Page:United States Statutes at Large Volume 115 Part 1.djvu/149

 PUBLIC LAW 107-16^JUNE 7, 2001 115 STAT. 127 SEC. 647. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED BENEFIT PLANS. (a) SECTION 403(b) PLANS. — Subsection (b) of section 403 is 26 USC 403. amended by adding at the end the following new paragraph: "(13) TRUSTEE-TO-TRUSTEE TRANSFERS TO PURCHASE PERMISSIVE SERVICE CREDIT. —No amount shall be includible in gross income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental plan (as defined in section 414(d)) if such transfer is— "(A) for the purchase of permissive service credit (as defined in section 415(n)(3)(A)) under such plan, or "(B) a repayment to which section 415 does not apply by reason of subsection (k)(3) thereof". (b) SECTION 457 PLANS. — Subsection (e) of section 457, as amended by section 641, is amended by adding after paragraph (16) the following new paragraph: " (17) TRUSTEE-TO-TRUSTEE TRANSFERS TO PURCHASE PERMISSIVE SERVICE CREDIT.— No amount shall be includible in gross income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental plan (as defined in section 414(d)) if such transfer is— "(A) for the purchase of permissive service credit (as defined in section 415(n)(3)(A)) under such plan, or "(B) a repayment to which section 415 does not apply by reason of subsection (k)(3) thereof.". (c) EFFECTIVE DATE. —The amendments made by this section Applicability, shall apply to trustee-to-trustee transfers after December 31, 2001. 26 USC 403 note. SEC. 648. EMPLOYERS MAY DISREGARD ROLLOVERS FOR PURPOSES OF CASH-OUT AMOUNTS. (a) QUALIFIED PLANS. — (1) AMENDMENT OF INTERNAL REVENUE CODE.— Section 411(a)(ll) (relating to restrictions on certain mandatory distributions) is amended by adding at the end the following: "(D) SPECIAL RULE FOR ROLLOVER CONTRIBUTIONS. — A plan shall not fail to meet the requirements of this paragraph if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term 'rollover contributions' means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and457(e)(16). ". (2) AMENDMENT OF ERISA.— Section 203(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(c)) is amended by adding at the end the following: "(4) A plan shall not fail to meet the requirements of this subsection if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term 'rollover contributions' means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Internal Revenue Code of 1986.".

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