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NOTES:
Source
(Added , title II, § 1012(a), Sept. 2, 1974, ; amended , title XIX, §§ 1901(a)(62),
1906
(b)(13)(A), Oct. 4, 1976, , 1834; , title II, § 206, Sept. 26, 1980, ; , title II, § 202(b), (c), (d)(2), (e)(2), (3), (f),
205, title III, § 301(a)(1), Aug. 23, 1984, , 1439, 1440, 1449, 1450; , title IX, §§ 9202(b),
9203
(b)(2), Oct. 21, 1986, , 1979; , title XI, §§ 1113(a), (b), (d)(B),
1114
(b)(10),
1139
(a), title XVIII, § 1898(a)(1)(A), (4)(A), (d)(1)(A), (2)(A), (f)(1)(A), Oct. 22, 1986, , 2447, 2451, 2487, 2941, 2943, 2955, 2956; , title IX, § 9346(b), Dec. 22, 1987, ; , title I, § 1018(t)(8)(B), Nov. 10, 1988, ; , title VII, §§ 7861(a)(5)(A), (6)(A),
, (2), (b)(1),
7881
(m)(1), Dec. 19, 1989, , 2435, 2443; , title V, § 521(b)(44), July 3, 1992, ; , title VII, § 767(a)(1), Dec. 8, 1994, ; , title I, § 1442(a), Aug. 20, 1996, ; , title X, § 1071(a)(1), (2)(A), Aug. 5, 1997, ; , title VI, §§ 633(a),
, (b)(1),
648
(a)(1), June 7, 2001, , 123, 125, 127.)
Amendment of Section
For termination of amendment by section 901 of , see Effective and Termination Dates of 2001 Amendment note below.
References in Text
Section 4281 of the employee Retirement Income Security Act of 1974, referred to in subsecs. (a)(3)(F)(i), (ii) and (d)(6)(A), is classified to section
of Title
, Labor.
Section 4203 of the employee Retirement Income Security Act of 1974, referred to in subsec. (a)(4)(G)(i)(I), is classified to section
of Title
.
Section 4205(b)(2)(A)(i) of such Act, referred to in subsec. (a)(4)(G)(i)(II), is classified to section
of Title
.
Section 4048 of such Act, referred to in subsec. (a)(4)(G)(ii), is classified to section
of Title
.
The Social Security Act, referred to in subsecs. (a)(9) and (b)(1)(G), is act Aug. 14, 1935, ch. 531, , as amended. Title II of the Social Security Act is classified generally to subchapter II (§ 401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section
of Title
and Tables.
Amendments
2001—Subsec. (a)(2). , §§ 633(a)(1),
, temporarily substituted “Except as provided in paragraph (12), a plan” for “A plan” in introductory provisions. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(11)(D). , §§ 648(a)(1),
, temporarily added subpar. (D). See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(12). , §§ 633(a)(2),
, temporarily added par. (12). See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(6)(B). , §§ 645(b)(1),
, temporarily inserted after second sentence “The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment which reduces or eliminates benefits or subsidies which create significant burdens or complexities for the plan and plan participants, unless such amendment adversely affects the rights of any participant in a more than de minimis manner.” See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(6)(D), (E). , §§ 645(a)(1),
, temporarily added subpars. (D) and (E). See Effective and Termination Dates of 2001 Amendment note below.
1997—Subsec. (a)(7)(B)(i). , § 1071(a)(2)(A), substituted “the dollar limit under section
” for “$3,500”.
Subsec. (a)(11)(A). , § 1071(a)(1), substituted “$5,000” for “$3,500”.
1996—Subsec. (a)(2). substituted “subparagraph (A) or (B)” for “subparagraph (A), (B), or (C)” in introductory provisions and struck out subpar. (C) which read as follows: “Multiemployer plans.—A plan satisfies the requirements of this subparagraph if—
“(i) the plan is a multiemployer plan (within the meaning of section
), and
“(ii) under the plan—
“(I) an employee who is covered pursuant to a collective bargaining agreement described in section
and who has completed at least 10 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions, and
“(II) the requirements of subparagraph (A) or (B) are met with respect to employees not described in subclause (I).”
1994—Subsec. (a)(11)(B). reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows:
“(i) In general.—For purposes of subparagraph (A), the present value shall be calculated—
“(I) by using an interest rate no greater than the applicable interest rate if the vested accrued benefit (using such rate) is not in excess of $25,000, and
“(II) by using an interest rate no greater than 120 percent of the applicable interest rate if the vested accrued benefit exceeds $25,000 (as determined under subclause (I)).
In no event shall the present value determined under subclause (II) be less than $25,000.
“(ii) Applicable interest rate.—For purposes of clause (i), the term ‘applicable interest rate’ means the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”
1992—Subsec. (d)(3). inserted at end “For purposes of this paragraph, in the case of the complete discontinuance of contributions under a profit-sharing or stock bonus plan, such plan shall be treated as having terminated on the day on which the plan administrator notifies the Secretary (in accordance with regulations) of the discontinuance.”
1989—Subsec. (a)(3)(G). , § 7861(a)(5)(A), added subpar. (G).
Subsec. (a)(4)(A). , § 7861(a)(6)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “years of service before age 18, except that in the case of a plan which does not satisfy subparagraph (A) or (B) of paragraph (2), the plan may not disregard any such year of service during which the employee was a participant;”.
Subsec. (a)(7)(D). , § 7881(m)(1)(D), added subpar. (D).
Subsec. (a)(8)(B). , § 7871(b)(1), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latest of—
“(i) the time a plan participant attains age 65,
“(ii) in the case of a plan participant who commences participation in the plan within 5 years before attaining normal retirement age under the plan, the 5th anniversary of the time the plan participant commences participation in the plan, or
“(iii) in the case of a plan participant not described in clause (ii), the 10th anniversary of the time the plan participant commences participation in the plan.”
Subsec. (b)(2)(B). , § 7871(a)(1), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “Disregard of subsidized portion of early retirement benefit.—A plan shall not be treated as failing to meet the requirements of subparagraph (A) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals.”
Subsec. (b)(2)(C), (D). , § 7871(a)(1), (2), redesignated subpar. (D) as (C) and substituted “this paragraph” for “this subparagraph”. Former subpar. (C) redesignated (B).
Subsec. (c)(2)(B). , § 7881(m)(1)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:
“(i) In general.—In the case of a defined benefit plan providing an annual benefit in the form of a single life annuity (without ancillary benefits) commencing at normal retirement age, the accrued benefit derived from contributions made by an employee as of any applicable date is the annual benefit equal to the employee’s accumulated contributions multiplied by the appropriate conversion factor.
“(ii) Appropriate conversion factor.—For purposes of clause (i), the term ‘appropriate conversion factor’ means the factor necessary to convert an amount equal to the accumulated contributions to a single life annuity (without ancillary benefits) commencing at normal retirement age and shall be 10 percent for a normal retirement age of 65 years. For other normal retirement ages the conversion factor shall be determined in accordance with regulations prescribed by the Secretary.”
Subsec. (c)(2)(C)(iii). , § 7881(m)(1)(A), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “interest on the sum of the amounts determined under clauses (i) and (ii) compounded annually at the rate of 120 percent of the Federal mid-term rate (as in effect under section
for the 1st month of a plan year) from the beginning of the first plan year to which subsection (a)(2) applies (by reason of the applicable effective date) to the date upon which the employee would attain normal retirement age.”
Subsec. (c)(2)(E). , § 7881(m)(1)(C), struck out subpar. (E) which read as follows: “Limitation.—The accrued benefit derived from employee contributions shall not exceed the greater of—
“(i) the employee’s accrued benefit under the plan, or
“(ii) the accrued benefit derived from employee contributions determined as though the amounts calculated under clauses (ii) and (iii) of subparagraph (C) were zero.”
1988—Subsec. (a)(11)(A). substituted “nonforfeitable” for “vested”.
1987—Subsec. (c)(2)(C)(iii). , § 9346(b)(1), substituted “120 percent of the Federal mid-term rate (as in effect under section
for the 1st month of a plan year)” for “5 percent per annum”.
Subsec. (c)(2)(D). , § 9346(b)(2), struck out “, the rate of interest described in clause (iii) of subparagraph (C), or both” before “from time to time” in first sentence and struck out second sentence which read as follows: “The rate of interest described in clause (iii) of subparagraph (C), or both, from time to time as he may deem necessary. The rate of interest shall bear the relationship to 5 percent which the Secretary determines to be comparable to the relationship which the long-term money rates and investment yields for the last period of 10 calendar years ending at least 12 months before the beginning of the plan year bear to the long-term money rates and investment yields for the 10-calendar year period 1964 through 1973.”
1986—Subsec. (a). , § 1898(d)(1)(A)(ii), inserted reference to par. (11) in introductory text.
, § 9202(b)(3), substituted “subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, in the case of a defined contribution plan, the requirements of subsection (b)(2)” for “paragraph (2) of subsection (b), and in the case of a defined benefit plan, also satisfies the requirements of paragraph (1) of subsection (b)” in first sentence.
Subsec. (a)(2). , § 1113(a), amended par. (2) generally, substituting provisions covering 5-year vesting, 3 to 7 year vesting, and multiemployer plans, for former provisions which had covered 10-year vesting, 5- to 15-year vesting, and the “rule of 45”.
Subsec. (a)(3)(D)(ii). , § 1898(a)(4)(A)(i), substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this clause may provide that such repayment must be made before the participant has any one-year break in service commencing after the withdrawal.”
Subsec. (a)(7)(C). , § 1898(a)(4)(A)(ii), substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this subparagraph may provide that such repayment must be made before the participant has 5 consecutive 1-year breaks in service commencing after such withdrawal.”
Subsec. (a)(8)(B). , § 9203(b)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latter of—
“(i) the time a plan participant attains age 65, or
“(ii) the 10th anniversary of the time a plan participant commenced participation in the plan.”
Subsec. (a)(10)(B). , § 1113(d)(B), substituted “3 years” for “5 years”.
Subsec. (a)(11)(A). , § 1898(d)(1)(A)(i), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If the present value of any accrued benefit exceeds $3,500, such benefit shall not be treated as nonforfeitable if the plan provides that the present value of such benefit could be immediately distributed without the consent of the participant.”
Subsec. (a)(11)(B). , § 1139(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of subparagraph (A), the present value shall be calculated by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”
Subsec. (a)(11)(C). , § 1898(d)(2)(A), added subpar. (C).
Subsec. (b)(1). , § 9202(b)(1), substituted “Defined benefit plans” for “General rules” in heading and added subpar. (H).
Subsec. (b)(2) to (4). , § 9202(b)(2), added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.
Subsec. (d)(1)(A), (B). , § 1114(b)(10), substituted “highly compensated employees (within the meaning of section
)” for “officers, shareholders, or highly compensated”.
Subsec. (d)(4). , § 1113(b), repealed par. (4) which provided that a class year plan satisfied the requirements of subsec. (a)(2) if it provided that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan year were nonforfeitable not later than the end of the 5th plan year following the plan year for which such contributions were made.
, § 1898(a)(1)(A), substituted “Class-year” for “Class year” in heading and amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The requirements of subsection (a)(2) shall be deemed to be satisfied in the case of a class year plan if such plan provides that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan year are nonforfeitable not later than the end of the 5th plan year following the plan year for which such contributions were made. For purposes of this section, the term ‘class year plan’ means a profit-sharing, stock bonus, or money purchase plan which provides for the separate nonforfeitability of employees’ rights to or derived from the contributions for each plan year.”
Subsec. (d)(6)(C). , § 1898(f)(1)(A), added subpar. (C).
1984—Subsec. (a)(4)(A). , § 202(b), substituted “18” for “22”.
Subsec. (a)(6)(C). , § 202(c), substituted “5 consecutive 1-year breaks” for “1-year break”, in heading, and in text substituted “5 consecutive 1-year breaks in service” for “any 1-year break in service” and “such 5-year period” for “such break” in two places.
Subsec. (a)(6)(D). , § 202(d)(2), amended subpar. (D) generally.
Subsec. (a)(6)(E). , § 202(e)(2), added subpar. (E).
Subsec. (a)(7)(B)(i). , § 205(b), substituted “$3,500” for “$1,750”.
Subsec. (a)(7)(C). , § 202(f), substituted “5 consecutive 1-year breaks in service” for “any one-year break in service”.
Subsec. (a)(11). , § 205(a), added par. (11).
Subsec. (b)(3)(A). , § 202(e)(3), inserted “, determined without regard to section
”.
Subsec. (d)(6). , § 301(a)(1), designated existing provisions as subpar. (A) and added subpar. (B).
1980—Subsec. (a). , § 206(1)–(4), in par. (3) added subpars. (E) and (F), and in par. (4) added subpar. (G).
Subsec. (d)(6). , § 206(5), inserted reference to section 4281 of the employee Retirement Income Security Act of 1974.
1976—Subsec. (a). , §§ 1901(a)(62)(A)–(C), 1906(b)(13)(A), substituted “paragraph (8)” for “subsection (a)(8)” in provisions preceding par. (1), substituted references to Sept. 2, 1974, for references to the date of enactment of the employee Retirement Income Security Act of 1974 in par. (3)(D)(iii), struck out “or his delegate” after “Secretary” in pars. (4)(C) and (7)(B), and substituted “(B)” for “(b)” in heading of par. (7)(C).
Subsec. (b)(1)(D)(i). , § 1901(a)(62)(D), substituted reference to Sept. 2, 1974, for reference to the date of enactment of the employee Retirement Income Security Act of 1974.
Subsecs. (c)(2)(B)(ii), (D), (d)(2), (3). , § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (e)(1)(C). , § 1901(a)(62)(D), substituted reference to Sept. 2, 1974, for reference to the date of enactment of the employee Retirement Income Security Act of 1974.
Subsec. (e)(2). , § 1901(a)(62)(E), substituted reference to Sept. 1, 1974, for reference to the date before the date of enactment of the employee Retirement Income Security Act of 1974.
Effective and Termination Dates of 2001 Amendment
, title VI, § 633(c), June 7, 2001, , provided that:
“(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section
of Title
, Labor] shall apply to contributions for plan years beginning after December 31, 2001.
“(2) Collective bargaining agreements.—In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified by the date of the enactment of this Act [June 7, 2001], the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan 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 on or after such date of the enactment); or
“(ii) January 1, 2002; or
“(B) January 1, 2006.
“(3) Service required.—With respect to any plan, the amendments made by this section shall not apply to any employee before the date that such employee has 1 hour of service under such plan in any plan year to which the amendments made by this section apply.”
, title VI, § 645(a)(3), June 7, 2001, , provided that: “The amendments made by this subsection [amending this section and section
of Title
, Labor] shall apply to years beginning after December 31, 2001.”
, title VI, § 648(c), June 7, 2001, , provided that: “The amendments made by this section [amending this section, section
of this title, and section
of Title
, Labor] shall apply to distributions after December 31, 2001.”
Amendment by inapplicable to taxable, plan, or limitation years beginning after Dec. 31, 2010, and the Internal Revenue Code of 1986 to be applied and administered to such years as if such amendment had never been enacted, see section 901 of , set out as a note under section
of this title.
Effective Date of 1997 Amendment
Section 1071(c) of provided that: “The amendments made by this section [amending this section, sections
and
of this title, and sections
to
of Title
, Labor] shall apply to plan years beginning after the date of the enactment of this Act [Aug. 5, 1997].”
Effective Date of 1996 Amendment
Section 1442(c) of provided that: “The amendments made by this section [amending this section and section
of Title
, Labor] shall apply to plan years beginning on or after the earlier of—
“(1) the later of—
“(A) January 1, 1997, or
“(B) the date on which the last of the collective bargaining agreements pursuant to which the plan is maintained terminates (determined without regard to any extension thereof after the date of the enactment of this Act [Aug. 20, 1996]), or
“(2) January 1, 1999.
Such amendments shall not apply to any individual who does not have more than 1 hour of service under the plan on or after the 1st day of the 1st plan year to which such amendments apply.”
Effective Date of 1994 Amendment
Section 767(d) of , as amended by , title I, § 1449(a), Aug. 20, 1996, ; , title XVI, § 1604(b)(3), Aug. 5, 1997, , provided that:
“(1) In general.—The amendments made by this section [amending this section, sections
and
of this title, and sections
and
of Title
, Labor] shall apply to plan years and limitation years beginning after December 31, 1994; except that an employer may elect to treat the amendments made by this section as being effective on or after the date of the enactment of this Act [Dec. 8, 1994].
“(2) No reduction in accrued benefits.—A participant’s accrued benefit shall not be considered to be reduced in violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the employee Retirement Income Security Act of 1974 [ U.S.C.
] merely because (A) the benefit is determined in accordance with section 417(e)(3)(A) of such Code, as amended by this Act, or section 205(g)(3) of the employee Retirement Income Security Act of 1974 [ U.S.C.
], as amended by this Act, or (B) the plan applies section 415(b)(2)(E) of such Code, as amended by this Act.
“(3) Section
.—
“(A) Exception.—A plan that was adopted and in effect before December 8, 1994, shall not be required to apply the amendments made by subsection (b) [amending section
of this title] with respect to benefits accrued before the earlier of—
“(i) the later of the date a plan amendment applying the amendments made by subsection (b) is adopted or made effective, or
“(ii) the first day of the first limitation year beginning after December 31, 1999.
Determinations under section 415(b)(2)(E) of the Internal Revenue Code of 1986 before such earlier date shall be made with respect to such benefits on the basis of such section as in effect on December 7, 1994, and the provisions of the plan as in effect on December 7, 1994, but only if such provisions of the plan meet the requirements of such section (as so in effect).
“(B) Timing of plan amendment.—A plan that operates in accordance with the amendments made by subsection (b) shall not be treated as failing to satisfy section 401(a) of the Internal Revenue Code of 1986 or as not being operated in accordance with the provisions of the plan until such date as the Secretary of the Treasury provides merely because the plan has not been amended to include the amendments made by subsection (b).”
Effective Date of 1992 Amendment
Amendment by applicable to distributions after Dec. 31, 1992, see section 521(e) of , set out as a note under section
of this title.
Effective Date of 1989 Amendment
Amendment by section 7861(a)(5)(A), (6)(A) of effective as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see section 7863 of , set out as a note under section
of this title.
Section 7871(a)(4) of provided that: “The amendments made by this subsection [amending this section and section
of Title
, Labor] shall take effect as if included in the amendments made by section 9202 of the Omnibus Budget Reconciliation Act of 1986 [].”
Section 7871(b)(3) of provided that: “The amendments made by this subsection [amending this section and section
of Title
, Labor] shall take effect as if included in the amendments made by section 9203 of the Omnibus Budget Reconciliation Act of 1986 [].”
Amendment by section 7881(m)(1) of effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, , §§ 9302–9346, to which such amendment relates, see section 7882 of , set out as a note under section
of this title.
Effective Date of 1988 Amendment
Amendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see section 1019(a) of , set out as a note under section
of this title.
Effective Date of 1987 Amendment
Amendment by applicable to plan years beginning after Dec. 31, 1987, with plan amendments not required to be made before first plan year beginning on or after Jan. 1, 1989, if certain conditions are met, see section 9346(c) of , set out as a note under section
of Title
, Labor.
Effective Date of 1986 Amendments
Section
1113
(f), formerly § 1113(e), of , as redesignated and amended by , title VII, § 7861(a)(3), (4), Dec. 19, 1989, , provided that:
“(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section
of this title and sections
to
of Title
, Labor] 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 employees covered by any such agreement in 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.
“(3) Participation required.—The amendments made by this section shall not apply to any employee who does not have 1 hour of service in any plan year to which the amendments made by this section apply.
“(4) Repeal of class year vesting.—If a plan amendment repealing class year vesting is adopted after October 22, 1986, such amendment shall not apply to any employee for the 1st plan year to which the amendments made by subsections (b) and (e)(2) [amending this section and section
of Title
] apply (and any subsequent plan year) if—
“(A) such plan amendment would reduce the nonforfeitable right of such employee for such year, and
“(B) such employee has at least 1 hour of service before the adoption of such plan amendment and after the beginning of such 1st plan year.
This paragraph shall not apply to an employee who has 5 consecutive 1-year breaks in service (as defined in section 411(a)(6)(A) of the Internal Revenue Code of 1986) which include the 1st day of the 1st plan year to which the amendments made by subsection (b) and (e)(2) apply. A plan shall not be treated as failing to meet the requirements of section 401(a)(26) of such Code by reason of complying with the provisions of this paragraph.”
Amendment by section 1114(b)(10) of applicable to years beginning after Dec. 31, 1988, see section 1114(c)(3) of , set out as a note under section
of this title.
Section 1139(d) of , as amended by , title I, § 1011A(k), Nov. 10, 1988, , provided that:
“(1) In general.—The amendments made by this section [amending this section and section
of this title and sections
and
of Title
, Labor] shall apply to distributions in plan years beginning after December 31, 1984, except that such amendments shall not apply to any distributions in plan years beginning after December 31, 1984, and before January 1, 1987, if such distributions were made in accordance with the requirements of the regulations issued under the Retirement Equity Act of 1984 [, see Short Title of 1984 Amendment note set out under section
of Title
].
“(2) Reduction in accrued benefits.—
“(A) In general.—If a plan—
“(i) adopts a plan amendment before the close of the first plan year beginning on or after January 1, 1989, which provides for the calculation of the present value of the accrued benefits in the manner provided by the amendments made by this section, and
“(ii) the plan reduces the accrued benefits for any plan year to which such plan amendment applies in accordance with such plan amendment,
such reduction shall not be treated as a violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the employee Retirement Income Security Act of 1974 ( U.S.C.
).
“(B) Special rule.—In the case of a plan maintained by a corporation incorporated on April 11, 1934, which is headquartered in Tarrant County, Texas—
“(i) such plan may be amended to remove the option of an employee to receive a lump sum distribution (within the meaning of section 402(e)(5) of such Code) if such amendment—
“(I) is adopted within 1 year of the date of the enactment of this Act [Oct. 22, 1986], and
“(II) is not effective until 2 years after the employees are notified of such amendment, and
“(ii) the present value of any vested accrued benefit of such plan determined during the 3-year period beginning on the date of the enactment of this Act shall be determined under the applicable interest rate (within the meaning of section 411(a)(11)(B)(ii) of such Code), except that if such value (as so determined) exceeds $50,000, then the value of any excess over $50,000 shall be determined by using the interest rate specified in the plan as of August 16, 1986.”
Section 1898(a)(1)(C) of provided that: “The amendments made by this paragraph [amending this section and section
of Title
, Labor] shall apply to contributions made for plan years beginning after the date of the enactment of this Act [Oct. 22, 1986]; except that, in the case of a plan described in section 302(b) of the Retirement Equity Act of 1984 [section 302(b) of , set out as a note under section
of Title
], such amendments shall not apply to any plan year to which the amendments made by such Act [see Short Title of 1984 Amendment note set out under section
of Title
] do not apply by reason of such section
.”
Amendment by section 1898(a)(4)(A), (d)(1)(A), (2)(A), (f)(1)(A) of effective as if included in the provision of the Retirement Equity Act of 1984, , to which such amendment relates, except as otherwise provided, see section 1898(j) of , set out as a note under section
of this title.
Amendment by section 9202(b) of applicable only with respect to plan years beginning on or after Jan. 1, 1988, and only to employees who have 1 hour of service in any plan year to which amendment applies, with special rule for collectively bargained plans, and amendment by section 9203(b)(2) of applicable only with respect to plan years beginning on or after Jan. 1, 1988, and only with respect to service performed on or after such date, see section 9204(a), (b) of , set out as an Effective and Termination Dates of 1986 Amendments note under section
of Title
, Labor.
Effective Date of 1984 Amendment
Amendment by applicable to plan years beginning after Dec. 31, 1984, except as otherwise provided, see sections 302 and 303 of , set out as a note under section
of Title
, Labor.
Effective Date of 1980 Amendment
Amendment by effective Sept. 26, 1980, see section 210(a) of , set out as an Effective Date note under section
of this title.
Effective Date of 1976 Amendment
Amendment by section 1901(a)(62) of effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of , set out as a note under section
of this title.
Effective Date
Section applicable, except as otherwise provided in section 1017(c) through (i) of , for plan years beginning after Sept. 2, 1974, and, in the case of plans in existence on Jan. 1, 1974, for plan years beginning after Dec. 31, 1975, see section 1017 of , set out as an Effective Date; Transitional Rules note under section
of this title.
Regulations
, title VI, § 645(b)(3), June 7, 2001, , provided that: “Not later than December 31, 2003, the Secretary of the Treasury is directed to issue regulations under section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the employee Retirement Income Security Act of 1974 [ U.S.C.
], including the regulations required by the amendment made by this subsection [amending this section and section
of Title
, Labor]. Such regulations shall apply to plan years beginning after December 31, 2003, or such earlier date as is specified by the Secretary of the Treasury.”
Secretary of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out amendments made by sections 1113 and 1114 of , see section 1141 of , set out as a note under section
of this title.
Secretary of Labor, Secretary of the Treasury, and Equal employment Opportunity Commission shall each issue before Feb. 1, 1988, final regulations to carry out amendments made by sections 9202 and 9203 of , see section 9204 of , set out as a note under section
of Title
, Labor.
Provisions Relating to Plan Amendments
Section 1541 of title XV of provided that:
“(a) In General.—If this section applies to any plan or contract amendment—
“(1) 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), and
“(2) such plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the employee Retirement Income Security Act of 1974 [ U.S.C.
] by reason of such amendment.
“(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 [enacting sections
and
of this title, amending sections
,
to
,
,
,
,
,
,
,
,
,
,
,
,
,
,
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,
,
,
,
, and
of this title, sections
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to
,
,
,
,
, and
of Title
, Labor, and section
of Title
, The Public Health and Welfare, renumbering sections
to
of this title as sections
to
, respectively, of this title, and amending provisions set out as a note under section
of this title] or subtitle H of title X [§§ 1071–1075, amending this section, sections
,
,
,
,
,
,
,
, and
of this title, and sections
to
of Title
and repealing section
of this title], and
“(B) before the first day of the first plan year beginning on or after January 1, 1999.
In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this paragraph shall be applied by substituting ‘2001’ for ‘1999’.
“(2) Conditions.—This section shall not apply to any amendment unless—
“(A) during the period—
“(i) beginning on the date the legislative amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative 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.”
Transitional Rule: Certain Plan Amendments Adopted or Effective On or Before August 20, 1996
Section 1449(d) of provided that: “In the case of a plan that was adopted and in effect before December 8, 1994, if—
“(1) a plan amendment was adopted or made effective on or before the date of the enactment of this Act [Aug. 20, 1996] applying the amendments made by section 767 of the Uruguay Round Agreements Act [, see Effective Date of 1994 Amendment note set out above], and
“(2) within 1 year after the date of the enactment of this Act [Aug. 20, 1996], a plan amendment is adopted which repeals the amendment referred to in paragraph (1),
the amendment referred to in paragraph (1) shall not be taken into account in applying section 767(d)(3)(A) of the Uruguay Round Agreements Act, as amended by subsection (a).”
Plan Amendments Reflecting Amendments by Section 7881(m) of Pub. L. 101–239 Not Treated as Reducing Accrued Benefits
For provisions directing that if during the period beginning Dec. 22, 1987, and ending June 21, 1988, a plan was amended to reflect the amendments by section 9346 of and such plan is amended to reflect the amendments by section 7881(m) of , any plan amendments made to reflect the amendments by section 7881(m) of shall not be treated as reducing accrued benefits for purposes of subsection (d)(6) of this section or section
of Title
, Labor, see section 7881(m)(3) of , set out as a note under section
of Title
.
Plan Amendments Not Required Until January 1, 1998
For provisions directing that if any amendments made by subtitle D [§§ 1401–1465] of title I of require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of , set out as a note under section
of this title.
Plan Amendments Not Required Until January 1, 1994
For provisions directing that if any amendments made by subtitle B [§§ 521–523] of title V of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1994, see section 523 of , set out as a note under section
of this title.
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and
1171–1177] or title XVIII [§§ 1800–1899A] of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of , as amended, set out as a note under section
of this title.
For provisions directing that if any amendments made by sections 9202(b) and 9203(b)(2) of require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 9204 of , set out as a note under section
of Title
, Labor.
Alternate Methods of Satisfying Requirements for Vesting and Accrued Benefits
Section 1012(c) of , as amended by , § 2, Oct. 22, 1986, , provided that: “In the case of any plan maintained on January 1, 1974, if, not later than 2 years after the date of the enactment of this Act [Sept. 2, 1974], the plan administrator petitions the Secretary of Labor, the Secretary of Labor may prescribe an alternate method which shall be treated as satisfying the requirements of subsection (a)(2) of section
of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], or of subsection (b)(1) (other than subparagraph (D) thereof) of such section 411, or of both such provisions for a period of not more than 4 years. The Secretary may prescribe such alternate method only when he finds that—
“(1) the application of such requirements would increase the costs of the plan to such an extent that there would result a substantial risk to the voluntary continuation of the plan or a substantial curtailment of benefit levels or the levels of employees’ compensation,
“(2) the application of such requirements or discontinuance of the plan would be adverse to the interests of plan participants in the aggregate, and
“(3) a waiver or extension of time granted under section
or (e) would be inadequate.
In the case of any plan with respect to which an alternate method has been prescribed under the preceding provisions of this subsection for a period of not more than 4 years, if, not later than 1 year before the expiration of such period, the plan administrator petitions the Secretary of Labor for an extension of such alternate method, and the Secretary makes the findings required by the preceding sentence, such alternate method may be extended for not more than 3 years.”
Section Referred to in Other Sections
This section is referred to in sections
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; title
sections
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