Page:United States Statutes at Large Volume 100 Part 3.djvu/619

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2427

"SEC. 457. DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS.

"(a) YEAR OF INCLUSION IN GROSS INCOME.—In the case of a participant in an eligible deferred compensation plan, any amount of compensation deferred under the plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income is paid or otherwise made available to the participant or other beneficiary. "(b) ELIGIBLE DEFERRED COMPENSATION PLAN DEFINED.—For purposes of this section, the term 'eligible deferred compensation plan' means a plan established and maintained by an eligible employer— "(1) in which only individuals who perform service for the employer may be participants, ^ ^ "(2) which provides that (except as provided in paragraph (3)) the maximum amount which may be deferred under the plan for the taxable year shall not exceed the lesser of— - — "(A) $7,500, or "(B) 33 V percent of the participant's includible comb pensation, ^ ' "(3) which may provide that, for 1 or more of the participant's last 3 taxable years ending before he attains normal retirement age under the plan, the ceiling set forth in paragraph (2) shall be the lesser of— "(A) $15,000, or "(B) the sum of— "(i) the plan ceiling established for purposes of para'* ~ graph (2) for the taxable year (determined without regard to this paragraph), plus ^"" ' "(ii) so much of the plan ceiling established for purposes of paragraph (2) for taxable years before the taxable year as has not previously been used under paragraph (2) or this paragraph, "(4) which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month, "(5) which meets the distribution requirements of subsection ^' "(6) which provides that— "(A) all amounts of compensation deferred under the
 * • (d), and

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plan,

"(B) all property and rights purchased with such amounts, and «£!'3 "(C) all income attributable to such amounts, property, or rights, ^ shall remain (until made available to the participant or other ^ beneficiary) solely the property and rights of the employer (without being restricted to the provision of benefits under the plan), subject only to the claims of the employer's general creditors. A plan which is established and maintained by an employer which is described in subsection (e)(l)(A) and which is administered in a manner which is inconsistent with the requirements of any of -he preceding paragraphs shall be treated as not meeting the requirements of such paragraph as of the 1st plan year beginning more

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