Page:United States Statutes at Large Volume 120.djvu/1063

 120 STAT. 1032

PUBLIC LAW 109–280—AUG. 17, 2006 ‘‘(B) ELECTIVE DEFERRAL.—The term ‘elective deferral’ means an employer contribution described in section 402(g)(3)(A) of the Internal Revenue Code of 1986. ‘‘(C) EMPLOYER SECURITY.—The term ‘employer security’ has the meaning given such term by section 407(d)(1). ‘‘(D) EMPLOYEE STOCK OWNERSHIP PLAN.—The term ‘employee stock ownership plan’ has the meaning given such term by section 4975(e)(7) of such Code. ‘‘(E) PUBLICLY TRADED EMPLOYER SECURITIES.—The term ‘publicly traded employer securities’ means employer securities which are readily tradable on an established securities market. ‘‘(F) YEAR OF SERVICE.—The term ‘year of service’ has the meaning given such term by section 203(b)(2). ‘‘(7) TRANSITION RULE FOR SECURITIES ATTRIBUTABLE TO EMPLOYER CONTRIBUTIONS.— ‘‘(A) RULES PHASED IN OVER 3 YEARS.— ‘‘(i) IN GENERAL.—In the case of the portion of an account to which paragraph (3) applies and which consists of employer securities acquired in a plan year beginning before January 1, 2007, paragraph (3) 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.—Clause (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. ‘‘(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the applicable percentage shall be determined as follows:

Applicability.

‘‘Plan year to which

The applicable paragraph (3) applies: percentage is: 1st .................................................................................................. 33 2d ................................................................................................... 66 3d ................................................................................................... 100.’’.

26 USC 401 note.

Applicability.

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(2) CONFORMING AMENDMENT.—Section 407(b)(3) of such Act (29 U.S.C. 1107(b)(3)) is amended by adding at the end the following: ‘‘(D) For diversification requirements for qualifying employer securities held in certain individual account plans, see section 204(j).’’. (c) EFFECTIVE DATES.— (1) IN GENERAL.—Except as provided in paragraphs (2) and (3), the amendments made by this section shall apply to plan years beginning after December 31, 2006. (2) SPECIAL RULE FOR COLLECTIVELY BARGAINED AGREEMENTS.—In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified on or before the date of the enactment of this Act, paragraph (1) shall be applied to benefits pursuant to, and individuals covered by, any such agreement by substituting for ‘‘December 31, 2006’’ the earlier of— (A) the later of—

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