414(a) SERVICE FOR PREDECESSOR EMPLOYER. --
For purposes of this part --
414(a)(1) in any case in which
the employer maintains a plan of a predecessor employer, service
for such predecessor shall be treated as service for the employer,
and
414(a)(2) in any case in which
the employer maintains a plan which is not the plan maintained
by a predecessor employer, service for such predecessor shall,
to the extent provided in regulations prescribed by the Secretary,
be treated as service for the employer.
414(b) EMPLOYEES OF CONTROLLED GROUP
OF CORPORATIONS. --
For purposes of sections 401, 408(k), 408(p), 410, 411, 415,
and 416, all employees of all corporations which are members
of a controlled group of corporations (within the meaning of
section 1563(a), determined without regard to section 1563(a)(4)
and (e)(3)(C)) shall be treated as employed by a single employer.
With respect to a plan adopted by more than one such corporation,
the applicable limitations provided by section 404(a) shall
be determined as if all such employers were a single employer,
and allocated to each employer in accordance with regulations
prescribed by the Secretary.
414(c) EMPLOYEES OF PARTNERSHIPS, PROPRIETORSHIPS,
ETC., WHICH ARE UNDER COMMON CONTROL. --
For purposes of sections 401, 408(k), 408(p), 410, 411, 415,
and 416, under regulations prescribed by the Secretary, all
employees of trades or businesses (whether or not incorporated)
which are under common control shall be treated as employed
by a single employer. The regulations prescribed under this
subsection shall be based on principles similar to the principles
which apply in the case of subsection (b).
414(d) GOVERNMENTAL PLAN. --
For purposes of this part, the term "governmental plan"
means a plan established and maintained for its employees by
the Government of the United States, by the government of any
State or political subdivision thereof, or by any agency or
instrumentality of any of the foregoing. The term "governmental
plan" also includes any plan to which the Railroad Retirement
Act of 1935 or 1937 applies and which is financed by contributions
required under that Act and any plan of an international organization
which is exempt from taxation by reason of the International
Organizations Immunities Act (59 Stat. 669). The term "governmental
plan" includes a plan which is established and maintained
by 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)), or an agency or instrumentality
of either, and all of the participants of which are employees
of such entity substantially all of whose services as such an
employee are in the performance of essential governmental functions
but not in the performance of commercial activities (whether
or not an essential government function).
414(e) CHURCH PLAN. --
414(e)(1) IN GENERAL. --For
purposes of this part, the term "church plan" means
a plan established and maintained (to the extent required in
paragraph (2)(B)) for its employees (or their beneficiaries)
by a church or by a convention or association of churches which
is exempt from tax under section 501.
414(e)(2) CERTAIN PLANS EXCLUDED.
--The term "church plan" does not include a plan --
414(e)(2)(A) which is established
and maintained primarily for the benefit of employees (or their
beneficiaries) of such church or convention or association of
churches who are employed in connection with one or more unrelated
trades or businesses (within the meaning of section 513); or
414(e)(2)(B) if less than substantially
all of the individuals included in the plan are individuals
described in paragraph (1) or (3)(B) (or their beneficiaries).
414(e)(3) DEFINITIONS AND OTHER PROVISIONS.
--For purposes of this subsection --
414(e)(3)(A) TREATMENT AS CHURCH
PLAN. --A plan established and maintained for its employees
(or their beneficiaries) by a church or by a convention or association
of churches includes a plan maintained by an organization, whether
a civil law corporation or otherwise, the principal purpose
or function of which is the administration or funding of a plan
or program for the provision of retirement benefits or welfare
benefits, or both, for the employees of a church or a convention
or association of churches, if such organization is controlled
by or associated with a church or a convention or association
of churches.
414(e)(3)(B) EMPLOYEE DEFINED.
--The term employee of a church or a convention or association
of churches shall include --
414(e)(3)(B)(i) a duly ordained,
commissioned, or licensed minister of a church in the exercise
of his ministry, regardless of the source of his compensation;
414(e)(3)(B)(ii) an employee
of an organization, whether a civil law corporation or otherwise,
which is exempt from tax under section 501 and which is controlled
by or associated with a church or a convention or association
of churches; and
414(e)(3)(B)(iii) an individual
described in subparagraph (E).
414(e)(3)(C) CHURCH TREATED AS EMPLOYER.
--A church or a convention or association of churches which
is exempt from tax under section 501 shall be deemed the employer
of any individual included as an employee under subparagraph
(B).
414(e)(3)(D) ASSOCIATION WITH CHURCH.
--An organization, whether a civil law corporation or otherwise,
is associated with a church or a convention or association of
churches if it shares common religious bonds and convictions
with that church or convention or association of churches.
414(e)(3)(E) SPECIAL RULE IN CASE OF
SEPARATION FROM PLAN. --If an employee who is included
in a church plan separates from the service of a church or a
convention or association of churches or an organization described
in clause (ii) of paragraph (3)(B), the church plan shall not
fail to meet the requirements of this subsection merely because
the plan --
414(e)(3)(E)(i) retains the
employee's accrued benefit or account for the payment of benefits
to the employee or his beneficiaries pursuant to the terms of
the plan; or
414(e)(3)(E)(ii) receives contributions
on the employee's behalf after the employee's separation from
such service, but only for a period of 5 years after such separation,
unless the employee is disabled (within the meaning of the disability
provisions of the church plan or, if there are no such provisions
in the church plan, within the meaning of section 72(m)(7))
at the time of such separation from service.
414(e)(4) CORRECTION OF FAILURE TO MEET
CHURCH PLAN REQUIREMENTS. --
414(e)(4)(A) IN GENERAL. --If
a plan established and maintained for its employees (or their
beneficiaries) by a church or by a convention or association
of churches which is exempt from tax under section 501 fails
to meet one or more of the requirements of this subsection and
corrects its failure to meet such requirements within the correction
period, the plan shall be deemed to meet the requirements of
this subsection for the year in which the correction was made
and for all prior years.
414(e)(4)(B) FAILURE TO CORRECT.
--If a correction is not made within the correction period,
the plan shall be deemed not to meet the requirements of this
subsection beginning with the date on which the earliest failure
to meet one or more of such requirements occurred.
414(e)(4)(C) CORRECTION PERIOD DEFINED.
--The term "correction period" means --
414(e)(4)(C)(i) the period
ending 270 days after the date of mailing by the Secretary of
a notice of default with respect to the plan's failure to meet
one or more of the requirements of this subsection;
414(e)(4)(C)(ii) any period
set by a court of competent jurisdiction after a final determination
that the plan fails to meet such requirements, or, if the court
does not specify such period, any reasonable period determined
by the Secretary on the basis of all the facts and circumstances,
but in any event not less than 270 days after the determination
has become final; or
414(e)(4)(C)(iii) any additional
period which the Secretary determines is reasonable or necessary
for the correction of the default,
whichever has the latest ending date.
414(e)(5) SPECIAL RULES FOR CHAPLAINS
AND SELF-EMPLOYED MINISTERS. --
414(e)(5)(A) CERTAIN MINISTERS MAY PARTICIPATE.
--
For purposes of this part --
414(e)(5)(A)(i) IN GENERAL. --A
duly ordained, commissioned, or licensed minister of a church
is described in paragraph (3)(B) if, in connection with the
exercise of their ministry, the minister --
414(e)(5)(A)(i)(I) is a self-employed
individual (within the meaning of section 401(c)(1)(B), or
414(e)(5)(A)(i)(II) is employed
by an organization other than an organization which is described
in section 501(c)(3) and with respect to which the minister
shares common religious bonds.
414(e)(5)(A)(ii) TREATMENT AS EMPLOYER
AND EMPLOYEE. --For purposes of sections 403(b)(1)(A)
and 404(a)(10), a minister described in clause (i)(I) shall
be treated as employed by the minister's own employer which
is an organization described in section 501(c)(3) and exempt
from tax under section 501(a).
414(e)(5)(B) SPECIAL RULES FOR APPLYING SECTION 403(b)
TO SELF-EMPLOYED MINISTERS. --
In the case of a minister described in subparagraph (A)(i)(I)
--
414(e)(5)(B)(i) the minister's
includible compensation under section 403(b)(3) shall be determined
by reference to the minister's earned income (within the meaning
of section 401(c)(2)) from such ministry rather than the amount
of compensation which is received from an employer, and
414(e)(5)(B)(ii) the years
(and portions of years) in which such minister was a self-employed
individual (within the meaning of section 401(c)(1)(B)) with
respect to such ministry shall be included for purposes of section
403(b)(4).
414(e)(5)(C) EFFECT ON NON-DENOMINATIONAL
PLANS. --If a duly ordained, commissioned, or licensed
minister of a church in the exercise of his or her ministry
participates in a church plan (within the meaning of this section)
and in the exercise of such ministry is employed by an employer
not otherwise participating in such church plan, then such employer
may exclude such minister from being treated as an employee
of such employer for purposes of applying sections 401(a)(3),
401(a)(4), and 401(a)(5), as in effect on September 1, 1974,
and sections 401(a)(4), 401(a)(5), 401(a)(26), 401(k)(3), 401(m),
403(b)(1)(D) (including section 403(b)(12)), and 410 to any
stock bonus, pension, profit-sharing, or annuity plan (including
an annuity described in section 403(b) or a retirement income
account described in section 403(b)(9)). The Secretary shall
prescribe such regulations as may be necessary or appropriate
to carry out the purpose of, and prevent the abuse of, this
subparagraph.
414(e)(5)(D) COMPENSATION TAKEN INTO
ACCOUNT ONLY ONCE. --If any compensation is taken into
account in determining the amount of any contributions made
to, or benefits to be provided under, any church plan, such
compensation shall not also be taken into account in determining
the amount of any contributions made to, or benefits to be provided
under, any other stock bonus, pension, profit-sharing, or annuity
plan which is not a church plan.
414(e)(5)(E) EXCLUSION. --In
the case of a contribution to a church plan made on behalf of
a minister described in subparagraph (A)(i)(II), such contribution
shall not be included in the gross income of the minister to
the extent that such contribution would not be so included if
the minister was an employee of a church.
414(f) MULTIEMPLOYER PLAN.
--
414(f)(1) DEFINITION. --For
purposes of this part, the term "multiemployer plan"
means a plan --
414(f)(1)(A) to which more
than one employer is required to contribute,
414(f)(1)(B) which is maintained
pursuant to one or more collective bargaining agreements between
one or more employee organizations and more than one employer,
and
414(f)(1)(C) which satisfies
such other requirements as the Secretary of Labor may prescribe
by regulation.
414(f)(2) CASES OF COMMON CONTROL.
--For purposes of this subsection, all trades or businesses
(whether or not incorporated) which are under common control
within the meaning of subsection (c) are considered a single
employer.
414(f)(3) CONTINUATION OF STATUS AFTER TERMINATION.
--
Notwithstanding paragraph (1), a plan is a multiemployer plan
on and after its termination date under title IV of the Employee
Retirement Income Security Act of 1974 if the plan was a multiemployer
plan under this subsection for the plan year preceding its termination
date.
414(f)(4) TRANSITIONAL RULE.
--For any plan year which began before the date of the enactment
of the Multiemployer Pension Plan Amendments Act of 1980, the
term "multiemployer plan" means a plan described in
this subsection as in effect immediately before that date.
414(f)(5) SPECIAL ELECTION.
--Within one year after the date of the enactment of the Multiemployer
Pension Plan Amendments Act of 1980, a multiemployer plan may
irrevocably elect, pursuant to procedures established by the
Pension Benefit Guaranty Corporation and subject to the provisions
of section 4403(b) and (c) of the Employee Retirement Income
Security Act of 1974, that the plan shall not be treated as
a multiemployer plan for any purpose under such Act or this
title, if for each of the last 3 plan years ending prior to
the effective date of the Multiemployer Pension Plan Amendments
Act of 1980 --
414(f)(5)(A) the plan was not
a multiemployer plan because the plan was not a plan described
in section 3(37)(A)(iii) of the Employee Retirement Income Security
Act of 1974 and section 414(f)(1)(C) (as such provisions were
in effect on the day before the date of the enactment of the
Multiemployer Pension Plan Amendments Act of 1980); and
414(f)(5)(B) the plan had been
identified as a plan that was not a multiemployer plan in substantially
all its filings with the Pension Benefit Guaranty Corporation,
the Secretary of Labor and the Secretary.
414(f)(6) ELECTION WITH REGARD TO MULTIEMPLOYER
STATUS. --
414(f)(6)(A) Within 1 year
after the enactment of the Pension Protection Act of 2006 --
414(f)(6)(A)(i) An election
under paragraph (5) may be revoked, pursuant to procedures prescribed
by the Pension Benefit Guaranty Corporation, if, for each of
the 3 plan years prior to the date of the enactment of that
Act, the plan would have been a multiemployer plan but for the
election under paragraph (5), and
414(f)(6)(A)(ii) a plan that
meets the criteria in subparagraph (A) and (B) of paragraph
(1) of this subsection or that is described in subparagraph
(E) may, pursuant to procedures prescribed by the Pension Benefit
Guaranty Corporation, elect to be a multiemployer plan, if --
414(f)(6)(A)(ii)(I) for each
of the 3 plan years immediately preceding the first plan year
for which the election under this paragraph is effective with
respect to the plan, the plan has met those criteria or is so
described,
414(f)(6)(A)(ii)(II) substantially
all of the plan's employer contributions for each of those plan
years were made or required to be made by organizations that
were exempt from tax under section 501, and
414(f)(6)(A)(ii)(III) the plan
was established prior to September 2, 1974.
414(f)(6)(B) An election under
this paragraph shall be effective for all purposes under this
Act and under the Employee Retirement Income Security Act of
1974, starting with any plan year beginning on or after January
1, 1999, and ending before January 1, 2008, as designated by
the plan in the election made under subparagraph (A)(ii).
414(f)(6)(C) Once made, an
election under this paragraph shall be irrevocable, except that
a plan described in subparagraph (A)(ii) shall cease to be a
multiemployer plan as of the plan year beginning immediately
after the first plan year for which the majority of its employer
contributions were made or required to be made by organizations
that were not exempt from tax under section 501.
414(f)(6)(D) The fact that
a plan makes an election under subparagraph (A)(ii) does not
imply that the plan was not a multiemployer plan prior to the
date of the election or would not be a multiemployer plan without
regard to the election.
414(f)(6)(E) A plan is described
in this subparagraph if it is a plan sponsored by an organization
which is described in section 501(c)(5) and exempt from tax
under section 501(a) and which was established in Chicago, Illinois,
on August 12, 1881.
414(f)(6)(F) MAINTENANCE UNDER COLLECTIVE
BARGAINING AGREEMENT. --For purposes of this title
and the Employee Retirement Income Security Act of 1974, a plan
making an election under this paragraph shall be treated as
maintained pursuant to a collective bargaining agreement if
a collective bargaining agreement, expressly or otherwise, provides
for or permits employer contributions to the plan by one or
more employers that are signatory to such agreement, or participation
in the plan by one or more employees of an employer that is
signatory to such agreement, regardless of whether the plan
was created, established, or maintained for such employees by
virtue of another document that is not a collective bargaining
agreement.
414(g) PLAN ADMINISTRATOR.
--
For purposes of this part, the term "plan administrator"
means --
414(g)(1) the person specifically
so designated by the terms of the instrument under which the
plan is operated;
414(g)(2) in the absence of
a designation referred to in paragraph (1) --
414(g)(2)(A) in the case of
a plan maintained by a single employer, such employer,
414(g)(2)(B) in the case of
a plan maintained by two or more employers or jointly by one
or more employers and one or more employee organizations, the
association, committee, joint board of trustees, or other similar
group of representatives of the parties who maintained the plan,
or
414(g)(2)(C) in any case to
which subparagraph (A) or (B) does not apply, such other person
as the Secretary may, by regulation, prescribe.
414(h) TAX TREATMENT OF CERTAIN CONTRIBUTIONS.
--
414(h)(1) IN GENERAL. --Effective
with respect to taxable years beginning after December 31, 1973,
for purposes of this title, any amount contributed --
414(h)(1)(A) to an employees'
trust described in section 401(a), or
414(h)(1)(B) under a plan described
in section 403(a),
shall not be treated as having been made by
the employer if it is designated as an employee contribution.
414(h)(2) DESIGNATION BY UNITS OF GOVERNMENT.
--For purposes of paragraph (1), in the case of any plan established
by the government of any State or political subdivision thereof,
or by any agency or instrumentality of any of the foregoing,
or a governmental plan described in the last sentence of section
414(d) (relating to plans of Indian tribal governments), where
the contributions of employing units are designated as employee
contributions but where any employing unit picks up the contributions,
the contributions so picked up shall be treated as employer
contributions.
414(i) DEFINED CONTRIBUTION PLAN.
--
For purposes of this part, the term "defined contribution
plan" means a plan which provides for an individual account
for each participant and for benefits based solely on the amount
contributed to the participant's account, and any income, expenses,
gains and losses, and any forfeitures of accounts of other participants
which may be allocated to such participant's account.
414(j) DEFINED BENEFIT PLAN.
--
For purposes of this part, the term "defined benefit plan"
means any plan which is not a defined contribution plan.
414(k) CERTAIN PLANS. --
A defined benefit plan which provides a benefit derived from
employer contributions which is based partly on the balance
of the separate account of a participant shall --
414(k)(1) for purposes of section
410 (relating to minimum participation standards), be treated
as a defined contribution plan,
414(k)(2) for purposes of sections
72(d) (relating to treatment of employee contributions as separate
contract), 411(a)(7)(A) (relating to minimum vesting standards),
415 (relating to limitations on benefits and contributions under
qualified plans), and 401(m) (relating to nondiscrimination
tests for matching requirements and employee contributions),
be treated as consisting of a defined contribution plan to the
extent benefits are based on the separate account of a participant
and as a defined benefit plan with respect to the remaining
portion of benefits under the plan, and
414(k)(3) for purposes of section
4975 (relating to tax on prohibited transactions), be treated
as a defined benefit plan.
414(l) MERGER AND CONSOLIDATIONS OF
PLANS OR TRANSFERS OF PLAN ASSETS. --
414(l)(1) IN GENERAL. --A trust
which forms a part of a plan shall not constitute a qualified
trust under section 401 and a plan shall be treated as not described
in section 403(a) unless in the case of any merger or consolidation
of the plan with, or in the case of any transfer of assets or
liabilities of such plan to, any other trust 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.
414(l)(2) ALLOCATION OF ASSETS IN PLAN
SPIN-OFFS, ETC. --
414(l)(2)(A) IN GENERAL. --In
the case of a plan spin-off of a defined benefit plan, a trust
which forms part of --
414(l)(2)(A)(i) the original
plan, or
414(l)(2)(A)(ii) any plan spun
off from such plan, shall not constitute a qualified trust under
this section unless the applicable percentage of excess assets
are allocated to each of such plans.
414(l)(2)(B) APPLICABLE PERCENTAGE.
--For purposes of subparagraph (A), the term "applicable
percentage" means, with respect to each of the plans described
in clauses (i) and (ii) of subparagraph (A), the percentage
determined by dividing --
414(l)(2)(B)(i) the excess
(if any) of --
414(l)(2)(B)(i)(I) the amount
determined under section 431(c)(6)(A)(i) in the case of a multiemployer
plan (and the sum of the funding shortfall and target normal
cost determined under section 430 in the case of any other plan),
over
414(l)(2)(B)(i)(II) the amount
of the assets required to be allocated to the plan after the
spin-off (without regard to this paragraph), by
414(l)(2)(B)(ii) the sum of
the excess amounts determined separately under clause (i) for
all such plans.
414(l)(2)(C) EXCESS ASSETS.
--For purposes of subparagraph (A), the term "excess assets"
means an amount equal to the excess (if any) of --
414(l)(2)(C)(i) the fair market
value of the assets of the original plan immediately before
the spin-off, over
414(l)(2)(C)(ii) the amount
of assets required to be allocated after the spin-off to all
plans (determined without regard to this paragraph).
414(l)(2)(D) CERTAIN SPUN-OFF PLANS NOT TAKEN INTO ACCOUNT.
--
414(l)(2)(D)(i) IN GENERAL.
--A plan involved in a spin-off which is described in clause
(ii), (iii), or (iv) shall not be taken into account for purposes
of this paragraph, except that the amount determined under subparagraph
(C)(ii) shall be increased by the amount of assets allocated
to such plan.
414(l)(2)(D)(ii) PLANS TRANSFERRED OUT
OF CONTROLLED GROUPS. --A plan is described in this
clause if, after such spin-off, such plan is maintained by an
employer who is not a member of the same controlled group as
the employer maintaining the original plan.
414(l)(2)(D)(iii) PLANS TRANSFERRED
OUT OF MULTIPLE EMPLOYER PLANS. --A plan as described
in this clause if, after the spin-off, any employer maintaining
such plan (and any member of the same controlled group as such
employer) does not maintain any other plan remaining after the
spin-off which is also maintained by another employer (or member
of the same controlled group as such other employer) which maintained
the plan in existence before the spin-off.
414(l)(2)(D)(iv) TERMINATED PLANS.
--A plan is described in this clause if, pursuant to the transaction
involving the spin-off, the plan is terminated.
414(l)(2)(D)(v) CONTROLLED GROUP.
--For purposes of this subparagraph, the term "controlled
group" means any group treated as a single employer under
subsection (b), (c), (m), or (o).
414(l)(2)(E) PARAGRAPH NOT TO APPLY
TO MULTIEMPLOYER PLANS. --This paragraph does not apply
to any multiemployer plan with respect to any spin-off to the
extent that participants either before or after the spin-off
are covered under a multiemployer plan to which title IV of
the Employee Retirement Income Security Act of 1974 applies.
414(l)(2)(F) APPLICATION TO SIMILAR
TRANSACTION. --Except as provided by the Secretary,
rules similar to the rules of this paragraph shall apply to
transactions similar to spin-offs.
414(l)(2)(G) SPECIAL RULES FOR BRIDGE
BANKS. --For purposes of this paragraph, in the case
of a bridge bank established under section 11(i) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(i)) --
414(l)(2)(G)(i) such bank shall
be treated as a member of any controlled group which includes
any insured bank (as defined in section 3(h) of such Act (12
U.S.C. 1813(h)) --
414(l)(2)(G)(i)(I) which maintains
a defined benefit plan,
414(l)(2)(G)(i)(II) which is
closed by the appropriate bank regulatory authorities, and
414(l)(2)(G)(i)(III) any asset
and liabilities of which are received by the bridge bank, and
414(l)(2)(G)(ii) the requirements
of this paragraph shall not be treated as met with respect to
such plan unless during the 180-day period beginning on the
date such insured bank is closed --
414(l)(2)(G)(ii)(I) the bridge
bank has the right to require the plan to transfer (subject
to the provisions of this paragraph) not more than 50 percent
of the excess assets (as defined in subparagraph (C)) to a defined
benefit plan maintained by the bridge bank with respect to participants
or former participants (including retirees and beneficiaries)
in the original plan employed by the bridge bank or formerly
employed by the closed bank, and
414(l)(2)(G)(ii)(II) no other
merger, spin-off, termination, or similar transaction involving
the portion of the excess assets described in subclause (I)
may occur without the prior written consent of the bridge bank.
414(m) EMPLOYEES OF AN AFFILIATED SERVICE
GROUP. --
414(m)(1) IN GENERAL. --For
purposes of the employee benefit requirements listed in paragraph
(4), except to the extent otherwise provided in regulations,
all employees of the members of an affiliated service group
shall be treated as employed by a single employer.
414(m)(2) AFFILIATED SERVICE GROUP.
--For purposes of this subsection, the term "affiliated
service group" means a group consisting of a service organization
(hereinafter in this paragraph referred to as the "first
organization") and one or more of the following:
414(m)(2)(A) any service organization
which --
414(m)(2)(A)(i) is a shareholder
or partner in the first organization, and
414(m)(2)(A)(ii) regularly
performs services for the first organization or is regularly
associated with the first organization in performing services
for third persons, and
414(m)(2)(B) any other organization
if --
414(m)(2)(B)(i) a significant
portion of the business of such organization is the performance
of services (for the first organization, for organizations described
in subparagraph (A), or for both) of a type historically performed
in such service field by employees, and
414(m)(2)(B)(ii) 10 percent
or more of the interests in such organization is held by persons
who are highly compensated employees (within the meaning of
section 414(q)) of the first organization or an organization
described in subparagraph (A).
414(m)(3) SERVICE ORGANIZATIONS.
--For purposes of this subsection, the term "service organization"
means an organization the principal business of which is the
performance of services.
414(m)(4) EMPLOYEE BENEFIT REQUIREMENTS.
--For purposes of this subsection, the employee benefit requirements
listed in this paragraph are --
414(m)(4)(A) paragraphs (3),
(4), (7), (16), (17), and (26) of section 401(a), and
414(m)(4)(B) sections 408(k),
408(p), 410, 411, 415, and 416.
414(m)(5) CERTAIN ORGANIZATIONS PERFORMING
MANAGEMENT FUNCTIONS. --For purposes of this subsection,
the term "affiliated service group" also includes
a group consisting of --
414(m)(5)(A) an organization
the principal business of which is performing, on a regular
and continuing basis, management functions for 1 organization
(or for 1 organization and other organizations related to such
1 organization), and
414(m)(5)(B) the organization
(and related organizations) for which such functions are so
performed by the organization described in subparagraph (A).
For purposes of this paragraph, the term "related
organizations" has the same meaning as the term "related
persons" when used in section 144(a)(3).
414(m)(6) OTHER DEFINITIONS.
--For purposes of this subsection --
414(m)(6)(A) ORGANIZATION DEFINED.
--The term "organization" means a corporation, partnership,
or other organization.
414(m)(6)(B) OWNERSHIP. --In
determining ownership, the principles of section 318(a) shall
apply.
414(n) EMPLOYEE LEASING. --
414(n)(1) IN GENERAL. --For
purposes of the requirements listed in paragraph (3), with respect
to any person (hereinafter in this subsection referred to as
the "recipient") for whom a leased employee performs
services --
414(n)(1)(A) the leased employee
shall be treated as an employee of the recipient, but
414(n)(1)(B) contributions
or benefits provided by the leasing organization which are attributable
to services performed for the recipient shall be treated as
provided by the recipient.
414(n)(2) LEASED EMPLOYEE. --
For purposes of paragraph (1), the term "leased employee"
means any person who is not an employee of the recipient and
who provides services to the recipient if --
414(n)(2)(A) such services
are provided pursuant to an agreement between the recipient
and any other person (in this subsection referred to as the
"leasing organization"),
414(n)(2)(B) such person has
performed such services for the recipient (or for the recipient
and related persons) on a substantially full-time basis for
a period of at least 1 year, and
414(n)(2)(C) such services
are performed under primary direction or control by the recipient.
414(n)(3) REQUIREMENTS. --For
purposes of this subsection, the requirements listed in this
paragraph are --
414(n)(3)(A) paragraphs (3),
(4), (7), (16), (17), and (26) of section 401(a),
414(n)(3)(B) sections 408(k),
408(p), 410, 411, 415, and 416, and
414(n)(4) TIME WHEN FIRST CONSIDERED
AS EMPLOYEE. --
414(n)(4)(A) IN GENERAL. --In
the case of any leased employee, paragraph (1) shall apply only
for purposes of determining whether the requirements listed
in paragraph (3) are met for periods after the close of the
period referred to in paragraph (2)(B).
414(n)(4)(B) YEARS OF SERVICE.
--In the case of a person who is an employee of the recipient
(whether by reason of this subsection or otherwise), for purposes
of the requirements listed in paragraph (3), years of service
for the recipient shall be determined by taking into account
any period for which such employee would have been a leased
employee but for the requirements of paragraph (2)(B).
414(n)(5) SAFE HARBOR. --
414(n)(5)(A) IN GENERAL. --In
the case of requirements described in subparagraphs (A) and
(B) of paragraph (3), this subsection shall not apply to any
leased employee with respect to services performed for a recipient
if --
414(n)(5)(A)(i) such employee
is covered by a plan which is maintained by the leasing organization
and meets the requirements of subparagraph (B), and
414(n)(5)(A)(ii) leased employee
(determined without regard to this paragraph) do not constitute
more than 20 percent of the recipient's nonhighly compensated
work force.
414(n)(5)(B) PLAN REQUIREMENTS.
--A plan meets the requirements of this subparagraph if --
414(n)(5)(B)(i) such plan is
a money purchase pension plan with a nonintegrated employer
contribution rate for each participant of at least 10 percent
of compensation,
414(n)(5)(B)(ii) such plan
provides for full and immediate vesting, and
414(n)(5)(B)(iii) each employee
of the leasing organization (other than employees who perform
substantially all of their services for the leasing organization)
immediately participates in such plan.
Clause (iii) shall not apply to any individual
whose compensation from the leasing organization in each plan
year during the 4-year period ending with the plan year is less
than $1,000.
414(n)(5)(C) DEFINITIONS. --For
purposes of this paragraph --
414(n)(5)(C)(i) HIGHLY COMPENSATED EMPLOYEE.
--The term "highly compensated employee" has the meaning
given such term by section 414(q).
414(n)(5)(C)(ii) NONHIGHLY COMPENSATED
WORK FORCE. --The term "nonhighly compensated
work force" means the aggregate number of individuals (other
than highly compensated employees) --
414(n)(5)(C)(ii)(I) who are
employees of the recipient (without regard to this subsection)
and have performed services for the recipient (or for the recipient
and related persons) on a substantially full-time basis for
a period of at least 1 year, or
414(n)(5)(C)(ii)(II) who are
leased employees with respect to the recipient (determined without
regard to this paragraph).
414(n)(5)(C)(iii) COMPENSATION.
--The term "compensation" has the same meaning as
when used in section 415; except that such term shall include
--
414(n)(5)(C)(iii)(I) any employer
contribution under a qualified cash or deferred arrangement
to the extent not included in gross income under section 402(e)(3)
or 402(h)(1)(B),
414(n)(5)(C)(iii)(II) any amount
which the employee would have received in cash but for an election
under a cafeteria plan (within the meaning of section 125),
and
414(n)(5)(C)(iii)(III) any
amount contributed to an annuity contract described in section
403(b) pursuant to a salary reduction agreement (within the
meaning of section 3121(a)(5)(D)).
414(n)(6) OTHER RULES. --For
purposes of this subsection --
414(n)(6)(A) RELATED PERSONS.
--The term "related persons" has the same meaning
as when used in section 144(a)(3).
414(n)(6)(B) EMPLOYEES OF ENTITIES UNDER
COMMON CONTROL. --The rules of subsections (b), (c),
(m), and (o) shall apply.
414(o) REGULATIONS. --
The Secretary shall prescribe such regulations (which may provide
rules in addition to the rules contained in subsections (m)
and (n)) as may be necessary to prevent the avoidance of any
employee benefit requirement listed in subsection (m)(4) or
(n)(3) or any requirement under section 457 through the use
of --
414(o)(1) separate organizations,
414(o)(2) employee leasing,
or
414(o)(3) other arrangements.
The regulations prescribed under subsection
(n) shall include provisions to minimize the recordkeeping requirements
of subsection (n) in the case of an employer which has no top-heavy
plans (within the meaning of section 416(g)) and which uses
the services of persons (other than employees) for an insignificant
percentage of the employer's total workload.
414(p) QUALIFIED DOMESTIC RELATIONS
ORDER DEFINED. --
For purposes of this subsection and section 401(a)(13) --
414(p)(1) IN GENERAL. --
414(p)(1)(A) QUALIFIED DOMESTIC RELATIONS
ORDER. --The term "qualified domestic relations
order" means a domestic relations order --
414(p)(1)(A)(i) which creates
or recognizes the existence of an alternate payee's right to,
or assigns to an alternate payee the right to, receive all or
a portion of the benefits payable with respect to a participant
under a plan, and
414(p)(1)(A)(ii) with respect
to which the requirements of paragraphs (2) and (3) are met.
414(p)(1)(B) DOMESTIC RELATIONS ORDER.
--The term "domestic relations order" means any judgment,
decree, or order (including approval of a property settlement
agreement) which --
414(p)(1)(B)(i) relates to
the provision of child support, alimony payments, or marital
property rights to a spouse, former spouse, child, or other
dependent of a participant, and
414(p)(1)(B)(ii) is made pursuant
to a State domestic relations law (including a community property
law).
414(p)(2) ORDER MUST CLEARLY SPECIFY
CERTAIN FACTS. --A domestic relations order meets the
requirements of this paragraph only if such order clearly specifies
--
414(p)(2)(A) the name and the
last known mailing address (if any) of the participant and the
name and mailing address of each alternate payee covered by
the order,
414(p)(2)(B) the amount or
percentage of the participant's benefits to be paid by the plan
to each such alternate payee, or the manner in which such amount
or percentage is to be determined,
414(p)(2)(C) the number of
payments or period to which such order applies, and
414(p)(2)(D) each plan to which
such order applies.
414(p)(3) ORDER MAY NOT ALTER
AMOUNT, FORM, ETC., OF BENEFITS. --A domestic relations order
meets the requirements of this paragraph only if such order
--
414(p)(3)(A) does not require
a plan to provide any type or form of benefit, or any option,
not otherwise provided under the plan,
414(p)(3)(B) does not require
the plan to provide increased benefits (determined on the basis
of actuarial value), and
414(p)(3)(C) does not require
the payment of benefits to an alternate payee which are required
to be paid to another alternate payee under another order previously
determined to be a qualified domestic relations order.
414(p)(4) EXCEPTION FOR CERTAIN PAYMENTS
MADE AFTER EARLIEST RETIREMENT AGE. --
414(p)(4)(A) IN GENERAL. --A
domestic relations order shall not be treated as failing to
meet the requirements of subparagraph (A) of paragraph (3) solely
because such order requires that payment of benefits be made
to an alternate payee --
414(p)(4)(A)(i) in the case
of any payment before a participant has separated from service,
on or after the date on which the participant attains (or would
have attained) the earliest retirement age,
414(p)(4)(A)(ii) as if the
participant had retired on the date on which such payment is
to begin under such order (but taking into account only the
present value of the benefits actually accrued and not taking
into account the present value of any employer subsidy for early
retirement), and
414(p)(4)(A)(iii) in any form
in which such benefits may be paid under the plan to the participant
(other than in the form of a joint and survivor annuity with
respect to the alternate payee and his or her subsequent spouse).
For purposes of clause (ii), the interest rate
assumption used in determining the present value shall be the
interest rate specified in the plan or, if no rate is specified,
5 percent.
414(p)(4)(B) EARLIEST RETIREMENT
AGE. --Purposes of this paragraph, the term "earliest retirement
age" means the earlier of --
414(p)(4)(B)(i) the date on
which the participant is entitled to a distribution under the
plan, or
414(p)(4)(B)(ii) the later
of --
414(p)(4)(B)(ii)(I) the date
the participant attains age 50, or
414(p)(4)(B)(ii)(II) the earliest
date on which the participant could begin receiving benefits
under the plan if the participant separated from service.
414(p)(5) TREATMENT OF FORMER SPOUSE
AS SURVIVING SPOUSE FOR PURPOSES OF DETERMINING SURVIVOR BENEFITS.
--To the extent provided in any qualified domestic relations
order --
414(p)(5)(A) the former spouse
of a participant shall be treated as a surviving spouse of such
participant for purposes of sections 401(a)(11) and 417 (and
any spouse of the participant shall not be treated as a spouse
of the participant for such purposes), and
414(p)(5)(B) if married for
at least 1 year, the surviving former spouse shall be treated
as meeting the requirements of section 417(d).
414(p)(6) PLAN PROCEDURES WITH RESPECT
TO ORDERS. --
414(p)(6)(A) NOTICE AND DETERMINATION
BY ADMINISTRATOR. --In the case of any domestic relations
order received by a plan --
414(p)(6)(A)(i) the plan administrator
shall promptly notify the participant and each alternate payee
of the receipt of such order and the plan's procedures for determining
the qualified status of domestic relations orders, and
414(p)(6)(A)(ii) within a reasonable
period after receipt of such order, the plan administrator shall
determine whether such order is a qualified domestic relations
order and notify the participant and each alternate payee of
such determination.
414(p)(6)(B) PLAN TO ESTABLISH
REASONABLE PROCEDURES. --Each plan shall establish reasonable
procedures to determine the qualified status of domestic relations
orders and to administer distributions under such qualified
orders.
414(p)(7) PROCEDURES FOR PERIOD DURING
WHICH DETERMINATION IS BEING MADE. --
414(p)(7)(A) IN GENERAL. --During
any period in which the issue of whether a domestic relations
order is a qualified domestic relations order is being determined
(by the plan administrator, by a court of competent jurisdiction,
or otherwise), the plan administrator shall separately account
for the amounts (hereinafter in this paragraph referred to as
the "segregated amounts") which would have been payable
to the alternate payee during such period if the order had been
determined to be a qualified domestic relations order.
414(p)(7)(B) PAYMENT TO ALTERNATE PAYEE
IF ORDER DETERMINED TO BE QUALIFIED DOMESTIC RELATIONS ORDER.
--If within the 18-month period described in subparagraph (E)
the order (or modification thereof) is determined to be a qualified
domestic relations order, the plan administrator shall pay the
segregated amounts (including any interest thereon) to the person
or persons entitled thereto.
414(p)(7)(C) PAYMENT TO PLAN PARTICIPANT
IN CERTAIN CASES. --If within the 18-month period described
in subparagraph (E) --
414(p)(7)(C)(i) it is determined
that the order is not a qualified domestic relations order,
or
414(p)(7)(C)(ii) the issue
as to whether such order is a qualified domestic relations order
is not resolved,
then the plan administrator shall pay the segregated
amounts (including any interest thereon) to the person or persons
who would have been entitled to such amounts if there had been
no order.
414(p)(7)(D) SUBSEQUENT DETERMINATION
OR ORDER TO BE APPLIED PROSPECTIVELY ONLY. --Any determination
that an order is a qualified domestic relations order which
is made after the close of the 18-month period described in
subparagraph (E) shall be applied prospectively only.
414(p)(7)(E) DETERMINATION OF 18-MONTH
PERIOD. --For purposes of this paragraph, the 18-month
period described in this subparagraph is the 18-month period
beginning with the date on which the first payment would be
required to be made under the domestic relations order.
414(p)(8) ALTERNATE PAYEE DEFINED.
--The term "alternate payee" means any spouse, former
spouse, child or other dependent of a participant who is recognized
by a domestic relations order as having a right to receive all,
or a portion of, the benefits payable under a plan with respect
to such participant.
414(p)(9) SUBSECTION NOT TO APPLY TO
PLANS TO WHICH SECTION 401(a)(13) DOES NOT APPLY. --This
subsection shall not apply to any plan to which section 401(a)(13)
does not apply. For purposes of this title, except as provided
in regulations, any distribution from an annuity contract under
section 403(b) pursuant to a qualified domestic relations order
shall be treated in the same manner as a distribution from a
plan to which section 401(a)(13) applies.
414(p)(10) WAIVER OF CERTAIN DISTRIBUTION
REQUIREMENTS. --With respect to the requirements of
subsections (a) and (k) of section 401, section 403(b), section
409(d), and section 457(d), plan shall not be treated as failing
to meet such requirements solely by reason of payments to an
alternative payee pursuant to a qualified domestic relations
order.
414(p)(11) APPLICATION OF RULES TO CERTAIN
OTHER PLANS. --For purposes of this title, a distribution
or payment from a governmental plan (as defined in subsection
(d)) or a church plan (as described in subsection (e)) or an
eligible deferred compensation plan (within the meaning of section
457(b)) shall be treated as made pursuant to a qualified domestic
relations order if it is made pursuant to a domestic relations
order which meets the requirement of clause (i) of paragraph
(1)(A).
414(p)(12) TAX TREATMENT OF PAYMENTS
FROM A SECTION 457 PLAN. --If a distribution or payment
from an eligible deferred compensation plan described in section
457(b) is made pursuant to a qualified domestic relations order,
rules similar to the rules of section 402(e)(1)(A) shall apply
to such distribution or payment.
414(p)(13) CONSULTATION WITH THE SECRETARY.
--In prescribing regulations under this subsection and section
401(a)(13), the Secretary of Labor shall consult with the Secretary.
414(q) HIGHLY COMPENSATED EMPLOYEE.
--
414(q)(1) IN GENERAL. --The
term "highly compensated employee" means any employee
who --
414(q)(1)(A) was a 5-percent
owner at any time during the year or the preceding year, or
414(q)(1)(B) for the preceding
year --
414(q)(1)(B)(i) had compensation
from the employer in excess of $80,000, and
414(q)(1)(B)(ii) if the employer
elects the application of this clause for such preceding year,
was in the top-paid group of employees for such preceding year.
The Secretary shall adjust the $80,000 amount
under subparagraph (B) at the same time and in the same manner
as under section 415(d), except that the base period shall be
the calendar quarter ending September 30, 1996.
414(q)(2) 5-PERCENT OWNER.
--An employee shall be treated as a 5-percent owner for any
year if at any time during such year such employee was a 5-percent
owner (as defined in section 416(i)(1)) of the employer.
414(q)(3) TOP-PAID GROUP. --An
employee is in the top-paid group of employees for any year
if such employee is in the group consisting of the top 20 percent
of the employees when ranked on the basis of compensation paid
during such year.
414(q)(4) COMPENSATION. --For
purposes of this subsection, the term "compensation"
has the meaning given such term by section 415(c)(3).
414(q)(5) EXCLUDED EMPLOYEES.
--For purposes of subsection (r) and for purposes of determining
the number of employees in the top-paid group, the following
employees shall be excluded --
414(q)(5)(A) employees who
have not completed 6 months of service,
414(q)(5)(B) employees who
normally work less than 171/2 hours per week,
414(q)(5)(C) employees who
normally work during not more than 6 months during any year,
414(q)(5)(D) employees who
have not attained age 21, and
414(q)(5)(E) except to the
extent provided in regulations, employees who are included in
a unit of employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining agreement between
employee representatives and the employer.
Except as provided by the Secretary, the employer
may elect to apply subparagraph (A), (B), (C), or (D) by substituting
a shorter period of service, smaller number of hours or months,
or lower age for the period of service, number of hours or months,
or age (as the case may be) than that specified in such subparagraph.
414(q)(6) FORMER EMPLOYEES.
--A former employee shall be treated as a highly compensated
employee if --
414(q)(6)(A) such employee
was a highly compensated employee when such employee separated
from service, or
414(q)(6)(B) such employee
was a highly compensated employee at any time after attaining
age 55.
414(q)(7) COORDINATION WITH OTHER PROVISIONS.
--Subsections (b), (c), (m), (n), and (o) shall be applied before
the application of this subsection.
414(q)(8) SPECIAL RULE FOR NONRESIDENT
ALIENS. --For purposes of this subsection and subsection
(r), employees who are nonresident aliens and who receive no
earned income (within the meaning of section 911(d)(2)) from
the employer which constitutes income from sources within the
United States (within the meaning of section 861(a)(3)) shall
not be treated as employees.
414(q)(9) CERTAIN EMPLOYEES NOT CONSIDERED
HIGHLY COMPENSATED AND EXCLUDED EMPLOYEES UNDER PRE-ERISA RULES
FOR CHURCH PLANS. --In the case of a church plan (as
defined in subsection (e)), no employee shall be considered
an officer, a person whose principal duties consist of supervising
the work of other employees, or a highly compensated employee
for any year unless such employee is a highly compensated employee
under paragraph (1) for such year.
414(r) SPECIAL RULES FOR SEPARATE LINE
OF BUSINESS. --
414(r)(1) IN GENERAL. --For
purposes of sections 129(d)(8) and 410(b), an employer shall
be treated as operating separate lines of business during any
year if the employer for bona fide business reasons operates
separate lines of business.
414(r)(2) LINE OF BUSINESS MUST HAVE
50 EMPLOYEES, ETC. --A line of business shall not be
treated as separate under paragraph (1) unless --
414(r)(2)(A) such line of business
has at least 50 employees who are not excluded under subsection
(q)(5),
414(r)(2)(B) the employer notifies
the Secretary that such line of business is being treated as
separate for purposes of paragraph (1), and
414(r)(2)(C) such line of business
meets guidelines prescribed by the Secretary or the employer
receives a determination from the Secretary that such line of
business may be treated as separate for purposes of paragraph
(1).
414(r)(3) SAFE HARBOR RULE.
--
414(r)(3)(A) IN GENERAL. --The
requirements of subparagraph (C) of paragraph (2) shall not
apply to any line of business if the highly compensated employee
percentage with respect to such line of business is --
414(r)(3)(A)(i) not less than
one-half, and
414(r)(3)(A)(ii) not more than
twice,
the percentage which highly compensated employees
are of all employees of the employer. An employer shall be treated
as meeting the requirements of clause (i) if at least 10 percent
of all highly compensated employees of the employer perform
services solely for such line of business.
414(r)(3)(B) DETERMINATION MAY BE BASED
ON PRECEDING YEAR. --The requirements of subparagraph
(A) shall be treated as met with respect to any line of business
if such requirements were met with respect to such line of business
for the preceding year and if --
414(r)(3)(B)(i) no more than
a de minimis number of employees were shifted to or from the
line of business after the close of the preceding year, or
414(r)(3)(B)(ii) the employees
shifted to or from the line of business after the close of the
preceding year contained a substantially proportional number
of highly compensated employees.
414(r)(4) HIGHLY COMPENSATED EMPLOYEE
PERCENTAGE DEFINED. --For purposes of this subsection,
the term "highly compensated employee percentage"
means the percentage which highly compensated employees performing
services for the line of business are of all employees performing
services for the line of business.
414(r)(5) ALLOCATION OF BENEFITS TO
LINE OF BUSINESS. --For purposes of this subsection,
benefits which are attributable to services provided to a line
of business shall be treated as provided by such line of business.
414(r)(6) HEADQUARTERS PERSONNEL, ETC.
--The Secretary shall prescribe rules providing for --
414(r)(6)(A) the allocation
of headquarters personnel among the lines of business of the
employer, and
414(r)(6)(B) the treatment
of other employees providing services for more than 1 line of
business of the employer or not in lines of business meeting
the requirements of paragraph (2).
414(r)(7) SEPARATE OPERATING UNITS.
--For purposes of this subsection, the term "separate line
of business" includes an operating unit in a separate geographic
area separately operated for a bona fide business reason.
414(r)(8) AFFILIATED SERVICE GROUPS.
--This subsection shall not apply in the case of any affiliated
service group (within the meaning of section 414(m)).
414(s) COMPENSATION. --
For purposes of any applicable provision --
414(s)(1) IN GENERAL. --Except
as provided in this subsection, the term "compensation"
has the meaning given such term by section 415(c)(3).
414(s)(2) EMPLOYER MAY ELECT NOT TO
TREAT CERTAIN DEFERRALS AS COMPENSATION. --An employer
may elect not to include as compensation any amount which is
contributed by the employer pursuant to a salary reduction agreement
and which is not includible in the gross income of an employee
under section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b).
414(s)(3) ALTERNATIVE DETERMINATION
OF COMPENSATION. --The Secretary shall by regulation
provide for alternative methods of determining compensation
which may be used by an employer, except that such regulations
shall provide that an employer may not use an alternative method
if the use of such method discriminates in favor of highly compensated
employees (within the meaning of subsection (q)).
414(s)(4) APPLICABLE PROVISION.
--For purposes of this subsection, the term "applicable
provision" means any provision which specifically refers
to this subsection.
414(t) APPLICATION OF CONTROLLED GROUP
RULES TO CERTAIN EMPLOYEE BENEFITS. --
414(t)(1) IN GENERAL. --All
employees who are treated as employed by a single employer under
subsection (b), (c), or (m) shall be treated as employed by
a single employer for purposes of an applicable section. The
provisions of subsection (o) shall apply with respect to the
requirements of an applicable section.
414(t)(2) APPLICABLE SECTION.
--For purposes of this subsection, the term "applicable
section" means section 79, 106, 117(d), 120, 125, 127,
129, 132, 137, 274(j), 505, or 4980B.
414(u) SPECIAL RULES RELATING TO VETERANS'
REEMPLOYMENT RIGHTS UNDER USERRA. --
414(u)(1) TREATMENT OF CERTAIN CONTRIBUTIONS
MADE PURSUANT TO VETERANS' REEMPLOYMENT RIGHTS. --If
any contribution is made by an employer or an employee under
an individual account plan with respect to an employee, or by
an employee to a defined benefit plan that provides for employee
contributions, and such contribution is required by reason of
such employee's rights under chapter 43 of title 38, United
States Code, resulting from qualified military service, then
--
414(u)(1)(A) such contribution
shall not be subject to any otherwise applicable limitation
contained in section 402(g), 402(h), 403(b), 404(a), 404(h),
408, 415, or 457, and shall not be taken into account in applying
such limitations to other contributions or benefits under such
plan or any other plan, with respect to the year in which the
contribution is made,
414(u)(1)(B) such contribution
shall be subject to the limitations referred to in subparagraph
(A) with respect to the year to which the contribution relates
(in accordance with rules prescribed by the Secretary), and
414(u)(1)(C) such plan shall
not be treated as failing to meet the requirements of section
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m),
403(b)(12), 408(k)(3), 408(k)(6), 408(p), 410(b), or 416 by
reason of the making of (or the right to make) such contribution.
For purposes of the preceding sentence, any
elective deferral or employee contribution made under paragraph
(2) shall be treated as required by reason of the employee's
rights under such chapter 43.
414(u)(2) REEMPLOYMENT RIGHTS UNDER
USERRA WITH RESPECT TO ELECTIVE DEFERRALS. --
414(u)(2)(A) IN GENERAL. --For
purposes of this subchapter and section 457, if an employee
is entitled to the benefits of chapter 43 of title 38, United
States Code, with respect to any plan which provides for elective
deferrals, the employer sponsoring the plan shall be treated
as meeting the requirements of such chapter 43 with respect
to such elective deferrals only if such employer --
414(u)(2)(A)(i) permits such
employee to make additional elective deferrals under such plan
(in the amount determined under subparagraph (B) or such lesser
amount as is elected by the employee) during the period which
begins on the date of the reemployment of such employee with
such employer and has the same length as the lesser of --
414(u)(2)(A)(i)(I) the product
of 3 and the period of qualified military service which resulted
in such rights, and
414(u)(2)(A)(i)(II) 5 years,
and
414(u)(2)(A)(ii) makes a matching
contribution with respect to any additional elective deferral
made pursuant to clause (i) which would have been required had
such deferral actually been made during the period of such qualified
military service.
414(u)(2)(B) AMOUNT OF MAKEUP REQUIRED.
--The amount determined under this subparagraph with respect
to any plan is the maximum amount of the elective deferrals
that the individual would have been permitted to make under
the plan in accordance with the limitations referred to in paragraph
(1)(A) during the period of qualified military service if the
individual had continued to be employed by the employer during
such period and received compensation as determined under paragraph
(7). Proper adjustment shall be made to the amount determined
under the preceding sentence for any elective deferrals actually
made during the period of such qualified military service.
414(u)(2)(C) ELECTIVE DEFERRAL. --For
purposes of this paragraph, the term "elective deferral"
has the meaning given such term by section 402(g)(3); except
that such term shall include any deferral of compensation under
an eligible deferred compensation plan (as defined in section
457(b)).
414(u)(2)(D) AFTER-TAX EMPLOYEE CONTRIBUTIONS.
--References in subparagraphs (A) and (B) to elective deferrals
shall be treated as including references to employee contributions.
414(u)(3) CERTAIN RETROACTIVE ADJUSTMENTS
NOT REQUIRED. --For purposes of this subchapter and
subchapter E, no provision of chapter 43 of title 38, United
States Code, shall be construed as requiring --
414(u)(3)(A) any crediting
of earnings to an employee with respect to any contribution
before such contribution is actually made, or
414(u)(3)(B) any allocation
of any forfeiture with respect to the period of qualified military
service.
414(u)(4) LOAN REPAYMENT SUSPENSIONS
PERMITTED. --If any plan suspends the obligation to
repay any loan made to an employee from such plan for any part
of any period during which such employee is performing service
in the uniformed services (as defined in chapter 43 of title
38, United States Code), whether or not qualified military service,
such suspension shall not be taken into account for purposes
of section 72(p), 401(a), or 4975(d)(1).
414(u)(5) QUALIFIED MILITARY SERVICE.
--For purposes of this subsection, the term "qualified
military service" means any service in the uniformed services
(as defined in chapter 43 of title 38, United States Code) by
any individual if such individual is entitled to reemployment
rights under such chapter with respect to such service.
414(u)(6) INDIVIDUAL ACCOUNT PLAN.
--For purposes of this subsection, the term "individual
account plan" means any defined contribution plan (including
any tax-sheltered annuity plan under section 403(b), any simplified
employee pension under section 408(k), any qualified salary
reduction arrangement under section 408(p), and any eligible
deferred compensation plan (as defined in section 457(b)).
414(u)(7) COMPENSATION. --
For purposes of sections 403(b)(3), 415(c)(3), and 457(e)(5),
an employee who is in qualified military service shall be treated
as receiving compensation from the employer during such period
of qualified military service equal to --
414(u)(7)(A) the compensation
the employee would have received during such period if the employee
were not in qualified military service, determined based on
the rate of pay the employee would have received from the employer
but for absence during the period of qualified military service,
or
414(u)(7)(B) if the compensation
the employee would have received during such period was not
reasonably certain, the employee's average compensation from
the employer during the 12-month period immediately preceding
the qualified military service (or, if shorter, the period of
employment immediately preceding the qualified military service).
414(u)(8) USERRA REQUIREMENTS FOR QUALIFIED
RETIREMENT PLANS. --For purposes of this subchapter
and section 457, an employer sponsoring a retirement plan shall
be treated as meeting the requirements of chapter 43 of title
38, United States Code, only if each of the following requirements
is met:
414(u)(8)(A) An individual
reemployed under such chapter is treated with respect to such
plan as not having incurred a break in service with the employer
maintaining the plan by reason of such individual's period of
qualified military service.
414(u)(8)(B) Each period of
qualified military service served by an individual is, upon
reemployment under such chapter, deemed with respect to such
plan to constitute service with the employer maintaining the
plan for the purpose of determining the nonforfeitability of
the individual's accrued benefits under such plan and for the
purpose of determining the accrual of benefits under such plan.
414(u)(8)(C) An individual
reemployed under such chapter is entitled to accrued benefits
that are contingent on the making of, or derived from, employee
contributions or elective deferrals only to the extent the individual
makes payment to the plan with respect to such contributions
or deferrals. No such payment may exceed the amount the individual
would have been permitted or required to contribute had the
individual remained continuously employed by the employer throughout
the period of qualified military service. Any payment to such
plan shall be made during the period beginning with the date
of reemployment and whose duration is 3 times the period of
the qualified military service (but not greater than 5 years).
414(u)(9) PLANS NOT SUBJECT TO TITLE
38. --This subsection shall not apply to any retirement
plan to which chapter 43 of title 38, United States Code, does
not apply.
414(u)(10) REFERENCES. --For
purposes of this section, any reference to chapter 43 of title
38, United States Code, shall be treated as a reference to such
chapter as in effect on December 12, 1994 (without regard to
any subsequent amendment).
414(v) CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS
AGE 50 OR OVER. --
414(v)(1) IN GENERAL. --
An applicable employer plan shall not be treated as failing
to meet any requirement of this title solely because the plan
permits an eligible participant to make additional elective
deferrals in any plan year.
414(v)(2) LIMITATION ON AMOUNT OF ADDITIONAL
DEFERRALS. --
414(v)(2)(A) IN GENERAL. --A
plan shall not permit additional elective deferrals under paragraph
(1) for any year in an amount greater than the lesser of --
414(v)(2)(A)(i) the applicable
dollar amount, or
414(v)(2)(A)(ii) the excess
(if any) of --
414(v)(2)(A)(ii)(I) the participant's
compensation (as defined in section 415(c)(3)) for the year,
over
414(v)(2)(A)(ii)(II) any other
elective deferrals of the participant for such year which are
made without regard to this subsection.
414(v)(2)(B) APPLICABLE DOLLAR AMOUNT. --
For purposes of this paragraph --
414(v)(2)(B)(i) In the case of an applicable
employer plan other than a plan described in section 401(k)(11)
or 408(p), the applicable dollar amount shall be determined
in accordance with the following table:
The applicable
For taxable years beginning in: dollar amount is:
2006 or thereafter ............................... $5,000.
414(v)(2)(B)(ii) In the case
of an applicable employer plan described in section 401(k)(11)
or 408(p), the applicable dollar amount shall be determined
in accordance with the following table:
The applicable
For taxable years beginning in: dollar amount is:
2006 or thereafter ............................... $2,500.
414(v)(2)(C) COST-OF-LIVING ADJUSTMENT.
--In the case of a year beginning after December 31, 2006, the
Secretary shall adjust annually the $5,000 amount in subparagraph
(B)(i) and the $2,500 amount in subparagraph (B)(ii) 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
taken into account shall be the calendar quarter beginning July
1, 2005, and any increase under this subparagraph which is not
a multiple of $500 shall be rounded to the next lower multiple
of $500.
414(v)(2)(D) AGGREGATION OF PLANS.
--For purposes of this paragraph, plans described in clauses
(i), (ii), and (iv) of paragraph (6)(A) that are maintained
by the same employer (as determined under subsection (b), (c),
(m) or (o)) shall be treated as a single plan, and plans described
in clause (iii) of paragraph (6)(A) that are maintained by the
same employer shall be treated as a single plan.
414(v)(3) TREATMENT OF CONTRIBUTIONS.
--In the case of any contribution to a plan under paragraph
(1) --
414(v)(3)(A) such contribution
shall not, with respect to the year in which the contribution
is made --
414(v)(3)(A)(i) be subject
to any otherwise applicable limitation contained in section
401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (determined
without regard to section 457(b)(3)), or
414(v)(3)(A)(ii) be taken into
account in applying such limitations to other contributions
or benefits under such plan or any other such plan, and
414(v)(3)(B) except as provided
in paragraph (4), such plan shall not be treated as failing
to meet the requirements of section 401(a)(4), 401(k)(3), 401(k)(11),
403(b)(12), 408(k), 410(b), or 416 by reason of the making of
(or the right to make) such contribution.
414(v)(4) APPLICATION OF NONDISCRIMINATION
RULES. --
414(v)(4)(A) IN GENERAL. --An
applicable employer plan shall be treated as failing to meet
the non-discrimination requirements under section 401(a)(4)
with respect to benefits, rights, and features unless the plan
allows all eligible participants to make the same election with
respect to the additional elective deferrals under this subsection.
414(v)(4)(B) AGGREGATION. --For
purposes of subparagraph (A), all plans maintained by employers
who are treated as a single employer under subsection (b), (c),
(m), or (o) of section 414 shall be treated as 1 plan, except
that a plan described in clause (i) of section 410(b)(6)(C)
shall not be treated as a plan of the employer until the expiration
of the transition period with respect to such plan (as determined
under clause (ii) of such section).
414(v)(5) ELIGIBLE PARTICIPANT. --
For purposes of this subsection, the term "eligible participant"
means a participant in a plan --
414(v)(5)(A) who would attain
age 50 by the end of the taxable year,
414(v)(5)(B) with respect to
whom no other elective deferrals may (without regard to this
subsection) be made to the plan for the plan (or other applicable)
year by reason of the application of any limitation or other
restriction described in paragraph (3) or comparable limitation
or restriction contained in the terms of the plan.
414(v)(6) OTHER DEFINITIONS AND RULES.
--For purposes of this subsection --
414(v)(6)(A) APPLICABLE EMPLOYER PLAN.
--The term "applicable employer plan" means --
414(v)(6)(A)(i) an employees'
trust described in section 401(a) which is exempt from tax under
section 501(a),
414(v)(6)(A)(ii) a plan under
which amounts are contributed by an individual's employer for
an annuity contract described in section 403(b),
414(v)(6)(A)(iii) an eligible
deferred compensation plan under section 457 of an eligible
employer described in section 457(e)(1)(A), and
414(v)(6)(A)(iv) an arrangement
meeting the requirements of section 408(k) or (p).
414(v)(6)(B) ELECTIVE DEFERRAL.
--The term "elective deferral" has the meaning given
such term by subsection (u)(2)(C).
414(v)(6)(C) EXCEPTION FOR SECTION 457
PLANS. --This subsection shall not apply to a participant
for any year for which a higher limitation applies to the participant
under section 457(b)(3).
414(w) SPECIAL RULES FOR CERTAIN WITHDRAWALS
FROM ELIGIBLE AUTOMATIC CONTRIBUTION ARRANGEMENTS.
--
414(w)(1) IN GENERAL. --If
an eligible automatic contribution arrangement allows an employee
to elect to make permissible withdrawals --
414(w)(1)(A) the amount of
any such withdrawal shall be includible in the gross income
of the employee for the taxable year of the employee in which
the distribution is made,
414(w)(1)(B) no tax shall be
imposed under section 72(t) with respect to the distribution,
and
414(w)(1)(C) the arrangement
shall not be treated as violating any restriction on distributions
under this title solely by reason of allowing the withdrawal.
In the case of any distribution to an employee
by reason of an election under this paragraph, employer mat