Page:United States Statutes at Large Volume 110 Part 3.djvu/64

 110 STAT. 1794 PUBLIC LAW 104-188—AUG. 20, 1996 contribution was at 3 percent of compensation for such prior year. "(D) ARRANGEMENT MAY BE ONLY PLAN OF EMPLOYER.— "(i) IN GENERAL.—An arrangement shall not be treated as a qualified salary reduction arrangement for any year if the employer (or any predecessor employer) maintained a qualified plan with respect to which contributions were made, or benefits were accrued, for service in any year in the period beginning with the year such arrangement became effective and ending with the year for which the determination is being made. "(ii) QUALIFIED PLAN.— For purposes of this subparagraph, the term 'qualified plan' means a plan, contract, pension, or trust described in subparagraph (A) or (B) of section 219(g)(5). "(E) COST-OF-LIVING ADJUSTMENT.— The Secretary shall adjust the $6,000 amount under subparagraph (A)(ii) at the same time and in the same manner as under section 415(d), except that the base period taken into account shall be the calendar quarter ending September 30, 1996, and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500. "(3) VESTING REQUIREMENTS. —The requirements of this paragraph are met with respect to a simple retirement account if the employee's rights to any contribution to the simple retirement account are nonforfeitable. For purposes of this paragraph, rules similar to the rules of subsection (k)(4) shall apply. " (4) PARTICIPATION REQUIREMENTS.— "(A) IN GENERAL.— The requirements of this paragraph are met with respect to any simple retirement account for a year only if, under the qualified salary reduction arrangement, all employees of the employer who— "(i) received at least $5,000 in compensation from the employer during any 2 preceding years, and "(ii) are reasonably expected to receive at least $5,000 in compensation during the year, are eligible to make the election under paragraph (2)(A)(i) or receive the nonelective contribution described in paragraph (2)(B). "(B) EXCLUDABLE EMPLOYEES.—An employer may elect to exclude from the requirement under subparagraph (A) employees described in section 410(b)(3). "(5) ADMINISTRATIVE REQUIREMENTS.— The requirements of this paragraph are met with respect to any simplified retirement account if, under the qualified salary reduction arrangement— "(A) an employer must— "(i) make the elective employer contributions under paragraph (2)(A)(i) not later than the close of the 30- day period following the last day of the month with respect to which the contributions are to be made, and "(ii) make the matching contributions under paragraph (2)(A)(iii) or the nonelective contributions under

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