Page:United States Statutes at Large Volume 100 Part 3.djvu/1138

 100 STAT. 2946

PUBLIC LAW 99-514—OCT. 22, 1986 and (6), respectively, and by inserting after paragraph (3) the following new paragraph: "(4) REQUIREMENT OF SPOUSAL CONSENT FOR USING PLAN ASSETS AS SECURITY FOR LOANS.—Each plan shall provide that, if section

401(a)(ll) applies to a participant when part or all of the participant's accrued benefit is to be used as security for a loan, no portion of the participant's accrued benefit may be used as security for such loan unless— "(A) the spouse of the participant (if any) consents in I; writing to such use during the 90-day period ending on the date on which the loan is to be so secured, and "(B) requirements comparable to the requirements of paragraph (2) are met with respect to such consent." (iii) Subsection (f) of section 417 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: "(5) DISTRIBUTIONS BY REASON OF SECURITY INTERESTS.—If the

use of any participant's accrued benefit (or any portion thereof) as security for a loan meets the requirements of subsection (a)(4), nothing in this section or section 411(a)(ll) shall prevent any distribution required by reason of a failure to comply with the terms of such loan." (B) AMENDMENT OF ERISA.—

(i) Subparagraph (B) of section 205(c)(l) of the Employee Retirement Income Security Act of 1974 is amended by striking out "paragraphs (2) and (3)" and inserting in lieu thereof "paragraphs (2), (3), and (4)". (ii) Subsection (c) of section 205 of such Act is amended by redesignating paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), respectively, and by inserting after paragraph (3) the following new paragraph: "(4) Each plan shall provide that, if this section applies to a participant when part or all of the participant's accrued benefit is to be used as security for a loan, no portion of the participant's accrued benefit may be used as security for such loan unless— "(A) the spouse of the participant (if any) consents in writing to such use during the 90-day period ending on the date on which the loan is to be so secured, and "(B) requirements comparable to the requirements of paragraph (2) are met with respect to such consent." (iii) Section 205 of such Act is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: "(j) If the use of any participant's accrued benefit (or any portion thereof) as security for a loan meets the requirements of subsection (c)(4), nothing in this section shall prevent any distribution required by reason of a failure to comply with the terms of such loan." _^, ^^,,

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(C) EFFECTIVE DATES.—

(i) The amendments made by this paragraph shall apply with respect to loans made after August 18, 1985. (ii) III the case of any loan which was made on or before August 18, 1985, and which is secured by a portion of the participant's accrued benefit, nothing in the amendments made by sections 103 and 203 of the Retirement Equity Act of 1984 shall prevent any dis-

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