Page:United States Statutes at Large Volume 111 Part 1.djvu/1112

 Ill STAT. 1088 PUBLIC LAW 105-34—AUG. 5, 1997 (D) Subsection (p) of section 408 is amended by adding at the end the following new paragraph: "(8) COORDINATION WITH MAXIMUM LIMITATION UNDER SUB- SECTION (a).—In the case of any simple retirement account, subsections (a)(1) and (b)(2) shall be applied by substituting 'the sum of the dollar amount in effect under paragraph (2)(A)(ii) of this subsection and the employer contribution required under subparagraph (A)(iii) or (B)(i) of paragraph (2) of this subsection, whichever is applicable' for '$2,000'.". (E) Clause (i) of section 408(p)(2)(D) is amended by adding at the end the following new sentence: "If only individuals other than employees described in subparagraph (A) or (B) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees so described are eligible to participate.". (F) Subparagraph (D) of section 408(p)(2) is amended by adding at the end the following new clause: Applicability. "(iii) GRACE PERIOD.— In the case of an employer who establishes and maintains a plan under this subsection for 1 or more years and who fails to meet any requirement of this subsection for any subsequent year due to any acquisition, disposition, or similar transaction involving another such employer, rules similar to the rules of section 410(b)(6)(C) shall apply for purposes of this subsection.". (G) Paragraph (5) of section 408(p) is amended in the text preceding subparagraph (A) by striking "simplified" and inserting "simple". (2) AMENDMENTS RELATED TO SECTION 1422. — (A) Clause (ii) of section 401(k)(ll)(D) is amended by striking the period and inserting "if such plan allows only contributions required under this paragraph.". (B) Paragraph (11) of section 401(k) is amended by adding at the end the following new subparagraph: "(E) COST-OF-LIVING ADJUSTMENT.—The Secretary shall adjust the $6,000 amount under subparagraph (B)(i)(I) at the same time and in the same manner as under section 408(p)(2)(E).". (C) Subparagraph (A) of section 404(a)(3) is amended— (i) in clause (i), by striking "not in excess of and all that follows and inserting the following: "not in excess of the greater of— "(I) 15 percent of the compensation otherwise Eaid or accrued during the taxable year to the eneficiaries under the stock bonus or profit-sharing plan, or "(II) the amount such employer is required to contribute to such trust under section 401(k)(ll) for such year.", and (ii) in clause (ii), by striking "15 percent" and all that follows and inserting the following "the amount described in subclause (I) or (II) of clause (i), whichever is greater, with respect to such taxable year.". (D) Subparagraph (B) of section 401(k)(ll) is amended by adding at the end the following new clause:

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