Page:United States Statutes at Large Volume 102 Part 4.djvu/522

 102 STAT. 3492

PUBLIC LAW 100-647—NOV. 10, 1988 "(II) July 19, 1984." (6) Section 404(k) of the 1986 Code is amended by striking out "merely by reason of any distribution" in the third sentence and inserting in lieu thereof "or as engaging in a prohibited transaction for purposes of section 4975(d)(3) merely by reason of any distribution or payment", (i) AMENDMENTS RELATED TO SECTION 1174 OF THE REFORM ACT.—

26 USC 409 note.

(1) Clause (ii) of section 409(o)(l)(A) of the 1986 Code (relating to distribution requirement) is amended by striking out "such year" and inserting in lieu thereof "distribution is required to begin under this clause". (2) Section 1174(a)(2) of the Reform Act is amended by striking out "plan terminations" and inserting in lieu thereof "distributions". (3) Section 409(o)(l)(A) of the 1986 Code is amended by striking out "unless the participant otherwise elects" and inserting in lieu thereof "if the participant and, if applicable pursuant to sections 401(a)(U) and 417, with the consent of the participant's spouse elects", (j) AMENDMENTS RELATED TO SECTION 1175 OF THE REFORM ACT.—

(1) Subclause (H) of section 401(a)(28XB) of the 1986 Code (relating to method of meeting requirements) is amended by inserting "and within 90 da3rs after the period during which the election may be made, the plan invests the portion of the participant's account covered by the election in accordance with such election" after "clause (i)". (2) Clause (iv) of section 401(a)(28XB) of the 1986 Code is amended to read as follows: "(iv) QUALIFIED ELECTION PERIOD.—For purposes of this subparagraph, the term 'qualified election period' means the 6-plan-year period beginning with the later of"(I) the 1st plan year in which the individual first became a qualified participant, or "(n) the Ist plan year beginning after December 31, 1986. For purposes of the preceding sentence, an employer may elect to treat an individual first becoming a qualified p£u*ticip€mt in the 1st plan year beginning in 1987 as having become a participant in the 1st plan year beginning in 1988." (3) The last sentence of section 409(d) of the 1986 Code (relating to employer securities must stay in the plan) is amended by inserting "or to any distribution or reinvestment required under section 401(a)(28)" after "section 401(a)(9)". (4) Section 4978(d) of the 1986 Ck>de (relating to section not to apply to certain dispositions) is amended by adding at the end thereof the following new paragraph: "(4) DISPOSITIONS TO MEET DIVERSIFICATION REQUIREMENTS.—

This section shall not apply to any disposition of qualified securities which is required under section 401(a)(28)," (5) Section 409(h) of the 1986 Code (relating to right to demand employer securities; put option) is amended by adding at the end thereof the following new paragraph: "(7) EXCEPTK»( WHERE EMPLOYEE ELECTED DIVERSIFICATION.—

-Faragrs^h (I)(A) Jihall not apply iwith respect to the portion of

�