Page:United States Statutes at Large Volume 100 Part 3.djvu/655

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2463

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(A) the amendments made by this section shall apply to plan years beginning after December 31, 1988, and (B) in the case of a collective bargaining agreement described in paragraph (2), the amendments made by this section shall not apply to years beginning before the earlier of— .i?.^i li ^, J (i) the later of— (I) January 1, 1989, or f.r •» (II) the date determined under paragraph (2)(B), •niix or ii;' (ii) January 1, 1991. SEC. 1118. BENEFITS TREATED AS ACCRUING RATABLY FOR PURPOSES OF DETERMINING WHETHER PLAN IS TOP-HEAVY.

(a) GENERAL RULE.—Paragraph (4) of section 416(g) (defining topheavy plan) is amended by adding at the end thereof the following new subparagraph: "(F) ACCRUED BENEFITS TREATED AS ACCRUING RATABLY.—

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The accrued benefit of any employee (other than a key employee) shall be determined— "(i) under the method which is used for accrual puj.pQggg fQj. QJJ plans of the employer, or ,,, "(ii) if there is no method described in clause (i), as if I! -aa such benefit accrued not more rapidly than the slowest accrual rate permitted under section 411(b)(1)(C)." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to plan years beginning after December 31, 1986. SEC. 1119. MODIFICATION OF RULES FOR BENEFIT FORFEITURES.

(a) GENERAL RULE.—Paragraph (8) of section 401(a) (relating to qualified pension, profit-sharing, and stock bonus plans) is amended by striking out "pension plan" and inserting in lieu thereof "defined benefit plan". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to plan years beginning after December 31, 1985. SEC. 1120. NONDISCRIMINATION REQUIREMENTS FOR TAX-SHELTERED ANNUITIES.

(a) GENERAL RULE.—Paragraph (1) of section 403(b) is amended by striking out "and" at the end of subparagraph (B), by inserting "and" at the end of subparagraph (C), and by inserting after subparagraph (C) the following new subparagraph: "(D) except in the case of a contract purchased by a church, such contract is purchased under a plan which meets the nondiscrimination requirements of paragraph (10).". (b) NONDISCRIMINATION REQUIREMENTS.—Subsection (b) of section

403 is amended by adding at the end thereof the following new paragraph: "(10) NONDISCRIMINATION REQUIREMENTS.—

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"(A) IN GENERAL.—For purposes of paragraph (1)(D), a plan meets the nondiscrimination requirements of this paragraph if— "(i) with respect to contributions not made pursuant to a salary reduction agreement, such plan meets the requirements of paragraphs (4), (5), and (26) of section

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