Page:United States Statutes at Large Volume 88 Part 1.djvu/997

 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

953

sation of each employee taken into account under the plan does not exceed the first $100,000 of such compensation." (d)

DEFINED BENEFIT PLANS FOR SELF-EMPLOYED INDIVIDUALS.—

(1) Subsection (a) of section 401 is amended by inserting after paragraph (IT) the following new paragraph: " (18) I n the case of a trust which is part of a plan providing a defined benefit for employees some or all of whom are employees within the meaning of subsection (c)(1), or are shareholderemployees within the meaning of section 1379(d), only if such plan satisfies the requirements of subsection (j). " (2) Section 401 (relating to qualified pension, profit-sharing, and stock bonus plans) is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: " (j) DEFINED BENEFIT PLANS PROVIDING BENEFITS FOR EMPLOYED INDIVIDUALS AND SHAREHOLDER-EMPLOYEES.—

SELF-

"(1) IN GENERAL.—A defined benefit plan satisfies the requirements of this subsection only if the basic benefit accruing under the plan for each plan year of participation by an employee within the meaning of subsection (c)(1) (or a shareholder-employee) is permissible under regulations prescribed by the Secretary or his delegate under this subsection to insure that there will be reasonable comparability (assuming level funding) between the maximum retirement benefits which may be provided with favorable tax treatment under this title for such employees under— " (A) defined contribution plans, " (B) defined benefit plans, and " (C) a combination of defined contribution plans and defined benefit plans. "(2) GUIDELINES FOR REGULATIONS.—The regulations prescribed under this subsection shall provide that a plan does not satisfy the requirements of this subsection if, under the plan, the basic benefit of any employee within the meaning of subsection (c)(1) (of" a shareholder-employee) may exceed the sum of the products for each plan year of participation of— " (A) his annual compensation (not in excess of $50,000) for such year, and " (B) the applicable percentage determined under paragraph (3). " (3) APPLICABLE PERCENTAGE.—

" (A) TABLE.—For purposes of paragraph (2), the applicable percentage for any individual for any plan year shall be based on the percentage shown on the following table opposite his age when his current period of participation in the plan began. ,,.

.

i.. •

i.-

V,

"Age when participation began: 30 or less 35 40 45 50 55 60 or over, " (B) ADDITIONAL REQUIREMENTS.—The

Applicable

percentage 6.5 5.4 4.4 3.6 3.0 2.5 2. 0

regulations prescribed under this subsection shall include provisions— " (i) for applicable percentages for ages between any two ages shown on the table, "(ii) for adjusting the applicable percentages in the case of plans providing benefits other than a basic benefit.

^"'^' P- "^52.

26 USC 1379. 26 USC 401.

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