Page:United States Statutes at Large Volume 88 Part 1.djvu/983

 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

939

"(4) If the contributions or the benefits provided under the plan do not discriminate in favor of employees who are— (A) officers, " (B) shareholders, or " (C) highly compensated. For purposes of this paragraph, there shall be excluded from consideration employees described in section 410(b)(2)(A) and ^"'^' P- 898. (C)." (b) AMENDMENTS RELATING TO SELF-EMPLOTED INDIVBDUALS AND OWNER-EMPLOYEES.— (1) AMENDMENT OF SECTION ( 4 0 I)(a) (lo).—So much of sub-

paragraph (A) of section 401(a) (10) as precedes clause (i) thereof is amended to read as follows: " (A) paragraph (3), the first and second sentences of paragraph (5), and section 410 shall not apply, but—". (2) AMENDMENT o r SECTION ( 4 O I)(d)(3).—Section 401(d)(3) (relating to additional requirements for qualification of trusts and and plans benefiting owner-employees) is amended to read as follows: "(3)(A) The plan benefits each employee having 3 or more years of service (within the meaning of section 410(a)(3)). " (B) For purposes of subparagraph (A), the term 'employee' does not include— " (i) any employee included in a unit of employees covered by a collective-bargaining agreement described in section 410(b)(2)(A), and "(ii) any employee who is a nonresident alien individual described in section 410(b)(2)(C). "

26 USC 40i.

(c) PERSONS OTHER T H A N BANKS M A T B E TRUSTEES OF TRUSTS BENEFITTING OWNER-EMPLOYEES.—

(1) The first sentence of section 401(d)(1) is amended to read as follows: " I n the case of a trust which is created on or after October 10, 1962, or which was created before such date but is not exempt from tax under section 501(a) as an organization 26 USC soi. described in subsection (a) on the day before such date, the assets thereof are held by a bank or other person who demonstrates to the satisfaction of the Secretary or his delegate that the manner in which he will administer the trust will be consistent with the requirements of this section. A trust shall not be disqualified under this paragraph merely because a person (including the employer) other than the trustee or custodian so administering the trust may be granted, under the trust instrument, the power to control the investment of the trust funds either by directing investments (including reinvestments, disposals, and exchanges) or by disapproving proposed investments (including reinvestments, disposals, or exchanges)." (2) The second sentence of section 401(d)(1) is amended by striking out "the date of the enactment of this subsection" and inserting in lieu thereof "October 10, 1962,". (d) CERTAIN CUSTODIAL ACCOUNTS.—Effective as of January 1, ^^^^ ^-^'^ '^^^ 1974, subsection (f) of section 401 (relating to certain custodial note. accounts) is amended to read as follows: " (f) CERTAIN CUSTODIAL ACCOUNTS AND A N N U I T Y CONTRACTS.—For

purposes of this title, a custodial account or an annuity contract shall be treated as a qualified trust under this section if—

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