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108hr5398ih
(2) Exceptions from coverage The provisions of this subpart shall not apply to— (A) any employee benefit plan described in section 4(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1003(a) ), which is not exempt under section 4(b)(1) of such Act ( 29 U.S.C.
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1003(b)(1) ), (B) any plan which is unfunded and is maintained by an employer or employer representative primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, (C) any arrangement which would be a severance pay arrangement, as defined in regulation...
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1002(2)(B)(i) ), if the employer were an employer within the meaning of section 3(5) of such Act ( 29 U.S.C. 1002(5) ), (D) any agreement to the extent it is a coverage agreement entered into pursuant to section 218 of the Social Security Act ( 42 U.S.C.
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418 ), (E) any individual retirement account or any individual retirement annuity within the meaning of section 408, or a retirement bond within the meaning of section 409, (F) any plan described in section 401(d), (G) any individual account plan consisting of an annuity contract described in section 403(b), (H) any el...
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Reporting and disclosure requirements (a) In general A public employee pension plan does not meet the requirements of section 401(a)(35) unless the terms of the plan include the requirements of this section. (b) Required disclosures The plan shall provide that, within 210 days after the close of each plan year, the ...
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(2) a statement of receipts and disbursements during the preceding 12-month period aggregated by general sources and applications, (3) a report containing— (A) a description of all investments and assets of the plan, including their value, (B) the names and positions of all of the trustees of the plan, and the time rem...
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including the number of participants and beneficiaries and a summary of their benefits, and a projection of the amount of benefits expected to be paid for the fifth, tenth, and fifteenth plan year following the date of the publication of the report, and (F) the percentage which the current value of the assets of the pl...
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Such information shall be written and calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.
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(c) Availability of plan documents for examination The plan shall provide that the administrator shall make copies of the plan description and the latest annual report and the bargaining agreement, trust agreement, contract, or other instruments under which the plan was established or is operated available for examina...
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(d) Availability of information upon request The plan shall provide that the administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is es...
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Review by qualified review boards of changes in employer contributions (a) In general A public employee pension plan does not meet the requirements of section 401(a)(35) unless, under the plan, changes in employer contributions are subject to review by a qualified review board established for the plan as provided in ...
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(b) Membership (1) In general The membership of a qualified review board established for a plan shall consist of 3 members selected from among individuals who, by means of their education and experience, have demonstrated expertise in the area of pension fund management, as follows: (A) one member is appointed by the...
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and (C) one member is selected jointly by the Governor and by a representative of participants in the plan (from a certified list of pension experts established in accordance with paragraph (2)). Each member of the board shall have 1 vote. Members of the board shall serve for such equivalent terms as shall be prescribe...
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(2) Certified list of experts The Governor of the State shall, for purposes of paragraph (1)(C), establish and maintain with respect to each public employee pension plan (for which such State is the principal State) a certified list of pension experts meeting the requirements for membership on the qualified review boa...
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(c) Powers The board shall be treated as a qualified review board for purposes of this section with respect to any public employee pension plan (for which such State is the principal State) only if the powers of such board under the law of the principal State include review by the board, for approval or disapproval by...
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in such form and manner as shall be prescribed in regulations of the Secretary, by— (A) at least one-third of the total number of trustees of any trust fund forming a part of the plan, or (B) the head of any employee organization representing at least 20 percent of the total number of active participants in the plan. T...
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Definitions and coverage (a) Definitions For purposes of this subpart— (1) Administrator The term administrator means— (A) the board of trustees, retirement board, or similar person with administrative responsibilities in connection with a plan, or any other person specifically so designated in connection with any r...
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(2) Beneficiary The term beneficiary means a person designated by a participant, or by the terms of a public employee pension plan, who is or may become entitled to a benefit thereunder. (3) Current liability The term current liability has the meaning provided in section 302(d)(7) of the Employee Retirement Income Se...
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(5) Employee organization The term employee organization means any labor union or any organization of any kind, or any agency or employee representation committee, association, group, or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers or employer re...
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(6) Employer The term employer means— (A) the government of any State or of any political subdivision of a State, (B) any agency or instrumentality of a government referred to in subparagraph (A), or (C) any agency or instrumentality of two or more governments referred to in subparagraph (A). (7) Employer contribution...
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(8) Employer representative The term employer representative means— (A) any group or association consisting, in whole or in part, of employers acting, in connection with a public employee pension plan, for an employer, or (B) any person acting, in connection with a public employee pension plan, indirectly in the inter...
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by an employer, an employer representative, or an employee organization, or by a combination thereof, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program— (A) provides retirement income to employees, or (B) results in a deferral of income by employees for peri...
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(10) Principal State The term principal State means, for any plan year with respect to a public employee pension plan, the State in which, as of the beginning of such plan year, the largest percentage of the participants of the plan employed in any single State is employed. (11) Governor The term Governor means, in c...
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(12) Participant The term participant means any individual who is or may become eligible to receive a benefit of any type from a public employee pension plan or whose beneficiaries may be eligible to receive any such benefit. (13) Person The term person means a State, a political subdivision of a State, any agency or...
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(14) Plan sponsor The term plan sponsor means— (A) in the case of a plan established or maintained solely for employees of a single employer, such employer, (B) in the case of a plan established or maintained by an employee organization, the employee organization, or (C) in the case of a plan established or maintained...
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(15) Plan year The term plan year means, with respect to a plan, the calendar, policy, or fiscal year on which the records of the plan are kept. (16) State The term State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, and Guam. (b) ...
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(2) Exceptions from coverage The provisions of this subpart shall not apply to— (A) any employee benefit plan described in section 4(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1003(a) ), which is not exempt under section 4(b)(1) of such Act ( 29 U.S.C.
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1003(b)(1) ), (B) any plan which is unfunded and is maintained by an employer or employer representative primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, (C) any arrangement which would be a severance pay arrangement, as defined in regulation...
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1002(2)(B)(i) ), if the employer were an employer within the meaning of section 3(5) of such Act ( 29 U.S.C. 1002(5) ), (D) any agreement to the extent it is a coverage agreement entered into pursuant to section 218 of the Social Security Act ( 42 U.S.C.
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418 ), (E) any individual retirement account or any individual retirement annuity within the meaning of section 408, or a retirement bond within the meaning of section 409, (F) any plan described in section 401(d), (G) any individual account plan consisting of an annuity contract described in section 403(b), (H) any el...
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Automatic enrollment of all employees in 401(k) plans (a) In general Subparagraph (A) of section 401(m)(11) of the Internal Revenue Code of 1986 (relating to additional alternative method of satisfying nondiscrimination tests) is amended by striking and at the end of clause (ii), by striking the period at the end of ...
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(b) Minimum coverage requirements Paragraph (11) of section 401(m) of such Code is amended by adding at the end the following new subparagraph: (C) Minimum coverage requirements The requirements of this subparagraph are met if— (i) the plan meets the requirements of section 410(b), or (ii) the plan is offered to all ...
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For purposes of clause (ii) a plan shall be treated as offered to an eligible employee if, under the plan, employer contributions are made on the employee’s behalf under the plan, unless, pursuant to an election by the employee, payments are made to the employee directly in cash in lieu of such employer contributions.....
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(d) Guidelines for meeting fiduciary requirements Section 404(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C.
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1104(a) ) is amended by adding at the end the following new paragraph: (3) (A) The Secretary shall prescribe by regulation guidelines for compliance with the requirements of the diversification requirement of paragraph (1)(C) and the prudence requirement (to the extent that it requires diversification) of paragraph (1)...
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Such guidelines shall consist of criteria for meeting a standard of well-balanced and highly diversified investment of plan assets. Compliance with such guidelines shall be deemed compliance with such requirements. (B) The criteria prescribed by the Secretary pursuant to subparagraph (A) shall include at least the foll...
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sufficient diversification measured as among varieties of stock categorized by large capitalization, medium capitalization, and small capitalization, and sufficient diversification measured as between investment funds focused on growth and investment funds focused on income; and (iii) adequate prospects for a reasonabl...
108hr5398ih
Diversification requirements for defined contribution plans that hold employer securities (a) In general Subsection (a) of section 401 of the Internal Revenue Code of 1986 (relating to requirements for qualification), as amended by this Act,
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is further amended by inserting after paragraph (35) the following new paragraph: (36) Diversification requirements for defined contribution plans that hold employer securities (A) In general In the case of a defined contribution plan described in this subsection that includes a trust which is exempt from tax under s...
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(B) Elective deferrals invested in employer securities (i) In general In the case of the portion of the account attributable to elective deferrals which is invested in employer securities, a plan meets the requirements of this subparagraph if each applicable individual in such plan may elect to direct the plan to div...
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(ii) Applicable individual For purposes of this subparagraph, the term applicable individual means— (I) any participant in the plan, (II) any beneficiary who is an alternate payee (within the meaning of section 414(p)(8)) under an applicable qualified domestic relations order (within the meaning of section 414(p)(1)(A...
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(C) Other employer contributions (i) In general In the case of the portion of the account attributable to employer contributions (other than elective deferrals) which is invested in employer securities, a plan meets the requirements of this subparagraph if each qualified participant in the plan may elect to direct th...
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The preceding sentence shall apply to the extent that the amount attributable to such reinvested portion exceeds the amount to which a prior election under this subparagraph or paragraph (28) applies. (ii) Qualified participant For purposes of this subparagraph, the term qualified participant means— (I) any participan...
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is an alternate payee (within the meaning of section 414(p)(8)) under an applicable qualified domestic relations order (within the meaning of section 414(p)(1)(A)), and (III) any beneficiary of a deceased participant who met the service requirement in subclause (I) or alternate payee described in subclause (II). (D) In...
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(E) Preservation of authority of plan to limit investment Nothing in this paragraph shall be construed to limit the authority of a plan to impose limitations on the portion of plan assets in any account which may be invested in employer securities. (F) Other definitions and rules For purposes of this paragraph— (i) E...
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(ii) Elective deferrals For purposes of this subparagraph, the term elective deferrals means an employer contribution described in section 402(g)(3)(A) and any employee contribution. (iii) Election Elections under this paragraph shall be not less frequently than quarterly.
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(iv) Employee stock ownership plan The term employee stock ownership plan shall have the same meaning given to such term by section 4975(e)(7).. (b) Conforming amendments (1) Section 401(a)(28) of such Code is amended by adding at the end the following new subparagraph: (D) Application This paragraph shall not apply...
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(3) Section 4975(e)(7) of such Code is amended by adding at the end the following new sentence: A plan shall not fail to be treated as an employee stock ownership plan merely because the plan meets the requirements of section 401(a)(36) (or provides greater diversification rights) or because participants in such plan e...
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(4) Section 4980(c)(3)(A) of such Code is amended by striking if— and all that follows and inserting if the requirements of subparagraphs (B) and (C) are met. (5) Section 407 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C.
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1107 ) is amended by adding at the end the following new subsection: (g) Notwithstanding section 408(e) or any other provision of this title, an individual account plan may not include provisions that do not meet the requirements of section 401(a)(36)(B) of the Internal Revenue Code of 1986.. 203. Improvements in simpl...
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and (2) by striking subparagraphs (B) and (C) and inserting the following: (B) has completed at least 3 years of service (as defined in section 411(a)(5)) for the employer. (b) Nondiscrimination rules Subparagraph (C) of section 408(k)(3) of such Code (requiring contribution to bear uniform relationship to total compe...
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and (2) by inserting after unless contributions thereto the following: are uniform for all employees maintaining a simplified employee pension or. (c) Consent to participation not required Paragraph (2) of section 408(k) of such Code (relating to participation requirements) is amended by adding at the end the followin...
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(d) Separate treatment of contributions to simplified employee pensions Subsection (h) of section 404 of such Code is amended by striking paragraphs (2) and (3) and inserting the following new paragraph: (2) Limitation based on combination of plans inapplicable Contributions to a simplified employee pension shall not...
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and (2) by inserting after paragraph (8) the following new paragraph: (9) Joint and survivor annuity requirements Requirements similar to the requirements of section 401(a)(11) shall apply with respect to annuities purchased with amounts distributed from simplified employee pensions.
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(f) Annual reporting requirements for simplified employee pensions Paragraph (1) of section 408(l) of such Code (relating to simplified employer reports) is amended to read as follows: (1) In general The Secretary shall require by regulations that an employer who makes a contribution on behalf of an employee to a sim...
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except that such reports shall include information sufficient to allow the employee to determine that the simplified employee pension is in compliance with the requirements of this section.
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(g) Deductibility of contributions to simplified employee pensions in connection with domestic service (1) In general Section 404 of such Code (relating to deductions for contributions of an employer to an employee’s trust or annuity plan and compensation under a deferred-payment plan) is amended by adding at the end...
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contributions by an employer to a simplified employee pension of an employee in connection with service constituting domestic service employment shall be treated as if such contributions would otherwise be deductible under section 162 but for subsection (a).
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(2) Domestic service employment For purposes of paragraph (1), the term domestic service employment means domestic service in a private home of the employer (within the meaning of the last sentence of section 3510(c)) in any case in which taxes are imposed by chapter 21 or 23 on remuneration paid for such service.. (2...
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Pension integration rules (a) Applicability of new integration rules extended to all existing accrued benefits Notwithstanding subsection (c)(1) of section 1111 of the Tax Reform Act of 1986 (relating to effective date of application of nondiscrimination rules to integrated plans) (100 Stat. 2440), effective for plan...
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(b) Integration disallowed for simplified employee pensions (1) In general Subparagraph (D) of section 408(k)(3) of the Internal Revenue Code of 1986 (relating to permitted disparity under rules limiting discrimination under simplified employee pensions) is repealed. (2) Conforming amendment Subparagraph (C) of such...
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(c) Eventual repeal of integration rules Effective for plan years beginning on or after January 1, 2006— (1) subparagraphs (C) and (D) of section 401(a)(5) of the Internal Revenue Code of 1986 (relating to pension integration exceptions under nondiscrimination requirements for qualification) are repealed, and subparag...
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and (2) subsection (l) of section 401 of such Code (relating to permitted disparity in plan contributions or benefits) is repealed. 205. Increase to age 75 for beginning mandatory distributions (a) Qualified pension plans Subparagraph (C) of section 401(a)(9) of the Internal Revenue Code of 1986 (relating to required...
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(b) Applicable age Subparagraph (C) of section 401(a)(9) of such Code is amended by adding at the end the following new clause: (v) Applicable age (I) In general For purposes of this clause, the term applicable age shall be determined in accordance with the following table: Applicable Calendar year: age: 2005 71 200...
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(II) Election to use age of spouse For purposes of this subparagraph, an employee who files a joint return for a taxable year may elect to substitute the age of the employee’s spouse for his age.. (c) Individual retirement accounts Paragraph (1) of section 219(d) of such Code is amended— (1) by striking age 70 1/2 in...
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(d) Roth IRA’s Paragraph (4) of section 408A(c) of such Code is amended— (1) by striking age 70 1/2 in the text and inserting the applicable age (as defined in section 401(a)(9)(C)(v)) , and (2) by striking age 70 1/2 in the heading and inserting the applicable age. 206.
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Restrictions on exclusion of unionized employees from participation in 401(k) plans Paragraph (4) of section 401(k) of the Internal Revenue Code of 1986 (relating to other requirements) is amended by adding at the end the following new subparagraph: (D) Benefits subject of bargaining A cash or deferred arrangement of...
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is not otherwise covered under an employee pension benefit plan (as defined in section 3(2)(A) of the Employee Retirement Income Security Act of 1974) which is maintained for employees of such employer pursuant to an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee r...
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000 limit on plans subject to automatic rollover upon mandatory distribution Section 401(a)(31)(B) of the Internal Revenue Code of 1986 (relating to certain mandatory distributions) is amended— (1) in clause (i), by striking In case of a trust which is part of an eligible plan, such trust and inserting A trust , (2) i...
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and (3) by striking clause (ii) and inserting the following new clause: (ii) Distribution described A distribution from a plan is described in this clause if such distribution is an immediate distribution of the entire nonforfeitable accrued benefit of the participant and is in excess of $1,000. 301.
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Savers credit made refundable and permanent (a) Savers credit made refundable (1) In general The Internal Revenue Code of 1986 is amended by redesignating section 25B as section 35A and by moving such section after section 35 in subpart C of part IV of subchapter A of chapter 1 of such Code (relating to refundable c...
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(B) Subparagraph (B) of section 24(b)(3) of such Code is amended by striking sections 23 and 25B and inserting section 23. (C) Subparagraph (C) of section 25(e)(1) of such Code is amended by striking 25B,. (D) Each of the following provisions of such Code are amended by striking 24, and 25B and inserting and 24 : (i) S...
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(E) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting or 35A after section 35. (F) The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 25 B. (G) The table of sections ...
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Elective deferrals and IRA contributions by certain individuals. (b) Savers credit made permanent (1) In general Section 35A of the Internal Revenue Code of 1986, as amended by this section, is amended by striking subsection (g). (2) Repeal of EGTRRA sunset Title IX of the Economic Growth and Tax Relief Reconciliati...
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Credit for qualified pension plan contributions of small employers (a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section: 45G.
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Small employer pension plan contributions (a) General rule For purposes of section 38, in the case of an eligible employer, the small employer pension plan contribution credit determined under this section for any taxable year is an amount equal to 50 percent of the amount which would (but for subsection (f)(1)) be a...
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(b) Credit limited to 3 years The credit allowable by this section shall be allowed only with respect to the period of 3 taxable years beginning with the taxable year in which the qualified retirement plan becomes effective. (c) Qualified employer contribution For purposes of this section— (1) Defined contribution pl...
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(2) Defined benefit plans In the case of a defined benefit plan, the term qualified employer contribution means the amount of employer contributions to the plan made on behalf of any nonhighly compensated employee to the extent that the accrued benefit of such employee derived from such contributions for the year do n...
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(d) Qualified retirement plan (1) In general The term qualified retirement plan means any plan described in section 401(a) which includes a trust exempt from tax under section 501(a) if the plan meets— (A) the contribution requirements of paragraph (2), (B) the vesting requirements of paragraph (3), and (C) the distr...
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under the plan— (i) the employer is required to make nonelective contributions of at least 1 percent of compensation (or the equivalent thereof in the case of a defined benefit plan) for each nonhighly compensated employee who is eligible to participate in the plan, and (ii) except in the case of a defined benefit plan...
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(B) Compensation limitation The compensation taken into account under subparagraph (A) for any year shall not exceed the limitation in effect for such year under section 401(a)(17). (3) Vesting requirements The requirements of this paragraph are met if the plan satisfies the requirements of subparagraph (A) or (B). (...
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(B) 5-year graded vesting A plan satisfies the requirements of this subparagraph if an employee has a nonforfeitable right to a percentage of the employee’s accrued benefit derived from employer contributions determined under the following table: The nonforfeitable Years of service: percentage is: 1 20 2 40 3 60 4 80 ...
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(4) Distribution requirements (A) In general Except as provided in subparagraph (B), the requirements of this paragraph are met if, under the plan— (i) in the case of a profit-sharing or stock bonus plan, amounts are distributable only as provided in section 401(k)(2)(B), and (ii) in the case of a pension plan, amoun...
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(B) Distributions within 5 years after separation, etc In no event shall a plan meet the requirements of this paragraph unless, under the plan, amounts distributed— (i) after separation from service or severance from employment, and (ii) within 5 years after the date of the earliest employer contribution to the plan, ...
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(e) Other definitions For purposes of this section— (1) Eligible employer The term eligible employer has the meaning given such term by section 408(p)(2)(C)(i). (2) Nonhighly compensated employees The term highly compensated employee has the meaning given such term by section 414(q) (determined without regard to sec...
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(f) Special rules (1) Disallowance of deduction No deduction shall be allowed for that portion of the qualified employer contributions paid or incurred for the taxable year which is equal to the credit determined under subsection (a). (2) Election not to claim credit This section shall not apply to a taxpayer for an...
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(g) Recapture of credit on forfeited contributions If any accrued benefit which is forfeitable by reason of subsection (d)(3) is forfeited, the employer’s tax imposed by this chapter for the taxable year in which the forfeiture occurs shall be increased by 35 percent of the employer contributions from which such benef...
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(i) Termination This section shall not apply to any plan established after December 31, 2012. (b) Credit allowed as part of general business credit Section 38(b) of such Code (defining current year business credit) is amended by striking plus at the end of paragraph (13), by striking the period at the end of paragrap...
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(c) Conforming amendments (1) Section 39(d) of such Code is amended by adding at the end the following new paragraph: (11) No carryback of small employer pension plan contribution credit before January 1, 2002 No portion of the unused business credit for any taxable year which is attributable to the small employer pe...
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by striking the period at the end of paragraph (10) and inserting , and , and by adding at the end the following new paragraph: (11) the small employer pension plan contribution credit determined under section 45G(a). (3) The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amende...
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45G. Small employer pension plan contributions (a) General rule For purposes of section 38, in the case of an eligible employer, the small employer pension plan contribution credit determined under this section for any taxable year is an amount equal to 50 percent of the amount which would (but for subsection (f)(1))...
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(b) Credit limited to 3 years The credit allowable by this section shall be allowed only with respect to the period of 3 taxable years beginning with the taxable year in which the qualified retirement plan becomes effective. (c) Qualified employer contribution For purposes of this section— (1) Defined contribution pl...
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(2) Defined benefit plans In the case of a defined benefit plan, the term qualified employer contribution means the amount of employer contributions to the plan made on behalf of any nonhighly compensated employee to the extent that the accrued benefit of such employee derived from such contributions for the year do n...
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(d) Qualified retirement plan (1) In general The term qualified retirement plan means any plan described in section 401(a) which includes a trust exempt from tax under section 501(a) if the plan meets— (A) the contribution requirements of paragraph (2), (B) the vesting requirements of paragraph (3), and (C) the distr...
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under the plan— (i) the employer is required to make nonelective contributions of at least 1 percent of compensation (or the equivalent thereof in the case of a defined benefit plan) for each nonhighly compensated employee who is eligible to participate in the plan, and (ii) except in the case of a defined benefit plan...
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(B) Compensation limitation The compensation taken into account under subparagraph (A) for any year shall not exceed the limitation in effect for such year under section 401(a)(17). (3) Vesting requirements The requirements of this paragraph are met if the plan satisfies the requirements of subparagraph (A) or (B). (...
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(B) 5-year graded vesting A plan satisfies the requirements of this subparagraph if an employee has a nonforfeitable right to a percentage of the employee’s accrued benefit derived from employer contributions determined under the following table: The nonforfeitable Years of service: percentage is: 1 20 2 40 3 60 4 80 ...
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(4) Distribution requirements (A) In general Except as provided in subparagraph (B), the requirements of this paragraph are met if, under the plan— (i) in the case of a profit-sharing or stock bonus plan, amounts are distributable only as provided in section 401(k)(2)(B), and (ii) in the case of a pension plan, amoun...
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(B) Distributions within 5 years after separation, etc In no event shall a plan meet the requirements of this paragraph unless, under the plan, amounts distributed— (i) after separation from service or severance from employment, and (ii) within 5 years after the date of the earliest employer contribution to the plan, ...
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(e) Other definitions For purposes of this section— (1) Eligible employer The term eligible employer has the meaning given such term by section 408(p)(2)(C)(i). (2) Nonhighly compensated employees The term highly compensated employee has the meaning given such term by section 414(q) (determined without regard to sec...