Page:United States Statutes at Large Volume 102 Part 4.djvu/503

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3473

amended by adding after subsection (c) the following new subsection: "(d) TREATMENT OF EMPLOYEE CoNTRiBUTiONS U N D E R DEFINED CONTRIBUTION PLANS AS SEPARATE CONTRACTS.—For purposes of this

section, employee contributions (and any income allocable thereto) under a defined contribution plan may be treated as a separate contract." (B) Section 72(e) of the 1986 Oxle is amended by striking out paragraph (9). (3) Section 414(k)(2) of the 1986 Code (relating to certain plans treated as defined contribution plans) is amended by inserting "72(d) (relating to treatment of employee contributions as separate contract)," before "411(a)(7)(A)". (4)(A) Hie amendment made by section 1122(e)(l) of the Reform Act is repealed and the Internal Revenue (Dode of 1986 26 USC 402 and shall be applied and administered as if such amendment had note. (B) Subclause (1) of section 402(a)(5)(D)(i) of the 1986 Code is amended by inserting "is payable as provided in clause (i), (iii), or (iv) of subsection (e)(4)(A) (without r^ard to the second sentence thereof) and" after "such distribution" the first place it appears. (C) Section 402(a)(5)(D)(i) of the 1986 0)de is amended by addu^ at the end thereof the following new sentence: "Any distribution described in section 401(a)(28)(B)(ii) shall be treated as meeting the requirements of subclauses (I) and (11)." (D) Section 402(a)(5)(D)(iii) is amended by striking out "lOYEAR" in the heading. (E) Section 402(a)(5)(D)(i)(ID of the 1986 Code (as in effect after 26 USC 402 note. the amendment made by subparagraph (A)) shall not apply to distributions after December 31, 1986, and before March 31, 1988 (5) Qause (ii) of section 402(a)(6)(H) of the 1986 Code (relating to special rule for frozen deposits) is amended by adding at the end thereof the following new flush sentence: "A deposit shall not be treated as a frozen deposit unless on at least 1 day during the 60-day period described in paragraph (5)(C) (without r^ard to this subparagraph) such deposit is described in the preceding sentence." (6) Qause (i) of section 402(e)(4)(B) of the 1986 Code is amended by striking out "taxpayer" and inserting in lieu thereof "employee". (7) The last sentence of section 402(e)(4)(J) of the 1986 Code (relating to unrealized appreciation on employer securities) is amended to read as follows: "In accordance with rules prescribed by the Secretary, a taxpayer may elect, on the return of tax on which a distribution is required to be included, not to have this subparagraph apply with respect to such distribution." (8) Section 402 of the 1986 Code (relating to taxability of beneficiary of employees' trust) is amended as follows: (A) Subsection (a)(l) is amended by striking out "paragraphs (2) and (4)" and inserting in lieu thereof "paragraph (4)". (B) Subsection (a)(4) is amended by striking out "or (2)".

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