Page:United States Statutes at Large Volume 120.djvu/1060

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 1029

‘‘(iv) EMPLOYEE STOCK OWNERSHIP PLAN.—The term ‘employee stock ownership plan’ has the meaning given such term by section 4975(e)(7). ‘‘(v) PUBLICLY TRADED EMPLOYER SECURITIES.—The term ‘publicly traded employer securities’ means employer securities which are readily tradable on an established securities market. ‘‘(vi) YEAR OF SERVICE.—The term ‘year of service’ has the meaning given such term by section 411(a)(5). ‘‘(H) TRANSITION RULE FOR SECURITIES ATTRIBUTABLE TO EMPLOYER CONTRIBUTIONS.— ‘‘(i) RULES PHASED IN OVER 3 YEARS.— ‘‘(I) IN GENERAL.—In the case of the portion of an account to which subparagraph (C) applies and which consists of employer securities acquired in a plan year beginning before January 1, 2007, subparagraph (C) shall only apply to the applicable percentage of such securities. This subparagraph shall be applied separately with respect to each class of securities. ‘‘(II) EXCEPTION FOR CERTAIN PARTICIPANTS AGED 55 OR OVER.—Subclause (I) shall not apply to an applicable individual who is a participant who has attained age 55 and completed at least 3 years of service before the first plan year beginning after December 31, 2005. ‘‘(ii) APPLICABLE PERCENTAGE.—For purposes of clause (i), the applicable percentage shall be determined as follows:

Applicability.

‘‘Plan year to which

The applicable subparagraph (C) applies: percentage is: 1st ........................................................................................... 33 2d ............................................................................................ 66 3d and following .................................................................... 100.’’.

(2) CONFORMING AMENDMENTS.— (A) Section 401(a)(28)(B) of such Code (relating to additional requirements relating to employee stock ownership plans) is amended by adding at the end the following new clause: ‘‘(v) EXCEPTION.—This subparagraph shall not apply to an applicable defined contribution plan (as defined in paragraph (35)(E)).’’. (B) Section 409(h)(7) of such Code is amended by inserting ‘‘or subparagraph (B) or (C) of section 401(a)(35)’’ before the period at the end. (C) Section 4980(c)(3)(A) of such Code is amended by striking ‘‘if—’’ and all that follows and inserting ‘‘if the requirements of subparagraphs (B), (C), and (D) are met.’’. (b) AMENDMENTS OF ERISA.— (1) IN GENERAL.—Section 204 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054) is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: ‘‘(j) DIVERSIFICATION REQUIREMENTS FOR CERTAIN INDIVIDUAL ACCOUNT PLANS.—

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