Page:United States Statutes at Large Volume 120.djvu/1089

 120 STAT. 1058

PUBLIC LAW 109–280—AUG. 17, 2006

SEC. 1104. VOLUNTARY EARLY RETIREMENT INCENTIVE AND EMPLOYMENT RETENTION PLANS MAINTAINED BY LOCAL EDUCATIONAL AGENCIES AND OTHER ENTITIES.

(a) VOLUNTARY EARLY RETIREMENT INCENTIVE PLANS.— (1) TREATMENT AS PLAN PROVIDING SEVERANCE PAY.—Section 457(e)(11) of the Internal Revenue Code of 1986 (relating to certain plans excluded) is amended by adding at the end the following new subparagraph: ‘‘(D) CERTAIN VOLUNTARY EARLY RETIREMENT INCENTIVE PLANS.— ‘‘(i) IN GENERAL.—If an applicable voluntary early retirement incentive plan— ‘‘(I) makes payments or supplements as an early retirement benefit, a retirement-type subsidy, or a benefit described in the last sentence of section 411(a)(9), and ‘‘(II) such payments or supplements are made in coordination with a defined benefit plan which is described in section 401(a) and includes a trust exempt from tax under section 501(a) and which is maintained by an eligible employer described in paragraph (1)(A) or by an education association described in clause (ii)(II), such applicable plan shall be treated for purposes of subparagraph (A)(i) as a bona fide severance pay plan with respect to such payments or supplements to the extent such payments or supplements could otherwise have been provided under such defined benefit plan (determined as if section 411 applied to such defined benefit plan). ‘‘(ii) APPLICABLE VOLUNTARY EARLY RETIREMENT INCENTIVE PLAN.—For purposes of this subparagraph, the term ‘applicable voluntary early retirement incentive plan’ means a voluntary early retirement incentive plan maintained by— ‘‘(I) a local educational agency (as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)), or ‘‘(II) an education association which principally represents employees of 1 or more agencies described in subclause (I) and which is described in section 501(c) (5) or (6) and exempt from tax under section 501(a).’’. (2) AGE DISCRIMINATION IN EMPLOYMENT ACT.—Section 4(l)(1) of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 623(l)(1)) is amended— (A) by inserting ‘‘(A)’’ after ‘‘(1)’’, (B) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, (C) by redesignating clauses (i) and (ii) of subparagraph (B) (as in effect before the amendments made by subparagraph (B)) as subclauses (I) and (II), respectively, and (D) by adding at the end the following: ‘‘(B) A voluntary early retirement incentive plan that— ‘‘(i) is maintained by—

26 USC 457.

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