I.R.C. § 401(a)(35)(D) Investment Options
I.R.C. § 401(a)(35)(D)(i) In General —
The requirements of this subparagraph are met if the
plan offers not less than 3 investment options, other than employer
securities, to which an applicable individual may direct the proceeds
from the divestment of employer securities pursuant to this paragraph,
each of which is diversified and has materially different risk and
return characteristics.
I.R.C. § 401(a)(35)(D)(ii) Treatment Of Certain Restrictions And Conditions
I.R.C. § 401(a)(35)(D)(ii)(I) Time For Making Investment Choices —
A plan shall not be treated as failing to meet the
requirements of this subparagraph merely because the plan limits
the time for divestment and reinvestment to periodic, reasonable
opportunities occurring no less frequently than quarterly.
I.R.C. § 401(a)(35)(D)(ii)(II) Certain Restrictions And Conditions Not Allowed —
Except as provided in regulations, a plan shall not
meet the requirements of this subparagraph if the plan imposes restrictions
or conditions with respect to the investment of employer securities
which are not imposed on the investment of other assets of the plan.
This subclause shall not apply to any restrictions or conditions
imposed by reason of the application of securities laws.
I.R.C. § 401(a)(35)(E) Applicable Defined Contribution Plan —
For purposes of this paragraph—
I.R.C. § 401(a)(35)(E)(i) In General —
The term “applicable defined contribution plan” means
any defined contribution plan which holds any publicly traded employer
securities.
I.R.C. § 401(a)(35)(E)(ii) Exception For Certain ESOPs —
Such term does not include an employee stock ownership
plan if—
I.R.C. § 401(a)(35)(E)(ii)(I) —
there are no contributions to such
plan (or earnings thereunder) which are held within such plan and
are subject to subsection (k) or
(m), and
I.R.C. § 401(a)(35)(E)(ii)(II) —
such plan is a separate plan for
purposes of section 414(l) with
respect to any other defined benefit plan or defined contribution
plan maintained by the same employer or employers.
I.R.C. § 401(a)(35)(E)(iii) Exception For One Participant Plans —
Such term does not include a one-participant retirement
plan.
I.R.C. § 401(a)(35)(E)(iv) One-Participant Retirement Plan —
For purposes of clause (iii), the term “one-participant
retirement plan” means a retirement plan that on the first day
of the plan year—
I.R.C. § 401(a)(35)(E)(iv)(I) —
covered only one individual (or the
individual and the individual's spouse) and the individual (or the
individual and the individual's spouse) owned 100 percent of the plan
sponsor (whether or not incorporated), or
I.R.C. § 401(a)(35)(E)(iv)(II) —
covered only one or more partners (or
partners and their spouses) in the plan sponsor.
I.R.C. § 401(a)(35)(F) Certain Plans Treated As Holding Publicly Traded Employer Securities
I.R.C. § 401(a)(35)(F)(i) In General —
Except as provided in regulations or in clause (ii), a plan holding employer
securities which are not publicly traded employer securities shall
be treated as holding publicly traded employer securities if any employer
corporation, or any member of a controlled group of corporations which
includes such employer corporation, has issued a class of stock which
is a publicly traded employer security.
I.R.C. § 401(a)(35)(F)(ii) Exception For Certain Controlled Groups With Publicly Traded
Securities —
Clause (i) shall
not apply to a plan if—
I.R.C. § 401(a)(35)(F)(ii)(I) —
no employer corporation, or parent
corporation of an employer corporation, has issued any publicly traded
employer security, and
I.R.C. § 401(a)(35)(F)(ii)(II) —
no employer corporation, or parent
corporation of an employer corporation, has issued any special class
of stock which grants particular rights to, or bears particular risks
for, the holder or issuer with respect to any corporation described
in clause (i) which
has issued any publicly traded employer security.
I.R.C. § 401(a)(35)(F)(iii) Definitions —
For purposes of this subparagraph, the term—
I.R.C. § 401(a)(35)(F)(iii)(I) —
“controlled group of corporations"
has the meaning given such term by section 1563(a), except that “50 percent"
shall be substituted for “80 percent” each place it appears,
I.R.C. § 401(a)(35)(F)(iii)(II) —
“employer corporation” means a corporation
which is an employer maintaining the plan, and
I.R.C. § 401(a)(35)(F)(iii)(III) —
“parent corporation” has the meaning
given such term by section 424(e).
I.R.C. § 401(a)(35)(G) Other Definitions —
For purposes of this paragraph—
I.R.C. § 401(a)(35)(G)(i) Applicable Individual —
The term “applicable individual” means—
I.R.C. § 401(a)(35)(G)(i)(I) —
any participant in the plan, and
I.R.C. § 401(a)(35)(G)(i)(II) —
any beneficiary who has an account
under the plan with respect to which the beneficiary is entitled to
exercise the rights of a participant.
I.R.C. § 401(a)(35)(G)(ii) Elective Deferral —
The term “elective deferral” means an employer contribution
described in section 402(g)(3)(A).
I.R.C. § 401(a)(35)(G)(iii) Employer Security —
The term “employer security” has the meaning given
such term by section 407(d)(1) of the Employee Retirement Income
Security Act of 1974.
I.R.C. § 401(a)(35)(G)(iv) Employee Stock Ownership Plan —
The term “employee stock ownership plan” has the
meaning given such term by section 4975(e)(7).
I.R.C. § 401(a)(35)(G)(v) Publicly Traded Employer Securities —
The term “publicly traded employer securities” means
employer securities which are readily tradable on an established
securities market.
I.R.C. § 401(a)(35)(G)(vi) Year Of Service —
The term “year of service” has the meaning given such
term by section 411(a)(5).
I.R.C. § 401(a)(35)(H) Transition Rule For Securities Attributable To Employer Contributions
I.R.C. § 401(a)(35)(H)(i) Rules Phased In Over 3 Years
I.R.C. § 401(a)(35)(H)(i)(I) In General —
In the case of the portion of an account to which
subparagraph (C) applies
and which consists of employer securities acquired in a plan year
beginning before January 1, 2007, subparagraph (C) shall only apply to the
applicable percentage of such securities. This subparagraph shall
be applied separately with respect to each class of securities.
I.R.C. § 401(a)(35)(H)(i)(II) Exception For Certain Participants Aged 55 Or Over —
Subclause (I) shall
not apply to an applicable individual who is a participant who has
attained age 55 and completed at least 3 years of service before
the first plan year beginning after December 31, 2005.
I.R.C. § 401(a)(35)(H)(ii) Applicable Percentage —
For purposes of clause (i), the applicable percentage
shall be determined as follows:
Plan year to which The applicable
subparagraph (C) applies: percentage is:
1st 33
2d 66
3d and following 100.
Editor's Note: Section 401(a)(35)(I)
below, as added by P.L. 117-328,
is effective for plan years beginning after December 31, 2027.
I.R.C. § 401(a)(35)(I) ESOP Rules Relating to Publicly Traded Securities —
In the case of an applicable defined contribution plan
which is an employee stock ownership plan, an employer security shall
be treated as described in subparagraph (G)(v) if—
I.R.C. § 401(a)(35)(I)(i) —
the security is the subject of priced
quotations by at least 4 dealers, published and made continuously
available on an interdealer quotation system (as such term is used
in section 13 of the Securities Exchange Act of 1934) which has made
the request described in section 6(j) of such Act to be treated as
an alternative trading system,
I.R.C. § 401(a)(35)(I)(ii) —
the security is not a penny stock (as
defined by section 3(a)(51) of such Act),
I.R.C. § 401(a)(35)(I)(iii) —
the security is issued by a corporation
which is not a shell company (as such term is used in section 4(d)(6)
of the Securities Act of 1933), a blank check company (as defined
in section 7(b)(3) of such Act), or subject to bankruptcy proceedings,
I.R.C. § 401(a)(35)(I)(iv) —
the security has a public float (as
such term is used in section 240.12b-2 of title 17, Code of Federal
Regulations) which has a fair market value of at least $1,000,000
and constitutes at least 10 percent of the total shares issued and
outstanding.
I.R.C. § 401(a)(35)(I)(v) —
in the case of a security issued by a
domestic corporation, the issuer publishes, not less frequently than
annually, financial statements audited by an independent auditor registered
with the Public Company Accounting Oversight Board established under
the Sarbanes-Oxley Act of 2002, and
I.R.C. § 401(a)(35)(I)(vi) —
in the case of a security issued by
a foreign corporation, the security is represented by a depositary
share (as defined under section 240.12b-2 of title 17, Code of Federal
Regulations), or is issued by a foreign corporation incorporated in
Canada and readily tradeable on an established securities market in
Canada, and the issuer—
I.R.C. § 401(a)(35)(I)(vi)(I) —
is subject to, and in compliance with,
the reporting requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 25 78m or 78o(d)),
I.R.C. § 401(a)(35)(I)(vi)(II) —
is subject to, and in compliance with,
the reporting requirements of section 230.257 of title 17, Code of
Federal Regulations, or
I.R.C. § 401(a)(35)(I)(vi)(III) —
is exempt from such requirements under
section 240.12g3– 2(b) of title 17, Code of Federal Regulations.
I.R.C. § 401(a)(36) Distributions During Working Retirement
I.R.C. § 401(a)(36)(A) In General —
A trust forming part of a pension plan shall not be treated
as failing to constitute a qualified trust under this section solely
because the plan provides that a distribution may be made from such
trust to an employee who has attained age 591/2 and
who is not separated from employment at the time of such distribution.
I.R.C. § 401(a)(36)(B) Certain Employees In The Building And Construction Industry —
Subparagraph (A) shall be applied by substituting “age
55” for “age 591/2” in the case of a multiemployer
plan described in section 4203(b)(1)(B)(i) of the Employee Retirement
Income Security Act of 1974, with respect to individuals who were
participants in such plan on or before April 30, 2013, if—
I.R.C. § 401(a)(36)(B)(i) —
the trust to which subparagraph (A) applies
was in existence before January 1, 1970, and
I.R.C. § 401(a)(36)(B)(ii) —
before December 31, 2011, at a time
when the plan provided that distributions may be made to an employee
who has attained age 55 and who is not separated from employment at
the time of such distribution, the plan received at least 1 written
determination from the Internal Revenue Service that the trust to
which subparagraph (A) applies constituted a qualified trust under
this section.
I.R.C. § 401(a)(37) Death Benefits Under USERRA-Qualified Active Military Service —
A trust shall not constitute a qualified trust unless
the plan provides that, in the case of a participant who dies while
performing qualified military service (as defined in section 414(u)), the survivors of the
participant are entitled to any additional benefits (other than benefit
accruals relating to the period of qualified military service) provided
under the plan had the participant resumed and then terminated employment
on account of death.
I.R.C. § 401(a)(38) Portability Of Lifetime Income
I.R.C. § 401(a)(38)(A) In General —
Except as may be otherwise provided by regulations, a
trust forming part of a defined contribution plan shall not be treated
as failing to constitute a qualified trust under this section solely
by reason of allowing—
I.R.C. § 401(a)(38)(A)(i) —
qualified distributions of a lifetime
income investment, or
I.R.C. § 401(a)(38)(A)(ii) —
distributions of a lifetime income investment
in the form of a qualified plan distribution annuity contract,
on or after the date that is 90 days
prior to the date on which such lifetime income investment is no longer
authorized to be held as an investment option under the plan.
I.R.C. § 401(a)(38)(B) Definitions —
For purposes of this subsection—
I.R.C. § 401(a)(38)(B)(i) —
the term “qualified distribution”
means a direct trustee-to-trustee transfer described in paragraph
(31)(A) to an eligible retirement plan (as defined in section 402(c)(8)(B)),
I.R.C. § 401(a)(38)(B)(ii) —
the term “lifetime income investment”
means an investment option which is designed to provide an employee
with election rights—
I.R.C. § 401(a)(38)(B)(ii)(I) —
which are not uniformly available with
respect to other investment options under the plan, and
I.R.C. § 401(a)(38)(B)(ii)(II) —
which are to a lifetime income feature
available through a contract or other arrangement offered under the
plan (or under another eligible retirement plan (as so defined), if
paid by means of a direct trustee to-trustee transfer described in
paragraph (31)(A) to such other eligible retirement plan),
I.R.C. § 401(a)(38)(B)(iii) —
the term “lifetime income feature”
means—
I.R.C. § 401(a)(38)(B)(iii)(I) —
feature which guarantees a minimum level
of income annually (or more frequently) for at least the remainder
of the life of the employee or the joint lives of the employee and
the employee's designated beneficiary, or
I.R.C. § 401(a)(38)(B)(iii)(II) —
an annuity payable on behalf of the
employee under which payments are made in substantially equal periodic
payments (not less frequently than annually) over the life of the
employee or the joint lives of the employee and the employee's
designated beneficiary, and
I.R.C. § 401(a)(38)(B)(iv) —
the term “qualified plan distribution
annuity contract” means an annuity contract purchased for a
participant and distributed to the participant by a plan or contract
described in subparagraph (B) of section 402(c)(8) (without regard
to clauses (i) and (ii) thereof).
Editor's Note: Sec. 401(a)(39), below,
added by Pub. L. 117-328, Sec.
334(a), shall apply to distributions made after the date which is
3 years after the date of enactment of this Act [enacted: December
29, 2022]
I.R.C. § 401(a)(39) Qualified Long-Term Care Distributions
I.R.C. § 401(a)(39)(A) In General —
A trust forming part of a defined contribution plan
shall not be treated as failing to constitute a qualified trust under
this section solely by reason of allowing qualified long-term care
distributions.
I.R.C. § 401(a)(39)(B) Qualified Long-Term Care Distribution —
For purposes of this paragraph—
I.R.C. § 401(a)(39)(B)(i) In General —
The term ‘qualified long-term care distribution’
means so much of the distributions made during the taxable year as
does not exceed, in the aggregate, the least of the following:
I.R.C. § 401(a)(39)(B)(i)(I) —
The amount paid by or assessed to the
employee during the taxable year for or with respect to certified
long-term care insurance for the employee or the employee's
spouse (or other family member of the employee as provided by the
Secretary by regulation).
I.R.C. § 401(a)(39)(B)(i)(II) —
An amount equal to 10 percent of the
present value of the nonforfeitable accrued benefit of the employee
under the plan.
I.R.C. § 401(a)(39)(B)(i)(III) —
$2,500.
I.R.C. § 401(a)(39)(B)(ii) Adjustment For Inflation —
In the case of taxable years beginning after December
31, 2024, the $2,500 amount in clause (i)(II) shall be increased by
an amount equal to—
I.R.C. § 401(a)(39)(B)(ii)(I) —
such dollar amount, multiplied by
I.R.C. § 401(a)(39)(B)(ii)(II) —
the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which the taxable year
begins, determined by substituting ‘calendar year 2023’
for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any increase
under the preceding sentence is not a multiple of $100, such amount
shall be rounded to the nearest multiple of $100.
I.R.C. § 401(a)(39)(C) Certified Long-Term Care Insurance —
The term ‘certified long-term care insurance’
means—
I.R.C. § 401(a)(39)(C)(i) —
a qualified long-term care insurance
contract (as defined in section 7702B(b)) covering qualified long-term
care services (as defined in section 7702B(c)),
I.R.C. § 401(a)(39)(C)(ii) —
coverage of the risk that an insured
individual would become a chronically ill individual (within the meaning
of section 101(g)(4)(B)) under a rider or other provision of a life
insurance contract which satisfies the requirements of section 101(g)(3)
(determined without regard to subparagraph (D) thereof), or
I.R.C. § 401(a)(39)(C)(iii) —
coverage of qualified long-term care
services (as so defined) under a rider or other provision of an insurance
or annuity contract which is treated as a separate contract under
section 7702B(e) and satisfies the requirements of section 7702B(g),
if such coverage
provides meaningful financial assistance in the event the insured
needs homebased or nursing home care. For purposes of the preceding
sentence, coverage shall not be deemed to provide meaningful financial
assistance unless benefits are adjusted for inflation and consumer
protections are provided, including protection in the event the coverage
is terminated.
I.R.C. § 401(a)(39)(D) Distributions Must Otherwise Be Includible —
Rules similar to the rules of section 402(l)(3) shall
apply for purposes of this paragraph.
I.R.C. § 401(a)(39)(E) Long-Term Care Premium Statement
I.R.C. § 401(a)(39)(E)(i) In General —
No distribution shall be treated as a qualified long-term
care distribution unless a long-term care premium statement with respect
to the employee has been filed with the plan.
I.R.C. § 401(a)(39)(E)(ii) Long-Term Care Premium Statement —
For purposes of this paragraph, a long-term care premium
statement is a statement provided by the issuer of long-term care
coverage, upon request by the owner of such coverage, which includes—
I.R.C. § 401(a)(39)(E)(ii)(I) —
the name and taxpayer identification
number of such issuer,
I.R.C. § 401(a)(39)(E)(ii)(II) —
a statement that the coverage is certified
long-term care insurance,
I.R.C. § 401(a)(39)(E)(ii)(III) —
identification of the employee as the
owner of such coverage,
I.R.C. § 401(a)(39)(E)(ii)(IV) —
identification of the individual covered
and such individual's relationship to the employee
I.R.C. § 401(a)(39)(E)(ii)(V) —
the premiums owed for the coverage for
the calendar year, and
I.R.C. § 401(a)(39)(E)(ii)(VI) —
such other information as the Secretary
may require.
I.R.C. § 401(a)(39)(E)(iii) Filing With Secretary —
A long-term care premium statement will be accepted only
if the issuer has completed a disclosure to the Secretary for the
specific coverage product to which the statement relates. Such disclosure
shall identify the issuer, type of coverage, and such other information
as the Secretary may require which is included in the filing of the
product with the applicable State authority.
Paragraphs (11), (12), (13), (14), (15), (19), and (20) shall apply only in the case
of a plan to which section 411 (relating
to minimum vesting standards) applies without regard to subsection (e)(2) of such section.
I.R.C. § 401(b) Plan Amendments —
I.R.C. § 401(b)(1) Certain Retroactive Changes In Plan —
A stock bonus, pension, profit-sharing, or annuity
plan shall be considered as satisfying the requirements of subsection (a) for the period beginning with
the date on which it was put into effect, or for the period beginning
with the earlier of the date on which there was adopted or put into
effect any amendment which caused the plan to fail to satisfy such
requirements, and ending with the time prescribed by law for filing
the return of the employer for his taxable year in which such plan
or amendment was adopted (including extensions thereof) or such later
time as the Secretary may designate, if all provisions of the plan
which are necessary to satisfy such requirements are in effect by
the end of such period and have been made effective for all purposes
for the whole of such period.
I.R.C. § 401(b)(2) Adoption Of Plan —
If an employer adopts a stock bonus, pension, profit-sharing,
or annuity plan after the close of a taxable year but before the time
prescribed by law for filing the return of the employer for the taxable
year (including extensions thereof), the employer may elect to treat
the plan as having been adopted as of the last day of the taxable
year. In the case of an individual who owns the entire interest in
an unincorporated trade or business, and who is the only employee
of such trade or business, any elective deferrals (as defined in section 402(g)(3)) under a qualified cash
or deferred arrangement to which the preceding sentence applies, which
are made by such individual before the time for filing the return
of such individual for the taxable year (determined without regard
to any extensions) ending after or with the end of the plan's
first plan year, shall be treated as having been made before the end
of such first plan year.
Editor's Note:
Pub.
L. 117-328. Div. T. Sec. 316, added para. (3) effective
for plan years beginning after Dec. 31, 2023.
I.R.C. § 401(b)(3) Retroactive Plan Amendments That Increase Benefit Accruals —
If—
I.R.C. § 401(b)(3)(A) —
an employer amends a stock bonus, pension,
profit-sharing, or annuity plan to increase benefits accrued under
the plan effective as of any date during the immediately preceding
plan year (other than increasing the amount of matching contributions
(as defined in subsection (m)(4)(A)),
I.R.C. § 401(b)(3)(B) —
such amendment would not otherwise cause
the plan to fail to meet any of the requirements of this subchapter,
and
I.R.C. § 401(b)(3)(C) —
such amendment is adopted before the
time prescribed by law for filing the return of the employer for the
taxable year (including extensions thereof) which includes the date
described in subparagraph (A), the employer may elect to treat such
amendment as having been adopted as of the last day of the plan year
in which the amendment is effective.
I.R.C. § 401(c) Definitions And Rules Relating To Self-Employed Individuals
And Owner-Employees —
For purposes of this section—
I.R.C. § 401(c)(1) Self-Employed Individual Treated As Employee
I.R.C. § 401(c)(1)(A) In General —
The term “employee” includes, for any taxable year,
an individual who is a self-employed individual for such taxable
year.
I.R.C. § 401(c)(1)(B) Self-Employed Individual —
The term “self-employed individual” means, with respect
to any taxable year, an individual who has earned income (as defined
in paragraph (2)) for
such taxable year. To the extent provided in regulations prescribed
by the Secretary, such term also includes, for any taxable year—
I.R.C. § 401(c)(1)(B)(i) —
an individual who would be a self-employed
individual within the meaning of the preceding sentence but for the
fact that the trade or business carried on by such individual did
not have net profits for the taxable year, and
I.R.C. § 401(c)(1)(B)(ii) —
an individual who has been a self-employed
individual within the meaning of the preceding sentence for any prior
taxable year.
I.R.C. § 401(c)(2) Earned Income
I.R.C. § 401(c)(2)(A) In General —
The term “earned income” means the net earnings from
self-employment (as defined in section 1402(a)), but such net earnings
shall be determined—
I.R.C. § 401(c)(2)(A)(i) —
only with respect to a trade or
business in which personal services of the taxpayer are a material
income-producing factor,
I.R.C. § 401(c)(2)(A)(ii) —
without regard to paragraphs (4) and (5) of section 1402(c),
I.R.C. § 401(c)(2)(A)(iii) —
in the case of any individual who
is treated as an employee under subparagraph (A), (C), or (D) of
section 3121(d)(3),
without regard to section 1402(c)(2),
I.R.C. § 401(c)(2)(A)(iv) —
without regard to items which are
not included in gross income for purposes of this chapter, and the
deductions properly allocable to or chargeable against such items,
I.R.C. § 401(c)(2)(A)(v) —
with regard to the deductions allowed
by section 404 to
the taxpayer, and
I.R.C. § 401(c)(2)(A)(vi) —
with regard to the deduction allowed
to the taxpayer by section 164(f).
For purposes
of this subparagraph, section 1402,
as in effect for a taxable year ending on December 31, 1962, shall
be treated as having been in effect for all taxable years ending
before such date. For purposes of this part only (other than sections 419 and 419A), this subparagraph shall
be applied as if the term “trade or business” for purposes of section 1402 included service described
in section 1402(c)(6).
I.R.C. § 401(c)(2)(B) [Repealed.]
I.R.C. § 401(c)(2)(C) Income From Disposition Of Certain Property —
For purposes of this section, the term “earned income"
includes gains (other than any gain which is treated under any provision
of this chapter as gain from the sale or exchange of a capital asset)
and net earnings derived from the sale or other disposition of, the
transfer of any interest in, or the licensing of the use of property
(other than good will) by an individual whose personal efforts created
such property.
I.R.C. § 401(c)(3) Owner-Employee —
The term “owner-employee” means an employee who—
I.R.C. § 401(c)(3)(A) —
owns the entire interest in an unincorporated
trade or business, or
I.R.C. § 401(c)(3)(B) —
in the case of a partnership, is a
partner who owns more than 10 percent of either the capital interest
or the profits interest in such partnership.
To the extent provided in regulations
prescribed by the Secretary, such term also means an individual who
has been an owner-employee within the meaning of the preceding sentence.
I.R.C. § 401(c)(4) Employer —
An individual who owns the entire interest in an unincorporated
trade or business shall be treated as his own employer. A partnership
shall be treated as the employer of each partner who is an employee
within the meaning of paragraph (1).
I.R.C. § 401(c)(5) Contributions On Behalf Of Owner-Employees —
The term “contribution on behalf of an owner-employee"
includes, except as the context otherwise requires, a contribution
under a plan—
I.R.C. § 401(c)(5)(A) —
by the employer for an owner-employee,
and
I.R.C. § 401(c)(5)(B) —
by an owner-employee as an employee.
I.R.C. § 401(c)(6) Special Rule For Certain Fishermen —
For purposes of this subsection, the term “self-employed
individual” includes an individual described in section 3121(b)(20) (relating to
certain fishermen).
I.R.C. § 401(d) Contribution Limit On Owner-Employees —
A trust forming part of a pension or profit-sharing
plan which provides contributions or benefits for employees some
or all of whom are owner-employees shall constitute a qualified trust
under this section only if, in addition to meeting the requirements
of subsection (a), the plan
provides that contributions on behalf of any owner-employee may be
made only with respect to the earned income of such owner-employee
which is derived from the trade or business with respect to which
such plan is established.
I.R.C. § 401(e) [Repealed.] —
[Repealed. Pub. L. 98-369,
div. A, title VII, 713(d)(3), July 18, 1984, 98
Stat. 958.]
I.R.C. § 401(f) Certain Custodial Accounts And Contracts —
For purposes of this title, a custodial account, an
annuity contract, or a contract (other than a life, health or accident,
property, casualty, or liability insurance contract) issued by an
insurance company qualified to do business in a State shall be treated
as a qualified trust under this section if—
I.R.C. § 401(f)(1) —
the custodial account or contract would,
except for the fact that it is not a trust, constitute a qualified
trust under this section, and
I.R.C. § 401(f)(2) —
in the case of a custodial account
the assets thereof are held by a bank (as defined in section 408(n)) or another person who
demonstrates, to the satisfaction of the Secretary, that the manner
in which he will hold the assets will be consistent with the requirements
of this section.
For purposes of this title, in the case of a custodial
account or contract treated as a qualified trust under this section
by reason of this subsection, the person holding the assets of such
account or holding such contract shall be treated as the trustee
thereof.
I.R.C. § 401(g) Annuity Defined —
For purposes of this section and sections 402, 403,
and 404, the term
“annuity” includes a face-amount certificate, as defined in section
2(a)(15) of the Investment Company Act of 1940 (15 U.S.C., sec. 80a-2);
but does not include any contract or certificate issued after December
31, 1962, which is transferable, if any person other than the trustee
of a trust described in section 401(a) which
is exempt from tax under section 501(a) is
the owner of such contract or certificate.
I.R.C. § 401(h) Medical, Etc., Benefits For Retired Employees And Their Spouses
And Dependents —
Under regulations prescribed by the Secretary, and
subject to the provisions of section 420,
a pension or annuity plan may provide for the payment of benefits
for sickness, accident, hospitalization, and medical expenses of
retired employees, their spouses and their dependents, but only if—
I.R.C. § 401(h)(1) —
such benefits are subordinate to the
retirement benefits provided by the plan,
I.R.C. § 401(h)(2) —
a separate account is established and
maintained for such benefits,
I.R.C. § 401(h)(3) —
the employer's contributions to such
separate account are reasonable and ascertainable,
I.R.C. § 401(h)(4) —
it is impossible, at any time prior
to the satisfaction of all liabilities under the plan to provide
such benefits, for any part of the corpus or income of such separate
account to be (within the taxable year or thereafter) used for, or
diverted to, any purpose other than the providing of such benefits,
I.R.C. § 401(h)(5) —
notwithstanding the provisions of subsection (a)(2), upon the satisfaction of
all liabilities under the plan to provide such benefits, any amount
remaining in such separate account must, under the terms of the plan,
be returned to the employer, and
I.R.C. § 401(h)(6) —
in the case of an employee who is a
key employee, a separate account is established and maintained for
such benefits payable to such employee (and his spouse and dependents)
and such benefits (to the extent attributable to plan years beginning
after March 31, 1984, for which the employee is a key employee) are
only payable to such employee (and his spouse and dependents) from
such separate account.
For purposes of paragraph (6),
the term “key employee” means any employee, who at any time during
the plan year or any preceding plan year during which contributions
were made on behalf of such employee, is or was a key employee as
defined in section 416(i).
In no event shall the requirements of paragraph (1) be treated as met if the aggregate
actual contributions for medical benefits, when added to actual
contributions for life insurance protection under the plan, exceed
25 percent of the total actual contributions to the plan (other than
contributions to fund past service credits) after the date on which
the account is established. For purposes of this subsection, the
term “dependent” shall include any individual who is a
child (as defined in section 152(f)(1))
of a retired employee who as of the end of the calendar year has not
attained age 27.
I.R.C. § 401(i) Certain Union-Negotiated Pension Plans —
In the case of a trust forming part of a pension plan
which has been determined by the Secretary to constitute a qualified
trust under subsection (a) and
to be exempt from taxation under section 501(a) for a period beginning
after contributions were first made to or for such trust, if it is
shown to the satisfaction of the Secretary that—
I.R.C. § 401(i)(1) —
such trust was created pursuant to
a collective bargaining agreement between employee representatives
and one or more employers,
I.R.C. § 401(i)(2) —
any disbursements of contributions,
made to or for such trust before the time as of which the Secretary
determined that the trust constituted a qualified trust, substantially
complied with the terms of the trust, and the plan of which the trust
is a part, as subsequently qualified, and
I.R.C. § 401(i)(3) —
before the time as of which the Secretary
determined that the trust constitutes a qualified trust, the contributions
to or for such trust were not used in a manner which would jeopardize
the interests of its beneficiaries,
then such trust shall be considered
as having constituted a qualified trust under subsection (a) and as having been exempt from
taxation under section 501(a) for
the period beginning on the date on which contributions were first
made to or for such trust and ending on the date such trust first
constituted (without regard to this subsection) a qualified trust
under subsection (a).
I.R.C. § 401(j) [Repealed.] —
[Repealed. Pub. L. 97-248,
title II, 238(b), Sept. 3, 1982, 96 Stat.
512.]
I.R.C. § 401(k) Cash Or Deferred Arrangements
I.R.C. § 401(k)(1) General Rule —
A profit-sharing or stock bonus plan, a pre-ERISA money
purchase plan, or a rural cooperative plan shall not be considered
as not satisfying the requirements of subsection (a) merely because the plan includes
a qualified cash or deferred arrangement.
I.R.C. § 401(k)(2) Qualified Cash Or Deferred Arrangement —
A qualified cash or deferred arrangement is any arrangement
which is part of a profit-sharing or stock bonus plan, a pre-ERISA
money purchase plan, or a rural cooperative plan which meets the
requirements of subsection (a)—
I.R.C. § 401(k)(2)(A) —
under which a covered employee may
elect to have the employer make payments as contributions to a trust
under the plan on behalf of the employee, or to the employee directly
in cash;
I.R.C. § 401(k)(2)(B) —
under which amounts held by the trust
which are attributable to employer contributions made pursuant to
the employee's election—
Editor's Note: Sec. 401(k)(2)(B)(i),
below, before amendment by Pub. L. 117–328,
Div. T, Sec. 334(b)(1), shall apply to distributions made before the
date which is 3 years after the enactment of this Act [enacted: December
29, 2022].
I.R.C. § 401(k)(2)(B)(i) —
may not be distributable to participants
or other beneficiaries earlier than—
I.R.C. § 401(k)(2)(B)(i)(I) —
severance from employment, death, or
disability,
I.R.C. § 401(k)(2)(B)(i)(II) —
an event described in paragraph (10),
I.R.C. § 401(k)(2)(B)(i)(III) —
in the case of a profit-sharing or
stock bonus plan, the attainment of age 59 1/2,
I.R.C. § 401(k)(2)(B)(i)(IV) —
subject to the provisions of paragraph
(14), upon hardship of the employee,
I.R.C. § 401(k)(2)(B)(i)(V) —
in the case of a qualified reservist
distribution (as defined in section 72(t)(2)(G)(iii)),
the date on which a period referred to in subclause (III) of such section
begins, or
I.R.C. § 401(k)(2)(B)(i)(VI) —
except as may be otherwise provided
by regulations, with respect to amounts invested in a lifetime income
investment (as defined in subsection (a)(38)(B)(ii)), the date that
is 90 days prior to the date that such lifetime income investment
may no longer be held as an investment option under the arrangement,
Editor's Note: Sec. 401(k)(2)(B)(i),
below, after amendment by Pub. L. 117–328,
Div. T, Sec. 334(b)(1), shall apply to distributions made after the
date which is 3 years after the enactment of this Act [enacted: December
29, 2022].
I.R.C. § 401(k)(2)(B)(i) —
may not be distributable to participants
or other beneficiaries earlier than—
I.R.C. § 401(k)(2)(B)(i)(I) —
severance from employment, death, or
disability,
I.R.C. § 401(k)(2)(B)(i)(II) —
an event described in paragraph (10),
I.R.C. § 401(k)(2)(B)(i)(III) —
in the case of a profit-sharing or
stock bonus plan, the attainment of age 59 1/2,
I.R.C. § 401(k)(2)(B)(i)(IV) —
subject to the provisions of paragraph
(14), upon hardship of the employee,
I.R.C. § 401(k)(2)(B)(i)(V) —
in the case of a qualified reservist
distribution (as defined in section 72(t)(2)(G)(iii)),
the date on which a period referred to in subclause (III) of such section
begins,
I.R.C. § 401(k)(2)(B)(i)(VI) —
except as may be otherwise provided
by regulations, with respect to amounts invested in a lifetime income
investment (as defined in subsection (a)(38)(B)(ii)), the date that
is 90 days prior to the date that such lifetime income investment
may no longer be held as an investment option under the arrangement,
or
I.R.C. § 401(k)(2)(B)(i)(VII) —
as provided in section 401(a)(39).
I.R.C. § 401(k)(2)(B)(ii) —
will not be distributable merely by
reason of the completion of a stated period of participation or the
lapse of a fixed number of years, and
I.R.C. § 401(k)(2)(B)(iii) —
except as may be otherwise provided
by regulations, in the case of amounts described in clause (i)(VI),
will be distributed only in the form of a qualified distribution (as
defined in subsection (a)(38)(B)(i)) or a qualified plan distribution
annuity contract (as defined in subsection (a)(38)(B)(iv)),
I.R.C. § 401(k)(2)(C) —
which provides that an employee's right
to his accrued benefit derived from employer contributions made to
the trust pursuant to his election is nonforfeitable, and
I.R.C. § 401(k)(2)(D) —
which does not require, as a condition
of participation in the arrangement, that an employee complete a period
of service with the employer (or employers) maintaining the plan extending
beyond the close of the earlier of—
I.R.C. § 401(k)(2)(D)(i) —
the period permitted under section 410(a)(1)
(determined without regard to subparagraph (B)(i) thereof), or
I.R.C. § 401(k)(2)(D)(ii) —
subject to the provisions of paragraph
(15), the first period of 3 consecutive 12-month periods during each
of which the employee has at least 500 hours of service.
I.R.C. § 401(k)(3) Application Of Participation And Discrimination Standards
I.R.C. § 401(k)(3)(A) —
A cash or deferred arrangement shall
not be treated as a qualified cash or deferred arrangement unless—
I.R.C. § 401(k)(3)(A)(i) —
those employees eligible to benefit
under the arrangement satisfy the provisions of section 410(b)(1), and
I.R.C. § 401(k)(3)(A)(ii) —
the actual deferral percentage for
eligible highly compensated employees (as defined in paragraph (5)) for the plan year bears a relationship
to the actual deferral percentage for all other eligible employees
for the preceding plan year which meets either of the following tests:
I.R.C. § 401(k)(3)(A)(ii)(I) —
The actual deferral percentage for
the group of eligible highly compensated employees is not more than
the actual deferral percentage of all other eligible employees multiplied
by 1.25.
I.R.C. § 401(k)(3)(A)(ii)(II) —
The excess of the actual deferral
percentage for the group of eligible highly compensated employees
over that of all other eligible employees is not more than 2 percentage
points, and the actual deferral percentage for the group of eligible
highly compensated employees is not more than the actual deferral
percentage of all other eligible employees multiplied by 2.
If 2 or more plans which include
cash or deferred arrangements are considered as 1 plan for purposes
of section 401(a)(4) or 410(b), the cash or deferred
arrangements included in such plans shall be treated as 1 arrangement
for purposes of this subparagraph.
If any highly compensated employee
is a participant under 2 or more cash or deferred arrangements of
the employer, for purposes of determining the deferral percentage
with respect to such employee, all such cash or deferred arrangements
shall be treated as 1 cash or deferred arrangement. An arrangement
may apply clause (ii) by
using the plan year rather than the preceding plan year if the employer
so elects, except that if such an election is made, it may not be
changed except as provided by the Secretary.
I.R.C. § 401(k)(3)(B) —
For purposes of subparagraph (A), the actual deferral percentage
for a specified group of employees for a plan year shall be the average
of the ratios (calculated separately for each employee in such group)
of—
I.R.C. § 401(k)(3)(B)(i) —
the amount of employer contributions
actually paid over to the trust on behalf of each such employee for
such plan year, to
I.R.C. § 401(k)(3)(B)(ii) —
the employee's compensation for such
plan year.
I.R.C. § 401(k)(3)(C) —
A cash or deferred arrangement shall
be treated as meeting the requirements of subsection (a)(4) with respect to contributions
if the requirements of subparagraph (A)(ii) are met.
I.R.C. § 401(k)(3)(D) —
For purposes of subparagraph (B), the employer contributions
on behalf of any employee—
I.R.C. § 401(k)(3)(D)(i) —
shall include any employer contributions
made pursuant to the employee's election under paragraph (2), and
I.R.C. § 401(k)(3)(D)(ii) —
under such rules as the Secretary
may prescribe, may, at the election of the employer, include—
I.R.C. § 401(k)(3)(D)(ii)(I) —
matching contributions (as defined
in 401(m)(4)(A))
which meet the requirements of paragraph (2)(B) and (C), and
I.R.C. § 401(k)(3)(D)(ii)(II) —
qualified nonelective contributions
(within the meaning of section 401(m)(4)(C)).
I.R.C. § 401(k)(3)(E) —
For purposes of this paragraph, in
the case of the first plan year of any plan (other than a successor
plan), the amount taken into account as the actual deferral percentage
of nonhighly compensated employees for the preceding plan year shall
be—
I.R.C. § 401(k)(3)(E)(i) —
3 percent, or
I.R.C. § 401(k)(3)(E)(ii) —
if the employer makes an election
under this subclause, the actual deferral percentage of nonhighly
compensated employees determined for such first plan year.
I.R.C. § 401(k)(3)(F) Special Rule For Early Participation —
If an employer elects to apply section 410(b)(4)(B) in determining
whether a cash or deferred arrangement meets the requirements of
subparagraph (A)(i),
the employer may, in determining whether the arrangement meets the
requirements of subparagraph (A)(ii),
exclude from consideration all eligible employees (other than highly
compensated employees) who have not met the minimum age and service
requirements of section 410(a)(1)(A).
I.R.C. § 401(k)(3)(G) Governmental Plan —
A governmental plan (within the meaning of section 414(d)) shall be treated as
meeting the requirements of this paragraph.
I.R.C. § 401(k)(4) Other Requirements
I.R.C. § 401(k)(4)(A) Benefits (Other Than Matching Contributions) Must Not Be Contingent
On Election To Defer —
A cash or deferred arrangement of any employer shall
not be treated as a qualified cash or deferred arrangement if any
other benefit (other than a de minimis financial incentive (not paid
for with plan assets) provided to employees who elect to have the
employer make contributions under the arrangement in lieu of receiving
cash) is conditioned (directly or indirectly) on the employee electing
to have the employer make or not make contributions under the arrangement
in lieu of receiving cash. The preceding sentence shall not apply
to any matching contribution (as defined in section 401(m)) made by reason of such
an election.
I.R.C. § 401(k)(4)(B) Eligibility Of State And Local Governments And Tax-Exempt Organizations
I.R.C. § 401(k)(4)(B)(i) Tax-Exempts Eligible —
Except as provided in clause (ii), any organization exempt
from tax under this subtitle may include a qualified cash or deferred
arrangement as part of a plan maintained by it.
I.R.C. § 401(k)(4)(B)(ii) Governments Ineligible —
A cash or deferred arrangement shall not be treated
as a qualified cash or deferred arrangement if it is part of a plan
maintained by a State or local government or political subdivision
thereof, or any agency or instrumentality thereof. This clause shall
not apply to a rural cooperative plan or to a plan of an employer
described in clause (iii).
I.R.C. § 401(k)(4)(B)(iii) Treatment Of Indian Tribal Governments —
An employer which is an Indian tribal government (as
defined in section 7701(a)(40)),
a subdivision of an Indian tribal government (determined in accordance
with section 7871(d)),
an agency or instrumentality of an Indian tribal government or subdivision
thereof, or a corporation chartered under Federal, State, or tribal
law which is owned in whole or in part by any of the foregoing may
include a qualified cash or deferred arrangement as part of a plan
maintained by the employer.
I.R.C. § 401(k)(4)(C) Coordination With Other Plans —
Except as provided in section 401(m), any employer contribution
made pursuant to an employee's election under a qualified cash or
deferred arrangement shall not be taken into account for purposes
of determining whether any other plan meets the requirements of section 401(a) or 410(b). This subparagraph shall
not apply for purposes of determining whether a plan meets the average
benefit requirement of section 410(b)(2)(A)(ii).
I.R.C. § 401(k)(5) Highly Compensated Employee —
For purposes of this subsection, the term “highly compensated
employee” has the meaning given such term by section 414(q).
I.R.C. § 401(k)(6) Pre-ERISA Money Purchase Plan —
For purposes of this subsection, the term “pre-ERISA
money purchase plan” means a pension plan—
I.R.C. § 401(k)(6)(A) —
which is a defined contribution plan
(as defined in section 414(i)),
I.R.C. § 401(k)(6)(B) —
which was in existence on June 27,
1974, and which, on such date, included a salary reduction arrangement,
and
I.R.C. § 401(k)(6)(C) —
under which neither the employee contributions
nor the employer contributions may exceed the levels provided for
by the contribution formula in effect under the plan on such date.
I.R.C. § 401(k)(7) Rural Cooperative Plan —
For purposes of this subsection—
I.R.C. § 401(k)(7)(A) In General —
The term “rural cooperative plan” means any pension
plan—
I.R.C. § 401(k)(7)(A)(i) —
which is a defined contribution plan
(as defined in section 414(i)),
and
I.R.C. § 401(k)(7)(A)(ii) —
which is established and maintained
by a rural cooperative.
I.R.C. § 401(k)(7)(B) Rural Cooperative Defined —
For purposes of subparagraph (A), the term “rural cooperative"
means—
I.R.C. § 401(k)(7)(B)(i) —
any organization which—
I.R.C. § 401(k)(7)(B)(i)(I) —
is engaged primarily in providing electric
service on a mutual or cooperative basis, or
I.R.C. § 401(k)(7)(B)(i)(II) —
is engaged primarily in providing
electric service to the public in its area of service and which is
exempt from tax under this subtitle or which is a State or local
government (or an agency or instrumentality thereof), other than
a municipality (or an agency or instrumentality thereof),
I.R.C. § 401(k)(7)(B)(ii) —
any organization described in paragraph (4) or (6) of section 501(c) and at least 80 percent
of the members of which are organizations described in clause (i),
I.R.C. § 401(k)(7)(B)(iii) —
a cooperative telephone company described
in section 501(c)(12),
I.R.C. § 401(k)(7)(B)(iv) —
any organization which—
I.R.C. § 401(k)(7)(B)(iv)(I) —
is a mutual irrigation or ditch company
described in section 501(c)(12) (without
regard to the 85 percent requirement thereof), or
I.R.C. § 401(k)(7)(B)(iv)(II) —
is a district organized under the laws
of a State as a municipal corporation for the purpose of irrigation,
water conservation, or drainage, and
I.R.C. § 401(k)(7)(B)(v) —
an organization which is a national
association of organizations described in clause (i), (ii),,2
(iii), or (iv).
2 So in original.
I.R.C. § 401(k)(7)(C) Special Rule For Certain Distributions —
A rural cooperative plan which includes a qualified
cash or deferred arrangement shall not be treated as violating the
requirements of section 401(a) or
of paragraph (2) merely
by reason of a hardship distribution or a distribution to a participant
after attainment of age 591/2. For purposes of this section,
the term “hardship distribution” means a distribution described in
paragraph (2)(B)(i)(IV) (without
regard to the limitation of its application to profit-sharing or
stock bonus plans).
I.R.C. § 401(k)(8) Arrangement Not Disqualified If Excess Contributions Distributed
I.R.C. § 401(k)(8)(A) In General —
A cash or deferred arrangement shall not be treated
as failing to meet the requirements of clause (ii) of paragraph (3)(A) for any plan year if,
before the close of the following plan year—
I.R.C. § 401(k)(8)(A)(i) —
the amount of the excess contributions
for such plan year (and any income allocable to such contributions
through the end of such year) is distributed, or
I.R.C. § 401(k)(8)(A)(ii) —
to the extent provided in regulations,
the employee elects to treat the amount of the excess contributions
as an amount distributed to the employee and then contributed by
the employee to the plan.
Any distribution of excess contributions
(and income) may be made without regard to any other provision of
law.
I.R.C. § 401(k)(8)(B) Excess Contributions —
For purposes of subparagraph (A), the term “excess contributions"
means, with respect to any plan year, the excess of—
I.R.C. § 401(k)(8)(B)(i) —
the aggregate amount of employer contributions
actually paid over to the trust on behalf of highly compensated employees
for such plan year, over
I.R.C. § 401(k)(8)(B)(ii) —
the maximum amount of such contributions
permitted under the limitations of clause (ii) of paragraph (3)(A) (determined by reducing
contributions made on behalf of highly compensated employees in order
of the actual deferral percentages beginning with the highest of
such percentages).
I.R.C. § 401(k)(8)(C) Method Of Distributing Excess Contributions —
Any distribution of the excess contributions for any
plan year shall be made to highly compensated employees on the basis
of the amount of contributions by, or on behalf of, each of such
employees.
I.R.C. § 401(k)(8)(D) Additional Tax Under Section 72(t) Not To Apply —
No tax shall be imposed under section 72(t) on any amount required
to be distributed under this paragraph.
I.R.C. § 401(k)(8)(E) Treatment Of Matching Contributions Forfeited By Reason Of Excess
Deferral Or Contribution Or Permissible Withdrawal —
For purposes of paragraph (2)(C), a matching contribution
(within the meaning of subsection (m))
shall not be treated as forfeitable merely because such contribution
is forfeitable if the contribution to which the matching contribution
relates is treated as an excess contribution under subparagraph (B), an excess deferral under
section 402(g)(2)(A),
a permissible withdrawal under section 414(w), or an excess aggregate
contribution under section 401(m)(6)(B).
I.R.C. § 401(k)(8)(F) Cross Reference —
For excise tax on certain excess contributions, see
section 4979.
I.R.C. § 401(k)(9) Compensation —
For purposes of this subsection, the term “compensation"
has the meaning given such term by section 414(s).
I.R.C. § 401(k)(10) Distributions Upon Termination Of Plan
I.R.C. § 401(k)(10)(A) In General —
An event described in this subparagraph is the termination
of the plan without establishment or maintenance of another defined
contribution plan (other than an employee stock ownership plan as
defined in section 4975(e)(7)).
I.R.C. § 401(k)(10)(B) Distributions Must Be Lump Sum Distributions
I.R.C. § 401(k)(10)(B)(i) In General —
A termination shall not be treated as described in
subparagraph (A) with
respect to any employee unless the employee receives a lump sum
distribution by reason of the termination.
I.R.C. § 401(k)(10)(B)(ii) Lump-Sum Distribution —
For purposes of this subparagraph, the term “lump-sum
distribution” has the meaning given such term by section 402(e)(4)(D) (without
regard to subclauses (I), (II), (III), and (IV) of clause (i) thereof). Such term includes
a distribution of an annuity contract from—
I.R.C. § 401(k)(10)(B)(ii)(I) —
a trust which forms a part of a
plan described in section 401(a) and
which is exempt from tax under section 501(a), or
I.R.C. § 401(k)(10)(B)(ii)(II) —
an annuity plan described in section
403(a).
I.R.C. § 401(k)(11) Adoption Of Simple Plan To Meet Nondiscrimination Tests —
I.R.C. § 401(k)(11)(A) In General —
A cash or deferred arrangement maintained by an eligible
employer shall be treated as meeting the requirements of paragraph (3)(A)(ii) if such arrangement
meets—
I.R.C. § 401(k)(11)(A)(i) —
the contribution requirements of subparagraph (B),
I.R.C. § 401(k)(11)(A)(ii) —
the exclusive plan requirements of
subparagraph (C),
and
I.R.C. § 401(k)(11)(A)(iii) —
the vesting requirements of section 408(p)(3).
I.R.C. § 401(k)(11)(B) Contribution Requirements
I.R.C. § 401(k)(11)(B)(i) In General —
The requirements of this subparagraph are met if, under
the arrangement—
Editor's Note: Sec. 401((k)(11)(B)(i),
below, before amendment by Pub. L. 117-328,
Div. T, Sec. 116(b)(2) and Sec. 117(g)(1), shall apply to taxable
years beginning before December 31, 2023.
I.R.C. § 401(k)(11)(B)(i)(I) —
an employee may elect to have the employer
make elective contributions for the year on behalf of the employee
to a trust under the plan in an amount which is expressed as a percentage
of compensation of the employee but which in no event exceeds the
amount in effect under section 408(p)(2)(A)(ii) (after
the application of any election under section 408(p)(2)(E)(i)(II)),
I.R.C. § 401(k)(11)(B)(i)(II) —
the employer is required to make a
matching contribution to the trust for the year in an amount equal
to so much of the amount the employee elects under subclause (I) as does not exceed
3 percent of compensation for the year, and
I.R.C. § 401(k)(11)(B)(i)(III) —
no other contributions may be made
other than contributions described in subclause (I) or (II).
Editor's Note: Sec. 401((k)(11)(B)(i),
below, after amendment by Pub. L. 117-328,
Div. T, Sec. 116(b)(2), shall apply to taxable years beginning after
December 31, 2023.
I.R.C. § 401(k)(11)(B)(i)(I) —
an employee may elect to have the employer
make elective contributions for the year on behalf of the employee
to a trust under the plan in an amount which is expressed as a percentage
of compensation of the employee but which in no event exceeds the
amount in effect under section 408(p)(2)(A)(ii),
I.R.C. § 401(k)(11)(B)(i)(II) —
the employer is required to make a
matching contribution to the trust for the year in an amount equal
to so much of the amount the employee elects under subclause (I) as does not exceed
3 percent of compensation for the year,
I.R.C. § 401(k)(11)(B)(i)(III) —
the employer may make nonelective
contributions of a uniform percentage (up to 10 percent) of compensation,
but not to exceed the amount in effect under section 408(p)(2)(A)(iv) in any year,
for each employee who is eligible to participate in the arrangement
and who has at least $5,000 of compensation from the employer for
the year, and
I.R.C. § 401(k)(11)(B)(i)(IV) —
no other contributions may be made
other than contributions described in subclause (I), (II) or (III).
I.R.C. § 401(k)(11)(B)(ii) Employer May Elect 2-Percent Nonelective Contribution —
An employer shall be treated as meeting the requirements
of clause (i)(II)
for any year if, in lieu of the contributions described in such clause,
the employer elects (pursuant to the terms of the arrangement) to
make nonelective contributions of 2 percent of compensation for each
employee who is eligible to participate in the arrangement and who
has at least $5,000 of compensation from the employer for the year.
If an employer makes an election under this subparagraph for any
year, the employer shall notify employees of such election within
a reasonable period of time before the 60th day before the beginning
of such year.
I.R.C. § 401(k)(11)(B)(iii) Administrative Requirements
I.R.C. § 401(k)(11)(B)(iii)(I) In General —
Rules similar to the rules of subparagraphs (B) and (C) of section 408(p)(5) shall apply for
purposes of this subparagraph.
I.R.C. § 401(k)(11)(B)(iii)(II) Notice Of Election Period —
The requirements of this subparagraph shall not be treated
as met with respect to any year unless the employer notifies each
employee eligible to participate, within a reasonable period of time
before the 60th day before the beginning of such year (and, for the
first year the employee is so eligible, the 60th day before the first
day such employee is so eligible), of the rules similar to the rules
of section 408(p)(5)(C) which
apply by reason of subclause (I).
I.R.C. § 401(k)(11)(C) Exclusive Plan Requirement —
The requirements of this subparagraph are met for any
year to which this paragraph applies if no contributions were made,
or benefits were accrued, for services during such year under any
qualified plan of the employer on behalf of any employee eligible
to participate in the cash or deferred arrangement, other than contributions
described in subparagraph (B).
I.R.C. § 401(k)(11)(D) Definitions And Special Rule
I.R.C. § 401(k)(11)(D)(i) Definitions —
For purposes of this paragraph, any term used in this
paragraph which is also used in section 408(p) shall have the meaning
given such term by such section.
I.R.C. § 401(k)(11)(D)(ii) Coordination With Top-Heavy Rules —
A plan meeting the requirements of this paragraph for
any year shall not be treated as a top-heavy plan under section 416 for such year if such plan
allows only contributions required under this paragraph.
Editor's Note: Sec. 401((k)(11)(E),
below, after amendment by Pub. L. 117-328,
Div. T, Sec. 117(g)(2), shall apply to taxable years beginning after
December 31, 2023.
I.R.C. § 401(k)(11)(E) Employers Electing Increased Contributions —
In the case of an employer which applies an election
under section 408(p)(2)(E)(i)(II) for
purposes of the contribution requirements of this paragraph under
subparagraph (B)(i)(I), rules similar to the rules of subparagraphs
(B)(iii), (C)(ii)(IV), and (G) of section 408(p)(2) shall apply for
purposes of subparagraphs (B)(i)(II) and (B)(ii) of this paragraph.
I.R.C. § 401(k)(12) Alternative Methods Of Meeting Nondiscrimination Requirements
I.R.C. § 401(k)(12)(A) In General —
A cash or deferred arrangement shall be treated as
meeting the requirements of paragraph (3)(A)(ii) if such arrangement—
I.R.C. § 401(k)(12)(A)(i) —
meets the contribution requirements
of subparagraph (B) and
the notice requirements of subparagraph (D), or
I.R.C. § 401(k)(12)(A)(ii) —
meets the contribution requirements
of subparagraph (C).
I.R.C. § 401(k)(12)(B) Matching Contributions
I.R.C. § 401(k)(12)(B)(i) In General —
The requirements of this subparagraph are met if, under
the arrangement, the employer makes matching contributions on behalf
of each employee who is not a highly compensated employee in an amount
equal to—
I.R.C. § 401(k)(12)(B)(i)(I) —
100 percent of the elective contributions
of the employee to the extent such elective contributions do not
exceed 3 percent of the employee's compensation, and
I.R.C. § 401(k)(12)(B)(i)(II) —
50 percent of the elective contributions
of the employee to the extent that such elective contributions exceed
3 percent but do not exceed 5 percent of the employee's compensation.
I.R.C. § 401(k)(12)(B)(ii) Rate For Highly Compensated Employees —
The requirements of this subparagraph are not met if,
under the arrangement, the rate of matching contribution with respect
to any elective contribution of a highly compensated employee at
any rate of elective contribution is greater than that with respect
to an employee who is not a highly compensated employee.
I.R.C. § 401(k)(12)(B)(iii) Alternative Plan Designs —
If the rate of any matching contribution with respect
to any rate of elective contribution is not equal to the percentage
required under clause (i),
an arrangement shall not be treated as failing to meet the requirements
of clause (i) if—
I.R.C. § 401(k)(12)(B)(iii)(I) —
the rate of an employer's matching
contribution does not increase as an employee's rate of elective
contributions increase, and
I.R.C. § 401(k)(12)(B)(iii)(II) —
the aggregate amount of matching contributions
at such rate of elective contribution is at least equal to the aggregate
amount of matching contributions which would be made if matching
contributions were made on the basis of the percentages described
in clause (i).
I.R.C. § 401(k)(12)(C) Nonelective Contributions —
The requirements of this subparagraph are met if, under
the arrangement, the employer is required, without regard to whether
the employee makes an elective contribution or employee contribution,
to make a contribution to a defined contribution plan on behalf of
each employee who is not a highly compensated employee and who is
eligible to participate in the arrangement in an amount equal to
at least 3 percent of the employee's compensation.
I.R.C. § 401(k)(12)(D) Notice Requirement —
An arrangement meets the requirements of this paragraph
if, under the arrangement, each employee eligible to participate
is, within a reasonable period before any year, given written notice
of the employee's rights and obligations under the arrangement which—
I.R.C. § 401(k)(12)(D)(i) —
is sufficiently accurate and comprehensive
to apprise the employee of such rights and obligations, and
I.R.C. § 401(k)(12)(D)(ii) —
is written in a manner calculated
to be understood by the average employee eligible to participate.
I.R.C. § 401(k)(12)(E) Other Requirements
I.R.C. § 401(k)(12)(E)(i) Withdrawal And Vesting Restrictions —
An arrangement shall not be treated as meeting the
requirements of subparagraph (B) or (C) of this paragraph unless
the requirements of subparagraphs (B) and (C) of paragraph (2) are met with respect to all
employer contributions (including matching contributions) taken into
account in determining whether the requirements of subparagraphs (B) and (C) of this paragraph are met.
I.R.C. § 401(k)(12)(E)(ii) Social Security And Similar Contributions Not Taken Into Account —
An arrangement shall not be treated as meeting the
requirements of subparagraph (B) or (C) unless such requirements
are met without regard to subsection (l),
and, for purposes of subsection (l),
employer contributions under subparagraph (B) or (C) shall not be taken into
account.
I.R.C. § 401(k)(12)(F) Timing Of Plan Amendment For Employer Making Nonelective Contributions
I.R.C. § 401(k)(12)(F)(i) In General —
Except as provided in clause (ii), a plan may be amended
after the beginning of a plan year to provide that the requirements
of subparagraph (C) shall apply to the arrangement for the plan year,
but only if the amendment is adopted—
I.R.C. § 401(k)(12)(F)(i)(I) —
at any time before the 30th day before the close of the
plan year, or
I.R.C. § 401(k)(12)(F)(i)(II) —
at any time before the last day under paragraph (8)(A)
for distributing excess contributions for the plan year.
I.R.C. § 401(k)(12)(F)(ii) Exception Where Plan Provided For Matching Contributions —
Clause (i) shall not apply to any plan year if the plan
provided at any time during the plan year that the requirements of
subparagraph (B) or paragraph (13)(D)(i)(I) applied to the plan year.
I.R.C. § 401(k)(12)(F)(iii) 4-Percent Contribution Requirement —
Clause (i)(II) shall not apply to an arrangement unless
the amount of the contributions described in subparagraph (C) which
the employer is required to make under the arrangement for the plan
year with respect to any employee is an amount equal to at least 4
percent of the employee's compensation.
I.R.C. § 401(k)(12)(G) Other Plans —
An arrangement shall be treated as meeting the contribution
requirements under subparagraph (B) or (C) if any other plan maintained
by the employer meets such requirements with respect to employees
eligible under the arrangement.
I.R.C. § 401(k)(13) Alternative Method For Automatic Contribution Arrangements To
Meet Nondiscrimination Requirements
I.R.C. § 401(k)(13)(A) In General —
A qualified automatic contribution arrangement shall
be treated as meeting the requirements of paragraph (3)(A)(ii).
I.R.C. § 401(k)(13)(B) Qualified Automatic Contribution Arrangement —
For purposes of this paragraph, the term “qualified
automatic contribution arrangement” means a cash or deferred arrangement—
I.R.C. § 401(k)(13)(B)(i) —
which is described in subparagraph (D)(i)(I) and meets the
applicable requirements of subparagraphs (C) through (E), or
I.R.C. § 401(k)(13)(B)(ii) —
which is described in subparagraph (D)(i)(II) and meets
the applicable requirements of subparagraphs (C) and (D).
I.R.C. § 401(k)(13)(C) Automatic Deferral
I.R.C. § 401(k)(13)(C)(i) In General —
The requirements of this subparagraph are met if,
under the arrangement, each employee eligible to participate in the
arrangement is treated as having elected to have the employer make
elective contributions in an amount equal to a qualified percentage
of compensation.
I.R.C. § 401(k)(13)(C)(ii) Election Out —
The election treated as having been made under clause (i) shall cease to apply
with respect to any employee if such employee makes an affirmative
election—
I.R.C. § 401(k)(13)(C)(ii)(I) —
to not have such contributions made,
or
I.R.C. § 401(k)(13)(C)(ii)(II) —
to make elective contributions at
a level specified in such affirmative election.
I.R.C. § 401(k)(13)(C)(iii) Qualified Percentage —
For purposes of this subparagraph, the term “qualified
percentage” means, with respect to any employee, any percentage
determined under the arrangement if such percentage is applied uniformly,
does not exceed 15 percent (10 percent during the period described
in subclause (I)), and is at least—
I.R.C. § 401(k)(13)(C)(iii)(I) —
3 percent during the period ending
on the last day of the first plan year which begins after the date
on which the first elective contribution described in clause (i) is made with respect
to such employee,
I.R.C. § 401(k)(13)(C)(iii)(II) —
4 percent during the first plan year
following the plan year described in subclause (I),
I.R.C. § 401(k)(13)(C)(iii)(III) —
5 percent during the second plan
year following the plan year described in subclause (I), and
I.R.C. § 401(k)(13)(C)(iii)(IV) —
6 percent during any subsequent plan
year.
I.R.C. § 401(k)(13)(C)(iv) Automatic Deferral For Current Employees Not Required —
Clause (i)
may be applied without taking into account any employee who—
I.R.C. § 401(k)(13)(C)(iv)(I) —
was eligible to participate in the
arrangement (or a predecessor arrangement) immediately before the
date on which such arrangement becomes a qualified automatic contribution
arrangement (determined after application of this clause), and
I.R.C. § 401(k)(13)(C)(iv)(II) —
had an election in effect on such
date either to participate in the arrangement or to not participate
in the arrangement.
I.R.C. § 401(k)(13)(D) Matching Or Nonelective Contributions
I.R.C. § 401(k)(13)(D)(i) In General —
The requirements of this subparagraph are met if,
under the arrangement, the employer—
I.R.C. § 401(k)(13)(D)(i)(I) —
makes matching contributions on behalf
of each employee who is not a highly compensated employee in an amount
equal to the sum of 100 percent of the elective contributions of the
employee to the extent that such contributions do not exceed 1 percent
of compensation plus 50 percent of so much of such contributions
as exceed 1 percent but do not exceed 6 percent of compensation,
or
I.R.C. § 401(k)(13)(D)(i)(II) —
is required, without regard to whether
the employee makes an elective contribution or employee contribution,
to make a contribution to a defined contribution plan on behalf of
each employee who is not a highly compensated employee and who is
eligible to participate in the arrangement in an amount equal to
at least 3 percent of the employee's compensation.
I.R.C. § 401(k)(13)(D)(ii) Application Of Rules For Matching Contributions —
The rules of clauses (ii) and (iii) of paragraph (12)(B) shall apply for purposes
of clause (i)(I).
I.R.C. § 401(k)(13)(D)(iii) Withdrawal And Vesting Restrictions —
An arrangement shall not be treated as meeting the
requirements of clause (i) unless,
with respect to employer contributions (including matching contributions)
taken into account in determining whether the requirements of clause (i) are met—
I.R.C. § 401(k)(13)(D)(iii)(I) —
any employee who has completed at
least 2 years of service (within the meaning of section 411(a)) has a nonforfeitable
right to 100 percent of the employee's accrued benefit derived from
such employer contributions, and
I.R.C. § 401(k)(13)(D)(iii)(II) —
the requirements of subparagraph (B) of paragraph (2) are met with respect to all
such employer contributions.
I.R.C. § 401(k)(13)(D)(iv) Application Of Certain Other Rules —
The rules of subparagraphs (E)(ii) and (G) of paragraph (12) shall apply for purposes
of subclauses (I) and (II) of clause (i).
I.R.C. § 401(k)(13)(E) Notice Requirements
I.R.C. § 401(k)(13)(E)(i) In General —
The requirements of this subparagraph are met if,
within a reasonable period before each plan year, each employee eligible
to participate in the arrangement for such year receives written notice
of the employee's rights and obligations under the arrangement which—
I.R.C. § 401(k)(13)(E)(i)(I) —
is sufficiently accurate and comprehensive
to apprise the employee of such rights and obligations, and
I.R.C. § 401(k)(13)(E)(i)(II) —
is written in a manner calculated
to be understood by the average employee to whom the arrangement
applies.
I.R.C. § 401(k)(13)(E)(ii) Timing And Content Requirements —
A notice shall not be treated as meeting the requirements
of clause (i) with
respect to an employee unless—
I.R.C. § 401(k)(13)(E)(ii)(I) —
the notice explains the employee's
right under the arrangement to elect not to have elective contributions
made on the employee's behalf (or to elect to have such contributions
made at a different percentage),
I.R.C. § 401(k)(13)(E)(ii)(II) —
in the case of an arrangement under
which the employee may elect among 2 or more investment options, the
notice explains how contributions made under the arrangement will
be invested in the absence of any investment election by the employee,
and
I.R.C. § 401(k)(13)(E)(ii)(III) —
the employee has a reasonable period
of time after receipt of the notice described in subclauses (I) and (II) and before the
first elective contribution is made to make either such election.
I.R.C. § 401(k)(13)(F) Timing Of Plan Amendment For Employer Making Nonelective Contributions
I.R.C. § 401(k)(13)(F)(i) In General —
Except as provided in clause (ii), a plan may be amended
after the beginning of a plan year to provide that the requirements
of subparagraph (D)(i)(II) shall apply to the arrangement for the
plan year, but only if the amendment is adopted—
I.R.C. § 401(k)(13)(F)(i)(I) —
at any time before the 30th day before the close of the
plan year, or
I.R.C. § 401(k)(13)(F)(i)(II) —
at any time before the last day under paragraph (8)(A)
for distributing excess contributions for the plan year.
I.R.C. § 401(k)(13)(F)(ii) Exception Where Plan Provided For Matching Contributions —
Clause (i) shall not apply to any plan year if the plan
provided at any time during the plan year that the requirements of
subparagraph (D)(i)(I) or paragraph (12)(B) applied to the plan year.
I.R.C. § 401(k)(13)(F)(iii) 4-Percent Contribution Requirement —
Clause (i)(II) shall not apply to an arrangement unless
the amount of the contributions described in subparagraph (D)(i)(II)
which the employer is required to make under the arrangement for the
plan year with respect to any employee is an amount equal to at least
4 percent of the employee's compensation.
I.R.C. § 401(k)(14) Special Rules Relating To Hardship Withdrawals —
For purposes of paragraph (2)(B)(i)(IV)—
I.R.C. § 401(k)(14)(A) Amounts Which May Be Withdrawn —
The following amounts may be distributed upon hardship
of the employee:
I.R.C. § 401(k)(14)(A)(i) —
Contributions to a profit-sharing or
stock bonus plan to which section 402(e)(3) applies.
I.R.C. § 401(k)(14)(A)(ii) —
Qualified nonelective contributions
(as defined in subsection (m)(4)(C)).
I.R.C. § 401(k)(14)(A)(iii) —
Qualified matching contributions described
in paragraph (3)(D)(ii)(I).
I.R.C. § 401(k)(14)(A)(iv) —
Earnings on any contributions described
in clause (i), (ii), or (iii).
I.R.C. § 401(k)(14)(B) No Requirement To Take Available Loan —
A distribution shall not be treated as failing to be
made upon the hardship of an employee solely because the employee
does not take any available loan under the plan.
I.R.C. § 401(k)(14)(C) Employee Certification —
In determining whether a distribution is upon the hardship
of an employee, the administrator of the plan may rely on a written
certification by the employee that the distribution is—
I.R.C. § 401(k)(14)(C)(i) —
on account of a financial need of a type
which is deemed in regulations prescribed by the Secretary to be an
immediate and heavy financial need, and
I.R.C. § 401(k)(14)(C)(ii) —
not in excess of the amount required
to satisfy such financial need, and
that the employee
has no alternative means reasonably available to satisfy such financial
need. The Secretary may provide by regulations for exceptions to the
rule of the preceding sentence in cases where the plan administrator
has actual knowledge to the contrary of the employee's certification,
and for procedures for addressing cases of employee misrepresentation.
I.R.C. § 401(k)(15) Special Rules For Participation Requirement For Long-Term, Part-Time
Workers —
For purposes
of paragraph (2)(D)(ii)—
I.R.C. § 401(k)(15)(A) Age Requirement Must Be Met —
Paragraph (2)(D)(ii) shall not apply to an employee unless
the employee has met the requirement of section 410(a)(1)(A)(i) by
the close of the last of the 12-month periods described in such paragraph.
I.R.C. § 401(k)(15)(B) Nondiscrimination And Top Heavy Rules Not To Apply
I.R.C. § 401(k)(15)(B)(i) Nondiscrimination Rules —
In the case of employees who are eligible to participate
in the arrangement solely by reason of paragraph (2)(D)(ii)—
I.R.C. § 401(k)(15)(B)(i)(I) —
notwithstanding subsection (a)(4), an
employer shall not be required to make nonelective or matching contributions
on behalf of such employees even if such contributions are made on
behalf of other employees eligible to participate in the arrangement,
and
I.R.C. § 401(k)(15)(B)(i)(II) —
an employer may elect to exclude such
employees from the application of subsection (a)(4), paragraphs (3),
(12), and (13), subsection (m)(2), and section 410(b).
I.R.C. § 401(k)(15)(B)(ii) Top-Heavy Rules —
An employer may elect to exclude all employees who are
eligible to participate in a plan maintained by the employer solely
by reason of paragraph (2)(D)(ii) from the application of the vesting
and benefit requirements under subsections (b) and (c) of section
416.
I.R.C. § 401(k)(15)(B)(iii) Vesting —
For purposes of determining whether an employee described
in clause (i) has a nonforfeitable right to employer contributions
(other than contributions described in paragraph (3)(D)(i)) under
the arrangement, each 12-month period for which the employee has at
least 500 hours of service shall be treated as a year of service,
and section 411(a)(6) shall be applied by substituting “at least
500 hours of service” for “more than 500 hours of service”
in subparagraph (A) thereof.
I.R.C. § 401(k)(15)(B)(iv) Employees Who Become Full-Time Employees —
This subparagraph (other than clause (iii)) shall cease
to apply to any employee as of the first plan year beginning after
the plan year in which the employee meets the requirements of section
410(a)(1)(A)(ii) without regard to paragraph (2)(D)(ii).
I.R.C. § 401(k)(15)(C) Exception For Employees Under Collectively Bargained Plans,
Etc. —
Paragraph (2)(D)(ii) shall not apply to employees described
in section 410(b)(3).
I.R.C. § 401(k)(15)(D) Special Rules
I.R.C. § 401(k)(15)(D)(i) Time Of Participation —
The rules of section 410(a)(4) shall apply to an employee
eligible to participate in an arrangement solely by reason of paragraph
(2)(D)(ii).
I.R.C. § 401(k)(15)(D)(ii) 12-Month Periods —
12-month periods shall be determined in the same manner
as under the last sentence of section 410(a)(3)(A).
I.R.C. § 401(k)(16) Starter 401(K) Deferral-Only Plans for Employers With No Retirement
Plan
I.R.C. § 401(k)(16)(A) In General —
A starter 401(k) deferral-only arrangement maintained
by an eligible employer shall be treated as meeting the requirements
of paragraph (3)(A)(ii).
I.R.C. § 401(k)(16)(B) Starter 401(K) Deferral-Only Arrangement —
For purposes of this paragraph, the term ‘starter
401(k) deferral-only arrangement’ means any cash or deferred
arrangement which meets—
I.R.C. § 401(k)(16)(B)(i) —
the automatic deferral requirements
of subparagraph (C),
I.R.C. § 401(k)(16)(B)(ii) —
the contribution limitations of subparagraph
(D), and
I.R.C. § 401(k)(16)(B)(iii) —
the requirements of subparagraph (E)
of paragraph (13).
I.R.C. § 401(k)(16)(C) Automatic Deferral
I.R.C. § 401(k)(16)(C)(i) In General —
The requirements of this subparagraph are met if, under
the arrangement, each eligible employee is treated as having elected
to have the employer make elective contributions in an amount equal
to a qualified percentage of compensation.
I.R.C. § 401(k)(16)(C)(ii) Election Out —
The election treated as having been made under clause
(i) shall cease to apply with respect to any employee if such employee
makes an affirmative election—
I.R.C. § 401(k)(16)(C)(ii)(I) —
to not have such contributions made,
or
I.R.C. § 401(k)(16)(C)(ii)(II) —
to make elective contributions at a
level specified in such affirmative election.
I.R.C. § 401(k)(16)(C)(iii) Qualified Percentage —
For purposes of this subparagraph, the term ‘qualified
percentage’ means, with respect to any employee, any percentage
determined under the arrangement if such percentage is applied uniformly
and is not less than 3 or more than 15 percent.
I.R.C. § 401(k)(16)(D) Contribution Limitations
I.R.C. § 401(k)(16)(D)(i) In General —
The requirements of this subparagraph are met if, under
the arrangement—
I.R.C. § 401(k)(16)(D)(i)(I) —
the only contributions which may be
made are elective contributions of employees described in subparagraph
(C), and
I.R.C. § 401(k)(16)(D)(i)(II) —
the aggregate amount of such elective
contributions which may be made with respect to any employee for any
calendar year shall not exceed $6,000.
I.R.C. § 401(k)(16)(D)(ii) Cost-of-Living Adjustment —
In the case of any calendar year beginning after December
31, 2024, the $6,000 amount under clause (i) shall be adjusted in
the same manner as under section 402(g)(4), except that ‘2023’
shall be substituted for ‘2005’.
I.R.C. § 401(k)(16)(D)(iii) Catch-Up Contributions for Individuals Age 50 or Over —
In the case of an individual who has attained the age
of 50 before the close of the taxable year, thelimitation under clause
(i)(II) shall be increased by the applicable amount determined under
section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)).
I.R.C. § 401(k)(16)(E) Eligible Employer —
For purposes of this paragraph—
I.R.C. § 401(k)(16)(E)(i) In General —
The term ‘eligible employer’ means any employer
if the employer does not maintain a qualified plan with respect to
which contributions are made, or benefits are accrued, for service
in the year for which the determination is being made. If only individuals
other than employees described in subparagraph (A) of section 410(b)(3)
are eligible to participate in such arrangement, then the preceding
sentence shall be applied without regard to any qualified plan in
which only employees described in such subparagraph are eligible to
participate.
I.R.C. § 401(k)(16)(E)(ii) Relief for Acquisitions, etc. —
Rules similar to the rules of section 408(p)(10) shall
apply for purposes of clause (i).
I.R.C. § 401(k)(16)(F) Qualified Plan —
The term ‘qualified plan’ means a plan,
contract, pension, account, or trust described in subparagraph (A)
or (B) of paragraph (5) of section 219(g) (determined without regard
to the last sentence of such paragraph (5)).
I.R.C. § 401(k)(16)(F) Eligible Employee —
For purposes of this paragraph—
I.R.C. § 401(k)(16)(F)(i) In General —
The term ‘eligible employee’ means any employee
of the employer who meets the minimum age and service conditions described
in section 410(a)(1).
I.R.C. § 401(k)(16)(F)(ii) Exclusions. —
The employer may elect to exclude from such definition
any employee described in paragraph (3) or (4) of section 410(b).
I.R.C. § 401(l) Permitted Disparity In Plan Contributions Or Benefits
I.R.C. § 401(l)(1) In General —
The requirements of this subsection are met with respect
to a plan if—
I.R.C. § 401(l)(1)(A) —
in the case of a defined contribution
plan, the requirements of paragraph (2)
are met, and
I.R.C. § 401(l)(1)(B) —
in the case of a defined benefit plan,
the requirements of paragraph (3) are
met.
I.R.C. § 401(l)(2) Defined Contribution Plan
I.R.C. § 401(l)(2)(A) In General —
A defined contribution plan meets the requirements
of this paragraph if the excess contribution percentage does not
exceed the base contribution percentage by more than the lesser of—
I.R.C. § 401(l)(2)(A)(i) —
the base contribution percentage, or
I.R.C. § 401(l)(2)(A)(ii) —
the greater of—
I.R.C. § 401(l)(2)(A)(ii)(I) —
5.7 percentage points, or
I.R.C. § 401(l)(2)(A)(ii)(II) —
the percentage equal to the portion
of the rate of tax under section 3111(a)
(in effect as of the beginning of the year) which is attributable
to old-age insurance.
I.R.C. § 401(l)(2)(B) Contribution Percentages —
For purposes of this paragraph--
I.R.C. § 401(l)(2)(B)(i) Excess Contribution Percentage —
The term “excess contribution percentage” means the
percentage of compensation which is contributed by the employer under
the plan with respect to that portion of each participant's compensation
in excess of the integration level.
I.R.C. § 401(l)(2)(B)(ii) Base Contribution Percentage —
The term “base contribution percentage” means the percentage
of compensation contributed by the employer under the plan with respect
to that portion of each participant's compensation not in excess
of the integration level.
I.R.C. § 401(l)(3) Defined Benefit Plan —
A defined benefit plan meets the requirements of this
paragraph if—
I.R.C. § 401(l)(3)(A) Excess Plans
I.R.C. § 401(l)(3)(A)(i) In General —
In the case of a plan other than an offset plan—
I.R.C. § 401(l)(3)(A)(i)(I) —
the excess benefit percentage does
not exceed the base benefit percentage by more than the maximum excess
allowance,
I.R.C. § 401(l)(3)(A)(i)(II) —
any optional form of benefit, preretirement
benefit, actuarial factor, or other benefit or feature provided with
respect to compensation in excess of the integration level is provided
with respect to compensation not in excess of such level, and
I.R.C. § 401(l)(3)(A)(i)(III) —
benefits are based on average annual
compensation.
I.R.C. § 401(l)(3)(A)(ii) Benefit Percentages —
For purposes of this subparagraph, the excess and base
benefit percentages shall be computed in the same manner as the excess
and base contribution percentages under paragraph (2)(B), except that such determination
shall be made on the basis of benefits attributable to employer contributions
rather than contributions.
I.R.C. § 401(l)(3)(B) Offset Plans —
In the case of an offset plan, the plan provides that—
I.R.C. § 401(l)(3)(B)(i) —
a participant's accrued benefit attributable
to employer contributions (within the meaning of section 411(c)(1)) may not be reduced
(by reason of the offset) by more than the maximum offset allowance,
and
I.R.C. § 401(l)(3)(B)(ii) —
benefits are based on average annual
compensation.
I.R.C. § 401(l)(4) Definitions Relating To Paragraph (3) —
For purposes of paragraph (3)—
I.R.C. § 401(l)(4)(A) Maximum Excess Allowance —
The maximum excess allowance is equal to—
I.R.C. § 401(l)(4)(A)(i) —
in the case of benefits attributable
to any year of service with the employer taken into account under
the plan, 3/4 of a percentage point, and
I.R.C. § 401(l)(4)(A)(ii) —
in the case of total benefits, 3/4
of a percentage point, multiplied by the participant's years of service
(not in excess of 35) with the employer taken into account under
the plan.
In no event shall the maximum excess
allowance exceed the base benefit percentage.
I.R.C. § 401(l)(4)(B) Maximum Offset Allowance —
The maximum offset allowance is equal to—
I.R.C. § 401(l)(4)(B)(i) —
in the case of benefits attributable
to any year of service with the employer taken into account under
the plan, 3/4 percent of the participant's final average compensation,
and
I.R.C. § 401(l)(4)(B)(ii) —
in the case of total benefits, 3/4
percent of the participant's final average compensation, multiplied
by the participant's years of service (not in excess of 35) with
the employer taken into account under the plan.
In no event shall the maximum offset
allowance exceed 50 percent of the benefit which would have accrued
without regard to the offset reduction.
I.R.C. § 401(l)(4)(C) Reductions
I.R.C. § 401(l)(4)(C)(i) In General —
The Secretary shall prescribe regulations requiring
the reduction of the 3/4 percentage factor under subparagraph (A) or (B)—
I.R.C. § 401(l)(4)(C)(i)(I) —
in the case of a plan other than an
offset plan which has an integration level in excess of covered compensation,
or
I.R.C. § 401(l)(4)(C)(i)(II) —
with respect to any participant in
an offset plan who has final average compensation in excess of covered
compensation.
I.R.C. § 401(l)(4)(C)(ii) Basis Of Reductions —
Any reductions under clause (i) shall be based on the
percentages of compensation replaced by the employer-derived portions
of primary insurance amounts under the Social Security Act for participants
with compensation in excess of covered compensation.
I.R.C. § 401(l)(4)(D) Offset Plan —
The term “offset plan” means any plan with respect
to which the benefit attributable to employer contributions for each
participant is reduced by an amount specified in the plan.
I.R.C. § 401(l)(5) Other Definitions And Special Rules —
For purposes of this subsection—
I.R.C. § 401(l)(5)(A) Integration Level
I.R.C. § 401(l)(5)(A)(i) In General —
The term “integration level” means the amount of compensation
specified under the plan (by dollar amount or formula) at or below
which the rate at which contributions or benefits are provided (expressed
as a percentage) is less than such rate above such amount.
I.R.C. § 401(l)(5)(A)(ii) Limitation —
The integration level for any year may not exceed the
contribution and benefit base in effect under section 230 of the
Social Security Act for such year.
I.R.C. § 401(l)(5)(A)(iii) Level To Apply To All Participants —
A plan's integration level shall apply with respect
to all participants in the plan.
I.R.C. § 401(l)(5)(A)(iv) Multiple Integration Levels —
Under rules prescribed by the Secretary, a defined
benefit plan may specify multiple integration levels.
I.R.C. § 401(l)(5)(B) Compensation —
The term “compensation” has the meaning given such
term by section 414(s).
I.R.C. § 401(l)(5)(C) Average Annual Compensation —
The term “average annual compensation” means the participant's
highest average annual compensation for—
I.R.C. § 401(l)(5)(C)(i) —
any period of at least 3 consecutive
years, or
I.R.C. § 401(l)(5)(C)(ii) —
if shorter, the participant's full
period of service.
I.R.C. § 401(l)(5)(D) Final Average Compensation
I.R.C. § 401(l)(5)(D)(i) In General —
The term “final average compensation” means the participant's
average annual compensation for—
I.R.C. § 401(l)(5)(D)(i)(I) —
the 3-consecutive year period ending
with the current year, or
I.R.C. § 401(l)(5)(D)(i)(II) —
if shorter, the participant's full
period of service.
I.R.C. § 401(l)(5)(D)(ii) Limitation —
A participant's final average compensation shall be
determined by not taking into account in any year compensation in
excess of the contribution and benefit base in effect under section 230 of the Social Security Act for such year.
I.R.C. § 401(l)(5)(E) Covered Compensation
I.R.C. § 401(l)(5)(E)(i) In General —
The term “covered compensation” means, with respect
to an employee, the average of the contribution and benefit bases
in effect under section 230 of the
Social Security Act for each year in the 35-year period ending with
the year in which the employee attains the social security retirement
age.
I.R.C. § 401(l)(5)(E)(ii) Computation For Any Year —
For purposes of clause (i), the determination for
any year preceding the year in which the employee attains the social
security retirement age shall be made by assuming that there is no
increase in the bases described in clause (i) after the determination
year and before the employee attains the social security retirement
age.
I.R.C. § 401(l)(5)(E)(iii) Social Security Retirement Age —
For purposes of this subparagraph, the term “social
security retirement age” has the meaning given such term by section 415(b)(8).
I.R.C. § 401(l)(5)(F) Regulations —
The Secretary shall prescribe such regulations as are
necessary or appropriate to carry out the purposes of this subsection,
including—
I.R.C. § 401(l)(5)(F)(i) —
in the case of a defined benefit plan
which provides for unreduced benefits commencing before the social
security retirement age (as defined in section 415(b)(8)), rules providing
for the reduction of the maximum excess allowance and the maximum
offset allowance, and
I.R.C. § 401(l)(5)(F)(ii) —
in the case of an employee covered
by 2 or more plans of the employer which fail to meet the requirements
of subsection (a)(4) (without
regard to this subsection), rules preventing the multiple use of
the disparity permitted under this subsection with respect to any
employee.
For purposes of clause (i), unreduced benefits shall
not include benefits for disability (within the meaning of section 223(d) of the Social Security Act).
I.R.C. § 401(l)(6) Special Rule For Plan Maintained By Railroads —
In determining whether a plan which includes employees
of a railroad employer who are entitled to benefits under the Railroad
Retirement Act of 1974 meets the requirements of this subsection,
rules similar to the rules set forth in this subsection shall apply.
Such rules shall take into account the employer-derived portion of
the employees' tier 2 railroad retirement benefits and any supplemental
annuity under the Railroad Retirement Act of 1974.
I.R.C. § 401(m) Nondiscrimination Test For Matching Contributions And Employee
Contributions —
I.R.C. § 401(m)(1) In General —
A defined contribution plan shall be treated as meeting
the requirements of subsection (a)(4) with
respect to the amount of any matching contribution or employee contribution
for any plan year only if the contribution percentage requirement
of paragraph (2) of this
subsection is met for such plan year.
I.R.C. § 401(m)(2) Requirements
I.R.C. § 401(m)(2)(A) Contribution Percentage Requirement —
A plan meets the contribution percentage requirement
of this paragraph for any plan year only if the contribution percentage
for eligible highly compensated employees for such plan year does
not exceed the greater of—
I.R.C. § 401(m)(2)(A)(i) —
125 percent of such percentage for
all other eligible employees for the preceding plan year, or
I.R.C. § 401(m)(2)(A)(ii) —
the lesser of 200 percent of such
percentage for all other eligible employees for the preceding plan
year, or such percentage for all other eligible employees for the
preceding plan year plus 2 percentage points.
This subparagraph may be applied
by using the plan year rather than the preceding plan year if the
employer so elects, except that if such an election is made, it may
not be changed except as provided by the Secretary.
I.R.C. § 401(m)(2)(B) Multiple Plans Treated As A Single Plan —
If two or more plans of an employer to which matching
contributions, employee contributions, or elective deferrals are
made are treated as one plan for purposes of section 410(b), such plans shall be
treated as one plan for purposes of this subsection. If a highly
compensated employee participates in two or more plans of an employer
to which contributions to which this subsection applies are made,
all such contributions shall be aggregated for purposes of this subsection.
I.R.C. § 401(m)(3) Contribution Percentage —
For purposes of paragraph (2), the contribution percentage
for a specified group of employees for a plan year shall be the average
of the ratios (calculated separately for each employee in such group)
of—
I.R.C. § 401(m)(3)(A) —
the sum of the matching contributions
and employee contributions paid under the plan on behalf of each
such employee for such plan year, to
I.R.C. § 401(m)(3)(B) —
the employee's compensation (within
the meaning of section 414(s))
for such plan year.
Under regulations, an employer may elect to take into
account (in computing the contribution percentage) elective deferrals
and qualified nonelective contributions under the plan or any other
plan of the employer. If matching contributions are taken into account
for purposes of subsection (k)(3)(A)(ii) for
any plan year, such contributions shall not be taken into account
under subparagraph (A) for
such year. Rules similar to the rules of subsection (k)(3)(E) shall apply for purposes
of this subsection.
I.R.C. § 401(m)(4) Definitions —
For purposes of this subsection—
I.R.C. § 401(m)(4)(A) Matching Contribution —
The term “matching contribution” means—
Editor's Note: Sec. 401(m)(4)(A)(i)-(ii),
below, before amendment by Pub. L. 117-328,
Div. T, Sec. 110(a), shall apply to contributions made for plan years
beginning before December 31, 2023.
I.R.C. § 401(m)(4)(A)(i) —
any employer contribution made to a
defined contribution plan on behalf of an employee on account of
an employee contribution made by such employee, and
I.R.C. § 401(m)(4)(A)(ii) —
any employer contribution made to
a defined contribution plan on behalf of an employee on account of
an employee's elective deferral.
Editor's Note: Sec. 401(m)(4)(A)(i)-(iii),
below, after amendment by Pub. L. 117-328,
Div. T, Sec. 110(a), shall apply to contributions made for plan years
beginning after December 31, 2023.
I.R.C. § 401(m)(4)(A)(i) —
any employer contribution made to a
defined contribution plan on behalf of an employee on account of
an employee contribution made by such employee,
I.R.C. § 401(m)(4)(A)(ii) —
any employer contribution made to
a defined contribution plan on behalf of an employee on account of
an employee's elective deferral, and
I.R.C. § 401(m)(4)(A)(ii)(iii) —
subject to the requirements of paragraph
(14), any employer contribution made to a defined contribution plan
on behalf of an employee on account of a qualified student loan payment.
I.R.C. § 401(m)(4)(B) Elective Deferral —
The term “elective deferral” means any
employer contribution described in section 402(g)(3).
I.R.C. § 401(m)(4)(C) Qualified Nonelective Contributions —
The term “qualified nonelective contribution”
means any employer contribution (other than a matching contribution)
with respect to which—
I.R.C. § 401(m)(4)(C)(i) —
the employee may not elect to have
the contribution paid to the employee in cash instead of being contributed
to the plan, and
I.R.C. § 401(m)(4)(C)(ii) —
the requirements of subparagraphs (B) and (C) of subsection (k)(2) are met.
Editor's Note: Sec. 110(b) of Pub. L. 117-328, Div. T, added subpar.
(D), is applicable to contributions made for plan years beginning
after December 31, 2023.
I.R.C. § 401(m)(4)(D) Qualified Student Loan Payment —
The term ‘qualified student loan payment’
means a payment made by an employee in repayment of a qualified education
loan (as defined in section 221(d)(1)) incurred by the employee to
pay qualified higher education expenses, but only—
I.R.C. § 401(m)(4)(D)(i) —
to the extent such payments in the aggregate
for the year do not exceed an amount equal to—
I.R.C. § 401(m)(4)(D)(i)(I) —
the limitation applicable under section
402(g) for the year (or, if lesser, the employee's compensation
(as defined in section 415(c)(3)) for the year), reduced by
I.R.C. § 401(m)(4)(D)(i)(II) —
the elective deferrals made by the
employee for such year, and
I.R.C. § 401(m)(4)(D)(i)(ii) —
if the employee certifies annually
to the employer making the matching contribution under this paragraph
that such payment has been made on such loan.
For purposes
of this subparagraph, the term ‘qualified higher education expenses’
means the cost of attendance (as defined in section 472 of the Higher
Education Act of 1965, as in effect on the day before the date of
the enactment of the Taxpayer Relief Act of 1997) at an eligible educational
institution (as defined in section 221(d)(2)).
I.R.C. § 401(m)(5) Employees Taken Into Consideration
I.R.C. § 401(m)(5)(A) In General —
Any employee who is eligible to make an employee contribution
(or, if the employer takes elective contributions into account, elective
contributions) or to receive a matching contribution under the plan
being tested under paragraph (1) shall
be considered an eligible employee for purposes of this subsection.
I.R.C. § 401(m)(5)(B) Certain Nonparticipants —
If an employee contribution is required as a condition
of participation in the plan, any employee who would be a participant
in the plan if such employee made such a contribution shall be treated
as an eligible employee on behalf of whom no employer contributions
are made.
I.R.C. § 401(m)(5)(C) Special Rule For Early Participation —
If an employer elects to apply section 410(b)(4)(B) in determining
whether a plan meets the requirements of section 410(b), the employer may, in
determining whether the plan meets the requirements of paragraph (2), exclude from consideration
all eligible employees (other than highly compensated employees)
who have not met the minimum age and service requirements of section 410(a)(1)(A).
I.R.C. § 401(m)(6) Plan Not Disqualified If Excess Aggregate Contributions Distributed
Before End Of Following Plan Year
I.R.C. § 401(m)(6)(A) In General —
A plan shall not be treated as failing
to meet the requirements of paragraph (1) for
any plan year if, before the close of the following plan year, the
amount of the excess aggregate contributions for such plan year (and
any income allocable to such contributions through the end of such
year) is distributed (or, if forfeitable, is forfeited). Such contributions
(and such income) may be distributed without regard to any other
provision of law.
I.R.C. § 401(m)(6)(B) Excess Aggregate Contributions —
For purposes of subparagraph (A), the term “excess aggregate
contributions” means, with respect to any plan year, the excess of—
I.R.C. § 401(m)(6)(B)(i) —
the aggregate amount of the matching
contributions and employee contributions (and any qualified nonelective
contribution or elective contribution taken into account in computing
the contribution percentage) actually made on behalf of highly compensated
employees for such plan year, over
I.R.C. § 401(m)(6)(B)(ii) —
the maximum amount of such contributions
permitted under the limitations of paragraph (2)(A) (determined by reducing
contributions made on behalf of highly compensated employees in order
of their contribution percentages beginning with the highest of such
percentages).
I.R.C. § 401(m)(6)(C) Method Of Distributing Excess Aggregate Contributions —
Any distribution of the excess aggregate contributions
for any plan year shall be made to highly compensated employees on
the basis of the amount of contributions on behalf of, or by, each
such employee. Forfeitures of excess aggregate contributions may
not be allocated to participants whose contributions are reduced
under this paragraph.
I.R.C. § 401(m)(6)(D) Coordination With Subsection (k) And 402(g) —
The determination of the amount of excess aggregate
contributions with respect to a plan shall be made after—
I.R.C. § 401(m)(6)(D)(i) —
first determining the excess deferrals
(within the meaning of section 402(g)),
and
I.R.C. § 401(m)(6)(D)(ii) —
then determining the excess contributions
under subsection (k).
I.R.C. § 401(m)(7) Treatment Of Distributions
I.R.C. § 401(m)(7)(A) Additional Tax Of Section 72(t) Not Applicable —
No tax shall be imposed under section 72(t) on any amount required
to be distributed under paragraph (6).
I.R.C. § 401(m)(7)(B) Exclusion Of Employee Contributions —
Any distribution attributable to employee contributions
shall not be included in gross income except to the extent attributable
to income on such contributions.
I.R.C. § 401(m)(8) Highly Compensated Employee —
For purposes of this subsection, the term “highly compensated
employee” has the meaning given to such term by section 414(q).
I.R.C. § 401(m)(9) Regulations —
The Secretary shall prescribe such regulations as may
be necessary to carry out the purposes of this subsection and subsection (k), including regulations permitting
appropriate aggregation of plans and contributions.
I.R.C. § 401(m)(10) Alternative Method Of Satisfying Tests —
A defined contribution plan shall be treated as meeting
the requirements of paragraph (2) with
respect to matching contributions if the plan—
I.R.C. § 401(m)(10)(A) —
meets the contribution requirements
of subparagraph (B) of
subsection (k)(11),
I.R.C. § 401(m)(10)(B) —
meets the exclusive plan requirements
of subsection (k)(11)(C),
and
I.R.C. § 401(m)(10)(C) —
meets the vesting requirements of section 408(p)(3).
I.R.C. § 401(m)(11) Additional Alternative Method Of Satisfying Tests
I.R.C. § 401(m)(11)(A) In General —
A defined contribution plan shall be treated as meeting
the requirements of paragraph (2) with
respect to matching contributions if the plan—
I.R.C. § 401(m)(11)(A)(i) —
meets the contribution requirements
of subparagraph (B)
or (C) of subsection
(k)(12),
I.R.C. § 401(m)(11)(A)(ii) —
meets the notice requirements of subsection (k)(12)(D), and
I.R.C. § 401(m)(11)(A)(iii) —
meets the requirements of subparagraph (B).
I.R.C. § 401(m)(11)(B) Limitation On Matching Contributions —
The requirements of this subparagraph are met if—
I.R.C. § 401(m)(11)(B)(i) —
matching contributions on behalf of
any employee may not be made with respect to an employee's contributions
or elective deferrals in excess of 6 percent of the employee's compensation,
I.R.C. § 401(m)(11)(B)(ii) —
the rate of an employer's matching
contribution does not increase as the rate of an employee's contributions
or elective deferrals increase, and
I.R.C. § 401(m)(11)(B)(iii) —
the matching contribution with respect
to any highly compensated employee at any rate of an employee contribution
or rate of elective deferral is not greater than that with respect
to an employee who is not a highly compensated employee.
I.R.C. § 401(m)(12) Alternative Method For Automatic Contribution Arrangements —
A defined contribution plan shall
be treated as meeting the requirements of paragraph (2) with respect to matching contributions
if the plan—
I.R.C. § 401(m)(12)(A) —
is a qualified automatic contribution
arrangement (as defined in subsection (k)(13)),
and
I.R.C. § 401(m)(12)(B) —
meets the requirements of paragraph
(11)(B).
Editor's Note: Sec. 401(m)(13), below,
before amendment by Pub. L. 117-328,
Div. T, Sec. 110(c), shall apply to contributions made for plan years
beginning before Dec. 31, 2023
I.R.C. § 401(m)(13) Cross Reference —
For excise tax on certain excess contributions, see
section 4979.
Editor's Note: Sec. 401(m)(13), below,
after amendment by Pub. L. 117-328,
Div. T, Sec. 110(c), shall apply to contributions made for plan years
beginning after Dec. 31, 2023
I.R.C. § 401(m)(13) Matching Contributions For Qualified Student Loan Payments
I.R.C. § 401(m)(13)(A) In General —
For purposes of paragraph (4)(A)(iii), an employer contribution
made to a defined contribution plan on account of a qualified student
loan payment shall be treated as a matching contribution for purposes
of this title if—
I.R.C. § 401(m)(13)(A)(i) —
the plan provides matching contributions
on account of elective deferrals at the same rate as contributions
on account of qualified student loan payments,
I.R.C. § 401(m)(13)(A)(ii) —
the plan provides matching contributions
on account of qualified student loan payments only on behalf of employees
otherwise eligible to receive matching contributions on account of
elective deferrals,
I.R.C. § 401(m)(13)(A)(iii) —
under the plan, all employees eligible
to receive matching contributions on account of elective deferrals
are eligible to receive matching contributions on account of qualified
student loan payments, and
I.R.C. § 401(m)(13)(A)(iv) —
the plan provides that matching contributions
on account of qualified student loan payments vest in the same manner
as matching contributions on account of elective deferrals.
I.R.C. § 401(m)(13)(B) Treatment for Purposes of Nondiscrimination Rules, Etc.
I.R.C. § 401(m)(13)(B)(i) Nondiscrimination Rules —
For purposes of subparagraph (A)(iii), subsection (a)(4),
and section 410(b), matching contributions described in paragraph
(4)(A)(iii) shall not fail to be treated as available to an employee
solely because such employee does not have debt incurred under a qualified
education loan (as defined in section 221(d)(1)).
I.R.C. § 401(m)(13)(B)(ii) Student Loan Payments Not Treated as Plan Contribution —
Except as provided in clause (iii), a qualified student
loan payment shall not be treated as a contribution to a plan under
this title.
I.R.C. § 401(m)(13)(B)(iii) Matching Contribution Rules —
Solely for purposes of meeting the requirements of paragraph
(11)(B), (12), or (13) of this subsection, or paragraph (11)(B)(i)(II),
(12)(B), (13)(D), or (16)(D) of subsection (k), a plan may treat a
qualified student loan payment as an elective deferral or an elective
contribution, whichever is applicable.
I.R.C. § 401(m)(13)(B)(iv) Actual Deferral Percentage Testing —
In determining whether a plan meets the requirements
of subsection (k)(3)(A)(ii) for a plan year, the plan may apply the
requirements of such subsection separately with respect to all employees
who receive matching contributions described in paragraph (4)(A)(iii)
for the plan year.
I.R.C. § 401(m)(13)(C) Employer May Rely on Employee Certification —
The employer may rely on an employee certification of
payment under paragraph (4)(D)(ii).
I.R.C. § 401(m)(14) Cross Reference —
For excise tax on certain excess contributions, see
section 4979.
I.R.C. § 401(n) Coordination With Qualified Domestic Relations Orders —
The Secretary shall prescribe such rules or regulations
as may be necessary to coordinate the requirements of subsection (a)(13)(B) and section 414(p) (and the regulations
issued by the Secretary of Labor thereunder) with the other provisions
of this chapter.
I.R.C. § 401(o) Special Rules For Applying Nondiscrimination Rules To Protect
Older, Longer Service And Grandfathered Participants
I.R.C. § 401(o)(1) Testing Of Defined Benefit Plans With Closed Classes Of Participants
I.R.C. § 401(o)(1)(A) Benefits, Rights, Or Features Provided To Closed Classes —
A defined benefit plan which provides benefits, rights,
or features to a closed class of participants shall not fail to satisfy
the requirements of subsection (a)(4) by reason of the composition
of such closed class or the benefits, rights, or features provided
to such closed class, if—
I.R.C. § 401(o)(1)(A)(i) —
for the plan year as of which the class
closes and the 2 succeeding plan years, such benefits, rights, and
features satisfy the requirements of subsection (a)(4) (without regard
to this subparagraph but taking into account the rules of subparagraph
(I)),
I.R.C. § 401(o)(1)(A)(ii) —
after the date as of which the class
was closed, any plan amendment which modifies the closed class or
the benefits, rights, and features provided to such closed class does
not discriminate significantly in favor of highly compensated employees,
and
I.R.C. § 401(o)(1)(A)(iii) —
the class was closed before April 5,
2017, or the plan is described in subparagraph (C).
I.R.C. § 401(o)(1)(B) Aggregate Testing With Defined Contribution Plans Permitted
On A Benefits Basis
I.R.C. § 401(o)(1)(B)(i) In General —
For purposes of determining compliance with subsection
(a)(4) and section 410(b), a defined benefit plan described in clause
(iii) may be aggregated and tested on a benefits basis with 1 or more
defined contribution plans, including with the portion of 1 or more
defined contribution plans which—
I.R.C. § 401(o)(1)(B)(i)(I) —
provides matching contributions (as
defined in subsection (m)(4)(A)),
I.R.C. § 401(o)(1)(B)(i)(II) —
provides annuity contracts described
in section 403(b) which are purchased with matching contributions
or nonelective contributions, or
I.R.C. § 401(o)(1)(B)(i)(III) —
consists of an employee stock ownership
plan (within the meaning of section 4975(e)(7)) or a tax credit employee
stock ownership plan (within the meaning of section 409(a)).
I.R.C. § 401(o)(1)(B)(ii) Special Rules For Matching Contributions —
For purposes of clause (i), if a defined benefit plan
is aggregated with a portion of a defined contribution plan providing
matching contributions—
I.R.C. § 401(o)(1)(B)(ii)(I) —
such defined benefit plan must also be
aggregated with any portion of such defined contribution plan which
provides elective deferrals described in subparagraph (A) or (C) of
section 402(g)(3), and
I.R.C. § 401(o)(1)(B)(ii)(II) —
such matching contributions shall be
treated in the same manner as nonelective contributions, including
for purposes of applying the rules of subsection (l).
I.R.C. § 401(o)(1)(B)(iii) Plans Described —
A defined benefit plan is described in this clause if—
I.R.C. § 401(o)(1)(B)(iii)(I) —
the plan provides benefits to a closed
class of participants,
I.R.C. § 401(o)(1)(B)(iii)(II) —
for the plan year as of which the class
closes and the 2 succeeding plan years, the plan satisfies the requirements
of section 410(b) and subsection (a)(4) (without regard to this subparagraph
but taking into account the rules of subparagraph (I)),
I.R.C. § 401(o)(1)(B)(iii)(III) —
after the date as of which the class
was closed, any plan amendment which modifies the closed class or
the benefits provided to such closed class does not discriminate significantly
in favor of highly compensated employees, and
I.R.C. § 401(o)(1)(B)(iii)(IV) —
the class was closed before April 5,
2017, or the plan is described in subparagraph (C).
I.R.C. § 401(o)(1)(C) Plans Described —
A plan is described in this subparagraph if, taking into
account any predecessor plan—
I.R.C. § 401(o)(1)(C)(i) —
such plan has been in effect for at least
5 years as of the date the class is closed, and
I.R.C. § 401(o)(1)(C)(ii) —
during the 5-year period preceding the
date the class is closed, there has not been a substantial increase
in the coverage or value of the benefits, rights, or features described
in subparagraph (A) or in the coverage or benefits under the plan
described in subparagraph (B)(iii) (whichever is applicable).
I.R.C. § 401(o)(1)(D) Determination Of Substantial Increase For Benefits, Rights,
And Features —
In applying subparagraph (C)(ii) for purposes of subparagraph
(A)(iii), a plan shall be treated as having had a substantial increase
in coverage or value of the benefits, rights, or features described
in subparagraph (A) during the applicable 5-year period only if, during
such period—
I.R.C. § 401(o)(1)(D)(i) —
the number of participants covered by
such benefits, rights, or features on the date such period ends is
more than 50 percent greater than the number of such participants
on the first day of the plan year in which such period began, or
I.R.C. § 401(o)(1)(D)(ii) —
such benefits, rights, and features
have been modified by 1 or more plan amendments in such a way that,
as of the date the class is closed, the value of such benefits, rights,
and features to the closed class as a whole is substantially greater
than the value as of the first day of such 5-year period, solely as
a result of such amendments.
I.R.C. § 401(o)(1)(E) Determination Of Substantial Increase For Aggregate Testing
On Benefits Basis —
In applying subparagraph (C)(ii) for purposes of subparagraph
(B)(iii)(IV), a plan shall be treated as having had a substantial
increase in coverage or benefits during the applicable 5-year period
only if, during such period—
I.R.C. § 401(o)(1)(E)(i) —
the number of participants benefitting
under the plan on the date such period ends is more than 50 percent
greater than the number of such participants on the first day of the
plan year in which such period began, or
I.R.C. § 401(o)(1)(E)(ii) —
the average benefit provided to such
participants on the date such period ends is more than 50 percent
greater than the average benefit provided on the first day of the
plan year in which such period began.
I.R.C. § 401(o)(1)(F) Certain Employees Disregarded —
For purposes of subparagraphs (D) and (E), any increase
in coverage or value or in coverage or benefits, whichever is applicable,
which is attributable to such coverage and value or coverage and benefits
provided to employees—
I.R.C. § 401(o)(1)(F)(i) —
who became participants as a result of
a merger, acquisition, or similar event which occurred during the
7-year period preceding the date the class is closed, or
I.R.C. § 401(o)(1)(F)(ii) —
who became participants by reason of
a merger of the plan with another plan which had been in effect for
at least 5 years as of the date of the merger,
shall be disregarded, except that
clause (ii) shall apply for purposes of subparagraph (D) only if,
under the merger, the benefits, rights, or features under 1 plan are
conformed to the benefits, rights, or features of the other plan prospectively.
I.R.C. § 401(o)(1)(G) Rules Relating To Average Benefit —
For purposes of subparagraph (E)—
I.R.C. § 401(o)(1)(G)(i) —
the average benefit provided to participants
under the plan will be treated as having remained the same between
the 2 dates described in subparagraph (E)(ii) if the benefit formula
applicable to such participants has not changed between such dates,
and
I.R.C. § 401(o)(1)(G)(ii) —
if the benefit formula applicable to
1 or more participants under the plan has changed between such 2 dates,
then the average benefit under the plan shall be considered to have
increased by more than 50 percent only if—
I.R.C. § 401(o)(1)(G)(ii)(I) —
the total amount determined under section
430(b)(1)(A)(i) for all participants benefitting under the plan for
the plan year in which the 5-year period described in subparagraph
(E) ends, exceeds
I.R.C. § 401(o)(1)(G)(ii)(II) —
the total amount determined under section
430(b)(1)(A)(i) for all such participants for such plan year, by using
the benefit formula in effect for each such participant for the first
plan year in such 5-year period,
by more than 50 percent. In the case
of a CSEC plan (as defined in section 414(y)), the normal cost of
the plan (as determined under section 433(j)(1)(B)) shall be used
in lieu of the amount determined under section 430(b)(1)(A)(i).
I.R.C. § 401(o)(1)(H) Treatment As Single Plan —
For purposes of subparagraphs (E) and (G), a plan described
in section 413(c) shall be treated as a single plan rather than as
separate plans maintained by each employer in the plan.
I.R.C. § 401(o)(1)(I) Special Rules —
For purposes of subparagraphs (A)(i) and (B)(iii)(II),
the following rules shall apply:
I.R.C. § 401(o)(1)(I)(i) —
In applying section 410(b)(6)(C), the
closing of the class of participants shall not be treated as a significant
change in coverage under section 410(b)(6)(C)(i)(II).
I.R.C. § 401(o)(1)(I)(ii) —
2 or more plans shall not fail to be
eligible to be aggregated and treated as a single plan solely by reason
of having different plan years.
I.R.C. § 401(o)(1)(I)(iii) —
Changes in the employee population
shall be disregarded to the extent attributable to individuals who
become employees or cease to be employees, after the date the class
is closed, by reason of a merger, acquisition, divestiture, or similar
event.
I.R.C. § 401(o)(1)(I)(iv) —
Aggregation and all other testing methodologies
otherwise applicable under subsection (a)(4) and section 410(b) may
be taken into account.
The rule of clause (ii) shall also
apply for purposes of determining whether plans to which subparagraph
(B)(i) applies may be aggregated and treated as 1 plan for purposes
of determining whether such plans meet the requirements of sub section
(a)(4) and section 410(b).
I.R.C. § 401(o)(1)(J) Spun-Off Plans —
For purposes of this paragraph, if a portion of a defined
benefit plan described in subparagraph (A) or (B)(iii) is spun off
to another employer and the spun-off plan continues to satisfy the
requirements of—
I.R.C. § 401(o)(1)(J)(i) —
subparagraph (A)(i) or (B)(iii)(II),
whichever is applicable, if the original plan was still within the
3-year period described in such subparagraph at the time of the spin
off, and
I.R.C. § 401(o)(1)(J)(ii) —
subparagraph (A)(ii) or (B)(iii)(III),
whichever is applicable,
the treatment under subparagraph
(A) or (B) of the spun-off plan shall continue with respect to such
other employer.
I.R.C. § 401(o)(2) Testing Of Defined Contribution Plans
I.R.C. § 401(o)(2)(A) Testing On A Benefits Basis —
A defined contribution plan shall be permitted to be
tested on a benefits basis if—
I.R.C. § 401(o)(2)(A)(i) —
such defined contribution plan provides
make-whole contributions to a closed class of participants whose accruals
under a defined benefit plan have been reduced or eliminated,
I.R.C. § 401(o)(2)(A)(ii) —
for the plan year of the defined contribution
plan as of which the class eligible to receive such make-whole contributions
closes and the 2 succeeding plan years, such closed class of participants
satisfies the requirements of section 410(b)(2)(A)(i) (determined
by applying the rules of paragraph (1)(I)),
I.R.C. § 401(o)(2)(A)(iii) —
after the date as of which the class
was closed, any plan amendment to the defined contribution plan which
modifies the closed class or the allocations, benefits, rights, and
features provided to such closed class does not discriminate significantly
in favor of highly compensated employees, and
I.R.C. § 401(o)(2)(A)(iv) —
the class was closed before April 5,
2017, or the defined benefit plan under clause (i) is described in
paragraph (1)(C) (as applied for purposes of paragraph (1)(B)(iii)(IV)).
I.R.C. § 401(o)(2)(B) Aggregation With Plans Including Matching Contributions
I.R.C. § 401(o)(2)(B)(i) In General —
With respect to 1 or more defined contribution plans
described in subparagraph (A), for purposes of determining compliance
with subsection (a)(4) and section 410(b), the portion of such plans
which provides make-whole contributions or other nonelective contributions
may be aggregated and tested on a benefits basis with the portion
of 1 or more other defined contribution plans which—
I.R.C. § 401(o)(2)(B)(i)(I) —
provides matching contributions (as defined
in subsection (m)(4)(A)),
I.R.C. § 401(o)(2)(B)(i)(II) —
provides annuity contracts described
in section 403(b) which are purchased with matching contributions
or nonelective contributions, or
I.R.C. § 401(o)(2)(B)(i)(III) —
consists of an employee stock ownership
plan (within the meaning of section 4975(e)(7)) or a tax credit employee
stock ownership plan (within the meaning of section 409(a)).
I.R.C. § 401(o)(2)(B)(ii) Special Rules For Matching Contributions —
Rules similar to the rules of paragraph (1)(B)(ii) shall
apply for purposes of clause (i).
I.R.C. § 401(o)(2)(C) Special Rules For Testing Defined Contribution Plan Features
Providing Matching Contributions To Certain Older, Longer Service
Participants —
In the case of a defined contribution plan which provides
benefits, rights, or features to a closed class of participants whose
accruals under a defined benefit plan have been reduced or eliminated,
the plan shall not fail to satisfy the requirements of subsection
(a)(4) solely by reason of the composition of the closed class or
the benefits, rights, or features provided to such closed class if
the defined contribution plan and defined benefit plan otherwise meet
the requirements of subparagraph (A) but for the fact that the make-whole
contributions under the defined contribution plan are made in whole
or in part through matching contributions.
I.R.C. § 401(o)(2)(D) Spun-Off Plans —
For purposes of this paragraph, if a portion of a defined
contribution plan described in subparagraph (A) or (C) is spun off
to another employer, the treatment under subparagraph (A) or (C) of
the spun-off plan shall continue with respect to the other employer
if such plan continues to comply with the requirements of clauses
(ii) (if the original plan was still within the 3-year period described
in such clause at the time of the spin off) and (iii) of subparagraph
(A), as determined for purposes of subparagraph (A) or (C), whichever
is applicable.
I.R.C. § 401(o)(3) Definitions And Special Rule —
For purposes of this subsection—
I.R.C. § 401(o)(3)(A) Make-Whole Contributions —
Except as otherwise provided in paragraph (2)(C), the
term “make-whole contributions” means nonelective allocations
for each employee in the class which are reasonably calculated, in
a consistent manner, to replace some or all of the retirement benefits
which the employee would have received under the defined benefit plan
and any other plan or qualified cash or deferred arrangement under
subsection (k)(2) if no change had been made to such defined benefit
plan and such other plan or arrangement. For purposes of the preceding
sentence, consistency shall not be required with respect to employees
who were subject to different benefit formulas under the defined benefit
plan.
I.R.C. § 401(o)(3)(B) References To Closed Class Of Participants —
References to a closed class of participants and similar
references to a closed class shall include arrangements under which
1 or more classes of participants are closed, except that 1 or more
classes of participants closed on different dates shall not be aggregated
for purposes of determining the date any such class was closed.
I.R.C. § 401(o)(3)(C) Highly Compensated Employee
The term “highly compensated employee” has
the meaning given such term in section 414(q).
I.R.C. § 401(p) Cross Reference —
For exemption from tax of a trust qualified under this
section, see section 501(a).
(Aug. 16, 1954, ch. 736, 68A Stat. 134; Oct. 10, 1962,
Pub. L. 87-792, Sec. 2, 76 Stat. 809; Oct. 23, 1962, Pub. L. 87-863, Sec. 2(a), 76 Stat. 1141; Feb. 26, 1964, Pub. L. 88-272, title II, Sec. 219(a),
78 Stat. 57; July 30, 1965, Pub. L. 89-97, title I, Sec. 106(d)(4), 79 Stat. 337; Nov. 13, 1966, Pub. L. 89-809, title II, Sec. 204(b)(1),
(c), 205(a), 80 Stat. 1577,
1578; Jan. 12, 1971, Pub. L. 91-691,
Sec. 1(a), 84 Stat.
2074; Sept. 2, 1974, Pub.
L. 93-406, title II, Sec. 1012(b), 1016(a)(2), 1021,
1022(a)-(d), (f), 1023, 2001(c)-(e)(4), (h)(1), 2004(a)(1), 88 Stat. 913, 929, 935, 938-940, 943,
952-955, 957, 979; Apr. 15, 1976, Pub. L. 94-267, Sec. 1(c)(1),
(2), 90 Stat. 367; Oct. 4, 1976,
Pub. L. 94-455, title
VIII, Sec. 803(b)(2), title XV, Sec. 1505(b), title XIX, Sec. 1901(a)(56),
1906(b)(13)(A), 90 Stat. 1584,
1738, 1773, 1834; Nov. 6, 1978, Pub.
L. 95-600, title I, Sec. 135(a), 141(f)(3), 143(a),
152(e), 92 Stat. 2785, 2795,
2796, 2799; Apr. 1, 1980, Pub. L. 96-222,
title I, Sec. 101(a)(7)(L)(i)(V), (9), (14)(E)(iii), 94 Stat. 199, 201, 205; Sept. 26, 1980, Pub. L. 96-364, title II, Sec. 208(a),
(e), title IV, Sec. 410(b), 94 Stat.
1289, 1290, 1308; Dec. 28, 1980, Pub. L. 96-605, title II, Sec. 221(a),
225(b)(1), (2), 94 Stat. 3528,
3529; Aug. 13, 1981, Pub. L. 97-34,
title III, Sec. 312(b)(1), (c)(2)-(4), (e)(2), 314(a)(1), 335, 338(a), 95 Stat. 283-286, 297, 298; Sept. 3, 1982, Pub. L. 97-248, title II, Sec. 237(a),
(b), (e)(1), 238(b), (d)(1), (2), 240(b), 242(a), 249(a), 254(a), 96 Stat. 511-513, 520, 521, 527, 533;
Jan. 12, 1983, Pub. L. 97-448,
title I, Sec. 103(c)(10)(A), (d)(2), (g)(2)(A), title III, Sec. 306(a)(12), 96 Stat. 2377-2379, 2405; Apr. 20, 1983, Pub. L. 98-21, title I, Sec. 124(c)(4)(A), 97 Stat. 91; July 18, 1984, Pub. L. 98-369, div. A, title II,
Sec. 211(b)(5), title IV, Sec. 474(r)(13), 491(e)(4), (5), title
V, Sec. 521(a), 524(d)(1), 527(a), (b), 528(b), title VII, Sec. 713(c)(2)(A),
(d)(3), 98 Stat. 754, 842, 853,
865, 872, 875-877, 957, 958; Aug. 23, 1984, Pub. L. 98-397, title II, Sec. 203(a),
204(a), title III, Sec. 301(b), 98 Stat.
1440, 1445, 1451; Oct. 22, 1986, Pub. L. 99-514, title XI, Sec. 1106(d)(1),
1111(a), (b), 1112(b), (d)(1), 1114(b)(7), 1116(a)-(e), 1117(a),
1119(a), 1121(b), 1136(a), 1143(a), 1145(a), 1171(b)(5), 1174(c)(2)(A),
1175(a)(1), 1176(a), title XVIII, Sec. 1848(b), 1852(a)(4)(A), (6),
(b)(8), (g), (h)(1), 1879(g)(1), (2), 1898(b)(2)(A), (3)(A), (7)(A),
(13)(A), (14)(A), (c)(3), 1899A(10), 100
Stat. 2435, 2439, 2444, 2445, 2451, 2454-2456, 2459, 2463,
2465, 2485, 2490, 2513, 2518, 2519, 2857, 2865-2869, 2906, 2907,
2945, 2948, 2950, 2953, 2958; Dec. 22, 1987, Pub. L. 100-203, title IX, Sec.
9341(a), 101 Stat. 1330-369;
Nov. 10, 1988, Pub. L. 100-647,
title I, Sec. 1011(c)(7)(A), (d)(4), (e)(3), (g)(1)-(3), (h)(3),
(k)(1)(A), (B), (2)-(7), (9), (l)(1)-(5)(A), (6), (7), 1011A(j),
(l), 1011B(j)(1), (2), (6), (k)(1), (2), title VI, Sec. 6053(a),
6055(a), 6071(a), (b), 102 Stat. 3458-3460,
3463, 3464, 3468-3470, 3483, 3492, 3493, 3696, 3697, 3705; Nov. 8,
1989, Pub. L. 101-140,
title II, Sec. 203(a)(5), 103 Stat. 830;
Dec. 19, 1989, Pub. L. 101-239,
title VII, Sec. 7311(a), 7811(g)(1), (h)(3), 7816(l), 7881(i)(1)(A),
(4)(A), 103 Stat. 2354, 2409,
2421, 2442; Nov. 5, 1990, Pub. L.
101-508, title XII, Sec. 12011(b), 104 Stat. 1388-571; July 3, 1992, Pub. L. 102-318, title V, Sec.
521(b)(5), (b)(6), (b)(7), (b)(8), 522(a)(1); Aug. 10, 1993, Pub. L. 103-66, title XIII, Sec.
13212; Dec. 8, 1994, Pub. L.
103-465, Sec. 732(a), 751(c)(9), 766(b), 766(d);
Aug. 20, 1996, Pub. L. 104-188,
title I, Sec. 1401(b), 1404(a), 1422, 1426(a), 1431, 1432, 1433,
1441, 1443, 1445, 1459, 1704, 110 Stat.
1755; Pub. L. 105-34,
title XV, XVI, Sec. 1502(b) 1505, 1525(a), 1530(c)(1), 1601(d), Aug.
5, 1997, 111 Stat 788; Pub. L. 106-554, Sec. 316, Dec.
21, 2000, 114 Stat. 2763; Pub. L. 107-16, Sec. 611, 636, 641,
643, 646, 657, 666, June 7, 2001, 115
Stat. 38; Pub. L. 107-147,
title IV, Sec. 411(o)(2), 411(q)(1), Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-311, title IV, Sec.
407(b), Oct. 4, 2004, 118 Stat. 1166;
Pub. L. 109-280,
title I, VIII, IX, Sec. 114(a), 827(b), 861, 901(a), 902, 905(b),
Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-245, Sec. 104(a),
June 17, 2008, 122 Stat. 1624; Pub. L. 110-458, title I, Sec. 101(d),
109, title II, Sec. 201(a), Dec. 23, 2008, 122
Stat. 5092; Pub.
L. 111-152, Sec. 1004(d)(5), Mar. 30, 2010, 124 Stat. 1029; Pub. L. 113-97, Sec. 202(c)(3)(a),
202(c)(4), 202(c)(5), Apr. 7, 2014, 128
Stat. 1101; Pub. L. 113-295,
Div. A, title II, Sec. 221(a)(52), Dec. 19, 2014, 128 Stat. 4010; Pub.
L. 115-123, Div. D, title II, Sec. 41114, Feb. 9, 2018, 132 Stat. 64; Pub.
L. 115-141, Div. U, title IV, Sec. 401(a)(69)-(72), Mar.
23, 2018, 132 Stat. 348; Pub. L. 116-94, Div. M, Sec. 104(a), Div.
O, title I, Sec. 102, 103, 109(a), (b), (c), 112, 114(a), (b), title
II, Sec. 201(a), 205, title IV, Sec. 401(a)(1), (2), Dec. 20, 2019; Pub. L. 116-136, Div. A, title II, Sec.
2203(a), Mar. 27, 2020; Pub. L. 116-260,
Div. EE, title II, Sec. 208(a), Dec. 27, 2020, 134 Stat. 1182; P.L. 117-328, Div. T, title, I, Sec. 107(a)-(c),
110(a)-(c), 113(a), 116(b)(2)-(3), 117(g)(1)-(2), 121(a), 123(a),
title II, 201(a), title III, 312(a), 316(a), 317(a), 327(a), 334(a),
337(a)-(b), title IV, 401(b)(2)-(3), December 29, 2022.)
BACKGROUND NOTES
AMENDMENTS TO SUBCHAPTER
1984--Pub. L. 98-369,
div. A, title V, 511(d), July 18, 1984, 98
Stat. 862, added heading for subpart D.
1980--Pub. L. 96-364,
title II, 202(b), Sept. 26, 1980, 94 Stat.
1285, added heading for subpart C.
AMENDMENTS TO PART
1986--Pub. L. 99-514,
title XVIII, 1899A(70), Oct. 22, 1986, 100
Stat. 2963, substituted “Qualifications” for “Qualification"
in item 409.
1984--Pub. L. 98-369,
div. A, title IV, 491(d)(54), (e)(10), July 18, 1984, 98 Stat. 852, 853, struck out items 405
and 409, which read “Qualified bond purchase plans” and “Retirement
bonds”, respectively, and redesignated item 409A as 409.
1983--Pub. L. 98-21,
title III, 321(e)(2)(D)(ii), Apr. 20, 1983, 97
Stat. 120, substituted “Employees of foreign affiliates
covered by section 3121(l) agreements” for “Certain employees of foreign
subsidiaries” in item 406.
1980--Pub. L. 96-603,
2(d)(1), Dec. 28, 1980, 94 Stat. 3510,
added item 404A.
Pub. L. 96-222,
title I, 101(a)(7)(L)(v)(VIII), Apr. 1, 1980, 94
Stat. 200, substituted “tax credit employee stock ownership
plans” for “ESOPS” in item 409A.
1978--Pub. L. 95-600,
title I, 141(f)(8), Nov. 6, 1978, 92 Stat.
2795, added item 409A.
1974--Pub. L. 93-406,
title II, 1016(b)(1), Sept. 2, 1974, 88
Stat. 932, inserted heading “Subpart A--General Rule” and
added analysis of subparts.
Pub. L. 93-406,
title II, 2002(h)(2), Sept. 2, 1974, 88
Stat. 970, added items 408 and 409.
1964--Pub. L. 88-272,
title II, 220(c)(1), Feb. 26, 1964, 78 Stat.
62, added items 406 and 407.
1964--Pub. L. 88-272, title II, 221(d)(1),
Feb. 26, 1964, 78 Stat. 75, substituted
“Certain stock options” for “Miscellaneous provisions” in heading
to part II.
1962--Pub. L. 87-792,
5(b), Oct. 10, 1962, 76 Stat. 827,
added item 405.
AMENDMENTS
2022 —
Subsec. (a)(9)(B)(iv). P.L. 117-328,
Div. T, Sec. 327(a), amended clause (iv). Before amendment, it read:
(iv) Special Rule For Surviving
Spouse Of Employee
If the designated beneficiary
referred to in clause (iii)(I) is
the surviving spouse of the employee—
(I) the date on which the
distributions are required to begin under clause (iii)(III) shall not
be earlier than the date on which the employee would have attained
age 72, and
(II) if the surviving spouse
dies before the distributions to such spouse begin, this subparagraph
shall be applied as if the surviving spouse were the employee.
Subsec. (a)(9)(C)(i)(I). P.L. 117-328, Div. T, Sec. 107(a), amended
subclause (I), by substituting “the applicable age” for “age
72”.
Subsec. (a)(9)(C). P.L. 117-328, Div. T, Sec. 107(c), added
new clause (v) at the end.
Subsec. (a)(9)(B)(iv)(I)
and (a)(9)(C)(ii)(I). P.L. 117-328,
Div. T, Sec. 107(b), amended par. (b) by substituting “the
applicable age” for “age 72”.
Subsec. (a)(9)(H)(iv)(II). P.L. 117-328, Div. T, Sec. 337(a), amended
subclause (II) by substituting “no beneficiary” for “no
individual”.
Subsec. (a)(9)(H)(v). P.L. 117-328, Div. T, Sec. 337(b), amended
clause (v) by inserting ‘‘For purposes of the preceding
sentence, in the case of a trust the terms of which are described
in clause (iv)(II), any beneficiary which is an organization described
in section 408(d)(8)(B)(i) shall be treated as a designated beneficiary
described in subclause (II)” at the end.
Subsec. (a)(9)(J). P.L. 117-328, Div. T, Sec. 201(a), amended
par. (9) by adding new subpar. (J).
Subsec. (a)(35)(I). P.L. 117-328, Sec. 123(a), amended by adding
new subsec. (I)
Subsec. (a)(39). P.L. 117-328, Div. T, Sec. 334(a), amended
subsec. (a) by adding new paragraph (39).
Subsec. (b)(3). P.L. 117-328, Div. T, Sec. 316, amended
subsec. (b) by adding new par. (3).
Subsec. (b)(2). P.L. 117-328, Div. T, Sec. 317, amended
subsec. (b)(2) by inserting “In the case of an individual who
owns the entire interest in an unincorporated trade or business, and
who is the only employee of such trade or business, any elective deferrals
(as defined in section 402(g)(3)) under a qualified cash or deferred
arrangement to which the preceding sentence applies, which are made
by such individual before the time for filing the return of such individual
for the taxable year (determined without regard to any extensions)
ending after or with the end of the plan's first plan year,
shall be treated as having been made before the end of such first
plan year.” at the end.
Subsec. (b)(4)(I). P.L. 117-328, Div. T, Sec. 107(b), amended
(b)(4)(I), by substituting “the applicable age” for “age
72”.
Subsec. (k)(2)(B)(i). P.L. 117-328, Div. T, Sec. 334(b)(1), amended
clause (i) by striking “or” at the end of subclause (V),
adding “or” at the end of subclause (VI), and adding new
subclause (VII).
Subsec. (k)(4)(A).P.L. 117-328, Div. T, Sec. 113(a), amended
by subpar. (A) by inserting “(other than a de minimis financial
incentive (not paid for with plan assets) provided to employees who
elect to have the employer make contributions under the arrangement
in lieu of receiving cash)” after “any other benefit”.
Subsec. (k)(11)(B)(i)(I). P.L. 117-328, Div. T, Sec. 117(g)(1), amended
subclause (I) by inserting “(after the application of any election
under section 408(p)(2)(E)(i)(II))” before the comma.
Subsec. (k)(11)(B)(i). P.L. 117-328, Div. T, Sec. 116(b)(2), amended
clause (i) by striking “and” at the end of subclause (II),
redesignating subclause (III) as (IV), and inserting new subclause:
“(III) the employer
may make nonelective contributions of a uniform percentage (up to
10 percent) of compensation, but not to exceed the amount in effect
under section 408(p)(2)(A)(iv) in any year, for each employee who
is eligible to participate in the arrangement and who has at least
$5,000 of compensation from the employer for the year, and”
Subsec. (k)(11)(B)(i)(IV). P.L. 117-328, Sec. 116(b)(3), amended subclause
(IV) by substituting “, (II), or (III)” for “(II)”
in redesignated subclause (IV).
Subsec. (k)(11)(E). P.L. 117-328, Div. T, Sec. 117(g)(2), amended
par. (E) by adding new subpara. (E).
Subsec. (k)(12)(G). P.L. 117-328, Sec. 401(b)(2), amended subpar.
(G) by substituting “the contribution requirements under subparagraph
(B) or (C)” for “the requirements under subparagraph (A)(i)”.
Subsec. (k)(13)(D)(iv). P.L. 117-328, Sec. 401(b)(3), amended clause
(iv) by substituting “and (G)” for “and (F)”.
Subsec. (k)(14)(C). P.L. 117-328, Sec. 312(a), amended par.
(14) by adding new subpar. (C) at the end.
Subsec. (k)(16). P.L. 117-328, Div. T, Sec. 121(a), amended
par. (16) by inserting new para (16) at end.
Subsec. (m)(4)(A). P.L. 117-328, Div. T, Sec. 110(a), amended
subpar. (A) by striking “and” from the end of clause (i),
by substituting “, and” for the period at the end of clause
(ii), and inserting new clause (iii).
Subsec. (m)(4)(D). P.L. 117-328, Div. T, Sec. 110(b), amended
subsec. (m)(4) by inserting new subparagraph (D).
Subsec. (m)(13). P.L. 117-328, Div. T, Sec. 110(c),amended
sec. (m) by redesignating par. (13) as (14) and adding new par. (13).
Before amendment, par. (13) read as follows:
“ (13) Cross reference—
For excise tax on certain excess contributions, see section 4979.”
2020 — Subsec. (a)(36). Pub. L. 116-260, Div. EE, Sec. 208(a),
amended par. (36). Before amendment, it read as follows:
“(36) Distributions During Working Retirement.—A
trust forming part of a pension plan shall not be treated as failing
to constitute a qualified trust under this section solely because
the plan provides that a distribution may be made from such trust
to an employee who has attained age 591/2 and
who is not separated from employment at the time of such distribution.”
Subsec. (a)(9)(I). Pub.
L. 116-136, Sec. 2203(a), amended par. (9) by adding subpar.
(I).
2019 —
Subsec. (a)(9)(B)(iv)(I). Pub. L. 116-94,
Div. O, Sec. 114(b), amended subclause (I) by substituting “age
72” for “age 70 1/2”.
Subsec. (a)(9)(C)(i)(I). Pub.
L. 116-94, Div. O, Sec. 114(a), amended subclause (I) by
substituting “age 72” for “age 70 1/2”.
Subsec. (a)(9)(C)(ii)(I). Pub.
L. 116-94, Div. O, Sec. 114(b), amended subclause (I) by
substituting “age 72” for “age 70 1/2”.
Subsec. (a)(9)(E). Pub.
L. 116-94, Div. O, Sec. 401(a)(2), amended subpar. (E).
Before amendment, it read as follows:
“(E) Designated Beneficiary.—For purposes
of this paragraph, the term “designated beneficiary” means any individual
designated as a beneficiary by the employee.”
Subsec. (a)(9)(H). Pub.
L. 116-94, Div. O, Sec. 401(a)(1), amended par. (9) by adding
subpar. (H).
Subsec. (a)(26)(I). Pub.
L. 116-94, Div. O, Sec. 205(b), amended par. (26) by adding
subpar. (I).
Subsec. (a)(36). Pub.
L. 116-94, Div. M, Sec. 104(a), amended par. (36) by substituting “age
59 1/2” for “age 62”.
Subsec. (a)(38). Pub.
L. 116-94, Div. O, Sec. 109(a), amended subsec. (a) by adding
par. (38).
Subsec. (b). Pub. L. 116-94,
Div. O, Sec. 201(a)(1), amended subsec. (b) by substituting ‘‘PLAN
AMENDMENTS.— (1) CERTAIN RETROACTIVE CHANGES IN PLAN.—A
stock bonus’’ for ‘‘RETROACTIVE CHANGES IN
PLAN.—A stock bonus’’ and by adding par. (2).
Subsec. (k)(2)(B)(i)(IV)-(VI). Pub. L. 116-94, Div. O, Sec. 109(b)(1),
amended clause (i) by striking “or” at the end of subclause
(IV), by substituting “or” for “and” at the
end of subclause (V), and by adding subclause (VI).
Subsec. (k)(2)(B)(i)-(iii). Pub.
L. 116-94, Div. O, Sec. 109(b)(2), amended subpar. (B) by
striking “and” at the end of clause (i), by substituting “,
and” for the semicolon at the end of clause (ii), and by adding
clause (iii).
Subsec. (k)(2)(D). Pub.
L. 116-94, Div. O, Sec. 112(a)(1), amended subpar. (D).
Before amendment, it read as follows:
“(D) which does not require, as a condition
of participation in the arrangement, that an employee complete a period
of service with the employer (or employers) maintaining the plan extending
beyond the period permitted under section 410(a)(1) (determined without
regard to subparagraph (B)(i) thereof).”
Subsec. (k)(12)(A). Pub.
L. 116-94, Div. O, Sec. 103(a)(1), amended subpar. (A) by
substituting “if such arrangement—(i) meets the contribution
requirements of subparagraph (B) and the notice requirements of subparagraph
(D), or (ii) meets the contribution requirements of subparagraph (C).’’
for “if such arrangement—(i) meets the contribution requirements
of subparagraph (B) or (C), and (ii) meets the notice requirements
of subparagraph (D).”.
Subsec. (k)(12)(F)-(G). Pub.
L. 116-94, Div. O, Sec. 103(b), amended par. (12) by redesignating
subpar. (F) as subpar. (G) and by adding a new subpar. (F).
Subsec. (k)(13)(B). Pub.
L. 116-94, Div. O, Sec. 103(a)(2), amended subpar. (B) by
substituting “means a cash or deferred arrangement—(i)
which is described in subparagraph (D)(i)(I) and meets the applicable
requirements of subparagraphs (C) through (E), or (ii) which is described
in subparagraph (D)(i)(II) and meets the applicable requirements of
subparagraphs (C) and (D).’’ for “means any cash
or deferred arrangement which meets the requirements of subparagraphs
(C) through (E).”
Subsec. (k)(13)(C)(iii). Pub.
L. 116-94, Div. O, Sec. 102(a), amended clause (iii) by
substituting “does not exceed 15 percent (10 percent during
the period described in subclause (I))” for “does not
exceed 10 percent”.
Subsec. (k)(13)(F). Pub.
L. 116-94, Div. O, Sec. 103(c), amended par. (13) by adding
subpar. (F).
Subsec. (k)(15). Pub.
L. 116-94, Div. O, Sec. 112(a)(2), amended subsec. (k) by
adding par. (15).
Subsec. (o)-(p). Pub.
L. 116-94, Div. O, Sec. 205(a), redesignated subsec. (o)
as subsec. (p) and added a new subsec. (o).
2018 — Subsec. (a)(2). Pub. L. 115-141, Div. U, Sec. 401(a)(69),
amended par. (2) by substituting “determination));” for “determination).;”.
Subsec. (a)(15). Pub.
L. 115-141, Div. U, Sec. 401(a)(70), amended par. (15) by
substituting “A trust” for “a trust”.
Subsec. (a)(32)(A). Pub.
L. 115-141, Div. U, Sec. 401(a)(71), amended subpar. (A)
by substituting “section” for “section section”
in both places it appears.
Subsec. (c)(2)(A)(iii). Pub.
L. 115-141, Div. U, Sec. 401(a)(72), amended clause (iii)
by substituting ‘‘subparagraph (A), (C), or (D) of section
3121(d)(3), without regard to section 1402(c)(2)’’ for ‘‘sections
3121(d)(3)(A), (C), or (D), without regard to paragraph (2) of section
1402(c)’’.
Subsec. (k)(2)(B)(i)(IV). Pub. L. 115-123, Sec. 41114(b),
amended subclause (IV). Before being amended, it read as follows:
“(IV) in the case of contributions to a
profit-sharing or stock bonus plan to which section 402(e)(3) applies,
upon hardship of the employee, or”.
Subsec. (k)(14). Pub.
L. 115-123, Sec. 41114(a), added par. (14).
2014 — Subsec. (a)(9)(H). Pub. L. 113-295, Div. A, Sec. 221(a)(52),
struck subpar. (H). Before being struck, it read as follows:
“(H) Temporary Waiver Of Minimum Required
Distribution
“(i) In General.—The requirements of
this paragraph shall not apply for calendar year 2009 to—
“(I) a defined contribution plan which
is described in this subsection or in section 403(a) or 403(b),
“(II) a defined contribution plan which
is an eligible deferred compensation plan described in section 457(b)
but only if such plan is maintained by an employer described in section
457(e)(1)(A), or
“(III) an individual retirement plan.
“(ii) Special Rules Regarding Waiver Period.—For
purposes of this paragraph—
“(I) the required beginning date with respect
to any individual shall be determined without regard to this subparagraph
for purposes of applying this paragraph for calendar years after 2009,
and
“(II) if clause (ii) of subparagraph (B)
applies, the 5-year period described in such clause shall be determined
without regard to calendar year 2009.”
Subsec. (a)(29). Pub. L. 113-97, Sec. 202(c)(3)(A),
amended par. (29) by substituting “multiemployer plan or a CSEC
plan” for “multiemployer plan”.
Subsec. (a)(32)(A). Pub. L. 113-97, Sec. 202(c)(5)(A),
amended subpar. (A) by substituting “430(j)(4) or 433(f)(5)”
for “430(j)(4)” each place it appeared.
Subsec. (a)(32)(C). Pub. L. 113-97, Sec. 202(c)(5)(B),
amended subpar. (C) by substituting “430(j)(3) or 433(f) by
reason of section 430(j)(4)(A) or 433(f)(5), respectively” for “430(j)(3)
by reason of section 430(j)(4)(A) thereof”.
Subsec. (a)(33)(C). Pub. L. 113-97, Sec. 202(c)(4),
amended subpar. (C) by substituting “multiemployer plans or
CSEC plans” for “multiemployer plans”.
2010 - Subsec. (h). Pub. L. 111-152, Sec. 1004(d),
amended subsec. (h) by adding the sentence at the end.
2008 - Subsec. (a)(9)(H). Pub. L. 110-458, Sec. 201(a),
added subpar. (H).
Subsec. (a)(29). Pub. L. 110-458, Sec. 101(d)(2)(A),
amended the heading for par. (29) by striking “On Plans In At-Risk
Status”.
Subsec. (a)(32)(C). Pub. L. 110-458, Sec. 101(d)(2)(B),
amended subpar. (C) by substituting “section 430(j)(3)”
for “section 430(j)” and “section 430(j)(4)(A)”
for “paragraph (5)(A)”.
Subsec. (a)(33)(B)(iii). Pub. 110-458, Sec. 101(d)(2)(C)(i),
amended clause (iii) by substituting “section 412(d)(2)”
for “section 412(c)(2)”.
Subsec. (a)(33)(D). Pub. L. 110-458, Sec. 101(d)(2)(C)(ii),
amended subpar. (D) by substituting “section 412(b)(1), without
regard to section 412(b)(2)” for “section 412(b)(2) (without
regard to subparagraph (B) thereof).
Subsec. (a)(35)(E)(iv). Pub. L. 110-458, Sec. 109(a),
amended clause (iv). Before amendment, it read as follows:
“(iv) One-Participant Retirement Plan.—
For purposes of clause (iii), the term “one-participant retirement
plan” means a retirement plan that—
“(I) on the first day of the plan year covered
only one individual (or the individual and the individual's spouse)
and the individual owned 100 percent of the plan sponsor (whether
or not incorporated), or covered only one or more partners (or partners
and their spouses) in the plan sponsor,
“(II) meets the minimum coverage requirements
of section 410(b) without being combined with any other plan of the
business that covers the employees of the business,
“(III) does not provide benefits to anyone
except the individual (and the individual's spouse) or the partners
(and their spouses),
“(IV) does not cover a business that is
a member of an affiliated service group, a controlled group of corporations,
or a group of businesses under common control, and
“(V) does not cover a business that uses
the services of leased employees (within the meaning of section 414(n)).
“For purposes of this clause, the term “partner"
includes a 2-percent shareholder (as defined in section 1372(b))
of an S corporation.”
Subsec. (k)(8)(E). Pub. L. 110-458, Sec. 109(b)(2),
amended subpar. (E) by substituting “a permissible withdrawal”
for “an erroneous automatic contribution” and by substituting “Permissible
Withdrawal” for “Erroneous Automatic Contribution”
in the heading.
Subsec. (k)(13)(D)(i)(I). Pub. L. 110-458, Sec. 109(b)(1),
amended subclause (I) by substituting “such contributions as
exceed 1 percent but do not” for “such compensation as
exceeds 1 percent but does not”.
Subsec. (a)(37).. Pub. L. 110-245, Sec. 104(a),
amended subsec. (a) by adding par. (37).
2006-Subsec. (a)(5)(G). Pub. L. 109-280, Sec. 861, amended
subpar. (G) by substituting “section 414(d))” for “section 414(d))
maintained by a State or local government or political subdivision
thereof (or agency or instrumentality thereof)” and by striking “State
and Local” in the heading.
Subsec. (a)(26)(G). Pub. L. 109-280, Sec. 861, amended
subpar. (G) by substituting “section 414(d))” for “section 414(d))
maintained by a State or local government or political subdivision
thereof (or agency or instrumentality thereof)” and by substituting
“Exception for” for “Exception for State and Local” in the heading.
Subsec. (a)(28)(B)(v). Pub. L. 109-280, Sec. 901(a)(2)(A),
added clause (v).
Subsec. (a)(29). Pub. L. 109-280, Sec. 114(a)(1),
amended par. (29). Before amendment it read as follows:
“(29) Security required upon adoption of plan amendment
resulting in significant underfunding.--
“(A) In general.--If--
“(i) a defined benefit plan (other than a multiemployer
plan) to which the requirements of section 412 apply adopts an amendment
an effect of which is to increase current liability under the plan
for a plan year, and
“(ii) the funded current liability percentage of
the plan for the plan year in which the amendment takes effect is
less than 60 percent, including the amount of the unfunded current
liability under the plan attributable to the plan amendment, the trust
of which such plan is a part shall not constitute a qualified trust
under this subsection unless such amendment does not take effect until
the contributing sponsor (or any member of the controlled group of
the contributing sponsor) provides security to the plan.
“(B) Form of security.--The security required under
subparagraph (A) shall consist of--
“(i) a bond issued by a corporate surety company
that is an acceptable surety for purposes of section 412 of the Employee
Retirement Income Security Act of 1974,
“(ii) cash, or United States obligations which
mature in 3 years or less, held in escrow by a bank or similar financial
institution, or
“(iii) such other form of security as is satisfactory
to the Secretary and the parties involved.
“(C) Amount of security.--The security shall be
in an amount equal to the excess of--
“(i) the lesser of--
“(I) the amount of additional plan assets which
would be necessary to increase the funded current liability percentage
under the plan to 60 percent, including the amount of the unfunded
current liability under the plan attributable to the plan amendment,
or
“(II) the amount of the increase in current liability
under the plan attributable to the plan amendment and any other plan
amendments adopted after December 22, 1987, and before such plan amendment,
over
“(ii) $10,000,000.
“(D) Release of security.--
“The security shall be released (and any amounts
thereunder shall be refunded together with any interest accrued thereon)
at the end of the first plan year which ends after the provision of
the security and for which the funded current liability percentage
under the plan is not less than 60 percent. The Secretary may prescribe
regulations for partial releases of the security by reason of increases
in the funded current liability percentage.
“(E) Definitions.--
“For purposes of this paragraph, the terms “current
liability”, “funded current liability percentage”, and “unfunded current
liability” shall have the meanings given such terms by section 412(l),
except that in computing unfunded current liability there shall not
be taken into account any unamortized portion of the unfunded old
liability amount as of the close of the plan year.”
Subsec. (a)(32)(A). Pub. L. 109-280, Sec. 114(a)(2)(A),
amended subpar. (A) by substituting “section 430(j)(4)” for “412(m)(5)"
each place it appeared.
Subsec. (a)(32)(C). Pub. L. 109-280, Sec. 114(a)(2)(B),
amended subpar. (C) by substituting “section 430(j)” for “section
412(m)”.
Subsec. (a)(33)(B)(i). Pub. L. 109-280, Sec. 114(a)(3)(A),
amended clause (i) by substituting “funding target attainment percentage
(as defined in section 430(d)(2))” for “funded current liability percentage
(within the meaning of section 412(l)(8))”.
Subsec. (a)(33)(B)(iii). Pub. L. 109-280, Sec. 114(a)(3)(B),
amended clause (iii) by substituting “section 412(c)(2)” for “subsection
412(c)(8)”.
Subsec. (a)(33)(D). Pub. L. 109-280, Sec. 114(a)(3)(C),
amended subpar. (D) by substituting “section 412(b)(2) (without regard
to subparagraph (B) thereof)” for “section 412(c)(11) (without regard
to subparagraph (B) thereof)”.
Subsec. (a)(35). Pub. L. 109-280, Sec. 901(a)(1),
added par. (35).
Subsec. (a)(36). Pub. L. 109-280, Sec. 905(b),
added par. (36).
Subsec. (k)(2)(B)(i)(III)-(V). Pub. L. 109-280, Sec. 827(b)(1),
amended clause (i) by striking “or” at the end of subclause (III),
by substituting “or” for “and” at the end of subclause (IV), and by
adding subclause (V).
Subsec. (k)(3)(G). Pub. L. 109-280, Sec. 861(b)(3),
amended subpar. (G) by inserting “Governmental Plan.-” after “(G)”.
Subsec. (k)(3)(G). Pub. L. 109-280, Sec. 861(a)(2),
amended subpar. (G) by striking “maintained by a State or local government
or political subdivision thereof (or agency or instrumentality thereof)”.
Subsec. (k)(8)(A)(i). Pub. L. 109-280, Sec. 902(e)(3)(B),
amended clause (i) by adding “through the end of such year” after
“such contributions”.
Subsec. (k)(8)(E). Pub. L. 109-280, Sec. 902(d)(2),
amended subpar. (E) by sinerting “Or Erroneous Automatic Contribution"
before the period in the heading and by inserting “an erroneous automatic
contribution under section 414(w),” after “402(g)(2)(A),”.
Subsec. (k)(13). Pub. L. 109-280, Sec. 902(a),
added par. (13).
Subsec. (m)(6)(A). Pub. L. 109-280, Sec. 902(e)(3)(B),
amended subpar. (A) by adding “through the end of such year” after
“to such contributions”.
Subsec. (m)(12)-(13). Pub. L. 109-280, Sec. 902(b),
amended subsec. (m) by redesignating par. (12) as par. (13) and by
adding a new par. (12).
2004--Subsec. (a)(26)(C)-(I). Pub. L. 108-311, Sec. 407(b),
amended par. (26) by striking subpar. (C) and redesignating subpar.
(D) through (I) as subpar. (C) through (H), respectively. Before
being struck, subpar. (C) read as follows:
“(C) Eligibility to participate.--In
the case of contributions under section 401(k) or 401(m), employees
who are eligible to contribute (or may elect to have contributions
made on their behalf) shall be treated as benefiting under the plan.”
2002—Subsec. (a)(30). Pub. L. 107-147, Sec. 411(o)(2),
amended par. (30) by substituting “402(g)(1)(A)” for “402(g)(1)”.
Subsec. (a)(31)(C)(i). Pub. L. 107-147, Sec. 411(q)(1),
amended clause (i) by inserting “is a qualified trust which is part
of a plan which is a defined contribution plan and” before “agrees”.
2001--Subsec. (a)(17). Pub. L. 107-16, Sec. 611(c)(1),
amended par. (17) by substituting “$200,000” for “$150,000” each place
it appeared.
Subsec. (a)(17)(B). Pub. L. 107-16, Sec. 611(c)(2),
amended subpar. (B) by substituting “July 1, 2001” for “October 1,
1993” and by substituting “$5,000” for “$10,000” each place it appeared.
Subsec. (a)(31). Pub. L. 107-16, Sec. 657(a)(2)(A),
amended the heading of par. (31) by substituting “Direct” for “Optional
direct”.
Subsec. (a)(31)(B). Pub. L. 107-16, Sec. 641(e)(3),
amended par. (B) by substituting “, 403(a)(4), 403(b)(8), and 457(e)(16)"
for “and 403(a)(4)”.
Subsec. (a)(31)(B). Pub. L. 107-16, Sec. 643(b),
amended par. (B) by adding the sentence at the end.
Subsec. (a)(31). Pub. L. 107-16, Sec. 657(a)(1),
redesignated subpar. (B) - (D) as subpar. (C) - (E), respectively,
and added subpar. (B).
Subsec. (a)(31)(C). Pub. L. 107-16, Sec. 657(a)(2)(B),
amended subpar. (C), as redesignated, by substituting “Subparagraphs
(A) and (B)” for “Subparagraph (A)”.
Subsec. (c)(2)(A). Pub. L. 107-16, Sec. 611(g)(1),
amended subpar. (A) by adding the sentence at the end.
Subsec. (k)(2)(B)(i)(I). Pub. L. 107-16, Sec. 646(a)(1)(A),
amended subclause (I) by substituting “severance from employment"
for “separation from service”.
Subsec. (k)(10). Pub. L. 107-16, Sec. 646(a)(1)(C)(iii),
amended par. (10) by striking “or disposition of assets or subsidiary"
from the heading.
Subsec. (k)(10)(A). Pub. L. 107-16, Sec. 646(a)(1)(B),
amended subpar. (A). Before amendment, it read as follows:
“(A) In general
“The following events are described
in this paragraph:
“(i) Termination
“The termination of the plan
without establishment or maintenance of another defined contribution
plan (other than an employee stock ownership plan as defined in section
4975(e)(7)).
“(ii) Disposition of assets
“The disposition by a corporation
of substantially all of the assets (within the meaning of section
409(d)(2)) used by such corporation in a trade or business of such
corporation, but only with respect to an employee who continues employment
with the corporation acquiring such assets.
“(iii) Disposition of subsidiary
“The disposition by a corporation
of such corporation's interest in a subsidiary (within the meaning
of section 409(d)(3)), but only with respect to an employee who continues
employment with such subsidiary.”
Subsec. (k)(10)(B)(i). Pub. L. 107-16, Sec. 646(a)(1)(C)(i),
amended clause (i) by substituting “A termination” for “An event"
and substituting “the termination” for “the event”.
Subsec. (k)(10)(C). Pub. L. 107-16, Sec. 646(a)(1)(C)(ii),
struck subpar. (C). Before being struck it read as follows:
“(C) Transferor corporation
must maintain plan
“An event shall not be treated
as described in clause (ii) or (iii) of subparagraph (A) unless the
transferor corporation continues to maintain the plan after the disposition.”
Subsec. (k)(11)(B)(i)(I). Pub. L. 107-16, Sec. 611(f)(3)(A),
amended subclause (I) by substituting “the amount in effect under
section 408(p)(2)(A)(ii)” for “$6,000”.
Subsec. (k)(11)(E). Pub. L. 107-16, Sec. 611(f)(3)(B),
struck subpar. (E). Before amendment it read as follows:
“(E) Cost-of-living adjustment--The
Secretary shall adjust the $6,000 amount under subparagraph (B)(i)(I)
at the same time and in the same manner as under section 408(p)(2)(E).”
Subsec. (m)(9). Pub.
L. 107-16, Sec. 666(a), amended par. (9). Before
amendment it read as follows:
“(9) Regulations
“The Secretary shall prescribe
such regulations as may be necessary to carry out the purposes of
this subsection and subsection (k) including--
“(A) such regulations as may
be necessary to prevent the multiple use of the alternative limitation
with respect to any highly compensated employee, and
“(B) regulations permitting
appropriate aggregation of plans and contributions.
“For purposes of the preceding
sentence, the term “alternative limitation” means the limitation of
section 401(k)(3)(A)(ii)(II) and the limitation of paragraph (2)(A)(ii)
of this subsection.”
2000--Subsec. (k)(10)(B)(ii). Pub. L. 106-554, Sec. 316(c),
amended clause (ii) by adding the last sentence.
1997--Subsec. (a)(1). Pub. L. 105-34, Sec. 1530(c)(1),
amended par. (1) by inserting “or by a charitable remainder trust
pursuant to a qualified gratuitous transfer (as defined in section
664(g)(1)),” after “stock bonus plans),”.
Subsec. (a)(5)(G). Pub. L. 105-34, Sec. 1505(a)(1),
added subpar. (G).
Subsec. (a)(13)(C), (D). Pub. L. 105-34, Sec. 1502(b),
added subpars. (C) and (D).
Subsec. (a)(26)(H). Pub. L. 105-34, Sec. 1505(a)(2),
amended subpar. (H). Prior to amendment, it read as follows:
“(H) Special rule for certain
police or firefighters.--
(i) In general.--An employer
may elect to have this paragraph applied separately with respect to
any classification of qualified public safety employees for whom a
separate plan is maintained.
(ii) Qualified public safety
employee.--For purposes of this subparagraph, the term “qualified
public safety employee” means any employee of any police department
or fire department organized and operated by a State or political
subdivision if the employee provides police protection, firefighting
services, or emergency medical services for any area within the jurisdiction
of such State or political subdivision.”
Subsec. (k)(3)(G). Pub. L. 105-34, Sec. 1505(b),
added subpar. (G).
Subsec. (k)(7)(B). Pub. L. 105-34, Sec. 1525(a)(1),
amended subpar. (B) by striking “and” at the end of clause (iii),
by redesignating clause (iv) as clause (v), and by adding a new clause
(iv).
Subsec. (k)(7)(B)(v). Pub. L. 105-34, Sec. 1525(a)(2),
amended clause (v) by substituting “, (iii), or (iv)” for “or (iii)”.
Subsec. (k)(11)(B)(iii). Pub. L. 105-34, Sec. 1601(d)(2)(D),
added clause (iii).
Subsec. (k)(11)(D)(ii). Pub. L. 105-34, Sec. 1601(d)(2)(A),
amended clause (ii) by striking the period and inserting “if such
plan allows only contributions required under this paragraph”.
Subsec. (k)(11)(E). Pub. L. 105-34, Sec. 1601(d)(2)(B),
added subpar. (E).
Subsec. (m)(11). Pub. L. 105-34, Sec. 1601(d)(3),
amended the heading by substituting “Additional alternative” for
“Alternative”.
1996--Subsec. (a)(5)(D). Pub. L. 104-188, Sec. 1431(c)(1),
substituted “section 414(q)(4)” for “section 414(q)(7)” in clause
(ii).
Subsec. (a)(5)(F). Pub. L. 104-188, Sec. 1445(a),
added subpar. (F).
Subsec. (a)(9)(C). Pub. L. 104-188, Sec. 1404(a),
amended subpar. (C). Before amendment, subpar. (C) read as follows:
“(C) Required beginning date.--For
purposes of this paragraph, the term “required beginning date” means
April 1 of the calendar year following the calendar year in which
the employee attains age 70-1/2. In the case of a governmental plan
or church plan, the required beginning date shall be the later of
the date determined under the preceding sentence or April 1 of the
calendar year following the calendar year in which the employee retires.
For purposes of this subparagraph, the term “church plan” means a
plan maintained by a church for church employees, and the term “church"
means any church (as defined in section 3121(w)(3)(A)) or qualified
church controlled organization (as defined in section 3121(w)(3)(B)).”
Subsec. (a)(17)(A). Pub. L. 104-188, Sec. 1431(b)(2),
amended subpar. (A). Before amendment, subpar. (A) read as follows:
“In determining the compensation
of an employee, the rules of section 414(q)(6) shall apply, except
that in applying such rules, the term “family” shall include only
the spouse of the employee and any lineal descendants of the employee
who have not attained age 19 before the close of the year.”
Subsec. (a)(20). Pub. L. 104-188, Sec. 1704(t)(67),
substituted “section 521” for “section 211”.
Subsec. (a)(26)(A). Pub. L. 104-188, Sec. 1432(a),
amended subpar. (A). Before amendment, subpar. (A) read as follows:
“(A) In general.--A trust shall
not constitute a qualified trust under this subsection unless such
trust is part of a plan which on each day of the plan year benefits
the lesser of--
(i) 50 employees of the employer,
or
(ii) 40 percent or more of all
employees of the employer.”
Subsec. (a)(26)(G). Pub. L. 104-188, Sec. 1432(b),
substituted “paragraph (2)(A) or (7)” for “paragraph (7)”.
Subsec. (a)(28)(B). Pub. L. 104-188, Sec. 1401(b)(5),
struck clause (v), generally effective for taxable years beginning
after December 31, 1999. Before being struck, it read as follows:
“(v) Coordination with distribution rules. --Any
distribution required by this subparagraph shall not be taken into
account in determining whether a subsequent distribution is a lump
sum distribution under section 402(d)(4)(A) or in determining whether
section 402(c)(10) applies.”
Subsec. (d). Pub.
L. 104-188, Sec. 1441(a), amended subsec. (d). Before
amendment, subsec. (d) read as follows:
(d) Additional requirements
for qualification of trusts and plans benefiting owner-employees
A trust forming part of a pension
or profit-sharing plan which provides contributions or benefits for
employees some or all of whom are owner-employees shall constitute
a qualified trust under this section only if, in addition to meeting
the requirements of subsection (a), the following requirements of
this subsection are met by the trust and by the plan of which such
trust is a part:
(1)(A) If the plan provides
contributions or benefits for an owner-employee who controls, or for
two or more owner-employees who together control, the trade or business
with respect to which the plan is established, and who also control
as an owner-employee or as owner-employees one or more other trades
or businesses, such plan and the plans established with respect to
such other trades or businesses, when coalesced, constitute a single
plan which meets the requirements of subsection (a) (including paragraph
(10) thereof) and of this subsection with respect to the employees
of all such trades or businesses (including the trade or business
with respect to which the plan intended to qualify under this section
is established).
(B) For purposes of subparagraph
(A), an owner-employee, or two or more owner-employees, shall be considered
to control a trade or business if such owner-employee, or such two
or more owner-employees together--
(i) own the entire interest
in an unincorporated trade or business, or
(ii) in the case of a partnership,
own more than 50 percent of either the capital interest or the profits
interest in such partnership.
For purposes of the preceding
sentence, an owner-employee, or two or more owner-employees, shall
be treated as owning any interest in a partnership which is owned,
directly or indirectly, by a partnership which such owner-employee,
or such two or more owner-employees, are considered to control within
the meaning of the preceding sentence.
(2) The plan does not provide
contributions or benefits for any owner-employee who controls (within
the meaning of paragraph (1)(B)), or for two or more owner-employees
who together control, as an owner-employee or as owner-employees,
any other trade or business, unless the employees of each trade or
business which such owner-employee or such owner-employees control
are included under a plan which meets the requirements of subsection
(a) (including paragraph (10) thereof) and of this subsection, and
provides contributions and benefits for employees which are not less
favorable than contributions and benefits provided for owner-employees
under the plan.
(3) Under the plan, contributions
on behalf of any owner-employee may be made only with respect to the
earned income of such owner-employee which is derived from the trade
or business with respect to which such plan is established.”
Subsec. (k)(3)(A). Pub. L. 104-188, Sec. 1433(c)(1),
substituted “the plan year” for “such year” in clause (ii); substituted
“for the preceding plan year” for “for such plan year” in clause (ii);
and by adding the sentence at the end.
Subsec. (k)(3)(E). Pub. L. 104-188, Sec. 1433(d),
added subpar. (E).
Subsec. (k)(3)(F). Pub. L. 104-188, Sec. 1459(a),
added subpar. (F).
Subsec. (k)(4)(B). Pub. L. 104-188, Sec. 1426(a),
amended subpar. (B). Before amendment, subpar. (B) read as follows:
“(B) State and local governments
and tax-exempt organizations not eligible
A cash or deferred arrangement
shall not be treated as a qualified cash or deferred arrangement if
it is part of a plan maintained by--
(i) a State or local government
or political subdivision thereof, or any agency or instrumentality
thereof, or
(ii) any organization exempt
from tax under this subtitle.
This subparagraph shall not
apply to a rural cooperative plan.
Subsec. (k)(7)(B). Pub. L. 104-188, Sec. 1443(b),
amended clause (i). Before amendment, clause (i) read as follows:
(p pi=1>(i) any organization which--
(I) is exempt from tax under
this subtitle or which is a State or local government or political
subdivision thereof (or agency or instrumentality thereof), and
(II) is engaged primarily in
providing electric service on a mutual or cooperative basis,”
Subsec. (k)(7)(C). Pub. L. 104-188, Sec. 1443(a),
added subpar. (C).
Subsec. (k)(8)(C). Pub. L. 104-188, Sec. 1433(e)(1),
substituted “on the basis of the amount of contributions by, or on
behalf of, each of such employees” for “on the basis of the respective
portions of the excess contributions attributable to each of such
employees”.
Subsec. (k)(10)(B). Pub. L. 104-188, Sec. 1401(b)(6),
amended clause (ii), generally effective for taxable years beginning
after December 31, 1999.
Subsec. (k)(11)-(12). Pub. L. 104-188, Sec. 1422 and
1433, respectively, added pars. (11) and (12).
Subsec. (m)(2)(A). Pub. L. 104-188, Sec. 1433(c)(2),
inserted “for such plan year” after “highly compensated employees”;
inserted “for the preceding plan year” after “eligible employees"
each place it appeared in clauses (i) and (ii); and added the flush
sentence at the end.
Subsec. (m)(3). Pub. L. 104-188, Sec. 1433(d)(2),
added the sentence at the end.
Subsec. (m)(5)(C). Pub. L. 104-188, Sec. 1459(b),
added subpar. (C).
Subsec. (m)(6)(C). Pub. L. 104-188, Sec. 1433(e)(2),
substituted “on the basis of the amount of contributions on behalf
of, or by, each such employee” for “on the basis of the respective
portions of such amounts attributable to each of such employees”.
Subsec. (m)(10), (11). Pub. L. 104-188, Sec. 1422(b),
redesignated par. (10) as par. (11), and added par. (11).
Subsec. (m)(11), (12). Pub. L. 104-188, Sec. 1433(b),
redesignated par. (11) (as redesignated by Pub. L. 104-188, Sec. 1422)
as par. (12) and added par. (11).
1994 - Subsec. (a)(17)(B). Pub. L. 103-465, Sec. 732(a),
amended subpar. (B). Prior to amendment, it read as follows:
“(B) Cost-of-living adjustment.
“(i) In general --
“If, for any calendar year after
1994, the excess (if any) of
“(I) $150,000, increased by
the cost-of-living adjustment for the calendar year, over
“(II) the dollar amount in effect
under subparagraph (A) for taxable years beginning in the calendar
year, is equal to or greater than $10,000, then the $150,000 amount
under subparagraph (A) (as previously adjusted under this subparagraph)
for any taxable year beginning in any subsequent calendar year shall
be increased by the amount of such excess, rounded to the next lowest
multiple of $10,000.
“(ii) Cost of living adjustment.
--
“The cost-of-living adjustment
for any calendar year shall be the adjustment made under section 415(d)
for such calendar year, except that the base period for purposes of
section 415(d)(1)(A) shall be the calendar quarter beginning October
1, 1993.”
Subsec. (a)(32). Pub. L. 103-465, Sec. 751(a)(7)(C),
added par. (32).
Subsec. (a)(33). Pub. L. 103-465, Sec. 766(b),
added par. (33).
Subsec. (a)(34). Pub. L. 103-465, Sec. 776(d),
added par. (34).
1993 - Subsec. (a)(17). Pub. L. 103-66, Sec. 13212(a)(1),
amended par. (17) by substituting “$150,000” for “$200,000” in the
first sentence; by striking the second sentence; and by adding at
the end a new subpar. (B). Before being struck, the second sentence
read as follows:
“The Secretary shall adjust the $200,000 amount
at the same time and in the same manner as under section 415(d).”
Subsec. (a)(17). Pub. L. 103-66, Sec. 13212(a)(2),
amended par. (17) by substituting “(17) Compensation Limit.-(A) In
General.-A trust” for “(17) A trust”.
1992 - Subsec. (a)(20). Pub. L. 102-318, Sec. 521(b)(5),
amended par. (20) by substituting “1 or more distributions within
1 taxable year to a distributee on account of a termination of the
plan of which the trust is a part, or in the case of a profit-sharing
or stock bonus plan, a complete discontinuance of contributions under
such plan” for “a qualified total distribution described in section
402(a)(5)(E)(i)(I)”; and by adding at the end the following new sentence:
“For purposes of this paragraph, rules similar to the rules of section
402(a)(6)(B) (as in effect before its repeal by section 211 of the
Unemployment Compensation Amendments of 1992) shall apply.”
Subsec. (a)(28(B)(v). Pub. L. 102-318, Sec. 521(b)(6),
amended clause (v). Before amendment, it read as follows:
“(v) Coordination with Distribution
Rules.-
“Any distribution required by
this subparagraph shall not be taken into account in determining whether-
“(I) a subsequent distribution
is a lump-sum distribution under section 402(e)(4)(A), or
“(II) section 402(a)(5)(D)(iii)
applies to a subsequent distribution.”
Subsec. (a)(31). Pub. L. 102-318, Sec. 522(a)(1),
added par. (31).
Subsec. (k)(2)(B)(i)(IV). Pub. L. 102-318, Sec. 521(b)(7),
amended subclause (IV) by substituting “section 402(e)(3)” for “section
402(a)(8)”.
Subsec. (k)(10)(B)(ii). Pub. L. 102-318, Sec. 521(b)(8),
amended clause (ii) by substituting “section 402(d)(4)” for “section
402(e)(4)” and by substituting “subparagraph (F)” for “subparagraph
(H)”.
1990 - Subsec. (h). Pub. L. 101-508, which directed
that ‘section 401(h) is amended by inserting ‘, and subject to the
provisions of section 420’ ‘ without specifying that amendment was
to the Internal Revenue Code of 1986, was executed by making the insertion
in subsec. (h) of this section to reflect the probable intent of Congress.
1989 - Subsec. (a)(9)(C). Pub. L. 101-140 struck out ‘(as
defined in section 89(i)(4))’ after ‘governmental or church plan’
and inserted at end ‘For purposes of this subparagraph, the term ‘church
plan’ means a plan maintained by a church for church employees, and
the term ‘church’ means any church (as defined in section 3121(w)(3)(A))
or qualified church-controlled organization (as defined in section
3121(w)(3)(B)).'
Subsec. (a)(28)(B)(ii)(II). Pub. L. 101-239, Sec. 7811(h)(3),
made technical correction to directory language of Pub. L. 100-647, Sec. 1011B(j)(1),
see 1988 Amendment note below.
Subsec. (a)(29)(A)(i). Pub. L. 101-239, Sec. 7881(i)(4)(A),
substituted ‘multiemployer plan) to which the requirements of section
412 apply’ for ‘multiemployer plan)’.
Subsec. (a)(29)(C)(i)(II). Pub. L. 101-239, Sec. 7881(i)(1)(A),
substituted ‘plan amendment and any other plan amendments adopted
after December 22, 1987, and before such plan amendment’ for ‘plan
amendment’.
Subsec. (a)(30). Pub. L. 101-239, Sec. 7811(g)(1),
moved par. (30) from a position after the undesignated closing par.
to a position immediately after par. (29).
Subsec. (h). Pub.
L. 101-239, Sec. 7311(a), inserted at end ‘In no
event shall the requirements of paragraph (1) be treated as met if
the aggregate actual contributions for medical benefits, when added
to actual contributions for life insurance protection under the plan,
exceed 25 percent of the total actual contributions to the plan (other
than contributions to fund past service credits) after the date on
which the account is established.’
Subsec. (k)(4)(B). Pub. L. 101-239, Sec. 7816(l),
amended Pub. L. 100-647,
Sec. 6071(b)(2), see 1988 Amendment note below.
1988 - Subsec. (a)(9)(C). Pub. L. 100-647, Sec. 6053(a),
inserted at end ‘In the case of a governmental plan or church plan
(as defined in section 89(i)(4)), the required beginning date shall
be the later of the date determined under the preceding sentence or
April 1 of the calendar year following the calendar year in which
the employee retires.’
Subsec. (a)(11)(E), (F). Pub. L. 100-647, Sec. 1011A(l),
redesignated subpar. (E), relating to cross reference, as (F).
Subsec. (a)(17). Pub. L. 100-647, Sec. 1011(d)(4),
inserted at end ‘In determining the compensation of an employee, the
rules of section 414(q)(6) shall apply, except that in applying such
rules, the term ‘family’ shall include only the spouse of the employee
and any lineal descendants of the employee who have not attained age
19 before the close of the year.'
Subsec. (a)(22). Pub. L. 100-647, Sec. 1011B(k)(1),
(2), substituted ‘is not readily tradable on an established market’
for ‘is not publicly traded’ in subpar. (A) and in last sentence,
and inserted at end ‘For purposes of the preceding sentence, subsections
(b), (c), (m), and (o) of section 414 shall not apply except for determining
whether stock of the employer is not readily tradable on an established
market.’
Subsec. (a)(26)(F), (G). Pub. L. 100-647, Sec. 1011(h)(3),
added subpars. (F) and (G). Former subpar. (F) redesignated (H).
Subsec. (a)(26)(H). Pub. L. 100-647, Sec. 6055(a),
added subpar. (H). Former subpar. (H) redesignated (I).
Pub.
L. 100-647, Sec. 1011(h)(3), redesignated former
subpar. (F) as (H).
Subsec. (a)(26)(I). Pub. L. 100-647, Sec. 6055(a),
redesignated former subpar. (H) as (I).
Subsec. (a)(27). Pub. L. 100-647, Sec. 1011A(j),
inserted par. heading, designated existing provisions as subpar. (A),
inserted subpar. (A) heading, and added subpar. (B).
Subsec. (a)(28)(B)(ii)(II). Pub. L. 100-647, Sec. 1011B(j)(1),
as amended by Pub. L. 101-239,
Sec. 7811(h)(3), inserted ‘and within 90 days after
the period during which the election may be made, the plan invests
the portion of the participant's account covered by the election in
accordance with such election' after ‘clause (i)’.
Subsec. (a)(28)(B)(iv). Pub. L. 100-647, Sec. 1011B(d)(2),
amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows:
‘For purposes of this subparagraph, the term ‘qualified election period’
means the 5-plan-year period beginning with the plan year after the
plan year in which the participant attains age 55 (or, if later, beginning
with the plan year after the 1st plan year in which the individual
1st became a qualified participant).'
Subsec. (a)(28)(B)(v). Pub. L. 100-647, Sec. 1011B(j)(6),
added cl. (v).
Subsec. (a)(30). Pub. L. 100-647, Sec. 1011(c)(7)(A),
added par. (30) at end.
Subsec. (k)(1), (2). Pub. L. 100-647, Sec. 6071(a),
struck out ‘electric’ after ‘or a rural’.
Subsec. (k)(2)(B). Pub. L. 100-647, Sec. 1011(k)(2)(A),
inserted ‘amounts held by the trust which are attributable to employer
contributions made pursuant to the employee's election' after ‘under
which’.
Subsec. (k)(2)(B)(i). Pub. L. 100-647, Sec. 1011(k)(2)(B),
struck out ‘amounts held by the trust which are attributable to employer
contributions made pursuant to the employee's election' before ‘may
not be’.
Pub.
L. 100-647, Sec. 1011(k)(1)(A), added subcl. (II),
redesignated former subcls. (V) and (VI) as (III) and (IV), respectively,
and struck out former subcls. (II) to (IV) which read as follows:
‘(II) termination of the plan without establishment
of a successor plan,
‘(III) the date of the sale by a corporation of
substantially all of the assets (within the meaning of section 409(d)(2))
used by such corporation in a trade or business of such corporation
with respect to an employee who continues employment with the corporation
acquiring such assets,
‘(IV) the date of the sale by a corporation of
such corporation's interest in a subsidiary (within the meaning of
section 409(d)(3)) with respect to an employee who continues employment
with such subsidiary,'.
Subsec. (k)(2)(B)(ii). Pub. L. 100-647, Sec. 1011(k)(2)(C),
struck out ‘amounts’ before ‘will not be’.
Subsec. (k)(3)(A). Pub. L. 100-647, Sec. 1011(k)(3)(B),
made technical correction to Pub.
L. 99-514, Sec. 1116(b)(4). See 1986 Amendment note
below.
Subsec. (k)(3)(A)(ii). Pub. L. 100-647, Sec. 1011(k)(3)(A),
inserted ‘eligible’ before ‘highly compensated employees’ in introductory
text, in subcl. (I), and in two places in subcl. (II).
Subsec. (k)(3)(C), (D). Pub. L. 100-647, Sec. 1011(k)(4),
(5), redesignated subpar. (C), relating to employer contributions,
as (D), and substituted ‘meet’ for ‘meets’ in cl. (ii)(I).
Subsec. (k)(4)(A). Pub. L. 100-647, Sec. 1011(k)(6),
struck out ‘provided by such employer’ after ‘any other benefit’.
Subsec. (k)(4)(B). Pub. L. 100-647, Sec. 6071(b)(2),
as amended by Pub. L. 101-239,
Sec. 7816(l), substituted ‘rural cooperative plan’
for ‘rural electric cooperative plan’ in last sentence.
Pub.
L. 100-647, Sec. 1011(k)(9), inserted at end ‘This
subparagraph shall not apply to a rural electric cooperative plan.’
Subsec. (k)(7). Pub. L. 100-647, Sec. 6071(b)(1),
substituted ‘Rural cooperative plan’ for ‘Rural electric cooperative
plan’ in heading and amended text generally. Prior to amendment, text
read as follows:
‘For purposes of this subsection -
‘(A) In general. - The term
‘rural cooperative plan’ means any pension plan -
‘(i) which is a defined contribution
plan (as defined in section 414(i)), and
‘(ii) which is established and
maintained by a rural cooperative.
‘(B) Rural cooperative defined.
-
For purposes of subparagraph
(A), the term ‘rural cooperative’ means -
‘(i) any organization which -
‘(I) is exempt from tax under
this subtitle or which is a State or local government or political
subdivision thereof (or agency or instrumentality thereof), and
‘(II) is engaged primarily in
providing electric service on a mutual or cooperative basis,
‘(ii) any organization described
in paragraph (4) or (6) of section 501(c) and at least 80 percent
of the members of which are organizations described in clause (i),
and
‘(iii) an organization which
is a national association of organizations described in clause (i)
or (ii).’
Pub.
L. 100-647, Sec. 1011(e)(3), amended par. (7) generally.
Prior to amendment, par. (7) read as follows:
‘For purposes of this subsection, the term ‘rural
electric cooperative plan’ means any pension plan -
‘(A) which is a defined contribution
plan (as defined in section 414(i)), and
‘(B) which is established and
maintained by a rural electric cooperative (as defined in section
457(d)(9)(B)) or a national association of such rural electric cooperatives.’
Subsec. (k)(8)(E), (F). Pub. L. 100-647, Sec. 1011(k)(7),
added subpar. (E) and redesignated former subpar. (E) as (F).
Subsec. (k)(10). Pub. L. 100-647, Sec. 1011(k)(1)(B),
added par. (10).
Subsec. (l)(2)(B)(i), (ii). Pub. L. 100-647, Sec. 1011(g)(1)(A),
substituted ‘contributed by the employer under’ for ‘contributed under’.
Subsec. (l)(3)(A)(ii). Pub. L. 100-647, Sec. 1011(g)(1)(B),
inserted ‘attributable to employer contributions’ after ‘basis of
benefits’.
Subsec. (l)(5)(C). Pub. L. 100-647, Sec. 1011(g)(2),
amended subpar. (C) generally. Prior to amendment, subpar. (C) read
as follows:
‘The term ‘average annual compensation’ means the
greater of -
‘(i) the participant's final
average compensation (determined without regard to subparagraph (D)(ii)),
or
‘(ii) the participant's highest
average annual compensation for any other period of at least 3 consecutive
years.'
Subsec. (l)(5)(E). Pub. L. 100-647, Sec. 1011(g)(3),
substituted ‘the social security retirement age’ for ‘age 65’ in cl.
(i) and in two places in cl. (ii), and added cl. (iii).
Subsec. (m)(1). Pub. L. 100-647, Sec. 1011(l)(1),
substituted ‘A defined contribution plan’ for ‘A plan’.
Subsec. (m)(2)(B). Pub. L. 100-647, Sec. 1011(l)(3),
substituted ‘contributions to which this subsection applies are made’
for ‘such contributions are made’.
Subsec. (m)(3). Pub. L. 100-647, Sec. 1011(l)(2),
inserted at end ‘If matching contributions are taken into account
for purposes of subsection (k)(3)(A)(ii) for any plan year, such contributions
shall not be taken into account under subparagraph (A) for such year.’
Subsec. (m)(4)(A)(i), (ii). Pub. L. 100-647, Sec. 1011(l)(4),
substituted ‘a defined contribution plan’ for ‘the plan’.
Subsec. (m)(4)(B). Pub. L. 100-647, Sec. 1011(l)(5)(A),
substituted ‘section 402(g)(3)’ for ‘section 402(g)(3)(A)’.
Subsec. (m)(6)(C). Pub. L. 100-647, Sec. 1011(l)(6),
substituted ‘excess aggregate contributions’ for ‘excess contributions’
in heading.
Subsec. (m)(7)(A). Pub. L. 100-647, Sec. 1011(l)(7),
substituted ‘paragraph (6)’ for ‘paragraph (8)’.
1987 - Subsec. (a)(29). Pub. L. 100-203 added par. (29).
1986 - Subsec. (a)(4). Pub. L. 99-514, Sec. 1114(b)(7),
amended par. (4) generally. Prior to amendment, par. (4) read as follows:
‘if the contributions or the benefits provided
under the plan do not discriminate in favor of employees who are -
‘(A) officers,
‘(B) shareholders, or
‘(C) highly compensated.
For purposes of this paragraph, there shall be
excluded from consideration employees described in section 410(b)(3)(A)
and (C).'
Subsec. (a)(5). Pub. L. 99-514, Sec. 1111(b),
amended par. (5) generally. Prior to amendment, par. (5) related to
conditions which taken alone would not require a classification to
be considered discriminatory and means of determining the basic or
regular rate of compensation of an employee and whether two or more
plans of an employer satisfy requirements of par. (4) when considered
as a single plan.
Subsec. (a)(8). Pub. L. 99-514, Sec. 1119(a),
substituted ‘defined benefit plan’ for ‘pension plan’.
Subsec. (a)(9)(C). Pub. L. 99-514, Sec. 1121(b),
amended subpar. (C) generally. Prior to amendment, subpar. (C) read
as follows:
‘For purposes of this paragraph, the term ‘required
beginning date’ means April 1 of the calendar year following the later
of -
‘(i) the calendar year in which the employee attains
age 70 1/2, or
‘(ii) the calendar year in which the employee retires.
Clause (ii) shall not apply in the case of an employee
who is a 5-percent owner (as defined in section 416(i)(1)(B)) at any
time during the 5-plan-year period ending in the calendar year in
which the employee attains age 70 1/2. If the employee becomes a 5-percent
owner during any subsequent plan year, the required beginning date
shall be April 1 of the calendar year following the calendar year
in which such subsequent plan year ends.'
Pub.
L. 99-514, Sec. 1852(a)(4)(A), substituted last 2
sentences for ‘Except as provided in section 409(d), clause (ii) shall
not apply in the case of an employee who is a 5-percent owner (as
defined in section 416) with respect to the plan year ending in the
calendar year in which the employee attains 70 1/2.’
Subsec. (a)(9)(G). Pub. L. 99-514, Sec. 1852(a)(6),
added subpar. (G).
Subsec. (a)(11)(A)(i). Pub. L. 99-514, Sec. 1898(b)(3)(A),
substituted ‘who does not die before the annuity starting date’ for
‘who retires under the plan’.
Subsec. (a)(11)(B). Pub. L. 99-514, Sec. 1898(b)(2)(A)(ii),
inserted at end ‘Clause (iii)(III) shall apply only with respect to
the transferred assets (and income therefrom) if the plan separately
accounts for such assets and any income therefrom.’
Subsec. (a)(11)(B)(iii)(I). Pub. L. 99-514, Sec. 1898(b)(7)(A),
inserted ‘(reduced by any security interest held by the plan by reason
of a loan outstanding to such participant)’.
Pub.
L. 99-514, Sec. 1898(b)(13)(A), substituted ‘section
417(a)(2)’ for ‘section 417(a)(2)(A)’.
Subsec. (a)(11)(B)(iii)(III). Pub. L. 99-514, Sec. 1898(b)(2)(A)(i),
inserted ‘(in a transfer after December 31, 1984)’.
Subsec. (a)(11)(D), (E). Pub. L. 99-514, Sec. 1145(a),
added subpar. (E) relating to exception for plans described in section
404(c) and redesignated former subpar. (D), relating to cross references,
as (E).
Pub.
L. 99-514, Sec. 1898(b)(14)(A), added subpar. (D)
and redesignated former subpar. (D), relating to cross references,
as (E).
Subsec. (a)(17). Pub. L. 99-514, Sec. 1106(d)(1),
added par. (17).
Subsec. (a)(20). Pub. L. 99-514, Sec. 1852(b)(8),
substituted ‘qualified total distribution described in section 402(a)(5)(E)(i)(I)’
for ‘qualifying rollover distribution (determined as if section 402(a)(5)(D)(i)
did not contain subclause (II) thereof) described in section 402(a)(5)(A)(i)
or 403(a)(4)(A)(i)’.
Subsec. (a)(21). Pub. L. 99-514, Sec. 1171(b)(5),
struck out par. (21) which read as follows: ‘A trust forming part
of a tax credit employee stock ownership plan shall not fail to be
considered a permanent program merely because employer contributions
under the plan are determined solely by reference to the amount of
credit which would be allowable under section 41 if the employer made
the transfer described in section 41(c)(1)(B)’.
Subsec. (a)(22). Pub. L. 99-514, Sec. 1899A(10),
substituted ‘If’ for ‘if’.
Pub. L.
99-514, Sec. 1176(a), inserted at end ‘The requirements
of subsection (e) of section 409 shall not apply to any employees
of an employer who are participants in any defined contribution plan
established and maintained by such employer if the stock of such employer
is not publicly traded and the trade or business of such employer
consists of publishing on a regular basis a newspaper for general
circulation.’
Subsec. (a)(23). Pub. L. 99-514, Sec. 1174(c)(2)(A),
amended par. (23) generally. Prior to amendment, par. (23) read as
follows: ‘A stock bonus plan which otherwise meets the requirements
of this section shall not be considered to fail to meet the requirements
of this section because it provides a cash distribution option to
participants if that option meets the requirements of section 409(h),
except that in applying section 409(h) for purposes of this paragraph,
the term ‘employer securities’ shall include any securities of the
employer held by the plan.'
Subsec. (a)(26). Pub. L. 99-514, Sec. 1112(b),
added par. (26).
Subsec. (a)(27). Pub. L. 99-514, Sec. 1136(a),
added par. (27).
Subsec. (a)(28). Pub. L. 99-514, Sec. 1175(a)(1),
added par. (28).
Subsec. (c)(2)(A)(v). Pub. L. 99-514, Sec. 1848(b),
substituted ‘section 404’ for ‘sections 404 and 405(c)’.
Subsec. (c)(6). Pub. L. 99-514, Sec. 1143(a),
added par. (6).
Subsec. (h). Pub. L. 99-514, Sec. 1852(h)(1),
substituted ‘key employee’ for ‘5-percent owner’ in two places in
par. (6) and amended last sentence generally, substituting ‘ ‘key
employee’ means any employee, who' for ‘ ‘5-percent owner’ means any
employee who,' and ‘key employee as defined in section 416(i)’ for
‘5-percent owner (as defined in section 416(i)(1)(B))’.
Subsec. (k)(1), (2). Pub. L. 99-514, Sec. 1879(g)(1),
substituted ‘, a pre-ERISA money purchase plan, or a rural electric
cooperative plan’ for ‘(or a pre-ERISA money purchase plan)’.
Subsec. (k)(2)(B). Pub. L. 99-514, Sec. 1116(b)(1),
amended subpar. (B) generally. Prior to amendment, subpar. (B) read
as follows: ‘under which amounts held by the trust which are attributable
to employer contributions made pursuant to the employee's election
may not be distributable to participants or other beneficiaries earlier
than upon retirement, death, disability, or separation from service
(or in the case of a profit sharing or stock bonus plan, hardship
or the attainment of age 59 1/2) and will not be distributable merely
by reason of the completion of a stated period of participation or
the lapse of a fixed number of years; and'.
Subsec. (k)(2)(C). Pub. L. 99-514, Sec. 1852(g)(3),
substituted ‘is nonforfeitable’ for ‘are nonforfeitable’.
Subsec. (k)(2)(D). Pub. L. 99-514, Sec. 1116(b)(2),
added subpar. (D).
Subsec. (k)(3). Pub. L. 99-514, Sec. 1116(d)(3),
which directed that the last sentence of subpar. (B) be struck out
was executed by striking out the last sentence of par. (3) as the
probable intent of Congress because subpar. (B) is composed of only
one sentence. Prior to being stricken, such last sentence read as
follows: ‘For purposes of the preceding sentence, the compensation
of any employee for a plan year shall be the amount of his compensation
which is taken into account under the plan in calculating the contribution
which may be made on his behalf for such plan year.’
Subsec. (k)(3)(A). Pub. L. 99-514, Sec. 1116(b)(4),
as amended by Pub. L.
100-647, Sec. 1011(k)(3)(B), substituted ‘any highly
compensated employee’ for ‘an employee’ in concluding provisions.
Pub.
L. 99-514, Sec. 1852(g)(2), substituted ‘If an employee
is a participant under 2 or more cash or deferred arrangements of
the employer, for purposes of determining the deferral percentage
with respect to such employee, all such cash or deferred arrangements
shall be treated as 1 cash or deferred arrangement’ for ‘The deferral
percentage taken into account under this subparagraph for any employee
who is a participant under 2 or more cash or deferred arrangements
of the employer shall be the sum of the deferral percentages for such
employee under each of such arrangements’.
Subsec. (k)(3)(A)(i). Pub. L. 99-514, Sec. 1112(d)(1),
struck out ‘subparagraph (A) or (B) of’ before ‘section 410(b)(1)’.
Subsec. (k)(3)(A)(ii). Pub. L. 99-514, Sec. 1116(c)(2),
substituted ‘paragraph (5)’ for ‘paragraph (4)’.
Pub. L.
99-514, Sec. 1116(a), substituted ‘1.25’ for ‘1.5’
in subcl. (I), and ‘2 percentage points’ for ‘3 percentage points’
and ‘2’ for ‘2.5’ in subcl. (II).
Subsec. (k)(3)(C). Pub. L. 99-514, Sec. 1852(g)(1),
added subpar. (C) relating to treatment of cash or deferred arrangements.
Pub. L.
99-514, Sec. 1116(e), added subpar. (C) relating
to employer contributions.
Subsec. (k)(4). Pub. L. 99-514, Sec. 1116(b)(3),
added par. (4). Former par. (4) redesignated (5).
Subsec. (k)(5). Pub. L. 99-514, Sec. 1116(b)(3),
(d)(1), redesignated former par. (4) as (5) and substituted ‘the term
‘highly compensated employee’ has the meaning given such term by section
414(q)' for ‘the term ‘highly compensated employee’ means any employee
who is more highly compensated than two-thirds of all eligible employees,
taking into account only compensation which is considered in applying
paragraph (3)'. Former par. (5) redesignated (6).
Subsec. (k)(6). Pub. L. 99-514, Sec. 1116(b)(3),
redesignated former par. (5) as (6). Former par. (6) redesignated
(7).
Pub.
L. 99-514, Sec. 1879(g)(2), added par. (6).
Subsec. (k)(7). Pub. L. 99-514, Sec. 1116(b)(3),
redesignated former par. (6) as (7).
Subsec. (k)(8). Pub. L. 99-514, Sec. 1116(c)(1),
added par. (8).
Subsec. (k)(9). Pub. L. 99-514, Sec. 1116(d)(2),
added par. (9).
Subsec. (l). Pub.
L. 99-514, Sec. 1111(a), amended subsec. (l) generally,
substituting provisions relating to permitted disparity in plan contributions
or benefits for provisions relating to nondiscriminatory coordination
of defined contribution plans with OASDI.
Subsec. (m). Pub.
L. 99-514, Sec. 1117(a), added subsec. (m) and redesignated
former subsec. (m) as (n).
Pub.
L. 99-514, Sec. 1898(c)(3), added subsec. (m).
Subsec. (n). Pub.
L. 99-514, Sec. 1117(a), redesignated former subsec.
(m) as (n). Former subsec. (n) redesignated (o).
Pub.
L. 99-514, Sec. 1898(c)(3), redesignated subsec.
(o) as (n).
Subsec. (o). Pub.
L. 99-514, Sec. 1117(a), redesignated former subsec.
(n) as (o).
Pub.
L. 99-514, Sec. 1898(c)(3), redesignated subsec.
(o) as (n).
1984 - Subsec. (a)(9). Pub. L. 98-369, Sec. 521(a)(1),
amended par. (9) generally, redesignating existing provisions as subpar.
(A) and in subpar. (A) as so redesignated struck out ‘In the case
of a plan which provides contributions or benefits for employees some
or all of whom are employees within the meaning of subsection (c)(1)’
before ‘a trust forming part of such plan’, substituted ‘the plan
provides that the entire interest of each employee - ‘ for ‘, under
the plan, the entire interest of each employee - ‘, redesignated subpars.
(A) and (B) as cls. (i) and (ii) respectively, in cl. (i) as so redesignated
substituted provisions stating that a qualified plan provides that
the entire interest will be distributed to the employee not later
than the beginning date for former provisions which provided alternative
dates for providing interest, in cl. (ii) as so redesignated substituted
alternate distribution dates to be set in accordance with regulations
for former provisions stating that a qualified plan shall be distributed
not later than the taxable year in which the taxpayer attains age
70 1/2, and struck out the par. following cl. (ii) which provided
‘A trust shall not be disqualified under this paragraph by reason
of distributions under a designation, prior to the date of the enactment
of this paragraph, by any employee under the plan of which such trust
is a part, of a method of distribution which does not meet the terms
of the preceding sentence.’, and added subpars. (B) to (F).
Pub. L.
98-369, Sec. 521(a)(2), repealed amendment made by Pub. L. 97-248, Sec. 242(a).
See 1982 Amendment note below.
Subsec. (a)(10)(B)(iii). Pub. L. 98-369, Sec. 524(d)(1),
added cl. (iii).
Subsec. (a)(11). Pub. L. 98-397, Sec. 203(a),
amended par. (11) generally, inserting provisions relating to preretirement
survivor annuities, and substituting present four subpars. for former
eight subpars.
Subsec. (a)(13). Pub. L. 98-397, Sec. 204(a),
designated existing provisions as subpar. (A), corrected the margin
of subpar. (A), and added subpar. (B).
Subsec. (a)(21). Pub. L. 98-369, Sec. 474(r)(13),
substituted provisions relating to the amount of the credit which
would be allowable under section 41 if the employer made the transfer
described in section 41(c)(1)(B) for former provisions which had related
to the amount of credit which would be allowable under section 46(a)
if the employer made the transfer described in section 48(n)(1) or
under section 44G if the employer made the transfer described in section
44G(c)(1)(B).
Subsec. (a)(22). Pub. L. 98-369, Sec. 491(e)(4),
substituted ‘section 409’ for ‘section 409A’.
Subsec. (a)(23). Pub. L. 98-369, Sec. 491(e)(5),
substituted ‘section 409(h)’ for ‘section 409A(h)’ in two places.
Subsec. (a)(24). Pub. L. 98-369, Sec. 211(b)(5),
substituted ‘section 818(a)(6)’ for ‘section 805(d)(6)’.
Subsec. (a)(25). Pub. L. 98-397, Sec. 301(b),
added par. (25).
Subsec. (e). Pub.
L. 98-369, Sec. 713(d)(3), repealed subsec. (e) which
related to contributions for premiums on annuity, etc., contracts.
Subsec. (f)(2). Pub. L. 98-369, Sec. 713(c)(2)(A),
substituted ‘(as defined in section 408(n))’ for ‘(as defined in subsection
(d)(1))’.
Subsec. (h)(6). Pub.
L. 98-369, Sec. 528(b), added par. (6).
Subsec. (k)(1), (2). Pub. L. 98-369, Sec. 527(b)(1),
inserted ‘(or a pre-ERISA money purchase plan)’.
Subsec. (k)(2)(B). Pub. L. 98-369, Sec. 527(b)(3),
substituted ‘(or in the case of a profit sharing or stock bonus plan,
hardship or the attainment of age 59 1/2)’ for ‘, hardship or the
attainment of age 59 1/2,’.
Subsec. (k)(3)(A). Pub. L. 98-369, Sec. 527(a),
struck out ‘qualified’ before ‘cash or deferred arrangement’, substituted
‘shall not be treated as a qualified cash or deferred arrangement
unless’ for ‘shall be considered to satisfy the requirements of subsection
(a)(4), with respect to the amount of contributions, and of subparagraph
(B) of section 410(b)(1) for a plan year if’, designated provisions
beginning ‘those employees’ and ending ‘section 401(b)(1)’ as cl.
(i) and text following as cl. (ii), redesignated former cls. (i) and
(ii) as subcls. (I) and (II) and inserted text following subcl. (II).
Subsec. (k)(5). Pub. L. 98-369, Sec. 527(b)(2),
added par. (5).
1983 - Subsec. (a)(21). Pub. L. 97-448, Sec. 103(g)(2)(A),
designated part of existing provisions as subpar. (A) and added subpar.
(B).
Subsec. (c)(2)(A)(vi). Pub.
L. 98-21 added cl. (vi).
Subsec. (d)(2). Pub. L. 97-448, Sec. 306(a)(12),
substituted ‘paragraph (1)(B)’ for ‘paragraph (9)(B)’.
Subsec. (d)(5). Pub. L. 97-448, Sec. 103(c)(10)(A),
substituted ‘Subparagraphs (A) and (B) shall not apply to contributions
described in subsection (e), and shall not apply to any deductible
employee contribution (as defined in section 72(o)(5))’ for ‘Subparagraphs
(A) and (B) do not apply to contributions described in subsection
(e)’ in second sentence.
Subsec. (j)(3). Pub. L. 97-448, Sec. 103(d)(2),
substituted ‘under subparagraph (A) of paragraph (2) shall be treated
as beginning a new period of plan participation with respect only
to such change’ for ‘under subparagraph (A) of subsection (j)(2) shall
be treated as beginning a new period of plan participation’ in last
sentence.
1982 - Subsec. (a)(9). Pub. L. 97-248, Sec. 242(a),
which was repealed by Pub.
L. 98-369, Sec. 521(a)(2), had amended par. (9) generally,
redesignating existing provisions as subpar. (A), in subpar. (A),
as so redesignated, struck out preliminary provision which limited
the application of this paragraph to plans providing contributions
or benefits for employees some or all of whom were employees within
the meaning of subsec. (c)(1), redesignated former subpars. (A) and
(B) as cls. (i) and (ii) of subpar. (A), in cl. (i), as so redesignated,
substituted reference to a key employee who is a participant in a
top-heavy plan for former reference to owner-employees (within the
meaning of subsec. (c)(3)), redesignated former cls. (i) and (ii)
of subpar. (B) as subcls. (I) and (II) of cl. (ii), struck out former
provision that a trust would not be disqualified under this paragraph
by reason of distributions under a designation, prior to the date
of the enactment of this paragraph, by any employee under the plan
of which such trust was a part, of a method of distribution which
did not meet the terms of this paragraph, and adding subpar. (B).
Subsec. (a)(10). Pub. L. 97-248, Sec. 237(e)(1),
amended par. (10) generally, redesignating subpar. (B) as (A) and
striking out former subpar. (A) relating to qualified trust as a trust
forming part of such plan, for provisions relating to discriminatory
plans with respect to nonapplicability of paragraph (3), the first
and second sentences of paragraph (5) and section 410 of this title.
Subsec. (a)(10)(B). Pub. L. 97-248, Sec. 240(b),
added subpar. (B).
Subsec. (a)(17), (18). Pub. L. 97-248, Sec. 237(b),
struck out pars. (17) and (18) which related, respectively, to a plan
which provides contributions or benefits for employees some or all
of whom are employees within the meaning of subsection (c)(1), or
are shareholder-employees within the meaning of section 1379(d), and
a trust which is part of a plan providing a defined benefit for employees
some or all of whom are employees within the meaning of subsection
(c)(1), or are shareholder-employees within the meaning of section
1379(d).
Subsec. (a)(24). Pub.
L. 97-248 added par. (24).
Subsec. (c)(1). Pub. L. 97-248, Sec. 238(d)(1),
amended par. (1) generally, substituting in heading ‘Self-employed
individual treated as employee’ for ‘Employee’, adding subparagraph
headings, and substituting provisions defining ‘employee’ and ‘self-employed
individual’, for provisions defining ‘employee’.
Subsec. (c)(2)(A). Pub. L. 97-248, Sec. 238(d)(2),
added cl. (v).
Subsec. (d). Pub.
L. 97-248, Sec. 237(a), redesignated pars. (9) to
(11) as (1) to (3), respectively. Former pars. (1) to (7), which related
to trusts created or organized before or after October 10, 1962, contributions
under the plan, benefits under the plan for employees, contributions
or benefits under the plan, limitations pursuant to the plan, applicability
of requirements of subsec. (a)(4) of this section, and distributions
under the plan, respectively, were struck out.
Subsec. (j). Pub.
L. 97-248, Sec. 238(b), struck out subsec. (j) which
related to general requirements, regulation guidelines, applicable
percentage, certain contributions and benefits not taken into account,
definitions, and special rules with respect to defined benefit plans
providing benefits for self-employed individuals and shareholder-employees.
Subsecs. (l), (o). Pub. L. 97-248, Sec. 249(a),
added subsec. (l) and redesignated former subsec. (l) as (o).
1981 - Subsec. (a)(17). Pub. L. 97-34, Sec. 312(b)(1),
designated provision relating to the annual compensation of each employee
as subpar. (A), and in subpar. (A) as so designated, substituted ‘$200,000’
for ‘$100,000’, and added subpar. (B).
Subsec. (a)(22). Pub.
L. 97-34, Sec. 338(a), inserted ‘(other than a profit-sharing
plan)’ and substituted ‘if’ for ‘If’ and ‘such plan’ for ‘said plan’.
Subsec. (a)(23). Pub.
L. 97-34, Sec. 335, substituted ‘409A(h), except
that in applying section 409A(h) for purposes of this paragraph, the
term ‘employer securities’ shall include any securities of the employer
held by the plan' for ‘409A(h)(2)’.
Subsec. (d)(4). Pub. L. 97-34, Sec. 312(e)(2),
inserted provision making subpar. (B) inapplicable to any distribution
to which section 72(m)(9) applies.
Subsec. (d)(5). Pub. L. 97-34, Sec. 314(a)(1),
inserted provision making subpar. (C) inapplicable to a distribution
on account of the termination of the plan.
Subsec. (e). Pub.
L. 97-34, Sec. 312(c)(2), substituted ‘for such taxable
year exceeds $15,000’ for ‘for all such years exceeds $7,500’.
Subsec. (j). Pub.
L. 97-34, Sec. 312(c)(3), (4), substituted in par.
(2)(A) ‘$100,000’ for ‘$50,000’ and in par. (3) inserted provision
that for purposes of this paragraph, a change in the annual compensation
taken into account under subpar. (A) of subsec. (j)(2) be treated
as beginning a new period of plan participation.
1980 - Subsec. (a)(2). Pub. L. 96-364, Sec. 208(e),
410(b), inserted provisions relating to applicability to multiemployer
plans and return of contributions made by a mistake of law or fact,
or return of withdrawal liability payment.
Subsec. (a)(4). Pub. L. 96-605, Sec. 225(b)(1),
substituted ‘section 410(b)(3)(A)’ for ‘section 410(b)(2)(A)’.
Subsec. (a)(12). Pub. L. 96-364, Sec. 208(a),
substituted provisions relating to applicability to multiemployer
plans subject to title IV of the Employee Retirement Income Security
Act of 1974 of provisions of preceding sentence, for provisions relating
to applicability of paragraph to multiemployer plans to extent determined
by Corporation.
Subsec. (a)(20). Pub. L. 96-222, Sec. 101(a)(14)(E)(iii),
substituted ‘makes a qualifying rollover distribution (determined
as if section 402(a)(5)(D)(i) did not contain subclause (II) thereof)
described in section 402(a)(5)(A)(i) or 403(a)(4)(A)(i)’ for ‘makes
a payment or distribution described in section 402(a)(5)(i) or 403(a)(4)(i)’.
Subsec. (a)(21). Pub. L. 96-222, Sec. 101(a)(7)(L)(i)(V),
substituted ‘a tax credit employee stock ownership plan’ for ‘an ESOP’.
Subsec. (a)(22)(B). Pub. L. 96-222, Sec. 101(a)(9),
substituted ‘are securities’ for ‘as securities’.
Subsec. (a)(23). Pub. L. 96-605, Sec. 221(a),
added par. (23).
Subsec. (d)(3)(B). Pub. L. 96-605, Sec. 225(b)(2),
substituted in cl. (i) ‘section 410(b)(3)(A)’ for ‘section 410(b)(2)(A)’
and in cl. (ii) ‘section 410(b)(3)(C)’ for ‘section 410(b)(2)(C)’.
1978 - Subsec. (a)(5). Pub. L. 95-600, Sec. 152(e),
inserted provision that for purposes of determining whether one or
more plans of the employer satisfy the requirements of section 410(b)(4),
an employer may take into account all simplified employee pensions
to which only the employer contributes.
Subsec. (a)(21). Pub. L. 95-600, Sec. 141(f)(3),
substituted ‘ESOP’ for ‘employee stock option plan which satisfies
the requirements of section 301(d) of the Tax Reduction Act of 1975’
and ‘section 48(n)(1)’ for ‘subsection (d)(6) or (e)(3) of section
301 of the Tax Reduction Act of 1975’.
Subsec. (a)(22). Pub. L. 95-600, Sec. 143(a),
added par. (22).
Subsecs. (k), (l). Pub. L. 95-600, Sec. 135(a),
added subsec. (k) and redesignated former subsec. (k) as (l).
1976 - Subsec. (a). Pub. L. 94-455, Sec. 803(b)(2),
1901(a)(56), 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’
in pars. (5), (11), and (14), substituted references to Sept. 2, 1974,
for references to the enactment of the Employee Retirement Income
Security Act of 1974 in pars. (12), (13), (15), and (19), added par.
(21), and inserted reference to par. (20) in provisions following
par. (21), such addition of reference to par. (20) duplicating amendment
by Pub. L. 94-267, Sec. 1(c)(2).
Pub. L.
94-267, Sec. 1(c)(2), substituted ‘(19), and (20)’
for ‘and (19)’.
Subsec. (a)(20). Pub. L. 94-267, Sec. 1(c)(1),
added par. (20).
Subsecs. (b), (c), (d). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (f). Pub.
L. 94-455, Sec. 1505(b), inserted reference to contracts
(other than life, health, or accident, property, casualty, or liability
insurance contracts) issued by an insurance company qualified to do
a business in a State and struck out ‘or his delegate’ after ‘Secretary’.
Subsecs. (h), (i), (j). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ‘or his delegate’ after ‘Secretary’.
1974 - Subsec. (a). Pub. L. 93-406, Sec. 1021(a)(2),
inserted provision that paragraphs (11), (12), (13), (14), (15), and
(19) shall apply only in the case of a plan to which section 411 (relating
to minimum vesting standards) applies without regard to subsection
(e)(2) of this section.
Subsec. (a)(3). Pub. L. 93-406, Sec. 1016(a)(2)(A),
substituted provisions referring simply to a plan of which the trust
is a part and the satisfaction by that plan of the requirements of
section 410 (relating to minimum participation standards) for provisions
referring to a trust, trusts, or trust or trusts and annuity plan
or plans designated by the employer as constituting parts of a plan
intended to qualify under subsec. (a) and spelling out the requisite
coverage of the plan.
Subsec. (a)(4). Pub. L. 93-406, Sec. 1022(a),
struck out provisions referring to persons whose principal duties
consist in supervising the work of other employees and inserted provisions
directing the exclusion from consideration of employees described
in section 410(b)(2) (A) and (C).
Subsec. (a)(5). Pub. L. 93-406, Sec. 1012(b),
1016(a)(2)(B), inserted provisions covering the determination of whether
two or more plans of an employer satisfy the requirements of par.
(4) when considered as a single plan and substituted ‘shall not be
considered discriminatory within the meaning of paragraph (4) of section
410(b) (without regard to paragraph (1)(A) thereof)’ for ‘shall not
be considered discriminatory within the meaning of paragraph (3)(B)
or (4)’.
Subsec. (a)(7). Pub. L. 93-406, Sec. 1016(a)(2)(C),
substituted provisions referring simply to the satisfaction by the
plan of which a trust is a part of the requirements of section 411
(relating to minimum vesting standards) for provisions spelling out
in detail the conditions which the plan had to satisfy in order that
the trust forming part of that plan constitute a qualified trust under
this section.
Subsec. (a)(10)(A). Pub. L. 93-406, Sec. 1022(b)(1),
2001(e)(4), inserted reference to section 410 in provisions preceding
cl. (i) and substituted ‘subsection (e)’ for ‘subsection (e)(3)(A)’
in cl. (ii).
Subsec. (a)(11). Pub. L. 93-406, Sec. 1021(a)(1),
added par. (11).
Subsec. (a)(12). Pub. L. 93-406, Sec. 1021(b),
added par. (12).
Subsec. (a)(13). Pub. L. 93-406, Sec. 1021(c),
added par. (13).
Subsec. (a)(14). Pub. L. 93-406, Sec. 1021(d),
added par. (14).
Subsec. (a)(15). Pub. L. 93-406, Sec. 1021(e),
added par. (15).
Subsec. (a)(16). Pub. L. 93-406, Sec. 2004(a)(1),
added par. (16).
Subsec. (a)(17). Pub. L. 93-406, Sec. 2001(c),
added par. (17).
Subsec. (a)(18). Pub. L. 93-406, Sec. 2001(d)(1),
added par. (18).
Subsec. (a)(19). Pub. L. 93-406, Sec. 1021(f),
added par. (19).
Subsec. (b). Pub.
L. 93-406, Sec. 1023, substituted reference to the
requirements of subsection (a) for the period beginning with the date
on which a stock bonus, pension, profit-sharing, or annuity plan was
put into effect, or for the period beginning with the earlier of the
date on which there was adopted or put into effect any amendment which
caused the plan to fail to satisfy such requirements, and ending with
the time prescribed by law for filing the return of the employer for
his taxable year in which such plan or amendment was adopted (including
extensions thereof) or such later time as the Secretary or his delegate
may designate for reference to the requirements of paragraphs (3),
(4), (5), and (6) of subsection (a) for the period beginning with
the date on which a stock bonus, pension, profit-sharing, or annuity
plan was put into effect and ending with the 15th day of the third
month following the close of the taxable year of the employer in which
the plan was put in effect.
Subsec. (d)(1). Pub. L. 93-406, Sec. 1022(c),
(f), substituted ‘October 10, 1962’ for ‘the date of the enactment
of this subsection’ and ‘assets thereof are held by a bank or other
person who demonstrates to the satisfaction of the Secretary or his
delegate that the manner in which he will administer the trust will
be consistent with the requirements of this section. A trust shall
not be disqualified under this paragraph merely because a person (including
the employer) other than the trustee or custodian so administering
the trust’ for ‘trustee is a bank, but a person (including the employer)
other than a bank’ and inserted reference to an insured credit union
(within the meaning of section 101(6) of the Federal Credit Union
Act) in definition of ‘bank’.
Subsec. (d)(3). Pub. L. 93-406, Sec. 1022(b)(2),
inserted reference to the section 410(a)(3) definition of ‘years of
service’ and substituted reference to employees included in a unit
of employees covered by a collective-bargaining agreement described
in section 410(b)(2)(A) and employees who are nonresident aliens described
in section 410(b)(2)(C) for reference to employees whose customary
employment was for not more than 20 hours in any one week or was for
not more than 5 months in any calendar year.
Subsec. (d)(4)(B). Pub. L. 93-406, Sec. 2001(h)(1),
inserted ‘in excess of contributions made by an owner-employee as
an employee’ after ‘benefits’.
Subsec. (d)(5). Pub. L. 93-406, Sec. 2001(e)(1),
substituted ‘Subparagraphs (A) and (B) do not apply to contributions
described in subsection (e)’ for ‘Subparagraphs (A) and (B) shall
not apply to any contribution which is not considered to be an excess
contribution (as defined in subsection (e)(1)) by reason of the application
of subsection (e)(3)’.
Subsec. (d)(8). Pub. L. 93-406, Sec. 2001(e)(2),
struck out par. (8) covering excess contributions.
Subsec. (e). Pub. L. 93-406, Sec. 2001(e)(3),
struck out pars. (1) and (2) which defined and described the effect
of excess contributions, redesignated par. (3) as the entire subsec.
(e) and in provisions as thus carried forward as the entire subsec.
(e) substituted ‘$7,500’ for ‘$2,500’ and inserted references to section
4972(b).
Subsec. (f). Pub.
L. 93-406, Sec. 1022(d), expanded provisions to cover
annuity contracts.
Subsecs. (j), (k). Pub. L. 93-406, Sec. 2001(d)(2),
added subsec. (j) and redesignated former subsec. (j) as (k).
1971 - Subsec. (i). Pub. L. 91-691 struck out ‘multi-employer’
before ‘pension plans’ in heading, and substituted ‘one or more employers’
for ‘two or more employers who are not related (determined under regulations
prescribed by the Secretary or his delegate)’ in par. (1).
1966 - Subsec. (a)(10)(A)(ii). Pub. L. 89-809, Sec. 204(b)(1)(A),
struck out ‘(determined without regard to section 404(a)(10))’ after
‘deducted under section 404’.
Subsec. (c)(2)(A). Pub. L. 89-809, Sec. 204(c),
struck out ‘to the extent that such net earnings constitute earned
income (as defined in section 911(b) but determined with the application
of subparagraph (B))’ after ‘The term ‘earned income’ means the net
earnings from self-employment (as defined in section 1402(a))', added
cl. (i) and redesignated former cls. (i) to (ii) as (ii) to (iv) respectively,
and struck out references to section 911(b) and subparagraph (B),
as in effect for a taxable year beginning on January 1, 1963, in text
following cl. (iv).
Subsec. (c)(2)(B). Pub. L. 89-809, Sec. 204(c),
struck out subpar. (B) relating to earned income when both personal
services and capital are material income-producing factors. See subsec.
(c)(2)(A)(i).
Subsec. (c)(2)(C). Pub. L. 89-809, Sec. 205(a),
added subpar. (C).
Subsecs. (d)(5)(A), (B), (d)(6)(A), (e)(1)(A),
(B)(i), (3). Pub. L. 89-809,
Sec. 204(b)(1)(B) to (E), struck out ‘(determined
without regard to section 404(a)(10))’ wherever appearing.
1965 - Subsec. (d)(4)(B). Pub. L. 89-97 substituted ‘section
72(m)(7)’ for ‘section 213(g)(3)’.
1964 - Subsecs. (i), (j). Pub. L. 88-272 added subsec. (i)
and redesignated former subsec. (i) as (j).
1962 - Subsec. (a)(5). Pub. L. 87-792, Sec. 2(1), inserted
provisions defining total compensation for purposes of par. (5) and
par. (10) of this subsection.
Subsec. (a)(7) to (10). Pub. L. 87-792, Sec. 2(2), added
pars. (7) to (10).
Subsecs. (c) to (g). Pub. L. 87-792, Sec. 2(3), added
subsecs. (c) to (g). Former subsec. (c) redesignated (h).
Subsec. (h). Pub.
L. 87-863 added subsec. (h). Former subsec. (h) redesignated
(i).
Pub. L. 87-792,
Sec. 2(3), redesignated former subsec. (c) as (h).
Subsec. (i). Pub.
L. 87-863 redesignated former subsec. (h) as (i).
EFFECTIVE
DATE OF 2022 AMENDMENTS
Amendments by P.L. 117-328, Div. T, Sec. 107(a)-(c),
apply to distributions required to be made after December 31, 2022,
with respect to individuals who attain age 72 after such date.
Amendments by P.L. 117-328, Div. T, Sec. 110, applicable
to contributions made for plan years beginning after Dec. 31, 2023.
Amendment by P.L. 117-328, Div. T, Sec. 113(a), applicable
with respect to plan years beginning after date of this Act [Enacted:
Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 116(b)(2)-(3),
applicable to taxable years beginning after December 31, 2023.
Amendment by P.L. 117-328, Div. T, Sec. 117(g)(2), applicable
to plan years beginning after Dec. 31, 2023.
Amendment by P.L. 117-328, Div. T, Sec. 121(a), applicable
to plan years beginning after December 31, 2023.
Amendment by P.L. 117-328, Div. T, Sec. 201(a) applicable
to calendar years ending after the date of enactment of this Act [enacted:
Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 312(a) applicable
to plan years beginning after the date of enactment of this Act [enacted:
Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 316, applicable
to plan years beginning after Dec. 31, 2023.
Amendment by P.L. 117-328, Div. T, Sec. 317, applicable
to plan years beginning after date of enactment of this Act [Enacted:
Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 327(a), applicable
to calendar years beginning after December 31, 2023.
P.L.
117-328, Div. T, Sec. 327(b), provided the following rule:
“ (b) EXTENSION OF
ELECTION OF AT LEAST AS RAPIDLY RULE.— The Secretary shall amend
Q&A–5(a) of Treasury Regulation section 1.401(a)(9)–5
(or any successor regulation thereto) to provide that if the surviving
spouse is the employee's sole designated beneficiary and the
spouse elects treatment under section 401(a)(9)(B)(iv), then the applicable
distribution period for distribution calendar years after the distribution
calendar year including the employee's date of death is determined
under the uniform lifetime table.”
Amendment by P.L. 117-328, Div. T, Sec. 334(a), effective
for distributions made after the date which is 3 years after the date
of enactment of this Act [Enacted: Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 334(b)(1), applicable
to distributions made after the date which is 3 years after the date
of the enactment of this Act [Enacted: Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 337(a)-(b),
applicable to calendar years beginning after the date of enactment
of this Act [Enacted: Dec. 29, 2022].
Amendment by P.L. 117-328, Div. T, Sec. 401(b)(2), shall
take effect as if included in the section of the Setting Every Community
Up for Retirement Enhancement Act of 2019 to which the amendment relates.
Amendment by P.L. 117-328, Div. T, Sec. 401(b)(3), shall
take effect as if included in the section of the Setting Every Community
Up for Retirement Enhancement Act of 2019 to which the amendment relates.
EFFECTIVE DATE OF 2020 AMENDMENTS
Amendment by Pub. L.
116-260, Div. EE, Sec. 208(a), effective for distributions
made before, on, or after the date of the enactment of this Act [Enacted:
Dec. 27, 2020].
Amendment by Pub.
L. 116-136, Sec. 2203(a), effective for calendar years beginning
after December 31, 2019.
Section 2203(b) of Pub.
L. 116-136 provided the following:
“(2) PROVISIONS RELATING TO PLAN OR CONTRACT
AMENDMENTS.—
“(A) IN GENERAL.—If this paragraph
applies to any plan or contract amendment—
“(i) such plan or contract shall not fail
to be treated as being operated in accordance with the terms of the
plan during the period described in subparagraph (B)(ii) solely because
the plan operates in accordance with this section, and
“(ii) except as provided by the Secretary
of the Treasury (or the Secretary's delegate), such plan or
contract shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of
1986 and section 204(g) of the Employee Retirement Income Security
Act of 1974 by reason of such amendment.
“(B) AMENDMENTS TO WHICH PARAGRAPH APPLIES.—
“(i) IN GENERAL.—This paragraph shall
apply to any amendment to any plan or annuity contract which—
“(I) is made pursuant to the amendments made
by this section, and
“(II) is made on or before the last day of
the first plan year beginning on or after January 1, 2022.
“In the case of a governmental plan, subclause
(II) shall be applied by substituting “2024” for “2022”.
“(ii) CONDITIONS.—This paragraph shall
not apply to any amendment unless during the period beginning on the
effective date of the amendment and ending on December 31, 2020, the
plan or contract is operated as if such plan or contract amendment
were in effect.”
EFFECTIVE DATE OF 2019
AMENDMENTS
Amendment by Pub. L. 116-94,
Div. M, Sec. 104(a), effective for plan years beginning after December
31, 2019.
Amendment by Pub. L. 116-94, Div. O, Sec. 114(a), (b),
effective for distributions required to be made after December 31,
2019, with respect to individuals who attain age 70 1/2 after such
date.
Amendment by Pub. L. 116-94, Div. O, Sec. 102(a), effective
for plan years beginning after December 31, 2019.
Amendments by Pub. L.
116-94, Div. O, Sec. 103, effective for plan years beginning
after December 31, 2019.
Amendments by Pub. L.
116-94, Div. O, Sec. 109, effective for plan years beginning
after December 31, 2019.
Amendments by Pub. L.
116-94, Div. O, Sec. 112, effective for plan years beginning
after December 31, 2020, except that, for purposes of section 401(k)(2)(D)(ii) of the Internal
Revenue Code of 1986 (as added by such amendments), 12-month
periods beginning before January 1, 2021, shall not be taken into
account.
Amendment by Pub. L. 116-94, Div. O, Sec. 114(a), (b),
effective for distributions required to be made after December 31,
2019, with respect to individuals who attain age 70 1/2 after such
date.
Amendments by Pub. L.
116-94, Div. O, Sec. 201(a), effective for plans adopted
for taxable years beginning after December 31, 2019.
Amendments by Pub. L.
116-94, Div. O, Sec. 205, effective on the date of the enactment
of this Act, without regard to whether any plan modifications referred
to in such amendments are adopted or effective before, on, or after
such date of enactment. Sec. 205(c)(2) of Pub.
L. 116-94, Div. O, provided the following special rule:
“(2) SPECIAL RULES.—
“(A) ELECTION OF EARLIER APPLICATION.—At
the election of the plan sponsor, the amendments made by this section
shall apply to plan years beginning after December 31, 2013.
“(B) CLOSED CLASSES OF PARTICIPANTS.—For
purposes of paragraphs (1)(A)(iii), (1)(B)(iii)(IV), and (2)(A)(iv)
of section 401(o) of the Internal Revenue
Code of 1986 (as added by this section), a closed class
of participants shall be treated as being closed before April 5, 2017,
if the plan sponsor's intention to create such closed class
is reflected in formal written documents and communicated to participants
before such date.
“(C) CERTAIN POST-ENACTMENT PLAN AMENDMENTS.—A
plan shall not be treated as failing to be eligible for the application
of section 401(o)(1)(A), 401(o)(1)(B)(iii), or 401(a)(26) of such
Code (as added by this section) to such plan solely because in the
case of—
“(i) such section 401(o)(1)(A), the plan
was amended before the date of the enactment of this Act to eliminate
1 or more benefits, rights, or features, and is further amended after
such date of enactment to provide such previously eliminated benefits,
rights, or features to a closed class of participants, or
“(ii) such section 401(o)(1)(B)(iii) or section
401(a)(26), the plan was amended before the date of the enactment
of this Act to cease all benefit accruals, and is further amended
after such date of enactment to provide benefit accruals to a closed
class of participants.
“Any such section shall only apply if the
plan otherwise meets the requirements of such section and in applying
such section, the date the class of participants is closed shall be
the effective date of the later amendment.”
Amendment by Pub. L. 116-94,
Div. O, Sec. 401(a), effective for distributions with respect to employees
who die after December 31, 2019. Sec. 401(b)(2)-(5) of Pub. L. 116-94, Div. O, provided the following:
“(2) COLLECTIVE BARGAINING EXCEPTION.—In
the case of a plan maintained pursuant to 1 or more collective bargaining
agreements between employee representatives and 1 or more employers
ratified before the date of enactment of this Act, the amendments
made by this section shall apply to distributions with respect to
employees who die in calendar years beginning after the earlier of—
“(A) the later of—
“(i) the date on which the last of such collective
bargaining agreements terminates (determined without regard to any
extension thereof agreed to on or after the date of the enactment
of this Act), or
“(ii) December 31, 2019, or
“(B) December 31, 2021.
“For purposes of subparagraph (A)(i), any
plan amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform to any
requirement added by this section shall not be treated as a termination
of such 6 collective bargaining agreement.
“(3) GOVERNMENTAL PLANS.—In the case
of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), paragraph
(1) shall be applied by substituting ‘‘December 31, 2021’’
for ‘‘December 31, 2019’’.
(4) EXCEPTION FOR CERTAIN EXISTING ANNUITY CONTRACTS.—
“(A) IN GENERAL.—The amendments made
by this section shall not apply to a qualified annuity which is a
binding annuity contract in effect on the date of enactment of this
Act and at all times thereafter.
“(B) QUALIFIED ANNUITY.—For purposes
of this paragraph, the term ‘‘qualified annuity’’
means, with respect to an employee, an annuity—
“(i) which is a commercial annuity (as defined
in section 3405(e)(6) of the Internal
Revenue Code of 1986);
(ii) under which the annuity payments are made
over the life of the employee or over the joint lives of such employee
and a designated beneficiary (or over a period not extending beyond
the life expectancy of such employee or the joint life expectancy
of such employee and a designated beneficiary) in accordance with
the regulations described in section 401(a)(9)(A)(ii) of such Code
(as in effect before such amendments) and which meets the other requirements
of section 401(a)(9) of such Code (as so in effect) with respect to
such payments; and
“(iii) with respect to which—
(I) annuity payments to the employee have begun
before the date of enactment of this Act, and the employee has made
an irrevocable election before such date as to the method and amount
of the annuity payments to the employee or any designated beneficiaries;
or
“(II) if subclause (I) does not apply, the
employee has made an irrevocable election before the date of enactment
of this Act as to the method and amount of the annuity payments to
the employee or any designated beneficiaries.
“(5) EXCEPTION FOR CERTAIN BENEFICIARIES.—
“(A) IN GENERAL.—If an employee dies
before the effective date, then, in applying the amendments made by
this section to such employee's designated beneficiary who dies
after such date—
“(i) such amendments shall apply to any beneficiary
of such designated beneficiary; and
“(ii) the designated beneficiary shall be
treated as an eligible designated beneficiary for purposes of applying section 401(a)(9)(H)(ii) of the Internal
Revenue Code of 1986 (as in effect after such amendments).
“(B) EFFECTIVE DATE.—For purposes of
this paragraph, the term ‘‘effective date’’
means the first day of the first calendar year to which the amendments
made by this section apply to a plan with respect to employees dying
on or after such date.”
EFFECTIVE DATE OF 2018
AMENDMENTS
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(69)-(72),
effective March 23, 2018.
Amendments by Pub. L. 115-123, Sec. 41114, effective
for plan years beginning after December 31, 2018.
EFFECTIVE DATE OF 2014
AMENDMENTS
Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(52),
effective on the date of the enactment of this Act [Enacted: Dec.
19, 2014].
Section
221(b)(2) of Pub. L. 113-295,
Div. A, provided the following Savings Provision:
“(2)
SAVINGS PROVISION.—If—
“(A)
any provision amended or repealed by the amendments made by this section
applied to—
“(i)
any transaction occurring before the date of the enactment of this
Act [Enacted: Dec. 19, 2014],
“(ii)
any property acquired before such date of enactment, or
“(iii)
any item of income, loss, deduction, or credit taken into account
before such date of enactment, and
“(B)
the treatment of such transaction, property, or item under such provision
would (without regard to the amendments or repeals made by this section)
affect the liability for tax for periods ending after date of enactment,
nothing in the amendments or repeals made by this section shall be
construed to affect the treatment of such transaction, property, or
item for purposes of determining liability for tax for periods ending
after such date of enactment.”
Amendments
by Sec. 202(c) of Pub. L. 113-97 effective
for years beginning after December 31, 2013.
EFFECTIVE
DATE OF 2010 AMENDMENTS
Amendment
by Sec. 1004(d)(5) of Pub. L. 111-152 effective
on the date of the enactment of this Act [Enacted: Mar. 30, 2010].
EFFECTIVE
DATE OF 2008 AMENDMENTS
Amendments
by Sec. 101(d)(2) of Pub. L. 110-458 effective
as if included in the provisions of the Pension Protection Act of
2006 [Pub. L. 109-280, Sec. 114]
to which they relate [Eff. Date: Plan years beginning after 2007].
Amendments by Sec. 109(a) of Pub. L. 110-458 effective as if
included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 901] to
which they relate Eff. Date: Plan years beginning after 2006].
Amendments by Sec. 109(b) of Pub. L. 110-458 effective as if
included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 902] to
which they relate [Eff. Date: Plan years beginning after 2007].
Amendment by Sec. 201(a) of Pub. L. 110-458 effective for calendar
years beginning after December 31, 2008.
Amendment by Sec. 104(a) of Pub. L. 110-245 effective with respect
to deaths and disabilities occurring on or after January 1, 2007.
Sec. 104(d)(2) of Pub. L. 110-245 provided
that:
“(2) PROVISIONS RELATING TO PLAN AMENDMENTS-
“ (A) IN GENERAL- If this subparagraph applies
to any plan or contract amendment, such plan or contract shall be
treated as being operated in accordance with the terms of the plan
during the period described in subparagraph (B)(iii).
“(B) AMENDMENTS TO WHICH SUBPARAGRAPH (A)
APPLIES-
“(i) IN GENERAL- Subparagraph (A) shall apply
to any amendment to any plan or annuity contract which is made—
“(I) pursuant to the amendments made by subsection
(a) or pursuant to any regulation issued by the Secretary of the Treasury
under subsection (a), and
“(II) on or before the last day of the first
plan year beginning on or after January 1, 2010. In the case of a
governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this clause
shall be applied by substituting ‘2012’ for ‘2010’ in subclause (II).
“(ii) CONDITIONS- This paragraph shall not
apply to any amendment unless—
“(I) the plan or contract is operated as
if such plan or contract amendment were in effect for the period described
in clause (iii), and
“(II) such plan or contract amendment applies
retroactively for such period.
“(iii) PERIOD DESCRIBED- The period described
in this clause is the period—
“(I) beginning on the effective date specified
by the plan, and
“(II) ending on the date described in clause
(i)(II) (or, if earlier, the date the plan or contract amendment is
adopted).”
EFFECTIVE
DATE OF 2006 AMENDMENTS
Amendments by Sec. 114 of Pub. L. 109-280, as amended by Pub. L. 110-458, Sec. 101(d)(3),
applicable for plan years beginning after 2007.
Amendments
by Sec. 827 of Pub. L. 109-280 applicable
to distributions after September 11, 2001. Sec. 827(c)(2) of Pub. L. 109-280 provided that:
“(2) WAIVER OF LIMITATIONS- If refund or credit
of any overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year period
beginning on the date of the enactment of this Act by the operation
of any law or rule of law (including res judicata), such refund or
credit may nevertheless be made or allowed if claim therefor is filed
before the close of such period.”
Amendments by Sec. 861 of Pub. L. 109-280 applicable to any
year beginning after the date of the enactment of this Act [Enacted:
Aug. 17, 2006].
Amendments by Sec. 901 of Pub. L. 109-280 applicable to plan
years beginning after December 31, 2006. Sec. 901(c)(2)-(3) of Pub. L. 109-280 provided the following
special rules:
“(2) SPECIAL RULE FOR COLLECTIVELY BARGAINED AGREEMENTS-
In the case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1
or more employers ratified on or before the date of the enactment
of this Act, paragraph (1) shall be applied to benefits pursuant to,
and individuals covered by, any such agreement by substituting for
“December 31, 2006” the earlier of--
“(A) the later of--
“(i) December 31, 2007, or
“(ii) the date on which the last of such collective
bargaining agreements terminates (determined without regard to any
extension thereof after such date of enactment), or
“ (B) December 31, 2008.
“(3) SPECIAL RULE FOR CERTAIN EMPLOYER SECURITIES
HELD IN AN ESOP-
“(A) IN GENERAL- In the case of employer securities
to which this paragraph applies, the amendments made by this section
shall apply to plan years beginning after the earlier of--
“(i) December 31, 2007, or
“(ii) the first date on which the fair market value
of such securities exceeds the guaranteed minimum value described
in subparagraph (B)(ii).
“(B) APPLICABLE SECURITIES- This paragraph shall
apply to employer securities which are attributable to employer contributions
other than elective deferrals, and which, on September 17, 2003--
“(i) consist of preferred stock, and
“(ii) are within an employee stock ownership plan
(as defined in section 4975(e)(7)
of the Internal Revenue Code of 1986), the terms of which
provide that the value of the securities cannot be less than the guaranteed
minimum value specified by the plan on such date.
“(C) COORDINATION WITH TRANSITION RULE- In applying section 401(a)(35)(H) of the Internal
Revenue Code of 1986 and section 204(j)(7) of the Employee
Retirement Income Security Act of 1974 (as added by this section)
to employer securities to which this paragraph applies, the applicable
percentage shall be determined without regard to this paragraph.”
Amendments by Sec. 902 of Pub. L. 109-280 applicable to plan
years beginning after December 31, 2007.
Amendment by Sec. 905 of Pub. L. 109-280 applicable to distributions
in plan years beginning after December 31, 2006.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 407(b) of Pub. L. 108-311 applicable as if
included in the provisions of the Small Business Job Protection Act
of 1996 [Pub. L. 104-188, Sec.
1432] to which they relate [effective: years beginning
after 1996].
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendments by Sec. 411(o)(2) of Pub. L. 107-147 applicable as if
included in the provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 [Pub. L. 107-16, Sec.
631] to which they relate.
Amendments by Sec. 411(q)(1) of Pub. L. 107-147 applicable as if
included in the provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 [Pub. L. 107-16, Sec.
643] to which they relate.
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendments by Sec. 611 of Pub. L. 107-16 applicable to years
beginning after December 31, 2001. Sec. 611(i) of Pub. L. 107-16, as added by Pub. L. 107-147, Sec. 411(j)(3),
provided the following special rule:
“(3) Special rule.--In the case
of plan that, on June 7, 2001, incorporated by reference the limitation
of section 415(b)(1)(A) of the
Internal Revenue Code of 1986, section 411(d)(6) of such
Code and section 204(g)(1) of the Employee Retirement Income Security
Act of 1974 do not apply to a plan amendment that--
“(A) is adopted on or before
June 30, 2002,
“(B) reduces benefits to the
level that would have applied without regard to the amendments made
by subsection (a) of this section, and
“(C) is effective no earlier
than the years described in paragraph (2).”
Amendment by Sec. 641 of Pub. L. 107-16 applicable to distributions
after December 31, 2001. Sec. 641(f)(3) provided the following special
rule:
“(3) SPECIAL RULE.--Notwithstanding
any other provision of law, subsections (h)(3) and (h)(5) of section
1122 of the Tax Reform Act of 1986 shall not apply to any distribution
from an eligible retirement plan (as defined in clause (iii) or (iv)
of section 402(c)(8)(B) of the
Internal Revenue Code of 1986) on behalf of an individual
if there was a rollover to such plan on behalf of such individual
which is permitted solely by reason of any amendment made by this
section.”
Amendment by Sec. 643 of Pub. L. 107-16 applicable to distributions
made after December 31, 2001.
Amendments by Sec. 646 of Pub. L. 107-16 applicable to distributions
after December 31, 2001.
Amendments by Sec. 657 of Pub. L. 107-16 applicable to distributions
made after final regulations implementing subsection (c)(2)(A) [of
this Act] are prescribed [Effective date: Mar. 28, 2005].
Amendment by Sec. 666 of Pub. L. 107-16 applicable to years
beginning after December 31, 2001.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358, provided that:
“(a) IN GENERAL.--All provisions of, and amendments
made by, this Act shall not apply--
“(1) to taxable, plan, or limitation
years beginning after December 31, 2010, or
“(2) in the case of title V,
to estates of decedents dying, gifts made, or generation skipping
transfers, after December 31, 2010.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal
Revenue Code of 1986 and the Employee Retirement Income Security Act
of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and
amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply
to section 803 (relating to no federal income tax on restitution received
by victims of the Nazi regime or their heirs or estates).”
PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT
PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF
2001 MADE PERMANENT
Section 811 of Pub.
L. 109-280 provided that:
“Title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 [Pub. L.
107-16] shall not apply to the provisions of, and
amendments made by, subtitles A through F [Sections 601-666] of title
VI of such Act (relating to pension and individual retirement arrangement
provisions).”
EFFECTIVE DATE OF 2000 AMENDMENTS
Amendment by Sec. 316 of Pub. L. 106-554 applicable as if
included in the provisions of the Small Business Job Protection Act
of 1996 to which it relates [generally, taxable years beginning after
1999].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 1502 of Pub. L. 105-34 applicable to judgments,
orders, and decrees issued, and settlement agreements entered into,
on or after the date of the enactment of this Act [Aug. 5, 1997].
Amendments by Sec. 1505 of Pub. L. 105-34 applicable to taxable
years beginning on or after the date of enactment of this Act [Aug.
5, 1997]. Sec. 1505(d)(2), as amended by Pub. L. 105-206, Sec. 6015(b),
and Pub. L. 109-280, Sec.
861(a)(2), provided the following special rule:
“(2) Treatment for years beginning before date
of enactment.--A governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of
1986) shall be treated as satisfying the requirements of sections
401(a)(3), 401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and
(b)(12)(A)(i), and 410 of such Code for all taxable years beginning
before the date of enactment of this Act [Aug. 5, 1997].”
Note that the amendment of Sec. 1505(d)(2) by Pub. L. 109-280, Sec. 861(a)(2) [striking
“maintained by a State or local government or political subdivision
thereof (or agency or instrumentality thereof)"] is effective for
any year beginning at the date of the enactment of Pub. L. 109-280 [Enacted: Aug. 17,
2006].
Amendments by Sec. 1525 of Pub. L. 105-34 applicable to years
beginning after December 31, 1997.
Amendments by Sec. 1530 of Pub. L. 105-34 applicable to transfers
made by trusts to, or for the use of, an employee stock ownership
plan after the date of the enactment of this Act [Aug. 5, 1997].
Amendments by Sec. 1601(d) of Pub. L. 105-34 effective as if included
in the provisions of the Small Business Job Protection Act of 1996
to which they relate, except that the amendment by Sec. 1601(d)(2)(D)
is effective for calendar years beginning after the enactment of
this Act [Aug. 5, 1997].
EFFECTIVE DATE OF 1996 AMENDMENTS
Amendments by section 1401 of Pub. L. 104-188, generally effective
for taxable years beginning after December 31, 1999. However, Sec.
1401(c)(2) provided the following transition rules:
“(2) Retention of certain transition
rules.--The amendments made by this section shall not apply to any
distribution for which the taxpayer is eligible to elect the benefits
of section 1122 (h)(3) or (h)(5) of the Tax Reform Act of 1986. Notwithstanding
the preceding sentence, individuals who elect such benefits after
December 31, 1999, shall not be eligible for 5-year averaging under section 402(d) of the Internal Revenue Code of
1986 (as in effect immediately before such amendments).”
Amendments by section 1404 of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1422 of Pub. L. 104-188, effective for plan
years beginning after December 31, 1996.
Amendments by section 1426 of Pub. L. 104-188, effective for plan
years beginning after December 31, 1996, but shall not apply to any
cash or deferred arrangement to whic clause (i) of section 1116(f)(2)(B)
of the Tax Reform Act of 1986 applies.
Amendments by section 1431(a) and (c) of Pub. L. 104-188, effective for years
beginning after December 31, 1996, except that in determining whether
an employee is a highly compensated employee for years beginning in
1997, such amendments shall be treated as having been in effect for
years beginning in 1996.
Amendments by section 1431(b) of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1432 of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1433(a)-(b) of Pub. L. 104-188, effective for years
beginning after December 31, 1998.
Amendments by section 1433(c)-(e) of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1441 of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1443(a) of Pub. L. 104-188, effective for distributions
after the date of the enactment of this Act [Aug. 20, 1996].
Amendments by section 1443(b) of Pub. L. 104-188, effective for plan
years beginning after December 31, 1996.
Amendments by section 1445 of Pub. L. 104-188, effective for years
beginning after December 31, 1996.
Amendments by section 1459 of Pub. L. 104-188, effective for plan
years beginning after December 31, 1998.
EFFECTIVE DATE OF 1994 AMENDMENTS
Amendment by section 732 of Pub. L. 103-465 effective for years
beginning after December 31, 1994. Sec. 732(e)(2) of Pub. L. 103-465 provided the following
exception:
“(2) Rounding not to result in decreases.--The
amendments made by this section providing for the rounding of indexed
amounts shall not apply to any year to the extent the rounding would
require the indexed amount to be reduced below the amount in effect
for years beginning in 1994.”
Amendment by section 751(a)(9) of Pub. L. 103-465 effective for plan
years beginning after December 31, 1994.
Amendment by section 766(b) of Pub. L. 103-465 effective for plan
amendments adopted on or after the date of the enactment of this Act
[Enacted: Dec. 8, 1994].
Amendment by section 776(d) of Pub. L. 103-465 effective with respect
to distributions that occur in plan years commencing after final regulations
implementing these provisions are prescribed by the Pension Benefit
Guaranty Corporation.
EFFECTIVE DATE OF 1993 AMENDMENTS
Amendments by section 13212(a) of Pub. L. 103-66 effective for benefits
accruing in plan years beginning after December 31, 1993. Sec. 13212(d)(2)-(3)
of Pub. L. 103-66 provided
the following special rules:
“(2) Collectively Bargained Plans.-In the case
of a plan maintained pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more employers ratified
before the date of the enactment of this Act [Enacted: Aug. 10, 1993],
the amendments made by this section shall not apply to contributions
or benefits pursuant to such agreements for plan years beginning before
the earlier of--
“(A) the latest of-
“(i) January 1, 1994,
“(ii) the date on which the last of such collective
bargaining agreements terminates (without regard to any extension,
amendment, or modification of such agreements on or after such date
of enactment), or
“(iii) in the case of a plan maintained pursuant
to collective bargaining under the Railway Labor Act, the date of
execution of an extension or replacement of the last of such collective
bargaining agreements in effect on such date of enactment, or
“(B) January 1, 1997.
“(3) Transition Rule for State and Local Plans.-
“(A) In General.-In the case of an eligible participant
in a governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of
1986), the dollar limitation under section 401(a)(17) of such Code
shall not apply to the extent the amount of compensation which is
allowed to be taken into account under the plan would be reduced below
the amount which was allowed to be taken into account under the plan
as in effect on July 1, 1993.
“(B) Eligible Participant.-For purposes of subparagraph
(A), an eligible participant is an individual who first became a participant
in the plan during a plan year beginning before the 1st plan year
beginning after the earlier of-
“(i) the plan year in which the plan is amended
to reflect the amendments made by this section, or
“(ii) December 31, 1995.
“(C) Plan Must Be Amended to Incorporate Limits.--This
paragraph shall not apply to any eligible participant of a plan unless
the plan is amended so that the plan incorporates by reference the
dollar limitation under section
401(a)(17) of the Internal Revenue Code of 1986, effective
with respect to noneligible participants for plan years beginning
after December 31, 1995 (or earlier if the plan amendment so provides).”
EFFECTIVE DATE OF 1992 AMENDMENTS
Amendments by section 521(b) of Pub. L. 102-318 effective for distributions
after December 31, 1992.
Amendment by section 522(a)(1) of Pub. L. 102-318 effective for distributions
after December 31, 1992.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub.
L. 101-508 applicable to transfers in taxable years
beginning after Dec. 31, 1990, see section 12011(c)(1) of Pub. L. 101-508, set out as an Effective
Date note under section 420 of this title.
EFFECTIVE DATE OF 1989 AMENDMENTS
Section 7311(b) of Pub.
L. 101-239 provided that:
‘(1) In general. - The amendment made by this section
(amending this section) shall apply to contributions after October
3, 1989.
‘(2) Transition. - The amendment made by this section
shall not apply to contributions made before January 1, 1990, if -
‘(A) the employer requested
before October 3, 1989, a private letter ruling or determination letter
with respect to the qualification of the plan maintaining the account
under section 401(h) of the Internal
Revenue Code of 1986,
‘(B) the request sets forth
a method under which the amount of contributions to the account are
to be determined on the basis of cost,
‘(C) such method is permissible under section 401(h)
of such Code under the provisions of General Counsel Memorandum 39785,
and
‘(D) the Internal Revenue Service
issued before October 4, 1989, a private letter ruling, determination
letter, or other letter providing that the specific plan involved
qualifies under section 401(a) of such Code when such method is used,
that contributions to the account are deductible, or acknowledging
that the account would not adversely affect the qualified status of
the plan (contingent on all phases of the particular plan being approved).’
Amendment by sections 7811(g)(1), (h)(3) and 7816(l)
of Pub. L. 101-239 effective,
except as otherwise provided, as if included in the provision of the
Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment
relates, see section 7817 of Pub.
L. 101-239, set out as a note under section 1 of
this title.
Section 7882 of Pub.
L. 101-239 provided that: ‘Except as otherwise provided
in this subpart (subpart C (Sec. 7881, 7882) of part V of title VII
of Pub. L. 101-239,
amending this section and sections 411 and 412 of this title, and
sections 1002, 1021, 1023, 1054, 1082, 1083, 1085b, 1103, 1107, 1108,
1113, 1132, 1306, 1322, 1341, 1342, 1344, 1362, 1364, 1368, 1370,
and 1371 of Title 29, Labor, enacting provisions set out as a note
under section 1054 of Title 29, and amending provisions set out as
notes under sections 404 and 412 of this title and sections 1021,
1301, 1322, and 1344 of Title 29), any amendment made by this subpart
shall take effect as if included in the provision of the Pension Protection
Act (Pub. L. 100-203,
title IX, subtitle D, part II, Sec. 9302-9346) to which such amendment
relates.'
Amendment by Pub.
L. 101-140 effective as if included in section 1151
of Pub. L. 99-514,
see section 203(c) of Pub. L. 101-140,
set out as a note under section 79 of this title.
EFFECTIVE DATE OF 1988 AMENDMENTS
Section 1011(c)(7)(E) of Pub. L. 100-647 provided that:
‘(i) Except as provided in clause (ii), the amendments
made by this paragraph (amending this section and sections 403, 408,
and 501 of this title) shall apply to plan years beginning after December
31, 1987.
‘(ii) In the case of a plan described in section
1105(c)(2) of the Reform Act (section 1105(c)(2) of Pub. L. 99-514, set out as an Effective
Date of 1986 Amendment note under section 402 of this title), the
amendments made by this paragraph shall not apply to contributions
made pursuant to an agreement described in such section for plan years
beginning before the earlier of -
‘(I) the later of January 1,
1988, or the date on which the last of such agreements terminates
(determined without regard to any extension thereof after February
28, 1986), or
‘(II) January 1, 1989.’
Section 1011(k)(1)(C) of Pub. L. 100-647 provided that:
‘(i) Subparagraph (A)(i) of section 401(k)(10)
of the 1986 Code (as added by subparagraph (B)) shall apply to distributions
after October 16, 1987.
‘(ii) Subparagraph (B) of section 401(k)(10) of
the 1986 Code (as added by subparagraph (B)) shall apply to distributions
after March 31, 1988.’
Section 1011(l)(5)(B) of Pub. L. 100-647 provided that: ‘The
amendment made by this paragraph (amending this section) shall take
effect as if included in the amendments made by section 1120 of the
Reform Act (Pub. L. 99-514).'
Amendment by sections 1011(d)(4), (e)(3), (g)(1)-(3),
(h)(3), (k)(1)(A), (B), (2)-(7), (9), (l)(1)-(4), (6), (7), 1011A(j),
(l), and 1011B(j)(1), (2), (6), (k)(1), (2) of Pub. L. 100-647 effective, except
as otherwise provided, as if included in the provision of the Tax
Reform Act of 1986, Pub. L. 99-514,
to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note
under section 1 of this title.
Section 6053(b) of Pub.
L. 100-647 provided that: ‘The amendment made by
subsection (a) (amending this section) shall take effect as if included
in the amendments made by section 1121 of the Reform Act (Pub. L. 99-514).'
Section 6055(b) of Pub.
L. 100-647 provided that: ‘The amendment made by
this section (amending this section) shall take effect as if included
in the amendments made by section 1112(b) of the Reform Act (Pub. L. 99-514).'
Section 6071(d) of Pub.
L. 100-647 provided that: ‘The amendments made by
this section (amending this section and section 457 of this title)
shall apply to taxable years beginning after the date of the enactment
of this Act (Nov. 10, 1988).’
EFFECTIVE DATE OF 1987 AMENDMENTS
Section 9341(c) of Pub.
L. 100-203, as amended by Pub. L. 101-239, title VII, Sec.
7881(i)(5), Dec. 19, 1989, 103 Stat.
2442, provided that:
‘(1) In general. - Except as provided in this subsection,
the amendments made by this section (enacting section 1085b of Title
29, Labor, and amending this section) shall apply to plan amendments
adopted after the date of the enactment of this Act (Dec. 22, 1987).
‘(2) Collective bargaining agreements. - In the
case of a plan maintained pursuant to 1 or more collective bargaining
agreements between employee representatives and 1 or more employers
ratified before the date of the enactment of this Act, the amendments
made by this section shall not apply to plan amendments adopted pursuant
to collective bargaining agreements ratified before the date of enactment
(without regard to any extension, amendment, or modification of such
agreements on or after such date of enactment).’
EFFECTIVE DATE OF 1986 AMENDMENTS
Amendment by section 1106(d)(1) of Pub. L. 99-514 applicable to benefits
accruing in years beginning after Dec. 31, 1988, except as otherwise
provided, see section 1106(i)(5) of Pub.
L. 99-514, set out as a note under section 415 of
this title.
Section 1111(c) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011(g)(4),
Nov. 10, 1988, 102 Stat. 3464,
provided that:
‘(1) Subsection (a). - The amendments made by subsection
(a) (amending this section) shall apply to benefits attributable to
plan years beginning after December 31, 1988.
‘(2) Subsection (b). - The amendments made by subsection
(b) (amending this section) shall apply to years beginning after December
31, 1988.
‘(3) Special rule for collective bargaining agreements.
- In the case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or more
employers ratified before March 1, 1986, the amendments made by this
section shall not apply to plan years beginning before the earlier
of -
‘(A) the later of -
‘(i) January 1, 1989, or
‘(ii) the date on which the
last of such collective bargaining agreements terminates (determined
without regard to any extension thereof after February 28, 1986),
or
‘(B) January 1, 1991.’
Section 1112(e) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011(h)(6)-(9),
Nov. 10, 1988, 102 Stat. 3465,
provided that:
‘(1) In general. - The amendments made by this
section (amending this section and sections 402, 404, 406, 407, 410,
and 818 of this title) shall apply to plan years beginning after December
31, 1988.
‘(2) Special rule for collective bargaining agreements.
- In the case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or more
employers ratified before March 1, 1986, the amendments made by this
section shall not apply to plan years beginning before the earlier
of -
‘(A) the later of -
‘(i) January 1, 1989, or
‘(ii) the date on which the
last of such collective bargaining agreement terminates (determined
without regard to any extension thereof after February 28, 1986),
or
‘(B) January 1, 1991.
‘(3) Waiver of excise tax on reversions. -
‘(A) In general. - If -
‘(i) a plan is in existence on August 16, 1986,
‘(ii) such plan would fail to
meet the requirements of section
401(a)(26) of the Internal Revenue Code of 1986 (as added
by subsection (b)) if such section were in effect for the plan year
including August 16, 1986, and
‘(iii) there is no transfer
of assets to or liabilities from the plan or spinoff or merger involving
such plan after August 16, 1986, then no tax shall be imposed under
section 4980 of such Code on any employer reversion by reason of the
termination or merger of such plan before the 1st year to which the
amendment made by subsection (b) applies.
‘(B) Interest rate for determining accrued benefit
of highly compensated employees for certain purposes. - In the case
of a termination, transfer, or distribution of assets of a plan described
in subparagraph (A)(ii) before the 1st year to which the amendment
made by subsection (b) applies -
‘(i) Amount eligible for rollover,
income averaging, or tax-free transfer. - For purposes of determining
any eligible amount, the present value of the accrued benefit of any
highly compensated employee shall be determined by using an interest
rate not less than the highest of -
‘(I) the applicable rate under
the plan's method in effect under the plan on August 16, 1986,
‘(II) the highest rate (as of
the date of the termination, transfer, or distribution) determined
under any of the methods applicable under the plan at any time after
August 15, 1986, and before the termination, transfer, or distribution
in calculating the present value of the accrued benefit of an employee
who is not a highly compensated employee under the plan (or any other
plan used in determining whether the plan meets the requirements of section 401 of the Internal Revenue Code of
1986), or
‘(III) 5 percent.
‘(ii) Eligible amount. - For
purposes of clause (i), the term ‘eligible amount’ means any amount
with respect to a highly compensated employee which -
‘(I) may be rolled over under section 402(a)(5)
of such Code,
‘(II) is eligible for income
averaging under section 402(e)(1) of such Code, or capital gains treatment
under section 402(a)(2) or 403(a)(2) of such Code (as in effect before
this Act), or
‘(III) may be transferred to
another plan without inclusion in gross income.
‘(iii) Amounts subject to early
withdrawal or excess distribution tax. - For purposes of sections
72(t) and 4980A of such Code, there shall not be taken into account
the excess (if any) of -
‘(I) the amount distributed
to a highly compensated employee by reason of such termination or
distribution, over
‘(II) the amount determined
by using the interest rate applicable under clause (i).
‘(iv) Distributions of annuity
contracts. - If an annuity contract purchased after August 16, 1986,
is distributed to a highly compensated employee in connection with
such termination or distribution, there shall be included in gross
income for the taxable year of such distribution an amount equal to
the excess of -
‘(I) the purchase price of such contract, over
‘(II) the present value of the
benefits payable under such contract determined by using the interest
rate applicable under clause (i).
Such excess shall not be taken into account for
purposes of sections 72(t) and 4980A of such Code.
‘(v) Highly compensated employee.
- For purposes of this subparagraph, the term ‘highly compensated
employee’ has the meaning given such term by section 414(q) of such
Code.
‘(4) Special rule for plans which may not terminate.
- To the extent provided in regulations prescribed by the Secretary
of the Treasury or his delegate, if a plan is prohibited from terminating
under title IV of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1301 et
seq.) before the 1st year to which the amendment made by subsection
(b) would apply, the amendment made by subsection (b) shall only apply
to years after the 1st year in which the plan is able to terminate.'
Amendment by section 1114(b)(7) of Pub. L. 99-514 applicable to years
beginning after Dec. 31, 1988, see section 1114(c)(3) of Pub. L. 99-514, set out as a note
under section 414 of this title.
Section 1116(f) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011(k)(8),
(10), Nov. 10, 1988, 102 Stat. 3470,
provided that:
‘(1) In general. - Except as provided in this subsection,
the amendments made by this section (amending this section) shall
apply to years beginning after December 31, 1988.
‘(2) Nondiscrimination rules. -
‘(A) In general. - Except as
provided in subparagraph (B), the amendments made by subsections (a),
(b)(4), and (d) (amending this section), and the provisions of section 401(k)(4)(B) of the Internal Revenue
Code of 1986 (as added by this section), shall apply to
years beginning after December 31, 1986.
‘(B) Transition rules for certain
governmental and tax-exempt plans. - Subparagraph (B) of section 401(k)(4) of the Internal Revenue Code of
1986 (relating to governments and tax-exempt organizations not eligible
for cash or deferred arrangements), as added by this section, shall
not apply to any cash or deferred arrangement adopted by -
‘(i) a State or local government
or political subdivision thereof, or any agency or instrumentality
thereof, before May 6, 1986, or
‘(ii) a tax-exempt organization
before July 2, 1986.
In the case of an arrangement described in clause
(i), the amendments made by subsections (a), (b)(4), and (d) shall
apply to years beginning after December 31, 1988. If clause (i) or
(ii) applies to any arrangement adopted by a governmental unit, then
any cash or deferred arrangement adopted by such unit on or after
the date referred to in the applicable clause shall be treated as
adopted before such date.
‘(3) Aggregation and excess contributions. - The
amendments made by subsections (c) and (e) (amending this section)
shall apply to years beginning after December 31, 1986.
‘(4) Collective bargaining agreements. -
‘(A) In general. - In the case
of a plan maintained pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more employers ratified
before March 1, 1986, the amendments made by this section shall not
apply to years beginning before the earlier of -
‘(i) the later of -
‘(I) January 1, 1989, or
‘(II) the date on which the
last of such collective bargaining agreements terminates (determined
without regard to any extension thereof after February 28, 1986),
or
‘(ii) January 1, 1991.
‘(B) Special rule for nondiscrimination
rules. - In the case of a plan described in subparagraph (A), the
amendments and provisions described in paragraph (2) shall not apply
to years beginning before the earlier of -
‘(i) the date determined under subparagraph (A)(i)(II),
or
‘(ii) January 1, 1989.
‘(5) Special rule for qualified offset arrangements.
-
‘(A) In general. - A cash or
deferred arrangement shall not be treated as failing to meet the requirements
of section 401(k)(4) of the Internal
Revenue Code of 1986 (as added by this section) to the
extent such arrangement is part of a qualified offset arrangement
consisting of such cash or deferred arrangement and a defined benefit
plan.
‘(B) Qualified offset arrangement.
- For purposes of subparagraph (A), a cash or deferred arrangement
is part of a qualified offset arrangement with a defined benefit plan
to the extent such offset arrangement satisfies each of the following
conditions with respect to the employer maintaining the arrangement
on April 16, 1986, and at all times thereafter:
‘(i) The benefit under the defined
benefit plan is directly and uniformly conditioned on the initial
elective deferrals (up to 4 percent of compensation).
‘(ii) The benefit provided under
the defined benefit plan (before the offset) is at least 60 percent
of an employee's cumulative elective deferrals (up to 4 percent of
compensation).
‘(iii) The benefit under the
defined benefit plan is reduced by the benefit attributable to the
employee's elective deferrals under the plan (up to 4 percent of compensation)
and the income allocable thereto. The interest rate used to calculate
the reduction shall not exceed the greater of the rate under section
411(a)(11)(B)(ii) of such Code or the interest rate applicable under
section 411(c)(2)(C)(iii) of such Code, taking into account section
411(c)(2)(D) of such Code.
For purposes of applying section 401(k)(3) of such
Code to the cash or deferred arrangement, the benefits under the defined
benefit plan conditioned on initial elective deferrals may be treated
as matching contributions under such rules as the Secretary of the
Treasury or his delegate may prescribe. The Secretary shall provide
rules for the application of this paragraph in the case of successor
plans.
‘(C) Definition of employer.
- For purposes of this paragraph, the term ‘employer’ includes any
research and development center which is federally funded and engaged
in cancer research, but only with respect to employees of contractor-operators
whose salaries are reimbursed as direct costs against the operator's
contract to perform work at such center.
‘(6) Withdrawals on sale of assets. - Subclauses
(II), (III), and (IV) of section
401(k)(2)(B)(i) of the Internal Revenue Code of 1986 (as
added by subsection (b)(1)) shall apply to distributions after December
31, 1984.
‘(7) Distributions before plan amendment. -
‘(A) In general. - If a plan
amendment is required to allow a plan to make any distribution described
in section 401(k)(8) of the Internal
Revenue Code of 1986, any such distribution which is made
before the close of the 1st plan year for which such amendment is
required to be in effect under section 1140 (set out as a note below),
shall be treated as made in accordance with the provisions of such
plan.
‘(B) Distributions pursuant to model amendment.
-
‘(i) Secretary to prescribe
amendment. - The Secretary of the Treasury or his delegate shall prescribe
an amendment which allows a plan to make any distribution described
in section 401(k)(8) of such Code.
‘(ii) Adoption by plan. - If
a plan adopts the amendment prescribed under clause (i) and makes
a distribution in accordance with such amendment, such distribution
shall be treated as made in accordance with the provisions of the
plan.’
Section 1117(d) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011(l)(12),
Nov. 10, 1988, 102 Stat. 3471,
provided that:
‘(1) In general. - The amendments made by this
section (enacting section 4979 of this title and amending this section
and section 414 of this title) shall apply to plan years beginning
after December 31, 1986.
‘(2) Collective bargaining agreements. - In the
case of a plan maintained pursuant to 1 or more collective bargaining
agreements between employee representatives and 1 or more employers
ratified before March 1, 1986, the amendments made by this section
shall not apply to plan years beginning before the earlier of -
‘(A) January 1, 1989, or
‘(B) the date on which the last
of such collective bargaining agreements terminates (determined without
regard to any extension thereof after February 28, 1986).
‘(3) Annuity contracts. - In the case of an annuity
contract under section 403(b) of the
Internal Revenue Code of 1986 -
‘(A) the amendments made by
this section shall apply to plan years beginning after December 31,
1988, and
‘(B) in the case of a collective
bargaining agreement described in paragraph (2), the amendments made
by this section shall not apply to years beginning before the earlier
of -
‘(i) the later of -
‘(I) January 1, 1989, or
‘(II) the date determined under
paragraph (2)(B), or
‘(ii) January 1, 1991.
‘(4) Distributions before plan amendment. -
‘(A) In general. - If a plan
amendment is required to allow a plan to make any distribution described
in section 401(m)(6) of the Internal
Revenue Code of 1986, any such distribution which is made
before the close of the 1st plan year for which such amendment is
required to be in effect under section 1140 (set out as a note below)
shall be treated as made in accordance with the provisions of the
plan.
‘(B) Distributions pursuant to model amendment.
-
‘(i) Secretary to prescribe
amendment. - The Secretary of the Treasury or his delegate shall prescribe
an amendment which allows a plan to make any distribution described
in section 401(m)(6) of the Internal
Revenue Code of 1986.
‘(ii) Adoption by plan. - If
a plan adopts the amendment prescribed under clause (i) and makes
a distribution in accordance with such amendment, such distribution
shall be treated as made in accordance with the provisions of the
plan.’
Section 1119(b) of Pub.
L. 99-514 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to plan years beginning after
December 31, 1985.’
Section 1121(d) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011A(a)(3),
(4), Nov. 10, 1988, 102 Stat. 3472,
provided that:
‘(1) In general. - Except as provided in this subsection,
the amendments made by this section (amending this section and sections
402, 408, and 4974 of this title) shall apply to years beginning after
December 31, 1988.
‘(2) Subsection (c). - The amendments made by subsection
(c) (amending sections 402 and 408 of this title) shall apply to years
beginning after December 31, 1986.
‘(3) Collective bargaining agreements. - In the
case of a plan maintained pursuant to 1 or more collective bargaining
agreements between employee representatives and 1 or more employers
ratified before March 1, 1986, the amendments made by this section
shall not apply to distributions to individuals covered by such agreements
in years beginning before the earlier of -
‘(A) the later of -
‘(i) the date on which the last
of such collective bargaining agreements terminates (determined without
regard to any extension thereof after February 28, 1986), or
‘(ii) January 1, 1989, or
‘(B) January 1, 1991.
‘(4) Transition rules. -
‘(A) The amendments made by
subsections (a) and (b) (amending this section and section 4974 of
this title) shall not apply with respect to any benefits with respect
to which a designation is in effect under section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982 (section 242(b)(2)
of Pub. L. 97-248,
formerly set out as a note below).
‘(B)(i) Except as provided in
clause (ii), the amendment made by subsection (b) (amending this section)
shall not apply in the case of any individual who has attained age
70 1/2 before January 1, 1988.
‘(ii) Clause (i) shall not apply
to any individual who is a 5-percent owner (as defined in section 416(i) of the Internal Revenue Code of
1986), at any time during -
‘(I) the plan year ending with
or within the calendar year in which such owner attains age 66 1/2,
and
‘(II) any subsequent plan year.
‘(5) Plans may incorporate section 401(a)(9) requirements
by reference. - Notwithstanding any other provision of law, except
as provided in regulations prescribed by the Secretary of the Treasury
or his delegate, a plan may incorporate by reference the requirements
of section 401(a)(9) of the Internal
Revenue Code of 1986.'
Section 1136(c) of Pub.
L. 99-514 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to years beginning after December
31, 1985.’
Section 1143(b) of Pub.
L. 99-514 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to taxable years beginning
after December 31, 1986.’
Section 1145(d) of Pub.
L. 99-514 provided that: ‘The amendments made by
this section (amending this section, section 1055 of Title 29, Labor,
and provisions set out as a note under section 1001 of Title 29) shall
apply as if included in the amendments made by the Retirement Equity
Act of 1984 (Pub. L. 98-397).'
Amendment by section 1171(b)(5) of Pub. L. 99-514 applicable to compensation
paid or accrued after Dec. 31, 1986, in taxable years ending after
such date, except as otherwise provided, see section 1171(c) of Pub. L. 99-514, set out as a note
under section 38 of this title.
Section 1174(c)(2)(B) of Pub. L. 99-514 provided that: ‘The
amendment made by this paragraph (amending this section) shall apply
to distributions attributable to stock acquired after December 31,
1986.’
Section 1175(a)(2) of Pub.
L. 99-514 provided that: ‘The amendment made by this
subsection (amending this section) shall apply to stock acquired after
December 31, 1986.’
Section 1176(c) of Pub.
L. 99-514 provided that: ‘The amendment made by subsection
(a) (amending this section) shall be effective December 31, 1986.
The amendment made by subsection (b) (amending section 409 of this
title) shall apply to acquisitions of securities after December 31,
1986.’
Section 1852(h)(1) of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1018(t)(3)(C),
Nov. 10, 1988, 102 Stat. 3588,
provided that the amendment made by that section is effective for
years beginning after Dec. 31, 1985.
Section 1879(g)(3) of Pub.
L. 99-514 provided that: ‘The amendments made by
this subsection (amending this section) shall apply to plan years
beginning after December 31, 1984.’
Amendment by sections 1848(b) and 1852(a)(4)(A),
(6), (b)(8), (g), (h)(1) of Pub. L.
99-514 effective, except as otherwise provided, as
if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which
such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note
under section 48 of this title.
Section 1898(j) of Pub.
L. 99-514 provided that: ‘Except as otherwise provided
in this section, any amendment made by this section (amending this
section, sections 402, 411, 414, 415, 417, and 2503 of this title,
and sections 1053 to 1056 of Title 29, Labor, and provisions set out
as notes under section 1001 of Title 29) shall take effect as if included
in the provision of the Retirement Equity Act of 1984 (Pub. L. 98-397) to which such amendment
relates.'
EFFECTIVE DATE OF 1984 AMENDMENTS
Amendment by section 203(a) of Pub. L. 98-397 applicable to plan
years beginning after Dec. 31, 1984, amendment by section 204(a) of Pub. L. 98-397 effective Jan. 1,
1985, and amendment by section 301(b) of Pub.
L. 98-397 applicable to plan amendments made after
July 30, 1984, but not applicable to the termination of a certain
defined benefit plan, except as otherwise provided, see sections 302
and 303 of Pub. L. 98-397,
set out as a note under section 1001 of Title 29, Labor.
Nothing in amendment by section 203(a) of Pub. L. 98-397 to prevent any distribution
required by reason of a failure to comply with the terms of a loan
made on or before Aug. 18, 1985, and secured by a portion of the participant's
accrued benefit, see section 1898(b)(4)(C)(ii) of Pub. L. 99-514, set out as an Effective
Date of 1986 Amendment note under section 417 of this title.
Amendment by section 211(b)(5) of Pub. L. 98-369 applicable to taxable
years beginning after Dec. 31, 1983, see section 215 of Pub. L. 98-369, set out as an Effective
Date note under section 801 of this title.
Amendment by section 474(r)(13) of Pub. L. 98-369 applicable to taxable
years beginning after Dec. 31, 1983, and to carrybacks from such years,
see section 475(a) of Pub. L. 98-369,
set out as a note under section 21 of this title.
Section 491(f)(3) of Pub.
L. 98-369 provided that: ‘The amendments made by
subsection (e) (redesignating section 409A as section 409 of this
title and amending this section and sections 41, 415, 4975, and 6699
of this title) shall take effect on January 1, 1984.’
Section 521(e) of Pub.
L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
‘(1) In general. - The amendments made by this
section (amending this section and sections 72, 403, and 408 of this
title and repealing provisions set out as a note under this section)
shall apply to years beginning after December 31, 1984.
‘(2) Repeal of section 242 of tefra. - The amendment
made by subsection (a)(2) (repealing section 242 of Pub. L. 97-248, which amended this
section and enacted provisions formerly set out below) shall take
effect as if included in the Tax Equity and Fiscal Responsibility
Act of 1982 (Pub. L. 97-248).
‘(3) Transition rule. - A trust forming part of
a plan shall not be disqualified under paragraph (9) of section 401(a) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954),
as amended by subsection (a)(1), by reason of distributions under
a designation (before January 1, 1984) by any employee in accordance
with a designation described in section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982 (as in efffect (sic) before
the amendments made by this Act) (formerly set out as an Effective
Date of 1982 Amendment note below).
‘(4) Special rule for governmental plans. - In
the case of a governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of
1986), paragraph (1) shall be applied by substituting ‘1986’ for ‘1984’.
‘(5) Special rule for collective bargaining agreements.
- In the case of a plan maintained pursuant to one or more collective
bargaining agreements ratified on or before the date of the enactment
of this Act (July 18, 1984) between employee representatives and one
or more employers, the amendments made by this section shall not apply
to years beginning before the earlier of -
‘(A) the date on which the last
of the collective bargaining agreements relating to the plan terminates
(determined without regard to any extension thereof agreed to after
the date of the enactment of this Act), or
‘(B) January 1, 1988.
For purposes of subparagraph (A), any plan amendment
made pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any requirement added
by this section shall not be treated as a termination of such collective
bargaining agreement.'
Section 524(d)(2) of Pub.
L. 98-369 provided that: ‘The amendment made by this
subsection (amending this section) shall apply to plan years beginning
after December 31, 1983.’
Section 527(c) of Pub.
L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
‘(1) Subsection (a). -
‘(A) In general. - Except as
provided in subparagraph (B), the amendment made by subsection (a)
(amending this section) shall apply to plan years beginning after
December 31, 1984.
‘(B) Exception for certain existing
plans. - The amendment made by subsection (a) shall not apply to any
plan -
‘(i) which was maintained by
a State on June 8, 1984, and
‘(ii) with respect to which
a determination letter had been issued by the Secretary on December
6, 1982.
‘(2) Subsection (b). -
‘(A) In general. - The amendments
made by this section (amending this section) shall apply with respect
to plan years beginning after the date of the enactment of this Act
(July 18, 1984).
‘(B) Transitional rule. - Rules
similar to the rules under section 135(c)(2) of the Revenue Act of
1978 (section 135(c)(2) of Pub. L.
95-600, set out below) shall apply with respect to
any pre-ERISA money purchase plan (as defined in section 401(k)(5) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954))
for plan years beginning after December 31, 1979, and on or before
the date of the enactment of this Act.'
Section 528(c) of Pub.
L. 98-369 provided that: ‘The amendments made by
this section (amending this section and section 415 of this title)
shall apply to years beginning after March 31, 1984.’
Amendment by section 713 of Pub. L. 98-369 effective as if included
in the provision of the Tax Equity and Fiscal Responsibility Act of
1982, Pub. L. 97-248,
to which such amendment relates, see section 715 of Pub. L. 98-369, set out as a note
under section 31 of this title.
EFFECTIVE DATE OF 1983 AMENDMENTS
Amendment by Pub.
L. 98-21 applicable to taxable years beginning after
Dec. 31, 1989, see section 124(d)(2) of Pub.
L. 98-21, set out as a note under section 1401 of
this title.
Amendment by Pub.
L. 97-448 effective, except as otherwise provided,
as if it had been included in the provision of the Economic Recovery
Tax Act of 1981, Pub. L. 97-34,
to which such amendment relates, see section 109 of Pub. L. 97-448, set out as a note
under section 1 of this title.
EFFECTIVE DATE OF 1982 AMENDMENTS
Section 242(b) of Pub.
L. 97-248, which prescribed the effective date for
amendment by section 242(a) of Pub.
L. 97-248, was repealed by Pub. L. 98-369, div. A, title V,
Sec. 521(a)(2), July 18, 1984, 98 Stat.
867.
Section 249(b) of Pub.
L. 97-248 provided that: ‘The amendments made by
this section (amending this section) shall apply to plan years beginning
after December 31, 1983.’
Section 254(b) of Pub.
L. 97-248 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply with respect to taxable years
beginning after December 31, 1981.’
Amendment by sections 237, 238, and 240 of Pub. L. 97-248 applicable to years
beginning after Dec. 31, 1983, see section 241 of Pub. L. 97-248, set out as an Effective
Date note under section 416 of this title.
EFFECTIVE DATE OF 1981 AMENDMENTS
Amendment by section 312(b)(1), (c)(2)-(4), (e)(2)
of Pub. L. 97-34 applicable
to plans which include employees within the meaning of subsec. (c)(1)
of this section with respect to taxable years beginning after Dec.
31, 1981, see section 312(f)(1) of Pub.
L. 97-34, set out as a note under section 72 of this
title.
Section 314(a)(2) of Pub.
L. 97-34 provided that: ‘The amendment made by paragraph
(1) (amending this section) shall apply to distributions after December
31, 1980, in taxable years beginning after such date.’
Section 338(b) of Pub.
L. 97-34 provided that: ‘The amendment made by this
section (amending this section) shall apply to acquisitions of securities
after December 31, 1979.’
Section 339 of Pub.
L. 97-34 provided that: ‘Except as otherwise provided,
the amendments made by this subtitle (subtitle D (Sec. 331-339) of
title III of Pub. L. 97-34,
enacting section 44G of this title and amending this section and sections
46, 48, 55, 56, 381, 383, 404, 409A, 415, 6096, 6411, 6511, and 6699
of this title) shall apply to taxable years beginning after December
31, 1981.'
EFFECTIVE DATE OF 1980 AMENDMENTS
Section 221(b) of Pub.
L. 96-605 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply with respect to plan years
beginning after December 31, 1980.’
Section 225(c) of Pub.
L. 96-605 provided that: ‘The amendments made by
this section (amending this section and sections 408 and 410 of this
title) shall apply with respect to plan years beginning after December
31, 1980.’
Section 410(c) of Pub.
L. 96-364 provided that: ‘The amendment made by this
section (amending this section and section 1103 of Title 29, Labor)
shall take effect on January 1, 1975, except that in the case of contributions
received by a collectively bargained plan maintained by more than
one employer before the date of enactment of this Act, (Sept. 26,
1980), any determination by the plan administrator that any such contribution
was made by mistake of fact or law before such date shall be deemed
to have been made on such date of enactment.’
Amendment by section 208(a), (e) of Pub. L. 96-364 effective Sept. 26,
1980, see section 210(a) of Pub. L.
96-364, set out as an Effective Date note under section
418 of this title.
Amendment by Pub.
L. 96-222 effective, except as otherwise provided,
as if it had been included in the provisions of the Revenue Act of
1978, Pub. L. 95-600,
to which such amendment relates, see section 201 of Pub. L. 96-222, set out as a note
under section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENTS
Section 135(c)(1) of Pub.
L. 95-600 provided that: ‘The amendments made by
this section (amending this section and section 402 of this title)
shall apply to plan years beginning after December 31, 1979.’
Amendment by section 141(f)(3) of Pub. L. 95-600 effective with respect
to qualified investment for taxable years beginning after Dec. 31,
1978, see section 141(g)(1) of Pub.
L. 95-600, set out as an Effective Date note under
section 409 of this title.
Section 143(b) of Pub.
L. 95-600 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to acquisitions of securities
after December 31, 1979.’
Amendment by section 152(e) of Pub. L. 95-600 applicable to taxable
years beginning after Dec. 31, 1978, see section 152(h) of Pub. L. 95-600, set out as a note
under section 408 of this title.
EFFECTIVE DATE OF 1976 AMENDMENTS
Amendment by section 803(b)(2) of Pub. L. 94-455 effective for taxable
years beginning after Dec. 31, 1974, see section 803(j) of Pub. L. 94-455, set out as a note
under section 46 of this title.
Section 1505(c) of Pub.
L. 94-455 provided that: ‘The amendments made by
this section (amending this section and section 801 of this title)
apply for taxable years beginning after December 31, 1975.’
Amendment by section 1901(a)(56) of Pub. L. 94-455 effective for taxable
years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note
under section 2 of this title.
Section 1(e) of Pub.
L. 94-267 provided that: ‘The amendments made by
this Act (amending this section and sections 402 to 404 and 805 of
this title, and enacting provisions set out as a note under section
402 of this title) shall apply with respect to payments made to an
employee on or after July 4, 1974.’
EFFECTIVE DATE OF 1974 AMENDMENT
Amendment by sections 1012(b) and 1016(a)(2) of Pub. L. 93-406 applicable, except
as otherwise provided in section 1017(c) through (i) of Pub. L. 93-406, for plan years beginning
after Sept. 2, 1974, but, in the case of plans in existence on Jan.
1, 1974, amendment by sections 1012(b) and 196(a)(2) of Pub. L. 93-406 applicable for plan
years beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93-406, set out as an Effective
Date; Transitional Rules note under section 410 of this title.
Section 1021(a)(1), (b) of Pub. L. 93-406 provided that the
amendment made by that section is effective with respect to plan years
beginning after Dec. 31, 1975.
Section 1022(d) of Pub.
L. 93-406 provided that the amendment made by that
section is effective as of Jan. 1, 1974.
Section 1022(f) of Pub.
L. 93-406 provided that the amendment made by that
section is effective as of Jan. 1, 1974.
Section 1024 of Pub.
L. 93-406 provided that: ‘Except as otherwise provided
in section 1021, the amendments made by section 1021 (amending this
section) shall apply to plan years to which part I applies. (For description
of plan years to which part I applies, see section 1017 of Pub. L. 93-406, set out as an Effective
Date; Transitional Rules note under section 410 of this title.) Except
as otherwise provided in section 1022, the amendments made by section
1022 (amending this section and section 6051 of this title) shall
apply to plan years to which part I applies. Section 1023 (amending
this section) shall take effect on the date of the enactment of this
Act (Sept. 2, 1974).'
Section 2001(i)(2)-(4) of Pub. L. 93-406 provided that:
‘(2) The amendments made by
subsection (c) (amending this section) apply to
‘(A) taxable years beginning
after December 31, 1975, and
‘(B) any other taxable years
beginning after December 31, 1973, for which contributions were made
under the plan in excess of the amounts permitted to be made under
sections 404(e) and 1379(b) (of this title) as in effect on the day
before the date of the enactment of this Act (Sept. 2, 1974).
‘(3) The amendments made by
subsection (d) (amending this section) apply to taxable years beginning
after December 31, 1975.
‘(4) The amendments made by
subsections (e) and (f) (enacting section 4972 of this title and amending
this section and section 72 of this title) apply to contributions
made in taxable years beginning after December 31, 1975.’
Amendment by section 2001(h)(1) of Pub. L. 93-406 applicable to taxable
years ending after Sept. 2, 1974, see section 2001(i)(6) of Pub. L. 93-406, set out as a note
under section 72 of this title.
Amendment by section 2004(a)(1) of Pub. L. 93-406 applicable to years
beginning after Dec. 31, 1975, see section 2004(d) of Pub. L. 93-406, set out as an Effective
Date; Transitional Provisions note under section 415 of this title.
EFFECTIVE DATE OF 1971 AMENDMENTS
Section 1(b) of Pub.
L. 91-691 provided that: ‘The amendments made by
subsection (a) (amending this section) shall apply to taxable years
beginning after December 31, 1953, and ending after August 16, 1954,
but only with respect to contributions made after December 31, 1954.’
EFFECTIVE DATE OF 1966 AMENDMENTS
Section 204(d) of Pub.
L. 89-809, as amended by Pub.
L. 90-607, Oct. 21, 1968, 82
Stat. 1189; Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: ‘The amendments made by subsections
(a) and (b) (amending this section and section 404 of this title)
shall apply with respect to taxable years beginning after December
31, 1967. The amendment made by subsection (c) (amending this section)
shall apply with respect to taxable years beginning after December
31, 1967, and in the case of a taxpayer who applies the averaging
provisions of section 401(e)(3) of
the Internal Revenue Code of 1986 (formerly I.R.C. 1954) for a taxable year
beginning after December 31, 1967, the computation of the amount deductible
under section 404 of such Code for any prior taxable year which began
before January 1, 1968, shall be made, for purposes of such averaging
provisions, as if the amendment made by subsection (c) were applicable
to such prior taxable year.'
Section 205(b) of Pub.
L. 89-809 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply to taxable years ending after
the date of the enactment of this Act (Nov. 13, 1966).’
EFFECTIVE DATE OF 1965 AMENDMENTS
Amendment by Pub.
L. 89-97 applicable to taxable years beginning after
Dec. 31, 1966, see section 106(e) of Pub.
L. 89-97, set out as a note under section 213 of
this title.
EFFECTIVE DATE OF 1964 AMENDMENTS
Section 219(b) of Pub.
L. 88-272 provided that: ‘The amendments made by
subsection (a) (amending this section) shall apply with respect to
taxable years beginning after December 31, 1953, and ending after
August 16, 1954, but only with respect to contributions made after
December 31, 1954.’
EFFECTIVE DATE OF 1962 AMENDMENTS
Section 2(c) of Pub.
L. 87-863 provided that: ‘The amendments made by
subsections (a) and (b) (amending this section and section 404 of
this title) shall apply to taxable years beginning after the date
of the enactment of this Act (Oct. 23, 1962).’
Amendment by Pub.
L. 87-792 applicable to taxable years beginning after
Dec. 31, 1962, see section 8 of Pub.
L. 87-792, set out as a note under section 22 of
this title.
REGULATORY AUTHORITY
Section 110(g) of Pub. L. 117-328, Div. T, provided the following
authority:
“(g) REGULATORY
AUTHORITY.—
“The Secretary
of the Treasury (or such Secretary's delegate) shall prescribe
regulations for purposes of implementing the amendments made by this
section, including regulations—
“ (1) permitting
a plan to make matching contributions for qualified student loan payments,
as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal
Revenue Code of 1986, as added by this section, at a different frequency
than matching contributions are otherwise made under the plan, provided
that the frequency is not less than annually;
“(2) permitting
employers to establish reasonable procedures to claim matching contributions
for such qualified student loan payments under the plan, including
an annual deadline (not earlier than 3 months after the close of each
plan year) by which a claim must be made; and
“ (3) promulgating
model amendments which plans may adopt to implement matching contributions
on such qualified student loan payments for purposes of sections 401(m),
408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986.”
PROVISIONS RELATING TO
PLAN AMENDMENTS.
Section 601 of Pub. L. 116-94, Div. O, provided that:
“(a) IN GENERAL.—If
this section applies to any retirement plan or contract amendment—
“(1) such retirement
plan or contract shall be treated as being operated in accordance
with the terms of the plan during the period described in subsection
(b)(2)(A); and
“(2) except as provided
by the Secretary of the Treasury (or the Secretary's delegate),
such retirement plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of
1986 and section 204(g) of the Employee Retirement Income Security
Act of 1974 by reason of such amendment.
“(b) AMENDMENTS TO
WHICH SECTION APPLIES.—
“(1) IN GENERAL.—This
section shall apply to any amendment to any retirement plan or annuity
contract which is made—
“(A) pursuant to any
amendment made by this Act or pursuant to any regulation issued by
the Secretary of the Treasury or the Secretary of Labor (or a delegate
of either such Secretary) under this Act; and
“(B) on or before
the last day of the first plan year beginning on or after January
1, 2022, or such later date as the Secretary of the Treasury may prescribe.
“In the case of a
governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), or an applicable
collectively bargained plan in the case of section 401 (and the amendments
made thereby), this paragraph shall be applied by substituting ‘‘2024’’
for ‘‘2022’’. For purposes of the preceding
sentence, the term ‘‘applicable collectively bargained
plan’’ means a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or more
employers ratified before the date of enactment of this Act.
“(2) CONDITIONS.—This
section shall not apply to any amendment unless—
“(A) during the period—
“(i) beginning on
the date the legislative or regulatory amendment described in paragraph
(1)(A) takes effect (or in the case of a plan or contract amendment
not required by such legislative or regulatory amendment, the effective
date specified by the plan); and
“(ii) ending on the
date described in paragraph (1)(B) (as modified by the second sentence
of paragraph (1)) (or, if earlier, the date the plan or contract amendment
is adopted),
“the plan or contract
is operated as if such plan or contract amendment were in effect;
and
“(B) such plan or
contract amendment applies retroactively for such period.”
SPECIAL DISASTER-RELATED
RULES FOR USE OF RETIREMENT FUNDS
Section 202 of Pub. L. 116-94, Div. Q, provided:
“SEC. 202. SPECIAL
DISASTER-RELATED RULES FOR USE OF RETIREMENT FUNDS.
“(a) TAX-FAVORED WITHDRAWALS
FROM RETIREMENT PLANS.—
“(1) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified disaster distribution.
“(2) AGGREGATE DOLLAR
LIMITATION.—
“(A) IN GENERAL.—For
purposes of this subsection, the aggregate amount of distributions
received by an individual which may be treated as qualified disaster
distributions for any taxable year shall not exceed the excess (if
any) of—
“(i) $100,000, over
“(ii) the aggregate
amounts treated as qualified disaster distributions received by such
individual for all prior taxable years.
“(B) TREATMENT OF
PLAN DISTRIBUTIONS.—If a distribution to an individual would
(without regard to subparagraph (A)) be a qualified disaster distribution,
a plan shall not be treated as violating any requirement of the Internal
Revenue Code of 1986 merely because the plan treats such distribution
as a qualified disaster distribution, unless the aggregate amount
of such distributions from all plans maintained by the employer (and
any member of any controlled group which includes the employer) to
such individual exceeds $100,000.
“(C) CONTROLLED GROUP.—For
purposes of subparagraph (B), the term ‘‘controlled group’’
means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986.
“(D) SPECIAL RULE
FOR INDIVIDUALS AFFECTED BY MORE THAN ONE DISASTER.—The limitation
of subparagraph (A) shall be applied separately with respect to distributions
made with respect to each qualified disaster.
“(3) AMOUNT DISTRIBUTED
MAY BE REPAID.—
“(A) IN GENERAL.—Any
individual who receives a qualified disaster distribution may, at
any time during the 3-year period beginning on the day after the date
on which such distribution was received, make 1 or more contributions
in an aggregate amount not to exceed the amount of such distribution
to an eligible retirement plan of which such individual is a beneficiary
and to which a rollover contribution of such distribution could be
made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16),
of the Internal Revenue Code of 1986, as the case may be.
“(B) TREATMENT OF
REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN
IRAS.—For purposes of the Internal Revenue Code of 1986, if
a contribution is made pursuant to subparagraph (A) with respect to
a qualified disaster distribution from an eligible retirement plan
other than an individual retirement plan, then the taxpayer shall,
to the extent of the amount of the contribution, be treated as having
received the qualified disaster distribution in an eligible rollover
distribution (as defined in section 402(c)(4) of such Code) and as
having transferred the amount to the eligible retirement plan in a
direct trustee to trustee transfer within 60 days of the distribution.
“(C) TREATMENT OF
REPAYMENTS OF DISTRIBUTIONS FROM IRAS.—For purposes of the Internal
Revenue Code of 1986, if a contribution is made pursuant to subparagraph
(A) with respect to a qualified disaster distribution from an individual
retirement plan (as defined by section 7701(a)(37) of such Code),
then, to the extent of the amount of the contribution, the qualified
disaster distribution shall be treated as a distribution described
in section 408(d)(3) of such Code and as having been transferred to
the eligible retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution.
“(4) DEFINITIONS.—For
purposes of this subsection—
“(A) QUALIFIED DISASTER
DISTRIBUTION.—Except as provided in paragraph (2), the term ‘‘qualified
disaster distribution’’ means any distribution from an
eligible retirement plan made—
“(i) on or after the
first day of the incident period of a qualified disaster and before
the date which is 180 days after the date of the enactment of this
Act, and
“(ii) to an individual
whose principal place of abode at any time during the incident period
of such qualified disaster is located in the qualified disaster area
with respect to such qualified disaster and who has sustained an economic
loss by reason of such qualified disaster.
“(B) ELIGIBLE RETIREMENT
PLAN.—The term ‘‘eligible retirement plan’’
shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
“(5) INCOME INCLUSION
SPREAD OVER 3-YEAR PERIOD.—
“(A) IN GENERAL.—In
the case of any qualified disaster distribution, unless the taxpayer
elects not to have this paragraph apply for any taxable year, any
amount required to be included in gross income for such taxable year
shall be so included ratably over the 3-taxable year period beginning
with such taxable year.
“(B) SPECIAL RULE.—For
purposes of subparagraph (A), rules similar to the rules of subparagraph
(E) of section 408A(d)(3) of the
Internal Revenue Code of 1986 shall apply.
“(6) SPECIAL RULES.—
“(A) EXEMPTION OF
DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For
purposes of sections 401(a)(31), 402(f), and 3405
of the Internal Revenue Code of 1986, qualified disaster
distributions shall not be treated as eligible rollover distributions.
“(B) QUALIFIED DISASTER
DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For
purposes the Internal Revenue Code of 1986, a qualified disaster distribution
shall be treated as meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such Code.
“(b) RECONTRIBUTIONS
OF WITHDRAWALS FOR HOME PURCHASES.—
“(1) RECONTRIBUTIONS.—
“(A) IN GENERAL.—Any
individual who received a qualified distribution may, during the applicable
period, make 1 or more contributions in an aggregate amount not to
exceed the amount of such qualified distribution to an eligible retirement
plan (as defined in section 402(c)(8)(B)
of the Internal Revenue Codeof 1986) of which such individual
is a beneficiary and to which a rollover contribution of such distribution
could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3),
of such Code, as the case may be.
“(B) TREATMENT OF
REPAYMENTS.—Rules similar to the rules of subparagraphs (B)
and (C) of subsection (a)(3) shall apply for purposes of this subsection.
“(2) QUALIFIED DISTRIBUTION.—For
purposes of this subsection, the term ‘‘qualified distribution’’
means any distribution—
“(A) described in
section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only to the extent
such distribution relates to financial hardship), 403(b)(11)(B), or
72(t)(2)(F), of the Internal Revenue Code of 1986,
“(B) which was to
be used to purchase or construct a principal residence in a qualified
disaster area, but which was not so used on account of the qualified
disaster with respect to such area, and
“(C) which was received
during the period beginning on the date which is 180 days before the
first day of the incident period of such qualified disaster and ending
on the date which is 30 days after the last day of such incident period.
“(3) APPLICABLE PERIOD.—For
purposes of this subsection, the term ‘‘applicable period’’
means, in the case of a principal residence in a qualified disaster
area with respect to any qualified disaster, the period beginning
on the first day of the incident period of such qualified disaster
and ending on the date which is 180 days after the date of the enactment
of this Act.
“(c) LOANS FROM QUALIFIED
PLANS.—
“(1) INCREASE IN LIMIT
ON LOANS NOT TREATED AS DISTRIBUTIONS.—In the case of any loan
from a qualified employer plan (as defined under section 72(p)(4) of the Internal Revenue Code of
1986) to a qualified individual made during the 180-day period beginning
on the date of the enactment of this Act—
“(A) clause (i) of
section 72(p)(2)(A) of such Code shall be applied by substituting ‘‘$100,000’’
for ‘‘$50,000’’, and
“(B) clause (ii) of
such section shall be applied by substituting ‘‘the present
value of the nonforfeitable accrued benefit of the employee under
the plan’’ for ‘‘one-half of the present value
of the nonforfeitable accrued benefit of the employee under the plan’’.
“(2) DELAY OF REPAYMENT.—In
the case of a qualified individual (with respect to any qualified
disaster) with an outstanding loan (on or after the first day of the
incident period of such qualified disaster) from a qualified employer
plan (as defined in section 72(p)(4)
of the Internal Revenue Codeof 1986)—
“(A) if the due date
pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code
for any repayment with respect to such loan occurs during the period
beginning on the first day of the incident period of such qualified
disaster and ending on the date which is 180 days after the last day
of such incident period, such due date shall be delayed for 1 year
(or, if later, until the date which is 180 days after the date of
the enactment of this Act),
“(B) any subsequent
repayments with respect to any such loan shall be appropriately adjusted
to reflect the delay in the due date under subparagraph (A) and any
interest accruing during such delay, and
“(C) in determining
the 5-year period and the term of a loan under subparagraph (B) or
(C) of section 72(p)(2) of such Code, the period described in subparagraph
(A) of this paragraph shall be disregarded.
“(3) QUALIFIED INDIVIDUAL.—For
purposes of this subsection, the term ‘‘qualified individual’’
means any individual—
“(A) whose principal
place of abode at any time during the incident period of any qualified
disaster is located in the qualified disaster area with respect to
such qualified disaster, and
“(B) who has sustained
an economic loss by reason of such qualified disaster.
“(d) PROVISIONS RELATING
TO PLAN AMENDMENTS.—
“(1) IN GENERAL.—If
this subsection applies to any amendment to any plan or annuity contract,
such plan or contract shall be treated as being operated in accordance
with the terms of the plan during the period described in paragraph
(2)(B)(i).
“(2) AMENDMENTS TO
WHICH SUBSECTION APPLIES.—
“(A) IN GENERAL.—This
subsection shall apply to any amendment to any plan or annuity contract
which is made—
“(i) pursuant to any
provision of this section, or pursuant to any regulation issued by
the Secretary or the Secretary of Labor under any provision of this
section, and
“(ii) on or before
the last day of the first plan year beginning on or after January
1, 2020, or such later date as the Secretary may prescribe.
“In the case of a
governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), clause (ii)
shall be applied by substituting the date which is 2 years after the
date otherwise applied under clause (ii).
“(B) CONDITIONS.—This
subsection shall 24 not apply to any amendment unless—
“(i) during the period—
“(I) beginning on
the date that this section or the regulation described in subparagraph
(A)(i) takes effect (or in the case of a plan or contract amendment
not required by this section or such regulation, the effective date
specified by the plan), and
“(II) ending on the
date described in subparagraph (A)(ii) (or, if earlier, the date the
plan or contract amendment is adopted),
“the plan or contract
is operated as if such plan or contract amendment were in effect,
and
“(ii) such plan or
contract amendment applies retroactively for such period.”
MODIFICATION OF RULES
GOVERNING HARDSHIP DISTRIBUTIONS
Pub. L. 115-123, Sec. 41113, provided
that:
“(a) IN GENERAL.—Not
later than 1 year after the date of the enactment of this Act, the
Secretary of the Treasury shall modify Treasury Regulation section
1.401(k)–1(d)(3)(iv)(E) to—
“(1) delete the 6-month
prohibition on contributions imposed by paragraph (2) thereof, and
“(2) make any other
modifications necessary to carry out the purposes of section 401(k)(2)(B)(i)(IV) of the
Internal Revenue Code of 1986.
“(b) EFFECTIVE DATE.—The
revised regulations under this section shall apply to plan years beginning
after December 31, 2018.”
RELIEF FOR 2016 DISASTER
AREAS
Section 11028 of Pub. L. 115-97 provided that:
“(a) IN GENERAL.—For
purposes of this section, the term ‘2016 disaster area’
means any area with respect to which a major disaster has been declared
by the President under section 401 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act during calendar year 2016.
“(b) SPECIAL RULES
FOR USE OF RETIREMENT FUNDS WITH RESPECT TO AREAS DAMAGED BY 2016
DISASTERS.—
“(1) TAX-FAVORED WITHDRAWALS
FROM RETIREMENT PLANS.—
“(A) IN GENERAL.—Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified 2016 disaster distribution.
“(B) AGGREGATE DOLLAR
LIMITATION.—
“(i) IN GENERAL.—For
purposes of this subsection, the aggregate amount of distributions
received by an individual which may be treated as qualified 2016 disaster
distributions for any taxable year shall not exceed the excess (if
any) of—
“(I) $100,000, over
(II) the aggregate amounts treated as qualified 2016 disaster distributions
received by such individual for all prior taxable years.
“(ii) TREATMENT OF
PLAN DISTRIBUTIONS.—If a distribution to an individual would
(without regard to clause (i)) be a qualified 2016 disaster distribution,
a plan shall not be treated as violating any requirement of this title
merely because the plan treats such distribution as a qualified 2016
disaster distribution, unless the aggregate amount of such distributions
from all plans maintained by the employer (and any member of any controlled
group which includes the employer) to such individual exceeds $100,000.
“(iii) CONTROLLED
GROUP.—For purposes of clause (ii), the term ‘controlled
group’ means any group treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 of
the Internal Revenue Codeof 1986.
“(C) AMOUNT DISTRIBUTED
MAY BE REPAID.—
“(i) IN GENERAL.—Any
individual who receives a qualified 2016 disaster distribution may,
at any time during the 3-year period beginning on the day after the
date on which such distribution was received, make one or more contributions
in an aggregate amount not to exceed the amount of such distribution
to an eligible retirement plan of which such individual is a beneficiary
and to which a rollover contribution of such distribution could be
made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue Code of
1986, as the case may be.
“(ii) TREATMENT OF
REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN
IRAS.— For purposes of the Internal Revenue Code of 1986, if
a contribution is made pursuant to clause (i) with respect to a qualified
2016 disaster distribution from an eligible retirement plan other
than an individual retirement plan, then the taxpayer shall, to the
extent of the amount of the contribution, be treated as having received
the qualified 2016 disaster distribution in an eligible rollover distribution
(as defined in section 402(c)(4)
of the Internal Revenue Code of 1986) and as having transferred
the amount to the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution.
“(iii) TREATMENT OF
REPAYMENTS FOR DISTRIBUTIONS FROM IRAS.—For purposes of the
Internal Revenue Code of 1986, if a contribution is made pursuant
to clause (i) with respect to a qualified 2016 disaster distribution
from an individual retirement plan (as defined by section 7701(a)(37) of the Internal Revenue
Code of 1986), then, to the extent of the amount of the
contribution, the qualified 2016 disaster distribution shall be treated
as a distribution described in section 408(d)(3) of such Code and
as having been transferred to the eligible retirement plan in a direct
trustee to trustee transfer within 60 days of the distribution.
“(D) DEFINITIONS.—For
purposes of this paragraph—
“(i) QUALIFIED 2016
DISASTER DISTRIBUTION.—Except as provided in subparagraph (B),
the term ‘‘qualified 2016 disaster distribution’’
means any distribution from an eligible retirement plan made on or
after January 1, 2016, and before January 1, 2018, to an individual
whose principal place of abode at any time during calendar year 2016
was located in a disaster area described in subsection (a) and who
has sustained an economic loss by reason of the events giving rise
to the Presidential declaration described in subsection (a) which
was applicable to such area.
“(ii) ELIGIBLE RETIREMENT
PLAN.—The term ‘eligible retirement plan’ shall
have the meaning given such term by section
402(c)(8)(B) of the Internal Revenue Code of 1986.
“(E) INCOME INCLUSION
SPREAD OVER 3-YEAR PERIOD.—
“(i) IN GENERAL.—In
the case of any qualified 2016 disaster distribution, unless the taxpayer
elects not to have this subparagraph apply for any taxable year, any
amount required to be included in gross income for such taxable year
shall be so included ratably over the 3-taxable-year period beginning
with such taxable year.
“(ii) SPECIAL RULE.—For
purposes of clause (i), rules similar to the rules of subparagraph
(E) of section 408A(d)(3) of the
Internal Revenue Code of 1986 shall apply.
“(F) SPECIAL RULES.—
“(i) EXEMPTION OF
DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For
purposes of sections 401(a)(31), 402(f), and 3405
of the Internal Revenue Code of 1986, qualified 2016 disaster
distribution shall not be treated as eligible rollover distributions.
“(ii) QUALIFIED 2016
DISASTER DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For
purposes of the Internal Revenue Code of 1986, a qualified 2016 disaster
distribution shall be treated as meeting the requirements of sections
401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of the Internal Revenue Code of
1986. (2) PROVISIONS RELATING TO PLAN AMENDMENTS.—
“(A) IN GENERAL.—If
this paragraph applies to any amendment to any plan or annuity contract,
such plan or contract shall be treated as being operated in accordance
with the terms of the plan during the period described in subparagraph
(B)(ii)(I).
“(B) AMENDMENTS TO
WHICH SUBSECTION APPLIES.—
“(i) IN GENERAL.—This
paragraph shall apply to any amendment to any plan or annuity contract
which is made—
“(I) pursuant to any
provision of this section, or pursuant to any regulation under any
provision of this section, and
“(II) on or before
the last day of the first plan year beginning on or after January
1, 2018, or such later date as the Secretary prescribes. In the case
of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), subclause
(II) shall be applied by substituting the date which is 2 years after
the date otherwise applied under subclause (II).
“(ii) CONDITIONS.—This
paragraph shall not apply to any amendment to a plan or contract unless
such amendment applies retroactively for such period, and shall not
apply to any such amendment unless the plan or contract is operated
as if such amendment were in effect during the period—
“(I) beginning on
the date that this section or the regulation described in clause (i)(I)
takes effect (or in the case of a plan or contract amendment not required
by this section or such regulation, the effective date specified by
the plan), and
“(II) ending on the
date described in clause (i)(II) (or, if earlier, the date the plan
or contract amendment is adopted).
“(c) SPECIAL RULES
FOR PERSONAL CASUALTY LOSSES RELATED TO 2016 MAJOR DISASTER.—
“(1) IN GENERAL.—If
an individual has a net disaster loss for any taxable year beginning
after December 31, 2015, and before January 1, 2018—
“(A) the amount determined
under section 165(h)(2)(A)(ii)
of the Internal Revenue Code of 1986 shall be equal to
the sum of—
“(i) such net disaster
loss, and
“(ii) so much of the
excess referred to in the matter preceding clause (i) of section 165(h)(2)(A)
of such Code (reduced by the amount in clause (i) of this subparagraph)
as exceeds 10 percent of the adjusted gross income of the individual,
“(B) section 165(h)(1)
of such Code shall be applied by substituting ‘$500’ for ‘$500
($100 for taxable years beginning after December 31, 2009)’,
“(C) the standard
deduction determined under section 63(c) of such Code shall be increased
by the net disaster loss,
“(D) section 56(b)(1)(E)
of such Code shall not apply to so much of the standard deduction
as is attributable to the increase under subparagraph (C) of this
paragraph.
“(2) NET DISASTER
LOSS.—For purposes of this subsection, the term ‘‘net
disaster loss’’ means the excess of qualified disaster-related
personal casualty losses over personal casualty gains (as defined
in section 165(h)(3)(A) of the
Internal Revenue Code of 1986).
“(3) QUALIFIED DISASTER-RELATED
PERSONAL CASUALTY LOSSES.—For purposes of this paragraph, the
term ‘qualified disaster-related personal casualty losses’
means losses described in section
165(c)(3) of the Internal Revenue Code of 1986 which arise
in a disaster area described in subsection (a) on or after January
1, 2016, and which are attributable to the events giving rise to the
Presidential declaration described in subsection (a) which was applicable
to such area.”
TAX-FAVORED WITHDRAWALS
FROM RETIREMENT PLANS
Section 502(a) of Pub. L. 115–63 provided:
“(a) TAX-FAVORED WITHDRAWALS FROM RETIREMENT
PLANS—
“ (1) IN GENERAL.--Section 72(t) of the Internal Revenue Code of
1986 shall not apply to any qualified hurricane distribution.
“ (2) AGGREGATE DOLLAR
LIMITATION.--
“(A) IN GENERAL.--For
purposes of this subsection, the aggregate amount of distributions
received by an individual which may be treated as qualified
hurricane distributions for any taxable year shall not exceed the
excess (if any) of--
“(i) $100,000, over
“(ii) the aggregate
amounts treated as qualified hurricane distributions
received by such individual for all prior
taxable years.
“(B) TREATMENT OF
PLAN DISTRIBUTIONS.--If a distribution to an individual would (without
regard to subparagraph (A)) be a qualified hurricane
distribution, a plan shall not be treated as violating
any requirement of the Internal Revenue Code of 1986
merely because the plan treats such distribution
as a qualified hurricane distribution, unless the
aggregate amount of such distributions from all plans
maintained by the employer (and any member of any
controlled group which includes the employer) to
such individual exceeds $100,000.
“(C) CONTROLLED GROUP.--For
purposes of subparagraph (B), the term “controlled
group” means any group treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code
of 1986.
“(3) AMOUNT DISTRIBUTED
MAY BE REPAID.--
“(A) IN GENERAL.--Any
individual who receives a qualified hurricane distribution
may, at any time during the 3-year period beginning
on the day after the date on which such distribution
was received, make one or more contributions in an
aggregate amount not to exceed the amount of such
distribution to an eligible retirement plan of which
such individual is a beneficiary and to which a rollover
contribution of such distribution could be made under
section 402(c), 403(a)(4), 403(b)(8), 408(d)(3),
or 457(e)(16), of the Internal Revenue Code of 1986,
as the case may be.
“ (B) TREATMENT OF
REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER
THAN IRAS.--For purposes of the Internal Revenue
Code of 1986, if a contribution is made pursuant
to subparagraph (A) with respect to a qualified hurricane
distribution from an eligible retirement plan other
than an individual retirement plan, then the taxpayer
shall, to the extent of the amount of the contribution,
be treated as having received the qualified hurricane
distribution in an eligible rollover distribution
(as defined in section 402(c)(4) of such Code) and
as having transferred the amount to the eligible
retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution.
(C) Treatment of repayments for distributions from
iras.--For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to
subparagraph (A) with respect to a qualified hurricane
distribution from an individual retirement plan (as
defined by section 7701(a)(37) of such Code), then,
to the extent of the amount of the contribution,
the qualified hurricane distribution shall be treated
as a distribution described in section 408(d)(3)
of such Code and as having been transferred to the
eligible retirement plan in a direct trustee to trustee
transfer within 60 days of the distribution.
“(4) DEFINITIONS.--For
purposes of this subsection--
“(A) QUALIFIED HURRICANE
DISTRIBUTION.--Except as provided in paragraph (2),
the term “qualified hurricane distribution” means--
“(i) any distribution
from an eligible retirement plan made on
or after August 23, 2017, and before January
1, 2019, to an individual whose principal
place of abode on August 23, 2017, is located
in the Hurricane Harvey disaster area and
who has sustained an economic loss by reason
of Hurricane Harvey,
“(ii) any distribution
(which is not described in clause (i)) from
an eligible retirement plan made on or after
September 4, 2017, and before January 1,
2019, to an individual whose principal place
of abode on September 4, 2017, is located
in the Hurricane Irma disaster area and who
has sustained an economic loss by reason
of Hurricane Irma, and
“(iii) any distribution
(which is not described in clause (i) or
(ii)) from an eligible retirement plan made
on or after September 16, 2017, and before
January 1, 2019, to an individual whose principal
place of abode on September 16, 2017, is
located in the Hurricane Maria disaster area
and who has sustained an economic loss by
reason of Hurricane Maria.
“(B) ELIGIBLE RETIREMENT
PLAN.--The term “eligible retirement plan” shall
have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
“(5) INCOME INCLUSION
SPREAD OVER 3-YEAR PERIOD.--
“(A) IN GENERAL.--In
the case of any qualified hurricane distribution,
unless the taxpayer elects not to have this paragraph
apply for any taxable year, any amount required to
be included in gross income for such taxable year
shall be so included ratably over the 3- taxable-year
period beginning with such taxable year.
“(B) SPECIAL RULE.--For
purposes of subparagraph (A), rules similar to the
rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue
Code of 1986 shall apply.
(6) Special rules.--
“(A) EXEMPTION OF
DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.--For
purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of
1986, qualified hurricane distributions shall not
be treated as eligible rollover distributions.
“(B) QUALIFIED HURRICANE
DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.--For
purposes the Internal Revenue Code of 1986, a qualified
hurricane distribution shall be treated as meeting
the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such
Code.
“(b) RECONTRIBUTIONS
OF WITHDRAWALS FOR HOME PURCHASES.--
“(1) RECONTRIBUTIONS.--
“(A) IN GENERAL.--Any
individual who received a qualified distribution
may, during the period beginning on August 23, 2017,
and ending on February 28, 2018, make one or more
contributions in an aggregate amount not to exceed
the amount of such qualified distribution to an eligible
retirement plan (as defined in section
402(c)(8)(B) of the Internal Revenue Code of
1986) of which such individual is a beneficiary and
to which a rollover contribution of such distribution
could be made under section 402(c), 403(a)(4), 403(b)(8),
or 408(d)(3), of such Code, as the case may be.
“(B) TREATMENT OF
REPAYMENTS.--Rules similar to the rules of subparagraphs
(B) and (C) of subsection (a)(3) shall apply for
purposes of this subsection.
“(2) QUALIFIED DISTRIBUTION.--For
purposes of this subsection, the term “qualified distribution”
means any distribution--
“(A) described in
section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but
only to the extent such distribution relates to financial
hardship), 403(b)(11)(B), or 72(t)(2)(F), of the
Internal Revenue Code of 1986,
“(B) received after
February 28, 2017, and before September 21, 2017,
and
“(C) which was to
be used to purchase or construct a principal residence
in the Hurricane Harvey disaster area, the Hurricane
Irma disaster area, or the Hurricane Maria disaster
area, but which was not so purchased or constructed
on account of Hurricane Harvey, Hurricane Irma, or
Hurricane Maria.”
“(A) EXEMPTION OF
DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For
purposes of sections 401(a)(31), 402(f), and 3405
of the Internal Revenue Code of 1986, qualified hurricane
distributions shall not be treated as eligible rollover distributions.”
INCOME AVERAGING FOR
AMOUNTS RECEIVED IN CONNECTION WITH THE EXXON VALDEZ LITIGATION
Pub. L. 110-343, Div. C, Sec. 504
provided that:
“(a) Income Averaging
of Amounts Received From the Exxon Valdez Litigation.—For purposes
of section 1301 of the Internal Revenue
Code of 1986—
“(1) any qualified
taxpayer who receives any qualified settlement income in any taxable
year shall be treated as engaged in a fishing business (determined
without regard to the commercial nature of the business), and
“(2) such qualified
settlement income shall be treated as income attributable to such
a fishing business for such taxable year.
“(b) Contributions
of Amounts Received to Retirement Accounts.—
“(1) IN GENERAL.—Any
qualified taxpayer who receives qualified settlement income during
the taxable year may, at any time before the end of the taxable year
in which such income was received, make one or more contributions
to an eligible retirement plan of which such qualified taxpayer is
a beneficiary in an aggregate amount not to exceed the lesser of—
“(A) $100,000 (reduced
by the amount of qualified settlement income contributed to an eligible
retirement plan in prior taxable years pursuant to this subsection),
or
“(B) the amount of
qualified settlement income received by the individual during the
taxable year.
“(2) TIME WHEN CONTRIBUTIONS
DEEMED MADE.—For purposes of paragraph (1), a qualified taxpayer
shall be deemed to have made a contribution to an eligible retirement
plan on the last day of the taxable year in which such income is received
if the contribution is made on account of such taxable year and is
made not later than the time prescribed by law for filing the return
for such taxable year (not including extensions thereof).
“(3) TREATMENT OF
CONTRIBUTIONS TO ELIGIBLE RETIREMENT PLANS.—For purposes of
the Internal Revenue Code of 1986, if a contribution is made pursuant
to paragraph (1) with respect to qualified settlement income, then—
“(A) except as provided
in paragraph (4)—
“(i) to the extent
of such contribution, the qualified settlement income shall not be
included in taxable income, and
“(ii) for purposes
of section 72 of such Code, such contribution shall not be considered
to be investment in the contract,
“(B) the qualified
taxpayer shall, to the extent of the amount of the contribution, be
treated—
“(i) as having received
the qualified settlement income—
“(I) in the case of
a contribution to an individual retirement plan (as defined under
section 7701(a)(37) of such Code), in a distribution described in
section 408(d)(3) of such Code, and
“(II) in the case
of any other eligible retirement plan, in an eligible rollover distribution
(as defined under section 402(f)(2) of such Code), and
“(ii) as having transferred
the amount to the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution,
“(C) section 408(d)(3)(B) of the Internal Revenue
Code of 1986 shall not apply with respect to amounts treated
as a rollover under this paragraph, and
“(D) section 408A(c)(3)(B) of the Internal Revenue
Code of 1986 shall not apply with respect to amounts contributed
to a Roth IRA (as defined under section 408A(b) of such Code) or a
designated Roth contribution to an applicable retirement plan (within
the meaning of section 402A of such Code) under this paragraph.
“(4) SPECIAL RULE
FOR ROTH IRAS AND ROTH 401(k)s.—For purposes of the Internal
Revenue Code of 1986, if a contribution is made pursuant to paragraph
(1) with respect to qualified settlement income to a Roth IRA (as
defined under section 408A(b) of such Code) or as a designated Roth
contribution to an applicable retirement plan (within the meaning
of section 402A of such Code), then—
“(A) the qualified
settlement income shall be includible in taxable income, and
“(B) for purposes
of section 72 of such Code, such contribution shall be considered
to be investment in the contract.
“(5) ELIGIBLE RETIREMENT
PLAN.—For purpose of this subsection, the term “eligible retirement
plan” has the meaning given such term under section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
“(c) Treatment of
Qualified Settlement Income Under Employment Taxes.—
“(1) SECA.?For purposes
of chapter 2 of the Internal Revenue Code of
1986 and section 211 of the Social
Security Act, no portion of qualified settlement income received by
a qualified taxpayer shall be treated as self-employment income.
“(2) FICA.—For
purposes of chapter 21 of the Internal Revenue
Code of 1986 and section 209 of
the Social Security Act, no portion of qualified settlement income
received by a qualified taxpayer shall be treated as wages.
“(d) Qualified Taxpayer.—For
purposes of this section, the term “qualified taxpayer” means—
“(1) any individual
who is a plaintiff in the civil action In re Exxon Valdez, No. 89-095-CV
(HRH) (Consolidated) (D. Alaska); or
“(2) any individual
who is a beneficiary of the estate of such a plaintiff who-
“(A) acquired the
right to receive qualified settlement income from that plaintiff;
and
“(B) was the spouse
or an immediate relative of that plaintiff.
“(e) Qualified Settlement
Income.—For purposes of this section, the term “qualified settlement
income” means any interest and punitive damage awards which are—
“(1) otherwise includible
in taxable income, and
“(2) received (whether
as lump sums or periodic payments) in connection with the civil action
In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. Alaska)
(whether pre- or post-judgment and whether related to a settlement
or judgment).”
MODIFICATIONS OF RULES GOVERNING HARDSHIPS AND
UNFORSEEN FINANCIAL EMERGENCIES
Section 826 of Pub.
L. 109-280 provided that:
“Within 180 days after the date of the enactment
of this Act, the Secretary of the Treasury shall modify the rules
for determining whether a participant has had a hardship for purposes
of section 401(k)(2)(B)(i)(IV)
of the Internal Revenue Code of 1986 to provide that
if an event (including the occurrence of a medical expense) would
constitute a hardship under the plan if it occurred with respect
to the participant's spouse or dependent (as defined in section
152 of such Code), such event shall, to the extent permitted under
a plan, constitute a hardship if it occurs with respect to a person
who is a beneficiary under the plan with respect to the participant.
The Secretary of the Treasury shall issue similar rules for purposes
of determining whether a participant has had--
“(1) a hardship for purposes of section 403(b)(11)(B)
of such Code; or
“(2) an unforeseen financial emergency for purposes
of sections 409A(a)(2)(A)(vi), 409A(a)(2)(B)(ii), and 457(d)(1)(A)(iii)
of such Code.”
GRANDFATHER RULE FOR CHURCH PLANS WHICH SELF-ANNUITIZE
Section 865 of Pub.
L. 109-280 provided that:
“(a) In General.-- In the case of any plan year
ending after the date of the enactment of this Act, annuity payments
provided with respect to any account maintained for a participant
or beneficiary under a qualified church plan shall not fail to
satisfy the requirements of section
401(a)(9) of the Internal Revenue Code of 1986 merely
because the payments are not made under an annuity contract purchased
from an insurance company if such payments would not fail such
requirements if provided with respect to a retirement income account
described in section 403(b)(9) of such Code.
“(b) Qualified Church Plan.-- For purposes of this
section, the term “qualified church plan” means any money purchase
pension plan described in section 401(a) of such Code which--
“(1) is a church plan (as defined in section 414(e)
of such Code) with respect to which the election provided by
section 410(d) of such Code has not been made, and
“(2) was in existence on April 17, 2002.”
TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS
FOR RELIEF RELATING TO HURRICANE KATRINA
Section 101 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) IN GENERAL.--Section
72(t) of the Internal Revenue Code of 1986 shall not apply
to any qualified Hurricane Katrina distribution.
“(b) AGGREGATE DOLLAR LIMITATION.--
“(1) IN GENERAL.--For purposes of this section,
the aggregate amount of distributions received by an individual which
may be treated as qualified Hurricane Katrina distributions for any
taxable year shall not exceed the excess (if any) of--
“(A) $100,000, over
“(B) the aggregate amounts treated as qualified
Hurricane Katrina distributions received by such individual for all
prior taxable years.
“(2) TREATMENT OF PLAN DISTRIBUTIONS.--If a distribution
to an individual would (without regard to paragraph (1)) be a qualified
Hurricane Katrina distribution, a plan shall not be treated as violating
any requirement of the Internal Revenue Code of 1986 merely because
the plan treats such distribution as a qualified Hurricane Katrina
distribution, unless the aggregate amount of such distributions from
all plans maintained by the employer (and any member of any controlled
group which includes the employer) to such individual exceeds $100,000.
“(3) CONTROLLED GROUP.--For purposes of paragraph
(2), the term “controlled group” means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 of
such Code.
“(c) AMOUNT DISTRIBUTED MAY BE REPAID.--
“(1) IN GENERAL.--Any individual who receives a
qualified Hurricane Katrina distribution may, at any time during the
3-year period beginning on the day after the date on which such distribution
was received, make one or more contributions in an aggregate amount
not to exceed the amount of such distribution to an eligible retirement
plan of which such individual is a beneficiary and to which a rollover
contribution of such distribution could be made under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of such Code, as the
case may be.
“(2) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM
ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.--For purposes of such Code,
if a contribution is made pursuant to paragraph (1) with respect to
a qualified Hurricane Katrina distribution from an eligible retirement
plan other than an individual retirement plan, then the taxpayer shall,
to the extent of the amount of the contribution, be treated as having
received the qualified Hurricane Katrina distribution in an eligible
rollover distribution (as defined in section 402(c)(4) of such Code)
and as having transferred the amount to the eligible retirement plan
in a direct trustee to trustee transfer within 60 days of the distribution.
“(3) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS
FROM IRAS.--For purposes of such Code, if a contribution is made pursuant
to paragraph (1) with respect to a qualified Hurricane Katrina distribution
from an individual retirement plan (as defined by section 7701(a)(37)
of such Code), then, to the extent of the amount of the contribution,
the qualified Hurricane Katrina distribution shall be treated as a
distribution described in section 408(d)(3) of such Code and as having
been transferred to the eligible retirement plan in a direct trustee
to trustee transfer within 60 days of the distribution.
“(d) DEFINITIONS.--For purposes of this section--
“(1) QUALIFIED HURRICANE KATRINA DISTRIBUTION.--Except
as provided in subsection (b), the term “qualified Hurricane Katrina
distribution” means any distribution from an eligible retirement plan
made on or after August 25, 2005, and before January 1, 2007, to an
individual whose principal place of abode on August 28, 2005, is located
in the Hurricane Katrina disaster area and who has sustained an economic
loss by reason of Hurricane Katrina.
“(2) ELIGIBLE RETIREMENT PLAN.--The term “eligible
retirement plan” shall have the meaning given such term by section
402(c)(8)(B) of such Code.
“(e) INCOME INCLUSION SPREAD OVER 3 YEAR PERIOD
FOR QUALIFIED HURRICANE KATRINA DISTRIBUTIONS.--
“(1) IN GENERAL.--In the case of any qualified
Hurricane Katrina distribution, unless the taxpayer elects not to
have this subsection apply for any taxable year, any amount required
to be included in gross income for such taxable year shall be so included
ratably over the 3-taxable year period beginning with such taxable
year.
“(2) SPECIAL RULE.--For purposes of paragraph (1),
rules similar to the rules of subparagraph (E) of section 408A(d)(3)
of such Code shall apply.
“(f) SPECIAL RULES.--
“(1) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO
TRUSTEE TRANSFER AND WITHHOLDING RULES.--For purposes of sections
401(a)(31), 402(f), and 3405 of such Code, qualified Hurricane Katrina
distributions shall not be treated as eligible rollover distributions.
“(2) QUALIFIED HURRICANE KATRINA DISTRIBUTIONS
TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.--For purposes of
such Code, a qualified Hurricane Katrina distribution shall be treated
as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii),
403(b)(11), and 457(d)(1)(A) of such Code.”
RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES
CANCELLED DUE TO HURRICANE KATRINA
Section 102 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) RECONTRIBUTIONS.--
“(1) IN GENERAL.--Any individual who received a
qualified distribution may, during the period beginning on August
25, 2005, and ending on February 28, 2006, make one or more contributions
in an aggregate amount not to exceed the amount of such qualified
distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue
Code of 1986) of which such individual is a beneficiary
and to which a rollover contribution of such distribution could be
made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of such
Code, as the case may be.
“(2) TREATMENT OF REPAYMENTS.--Rules similar to
the rules of paragraphs (2) and (3) of section 101(c) of this Act
shall apply for purposes of this section.
“(b) QUALIFIED DISTRIBUTION DEFINED.--For purposes
of this section, the term “qualified distribution” means any distribution--
“(1) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the extent such distribution relates
to financial hardship), 403(b)(11)(B), or 72(t)(2)(F) of such Code,
“(2) received after February 28, 2005, and before
August 29, 2005, and
“(3) which was to be used to purchase or construct
a principal residence in the Hurricane Katrina disaster area, but
which was not so purchased or constructed on account of Hurricane
Katrina.”
PROVISIONS RELATING TO PLAN AMENDMENTS
Section 104 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective
Dec. 21, 2005) provided that:
“(a) IN GENERAL.--If this section applies to any
amendment to any plan or annuity contract, such plan or contract shall
be treated as being operated in accordance with the terms of the plan
during the period described in subsection (b)(2)(A).
“(b) AMENDMENTS TO WHICH SECTION APPLIES.--
“(1) IN GENERAL.--This section shall apply to any
amendment to any plan or annuity contract which is made--
“(A) pursuant to any amendment made by this title,
or pursuant to any regulation issued by the Secretary of the Treasury
or the Secretary of Labor under this title, and
“(B) on or before the last day of the first plan
year beginning on or after January 1, 2007, or such later date as
the Secretary of the Treasury may prescribe.
“In the case of a governmental plan (as defined
in section 414(d) of the Internal Revenue
Code of 1986), subparagraph (B) shall be applied by substituting
the date which is 2 years after the date otherwise applied under subparagraph
(B).
“(2) CONDITIONS.--This section shall not apply
to any amendment unless--
“(A) during the period--
“(i) beginning on the date the legislative or regulatory
amendment described in paragraph (1)(A) takes effect (or in the case
of a plan or contract amendment not required by such legislative or
regulatory amendment, the effective date specified by the plan), and
“(ii) ending on the date described in paragraph
(1)(B) (or, if earlier, the date the plan or contract amendment is
adopted),
“the plan or contract is operated as if such plan
or contract amendment were in effect; and
“(B) such plan or contract amendment applies retroactively
for such period.”
CERTAIN ARRANGEMENTS MAINTAINED BY THE YMCA
RETIREMENT FUND TREATED AS CHURCH PLANS
Section 1 of Pub.
L. 108-476 provided that:
“(1) CERTAIN ARRANGEMENTS MAINTAINED BY THE YMCA
RETIREMENT FUND TREATED AS CHURCH PLANS.-
“(a) RETIREMENT PLANS.-
“(1) IN GENERAL.-For purposes
of sections 401(a) and 403(b) of the
Internal Revenue Code of 1986, any retirement plan maintained
by the YMCA Retirement Fund as of January 1, 2003, shall be treated
as a church plan (within the meaning of section 414(e) of such Code)
which is maintained by an organization described in section 414(e)(3)(A)
of such Code.
“(2) TAX-DEFERRED RETIREMENT
PLAN.-In the case of a retirement plan described in paragraph (1)
which allows contributions to be made under a salary reduction agreement-
(A) such treatment shall not
apply for purposes of section 415(c)(7) of such Code, and
(B) any account maintained for
a participant or beneficiary of such plan shall be treated for purposes
of such Code as a retirement income account described in section 403(b)(9)
of such Code, except that such account shall not, for purposes of
section 403(b)(12) of such Code, be treated as a contract purchased
by a church for purposes of section 403(b)(1)(D) of such Code.
(3) MONEY PURCHASE PENSION PLAN.-In
the case of a retirement plan described in paragraph (1) which is
subject to the requirements of section 401(a) of such Code-
(A) such plan (but not any reserves
held by the YMCA Retirement Fund)-
(i) shall be treated for purposes
of such Code as a defined contribution plan which is a money purchase
pension plan, and
(ii) shall be treated as having
made an election under section 410(d) of such Code for plan years
beginning after December 31, 2005, except that notwithstanding the
election-
(I) nothing in the Employee
Retirement Income Security Act of 1974 or such Code shall prohibit
the YMCA Retirement Fund from commingling for investment purposes
the assets of the electing plan with the assets of such Fund and with
the assets of any employee benefit plan maintained by such Fund, and
(II) nothing in this section
shall be construed as subjecting any assets described in subclause
(I), other than the assets of the electing plan, to any provision
of such Act.
(B) notwithstanding section
401(a)(11) or 417 of such Code or section 205 of such Act, such plan
may offer a lump-sum distribution option to participants who have
not attained age 55 without offering such participants an annuity
option, and
(C) any account maintained for
a participant or beneficiary of such plan shall, for purposes of section
401(a)(9) of such Code, be treated as a retirement income account
described in section 403(b)(9) of such Code.
(4) SELF-FUNDED DEATH BENEFIT
PLAN.-For purposes of section 7702(j) of such Code, a retirement plan
described in paragraph (1) shall be treated as an arrangement described
in section 7702(j)(2).
“(b) YMCA RETIREMENT FUND.-For purposes of this
section the term “YMCA Retirement Fund” means the Young Men's Christian
Association Retirement Fund, a corporation created by an Act of the
State of New York which became law on April 30, 1921.
“(c) EFFECTIVE DATE.-This section shall apply to
plan years beginning after December 31, 2003.”
SAFE HARBOR RELIEF
Section 636(a) of Pub.
L. 107-16 provided that:
“(a) SAFE HARBOR RELIEF.--
“(1) IN GENERAL.--The Secretary
of the Treasury shall revise the regulations relating to hardship
distributions under section
401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986
to provide that the period an employee is prohibited from making elective
and employee contributions in order for a distribution to be deemed
necessary to satisfy financial need shall be equal to 6 months.
“(2) EFFECTIVE DATE.--The revised
regulations under this subsection shall apply to years beginning after
December 31, 2001.”
TREATMENT OF QUALIFIED FOOTBALL COACHES PLAN
Section 1704(k) of Pub.
L. 104-188 provided that:
“(1) In general.--For purposes
of the Internal Revenue Code of 1986, a qualified football coaches
plan--
(A) shall be treated as a multiemployer
collectively bargained plan, and
(B) notwithstanding section
401(k)(4)(B) of such Code, may include a qualified cash and deferred
arrangement under section 401(k) of such Code.
(2) Qualified football coaches
plan.--For purposes of this subsection, the term “qualified football
coaches plan” means any defined contribution plan which is established
and maintained by an organization--
(A) which is described in section
501(c) of such Code,
(B) the membership of which
consists entirely of individuals who primarily coach football as full-time
employees of 4-year colleges or universities described in section
170(b)(1)(A)(ii) of such Code, and
(C) which was in existence on
September 18, 1986.
(3) Effective date.--This subsection
shall apply to years beginning after December 22, 1987.”
APPLICABILITY OF SUBSECTION (a)(26)
Section 6065 of Pub.
L. 100-647 provided that: ‘In the case of plan years
beginning before January 1, 1993, section 401(a)(26) of the 1986 Code
shall not apply to any governmental plan (within the meaning of section
414(d) of such Code) with respect to employees who were participants
in such plan on July 14, 1988.’
COORDINATION OF INTERNAL REVENUE CODE OF 1986
WITH EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
Section 9343(a) of Pub.
L. 100-203 provided that: ‘Except to the extent specifically
provided in the Internal Revenue Code of 1986 or as determined by
the Secretary of the Treasury, titles I and IV of the Employee Retirement
Income Security Act of 1974 (29
U.S.C. 1001 et seq., 1301 et seq.) are not applicable
in interpreting such Code.'
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1,
1989
Section 1140 of title XI of Pub. L. 99-514, as amended by Pub. L. 101-239, title VII, Sec.
7861(c), Dec. 19, 1989, 103 Stat. 2431,
provided that:
‘(a) In General. - If any amendment made by this
subtitle, subtitle C (subtitles A (Sec. 1101-1147) and C (Sec. 1171-1177)
of title XI of Pub. L. 99-514,
enacting sections 2057, 4972, 4979, 4980, 4981A, and 6659A of this
title, amending sections 38, 56, 72, 106, 108, 117, 120, 127, 129,
132, 133, 219, 274, 401 to 404A, 406 to 411, 414 to 417, 423, 457,
501, 505, 818, 852, 3121, 3306, 3405, 4973 to 4975, 4979A, 6051, 6693,
and 7701 of this title and sections 1052 to 1055 and 1108 of Title
29, Labor, repealing sections 41 and 6699 of this title, and amending
provisions set out as a note under section 1001 of Title 29), or title
XVIII of this Act (see Tables for classification) requires an amendment
to any plan, such plan amendment shall not be required to be made
before the first plan year beginning on or after January 1, 1989,
if -
‘(1) during the period after
such amendment takes effect and before such first plan year, the plan
is operated in accordance with the requirements of such amendment
or in accordance with an amendment prescribed by the Secretary and
adopted by the plan, and
‘(2) such plan amendment applies
retroactively to the period after such amendment takes effect and
such first plan year.
A pension plan shall not be treated as failing
to provide definitely determinable benefits or contributions, or to
be operated in accordance with the provisions of the plan, merely
because it operates in accordance with this provision.
‘(b) Model Amendment. -
‘(1) Secretary to prescribe
amendment. - The Secretary of the Treasury or his delegate shall prescribe
an amendment or amendments which allow a plan to meet the requirements
of any amendment made by this subtitle or subtitle C - ‘(A) which
requires an amendment to such plan, and ‘(B) is effective before
the first plan year beginning after December 31, 1988.
‘(2) Adoption by plan. - If
a plan adopts the amendment or amendments prescribed under paragraph
(1) and operates in accordance with such amendment or amendments,
such plan shall not be treated as failing to provide definitely determinable
benefits or contributions or to be operated in accordance with the
provisions of the plan.
‘(c) Special Rule for Collectively Bargained Plans.
- In the case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or more
employers ratified before March 1, 1986, subsection (a) shall be applied
by substituting for the first plan year beginning on or after January
1, 1989, the first plan year beginning after the later of -
‘(1) December 31, 1988, or
‘(2) the earlier of -
‘(A) December 31, 1990, or
‘(B) the date on which the last
of such collective bargaining agreements terminate (without regard
to any extension after February 28, 1986).
For purposes of paragraph (1)(B) ((2)(B)) and any
other provision of this title (see Tables for classification), an
agreement shall not be treated as terminated merely because the plan
is amended pursuant to such agreement to meet the requirements of
any amendment made by this title or title XVIII of this Act.'
ISSUANCE OF FINAL REGULATIONS
Section 1141 of Pub.
L. 99-514 provided that: ‘The Secretary of the Treasury
or his delegate shall issue before February 1, 1988, such final regulations
as may be necessary to carry out the amendments made by -
‘(1) section 1111 (amending
this section), relating to application of nondiscrimination rules
to integrated plans,
‘(2) section 1112 (amending
this section and sections 402, 404, 406, 407, 410, and 818 of this
title), relating to coverage requirements for qualified plans,
‘(3) section 1113 (amending
sections 410 and 411 of this title and sections 1052 to 1054 of Title
29, Labor), relating to minimum vesting standards,
‘(4) section 1114 (amending
this section, sections 106, 117, 120, 127, 129, 132, 274, 404A, 406,
407, 411, 414, 415, 423, 501, 505, and 4975 of this title, and section
1108 of Title 29), relating to the definition of highly compensated
employee,
‘(5) section 1115 (amending
section 414 of this title), relating to separate lines of business
and the definition of compensation,
‘(6) section 1116 (amending
this section), relating to rules for section 401(k) plans,
‘(7) section 1117 (enacting
section 4979 of this title and amending this section and section 414
of this title), relating to nondiscrimination requirements for employer
matching and employer contribution,
‘(8) section 1120 (amending
section 403 of this title), relating to nondiscrimination requirements
for tax sheltered annuities, and
‘(9) section 1133 (enacting
section 4981A (now 4980A) of this title), relating to tax on excess
distributions.’
SECRETARY TO ACCEPT APPLICATIONS WITH RESPECT
TO SECTION 401(k) PLANS
Section 1142 of Pub.
L. 99-514 provided that: ‘The Secretary of the Treasury
or his delegate shall, not later than May 1, 1987, begin accepting
applications for opinion letters with respect to master and prototype
plans for qualified cash or deferred arrangements under section 401(k) of the Internal Revenue Code of
1986.'
TREATMENT OF INDIVIDUALS HAVING BEGINNING DATE
AFFECTED BY PUB. L. 99-514
Section 1852(a)(4)(C) of Pub. L. 99-514, as added by Pub. L. 100-647, title I, Sec. 1018(t)(3)(A),
Nov. 10, 1988, 102 Stat. 3588,
provided that: ‘An individual whose required beginning date would,
but for the amendment made by subparagraph (A) (amending this section),
occur after December 31, 1986, but whose required beginning date after
such amendment occurs before January 1, 1987, shall be treated as
if such individual had become a 5-percent owner during the plan year
ending in 1986.’
DISTRIBUTION REQUIREMENTS FOR ACCOUNTS AND ANNUITIES
OF AN INSURER IN A REHABILITATION PROCEEDING
Section 553 of Pub.
L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
‘(a) In General. - For purposes of sections 401(a)(9),
408(a)(6) and (7), and 408(b)(3) and (4) of the Internal Revenue Code
of 1986 (formerly I.R.C. 1954)
-
‘(1) a trust, custodial account,
or annuity or other contract forming part of a pension or profit-sharing
plan, or a retirement annuity, or
‘(2) a grantor of an individual
retirement account or an individual retirement annuity, shall not
be treated as failing to meet the requirements of such sections if
such account, annuity, or contract was issued by an insurance company
which, on March 15, 1984, was a party to a rehabilitation proceeding
under the applicable State insurance law.
‘(b) Limitation. - Subsection (a) shall apply only
during the period during which -
‘(1) the insurance company continues
to be a party to the proceeding described in subsection (a), and
‘(2) distributions under the
trust, custodial account, or annuity or other contract may not be
made by reason of such proceeding.’
QUALIFICATION REQUIREMENTS MODIFIED IF REGULATIONS
NOT ISSUED
Section 524(e) of Pub.
L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
‘(1) In general. - If the Secretary of the Treasury
or his delegate does not publish final regulations under section 416 of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
(as in effect on the day before the date of the enactment of this
Act (July 18, 1984)) before January 1, 1985, the Secretary shall publish
before such date plan amendment provisions which may be incorporated
in a plan to meet the requirements of section 401(a)(10)(B)(ii) of
such Code.
‘(2) Effect of incorporation. - If a plan is amended
to incorporate the plan amendment provisions described in paragraph
(1), such plan shall be treated as meeting the requirements of section 401(a)(10)(B)(ii) of the Internal
Revenue Code of 1986 during the period such amendment is
in effect but not later than 6 months after the final regulations
described in paragraph (1) are published.
‘(3) Failure by secretary to publish. - If the
Secretary of the Treasury or his delegate does not publish plan amendment
provisions described in paragraph (1), the plan shall be treated as
meeting the requirements of section
401(a)(10)(B) of the Internal Revenue Code of 1986 if -
‘(A) such plan is amended to
incorporate such requirements by reference, except that
‘(B) in the case of any optional
requirement under section 416 of such Code, if such amendment does
not specify the manner in which such requirement will be met, the
employer shall be treated as having elected the requirement with respect
to each employee which provides the maximum vested accrued benefit
for such employee.’
TRANSITIONAL RULE
Section 135(c)(2) of Pub.
L. 95-600, as amended by Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that: ‘In the case of cash or deferred arrangements in existence on
June 27, 1974 -
‘(A) the qualification of the
plan and the trust under section 401 of
the Internal Revenue Codeof 1986 (formerly I.R.C. 1954);
‘(B) the exemption of the trust
under section 501(a) of such Code;
‘(C) the taxable year of inclusion
in gross income of the employee of any amount so contributed by the
employer to the trust; and
‘(D) the excludability of the
interest of the employee in the trust under sections 2039 and 2517
of such Code, shall be determined for plan years beginning before
January 1, 1980 in a manner consistent with Revenue Ruling 56-497 (1956-2
C.B. 284), Revenue Ruling
63-180 (1963-2 C.B. 189), and Revenue Ruling 68-89 (1968-1
C.B. 402).'
SALARY REDUCTION REGULATIONS
Section 2006 of Pub.
L. 93-406, as amended by Pub.
L. 94-455, title XV, Sec. 1506, Oct. 4, 1976, 90 Stat. 1739; Pub. L. 95-615, Sec. 5, Nov. 8,
1978, 92 Stat. 3097; Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
‘(a) Inclusion of Certain Contributions in Income.
- Except in the case of plans or arrangements in existence on June
27, 1974, a contribution made before January 1, 1980, to an employees’
trust described in section 401(a), 403(a) or 405(a) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
which is exempt from tax under section 501(a) of such Code, or under
an arrangement which, but for the fact that it was not in existence
on June 27, 1974, would be an arrangement described in subsection
(b)(2) of this section, shall be treated as a contribution made by
an employee if the contribution is made under an arrangement under
which the contribution will be made only if the employee elects to
receive a reduction in his compensation or to forego an increase in
his compensation.
‘(b) Administration in the Case of Certain Qualified
Pension or Profit-Sharing Plans, Etc., in Existence on June 27, 1974.
- No salary reduction regulations may be issued by the Secretary of
the Treasury in final form before January 1, 1980, with respect to
an arrangement which was in existence on June 27, 1974, and which,
on that date -
‘(1) provided for contributions
to an employee's trust described in section 401(a), 403(a), or 405(a) of the Internal Revenue Code of
1986 (subsec. (a) of this section, section 403(a) of this title, or
section 405(a) of this title) which is exempt from tax under section
501(a) of such Code (section 501(a) of this title), or
‘(2) was maintained as part
of an arrangement under which an employee was permitted to elect to
receive part of his compensation in one or more alternative forms
if one of such forms results in the inclusion of amounts in income
under the Internal Revenue Code of 1986 (this title).
‘(c) Administration of Law With Respect to Certain
Plans. -
‘(1) Administration in the case
of plans described in subsection (b). - Until salary reduction regulations
have been issued in final form, the law with respect to plans or arrangements
described in subsection (b) shall be administered - ‘(A) without
regard to the proposed salary reduction regulations (37 FR 25938) and without regard to any
other proposed salary reduction regulations, and ‘(B) in the manner
in which such law was administered before January 1, 1972.
‘(2) Administration in the case
of qualified profit-sharing plans. - In the case of plans or arrangements
described in subsection (b), in applying this section to the tax treatment
of contributions to qualified profit-sharing plans where the contributed
amounts are distributable only after a period of deferral, the law
shall be administered in a manner consistent with - ‘(A) Revenue Ruling 56-497 (1956
- 2 C.B. 284), ‘(B) Revenue
Ruling 63-180 (1963 - 2 C.B. 189), and
‘(C) Revenue
Ruling 68-89 (1968 - 1 C.B. 402).
‘(d) Limitation on Retroactivity of Final Regulations.
- In the case of any salary reduction regulations which become final
after December 31, 1979 -
‘(1) for purposes of chapter1 of the Internal Revenue Code of 1986 (relating
to normal taxes and surtaxes), such regulations shall not apply before
January 1, 1980; and
‘(2) for purposes of chapter
21 of such Code (relating to Federal Insurance Contributions Act)
and for purposes of chapter 24 of such Code (relating to collection
of income tax at source on wages), such regulations shall not apply
before the day on which such regulations are issued in final form.
‘(e) Salary Reduction Regulations Defined. - For
purpose of this section, the term ‘salary reduction regulations’ means
regulations dealing with the includibility in gross income (at the
time of contribution) of amounts contributed to a plan which includes
a trust that qualifies under section 401(a) (subsec. (a) of this section),
or a plan described in section 403(a) or 405(a), including plans or
arrangements described in subsection (b)(2), if the contribution is
made under an arrangement under which the contribution will be made
only if the employee elects to receive a reduction in his compensation
or to forego an increase in his compensation, or under an arrangement
under which the employee is permitted to elect to receive part of
his compensation in one or more alternative forms (if one of such
forms results in the inclusion of amounts in income under the Internal
Revenue Code of 1986).'
Pub. L. 95-615,
Sec. 210(b), Nov. 8, 1978, 92
Stat. 3109, provided that: ‘Section 5 of this Act (amending
this note) shall not apply with respect to any type of plan for any
period for which rules for that type of plan are provided by the Revenue
Act of 1978 (see Short Title note set out under section 1 of this
title).’
SHORT TITLE OF 1962 AMENDMENT
Section 1 of Pub. L. 87-792 provided: ‘That this
Act (enacting sections 405 and 6047 of this title and amending this
section and sections 37, 62, 72, 101, 104, 105, 172, 402 to 404, 503,
805, 1361, 2039, 2517, 3306, 3401, and 7207 of this title) may be
cited as the ‘Self-Employed Individuals Tax Retirement Act of 1962’.'
