Page:United States Statutes at Large Volume 100 Part 3.djvu/641

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2449

"(2) SPECIAL RULE FOR CURRENT YEAR.—In the case of the year for which the relevant determination is being made, an employee not described in subparagraph (B), (C), or (D) of paragraph (1) for the preceding year (without regard to this paragraph) shall not be treated as described in subparagraph (B), (C), or (D) of paragraph (1) unless such employee is a member of the group consisting of the 100 employees paid the greatest compensation during the year for which such determination is being made. "(3) 5-PERCENT OWNER.—An employee shall be treated as a 5percent owner for any year if at any time during such year such employee was a 5-percent owner (as defined in section 416(i)(l)) of the employer. "(4) 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. "(5) SPECIAL RULES FOR TREATMENT OF OFFICERS.— "(A) NOT MORE THAN 50 OFFICERS TAKEN INTO ACCOUNT.—

For purposes of paragraph (1)(D), no more than 50 employees (or, if lesser, the greater of 3 employees or 10 percent of the employees) shall be treated as officers. •'

"(B) AT LEAST i OFFICER TAKEN INTO ACCOUNT.—If for

any

year no officer of the employer is described in paragraph (1)(D), the highest paid officer of the employer for such year shall be treated as described in such paragraph. "(6) TREATMENT OF CERTAIN FAMILY MEMBERS.—

"(A) IN GENERAL.—If any individual is a member of the family of a 5-percent owner or of a highly compensated employee in the group consisting of the 10 highly compensated employees paid the greatest compensation during the year, then— "(i) such individual shall not be considered a separate employee, and "(ii) any compensation paid to such individual (and any applicable contribution or benefit on behalf of such A individual) shall be treated as if it were paid to (or on behalf of) the 5-percent owner or highly compensated employee. "(B) FAMILY.—For purposes of subparagraph (A), the term 'family' means, with respect to any employee, such employee's spouse and lineal ascendants or descendants and the spouses of such lineal ascendants or descendants. "(7) COMPENSATION.—For purposes of this subsection— "(A) IN GENERAL.—The term 'compensation' means compensation within the meaning of section 415(c)(3). >

"(B) CERTAIN PROVISIONS NOT TAKEN INTO ACCOUNT.—The

determination under subparagraph (A) shall be made— "(i) without regard to sections 125, 402(a)(8), and 402(h)(1)(B), and "(ii) in the case of employer contributions made pursuant to a salary reduction agreement, without regard to section 403(b). "(8) EXCLUDED EMPLOYEES.—For purposes of subsection (r) and for purposes of determining the number of employees in the toppaid group under paragraph (4), the following employees shall be excluded—

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