Page:United States Statutes at Large Volume 100 Part 3.djvu/1042

 100 STAT. 2850

PUBLIC LAW 99-514—OCT. 22, 1986 (4) The amendments made by this subsection shall apply to contracts issued after the date which is 6 months after the date of the enactment of this Act in taxable years ending after such date. (c) CLARIFICATION OF EXCEPTION FOR DISTRIBUTION AFTER DEATH.—

Effective with respect to distributions made after the date 6 months after the date of the enactment of this Act, subparagraph (B) of section 72(q)(2) (relating to 5-percent penalty for premature distributions from annuity contracts) is amended to read as follows: "(B) made on or after the death of the holder (or, where the holder is not an individual, the death of the primary annuitant (as defined in subsection (s)(6)(B))),". (d) EXCEPTION FOR ANNUITIES WHICH ARE QUALIFIED FUNDING

ASSETS.—Paragraph (2) of section 72(q) (relating to 5-percent penalty for premature distributions from annuity contracts) is amended by striking out "or" at the end of subparagraph (E), by striking out the period at the end of subparagraph (F) and inserting in lieu thereof ", or", and by adding at the end thereof the following new subparagraph: "(G) under a qualified funding asset (within the meaning " of section 130(d), but without regard to whether there is a qualified assignment)." SEC. 1827. AMENDMENTS RELATED TO SECTION 223 OF THE ACT. (a) DETERMINATION OF COSTS IN THE CASE OF DISCRIMINATORY PLANS.—

(1) IN GENERAL.—Subparagraph (B) of section 79(d)(1) (relating to nondiscrimination requirements) is amended to read as follows: "(B) the cost of group-term life insurance on the life of any key employee shall be the greater of— "(i) such cost determined without regard to subsection (c), or "(ii) such cost determined with regard to subsection (0." (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to taxable years ending after the date of the enactment of this Act. (b) CLARIFICATION OF EFFECTIVE DATE.—

(1) Subparagraph (A) of section 223(d)(2) of the Tax Reform Act of 1984 (relating to treatment of former employees in case of existing group-term insurance plans) is amended by striking out the material following clause (ii) and inserting in lieu thereof the following: "but only with respect to an individual who attained age 55 on or before January 1, 1984, and was employed by such employer (or a predecessor employer) at any time during 1983. Such amendments also shall not apply to any employee who retired from employment on or before January 1, 1984, and who, when he retired, was covered by the plan (or a predecessor plan)." (2) Subparagraph (C) of section 223(d)(2) of the Tax Reform Act of 1984 is amended by striking out "after December 31, 1986," and by striking out shall not be taken into account" and inserting in lieu thereof "may, at the employer's election, be disregarded".

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