Page:United States Statutes at Large Volume 120.djvu/961

 120 STAT. 930

PUBLIC LAW 109–280—AUG. 17, 2006

‘‘(B) In the case of a participant who is a majority owner, the amount of benefits guaranteed under this section shall equal the product of— ‘‘(i) a fraction (not to exceed 1) the numerator of which is the number of years from the later of the effective date or the adoption date of the plan to the termination date, and the denominator of which is 10, and ‘‘(ii) the amount of benefits that would be guaranteed under this section if the participant were not a majority owner.’’ (b) MODIFICATION OF ALLOCATION OF ASSETS.— (1) Section 4044(a)(4)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1344(a)(4)(B)) is amended by striking ‘‘section 4022(b)(5)’’ and inserting ‘‘section 4022(b)(5)(B)’’. (2) Section 4044(b) of such Act (29 U.S.C. 1344(b)) is amended— (A) by striking ‘‘(5)’’ in paragraph (2) and inserting ‘‘(4), (5),’’, and (B) by redesignating paragraphs (3) through (6) as paragraphs (4) through (7), respectively, and by inserting after paragraph (2) the following new paragraph: ‘‘(3) If assets available for allocation under paragraph (4) of subsection (a) are insufficient to satisfy in full the benefits of all individuals who are described in that paragraph, the assets shall be allocated first to benefits described in subparagraph (A) of that paragraph. Any remaining assets shall then be allocated to benefits described in subparagraph (B) of that paragraph. If assets allocated to such subparagraph (B) are insufficient to satisfy in full the benefits described in that subparagraph, the assets shall be allocated pro rata among individuals on the basis of the present value (as of the termination date) of their respective benefits described in that subparagraph.’’. (c) CONFORMING AMENDMENTS.— (1) Section 4021 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1321) is amended— (A) in subsection (b)(9), by striking ‘‘as defined in section 4022(b)(6)’’, and (B) by adding at the end the following new subsection: ‘‘(d) For purposes of subsection (b)(9), the term ‘substantial owner’ means an individual who, at any time during the 60-month period ending on the date the determination is being made— ‘‘(1) owns the entire interest in an unincorporated trade or business, ‘‘(2) in the case of a partnership, is a partner who owns, directly or indirectly, more than 10 percent of either the capital interest or the profits interest in such partnership, or ‘‘(3) in the case of a corporation, owns, directly or indirectly, more than 10 percent in value of either the voting stock of that corporation or all the stock of that corporation. For purposes of paragraph (3), the constructive ownership rules of section 1563(e) of the Internal Revenue Code of 1986 (other than paragraph (3)(C) thereof) shall apply, including the application of such rules under section 414(c) of such Code.’’. (2) Section 4043(c)(7) of such Act (29 U.S.C. 1343(c)(7)) is amended by striking ‘‘section 4022(b)(6)’’ and inserting ‘‘section 4021(d)’’.

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