Page:United States Statutes at Large Volume 100 Part 3.djvu/709

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2517

"(i) in which the participant separates from service by reason of the attainment of normal retirement age under the plan, disability, or death, or "(ii) which is the 5th plan year following the plan year in which the participant otherwise separates from service, except that this clause shall not apply if the participant is reemployed by the employer before such year. "(B) EXCEPTION FOR CERTAIN FINANCED SECURITIES.—For

purposes of this subsection, the account balance of a participant shall not include any employer securities acquired with the proceeds of the loan described in section 404(a)(9) until the close of the plan year in which such loan is repaid in full. "(C) LIMITED DISTRIBUTION PERIOD.—The plan provides that, unless the participant elects otherwise, the distribution of the participant's account balance will be in substantially equal periodic payments (not less frequently than annually) over a period not longer than the greater of— "(i) 5 years, or "(ii) in the case of a participant with an account balance in excess of $500,000, 5 years plus 1 additional year (but not more than 5 additional years) for each $100,000 or fraction thereof by which such balance exceeds $500,000. "(2) CosT-OF-uviNG ADJUSTMENT.—The Secretary shall adjust the dollar amounts under paragraph (1)(C) at the same time and in the same manner as under section 415(d)." (2) CONFORMING AMENDMENTS.—Sections 409(a)(3) is amended by striking out "and (h)" and inserting in lieu thereof "(h), and (o)". (3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to distributions attributable to stock acquired after December 31, 1986. (c) PUT OPTION REQUIREMENTS.— (1) PAYMENT REQUIREMENT.—

(A) IN GENERAL.—Subsection (h) of section 409 (relating to right to demand employer securities; put option) is amended by adding at the end thereof the following new paragraphs: "(5) PAYMENT REQUIREMENT FOR TOTAL DISTRIBUTION.—If an

employer is required to repurchase employer securities which are distributed to the employee as part of a total distribution, the requirements of paragraph (1)(B) shall be treated as met if— "(A) the amount to be paid for the employer securities is paid in substantially equal periodic payments (not less frequently than annually) over a period beginning not later than 30 days after the exercise of the put option described in paragraph (4) and not exceeding 5 years, and "(B) there is adequate security provided and reasonable interest paid on the unpaid amounts referred to in subparagraph (A). For purposes of this paragraph, the term 'total distribution' means the distribution within 1 taxable year to the recipient of the balance to the credit of the recipient's account. "(6)

PAYMENT

REQUIREMENT

FOR INSTALLMENT

DISTRIBU

TiONS.—If an employer is required to repurchase employer secu-

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