Page:United States Statutes at Large Volume 100 Part 3.djvu/652

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2460 n

"(4) DEFINITIONS.—For purposes of this subsection— "(A) MATCHING CONTRIBUTION.—The term 'matching contribution' means— "(i) any employer contribution made to the plan on behalf of an employee on account of an employee con; tribution made by such employee, and i _ / "(ii) any employer contribution made to the plan on fil V. behalf of an employee on account of an employee's elective deferral. "(B) ELECTIVE DEFERRAL.—The term 'elective deferral' means any employer contribution described in section - • 402(g)(3)(A). "(C) QUALIFIED NONELECTIVE CONTRIBUTIONS.—The term , 'qualified nonelective contribution' means any employer contribution (other than a matching contribution) with respect to which— "(i) the employee may not elect to have the contribuciMA'>-; tion paid to the employee in cash instead of being contributed to the plan, and '^n-'i f' "(ii) the requirements of subparagraphs (B) and (C) of subsection (k)(2) are met. "(5) EMPLOYEES TAKEN INTO CONSIDERATION.—

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"(A) IN GENERAL.—Any employee who is eligible to make an employee contribution (or, if the employer takes elective contributions into account, elective contributions) or to receive a matching contribution under the plan being tested under paragraph (1) shall be considered an eligible employee for purposes of this subsection. "(B) CERTAIN NONPARTICIPANTS.—If an employee contribution is required as a condition of participation in the plan, any employee who would be a participant in the plan if such employee made such a contribution shall be treated as an eligible employee on behalf of whom no employer contributions are made. "(6) PLAN NOT DISQUAUFIED IF EXCESS AGGREGATE CONTRIBUTIONS DISTRIBUTED BEFORE END OF FOLLOWING PLAN YEAR.—

"(A) IN GENERAL.—A plan shall not be treated as failing to meet the requirements of paragraph (1) for any plan year if, before the close of the following plan year, the amount of the excess aggregate contributions for such plan year (and any income allocable to such contributions) is distributed (or, if forfeitable, is forfeited). Such contributions (and such i income) may be distributed without regard to any other provision of law. "(B) EXCESS AGGREGATE CONTRIBUTIONS.—For purposes of subparagraph (A), the term 'excess aggregate contributions' means, with respect to any plan year, the excess of— "(i) the aggregate amount of the matching contribus«', tions and employee contributions (and any qualified AofM u i; nonelective contribution or elective contribution taken into account in computing the contribution percentage) 'k--^-:AC.'-''::' actually made on behalf of highly compensated employees for such plan year, over ' (ii) the maximum amount of such contributions permitted under the limitations of paragraph (2)(A) (deterYn VJ mined by reducing contributions made on behalf of highly compensated employees in order of their con-

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