26 U.S.C. § 414 — Definitions and special rules

Page 1394 TITLE 26—INTERNAL REVENUE CODE § 414 model plan language similar to model plan language published under section 413(e)(5) of such Code. ‘‘(3) EDUCATIONAL OUTREACH TO EMPLOYERS EXEMPT FROM TAX.—The Secretary of the Treasury (or the Sec- retary’s delegate), in consultation with the Secretary of Labor, shall provide education and outreach to in- crease awareness to employers described in section 501(c)(3) of the Internal Revenue Code of 1986, and which are exempt from tax under section 501(a) of such Code, that multiple employer plans are subject to the Em- ployee Retirement Income Security Act of 1974 and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees.’’ § 414. Definitions and special rules (a) Service for predecessor employer For purposes of this part— (1) in any case in which the employer main- tains a plan of a predecessor employer, service for such predecessor shall be treated as service for the employer, and (2) in any case in which the employer main- tains a plan which is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided in regulations prescribed by the Secretary, be treated as service for the employer. (b) Employees of controlled group of corpora- tions (1) In general For purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, all employees of all cor- porations which are members of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C)) shall be treated as employed by a single employer. With re- spect to a plan adopted by more than one such corporation, the applicable limitations pro- vided by section 404(a) shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary. (2) Special rules for applying family attribu- tion For purposes of applying the attribution rules under section 1563 with respect to para- graph (1), the following rules apply: (A) Community property laws shall be dis- regarded for purposes of determining owner- ship. (B) Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual’s spouse shall not be attributed to such spouse by reason of the combined application of para- graphs (1) and (6)(A) of section 1563(e). (C) Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not at- tributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such cor- porations being members of the same con- trolled group. (3) Plan shall not fail to be treated as satis- fying this section If application of paragraph (2) causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which sec- tion 410(b)(6)(C) applies. (c) Employees of partnerships, proprietorships, etc., which are under common control (1) In general Except as provided in paragraph (2), for pur- poses of sections 401, 408(k), 408(p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or busi- nesses (whether or not incorporated) which are under common control shall be treated as em- ployed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (b). (2) Special rules relating to church plans (A) General rule Except as provided in subparagraphs (B) and (C), for purposes of this subsection and subsection (m), an organization that is oth- erwise eligible to participate in a church plan shall not be aggregated with another such organization and treated as a single employer with such other organization for a plan year beginning in a taxable year un- less— (i) one such organization provides (di- rectly or indirectly) at least 80 percent of the operating funds for the other organiza- tion during the preceding taxable year of the recipient organization, and (ii) there is a degree of common manage- ment or supervision between the organiza- tions such that the organization providing the operating funds is directly involved in the day-to-day operations of the other or- ganization. (B) Nonqualified church-controlled organiza- tions Notwithstanding subparagraph (A), for purposes of this subsection and subsection (m), an organization that is a nonqualified church-controlled organization shall be ag- gregated with 1 or more other nonqualified church-controlled organizations, or with an organization that is not exempt from tax under section 501, and treated as a single em- ployer with such other organization, if at least 80 percent of the directors or trustees of such other organization are either rep- resentatives of, or directly or indirectly con- trolled by, such nonqualified church-con- trolled organization. For purposes of this subparagraph, the term ‘‘nonqualified church-controlled organization’’ means a church-controlled tax-exempt organization described in section 501(c)(3) that is not a qualified church-controlled organization (as defined in section 3121(w)(3)(B)). (C) Permissive aggregation among church-re- lated organizations The church or convention or association of churches with which an organization de- scribed in subparagraph (A) is associated (within the meaning of subsection (e)(3)(D)), or an organization designated by such church or convention or association of Page 1395 TITLE 26—INTERNAL REVENUE CODE § 414 churches, may elect to treat such organiza- tions as a single employer for a plan year. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe. (D) Permissive disaggregation of church-re- lated organizations For purposes of subparagraph (A), in the case of a church plan, an employer may elect to treat churches (as defined in section 403(b)(12)(B)) separately from entities that are not churches (as so defined), without re- gard to whether such entities maintain sepa- rate church plans. Such election, once made, shall apply to all succeeding plan years un- less revoked with notice provided to the Sec- retary in such manner as the Secretary shall prescribe. (d) Governmental plan For purposes of this part, the term ‘‘govern- mental plan’’ means a plan established and maintained for its employees by the Govern- ment of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term ‘‘governmental plan’’ also includes any plan to which the Railroad Retire- ment Act of 1935 or 1937 applies and which is fi- nanced by contributions required under that Act and any plan of an international organization which is exempt from taxation by reason of the International Organizations Immunities Act (59 Stat. 669). The term ‘‘governmental plan’’ in- cludes a plan which is established and main- tained by an Indian tribal government (as de- fined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accord- ance with section 7871(d)), or an agency or in- strumentality of either, and all of the partici- pants of which are employees of such entity sub- stantially all of whose services as such an em- ployee are in the performance of essential gov- ernmental functions but not in the performance of commercial activities (whether or not an es- sential government function). (e) Church plan (1) In general For purposes of this part, the term ‘‘church plan’’ means a plan established and main- tained (to the extent required in paragraph (2)(B)) for its employees (or their benefici- aries) by a church or by a convention or asso- ciation of churches which is exempt from tax under section 501. (2) Certain plans excluded The term ‘‘church plan’’ does not include a plan— (A) which is established and maintained primarily for the benefit of employees (or their beneficiaries) of such church or con- vention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513); or (B) if less than substantially all of the in- dividuals included in the plan are individ- uals described in paragraph (1) or (3)(B) (or their beneficiaries). (3) Definitions and other provisions For purposes of this subsection— (A) Treatment as church plan A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corpora- tion or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provi- sion of retirement benefits or welfare bene- fits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associ- ated with a church or a convention or asso- ciation of churches. (B) Employee defined The term employee of a church or a con- vention or association of churches shall in- clude— (i) a duly ordained, commissioned, or li- censed minister of a church in the exercise of his ministry, regardless of the source of his compensation; (ii) an employee of an organization, whether a civil law corporation or other- wise, which is exempt from tax under sec- tion 501 and which is controlled by or asso- ciated with a church or a convention or as- sociation of churches; and (iii) an individual described in subpara- graph (E). (C) Church treated as employer A church or a convention or association of churches which is exempt from tax under section 501 shall be deemed the employer of any individual included as an employee under subparagraph (B). (D) Association with church An organization, whether a civil law cor- poration or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or conven- tion or association of churches. (E) Special rule in case of separation from plan If an employee who is included in a church plan separates from the service of a church or a convention or association of churches or an organization described in clause (ii) of paragraph (3)(B), the church plan shall not fail to meet the requirements of this sub- section merely because the plan— (i) retains the employee’s accrued ben- efit or account for the payment of benefits to the employee or his beneficiaries pursu- ant to the terms of the plan; or (ii) receives contributions on the em- ployee’s behalf after the employee’s sepa- ration from such service, but only for a pe- riod of 5 years after such separation, un- less the employee is disabled (within the meaning of the disability provisions of the church plan or, if there are no such provi- sions in the church plan, within the mean- Page 1396 TITLE 26—INTERNAL REVENUE CODE § 414 ing of section 72(m)(7)) at the time of such separation from service. (4) Correction of failure to meet church plan requirements (A) In general If a plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 fails to meet one or more of the requirements of this subsection and corrects its failure to meet such requirements within the correction period, the plan shall be deemed to meet the requirements of this subsection for the year in which the correc- tion was made and for all prior years. (B) Failure to correct If a correction is not made within the cor- rection period, the plan shall be deemed not to meet the requirements of this subsection beginning with the date on which the ear- liest failure to meet one or more of such re- quirements occurred. (C) Correction period defined The term ‘‘correction period’’ means— (i) the period, ending 270 days after the date of mailing by the Secretary of a no- tice of default with respect to the plan’s failure to meet one or more of the require- ments of this subsection; (ii) any period set by a court of com- petent jurisdiction after a final determina- tion that the plan fails to meet such re- quirements, or, if the court does not speci- fy such period, any reasonable period de- termined by the Secretary on the basis of all the facts and circumstances, but in any event not less than 270 days after the de- termination has become final; or (iii) any additional period which the Sec- retary determines is reasonable or nec- essary for the correction of the default, whichever has the latest ending date. (5) Special rules for chaplains and self-em- ployed ministers (A) Certain ministers may participate For purposes of this part— (i) In general A duly ordained, commissioned, or li- censed minister of a church is described in paragraph (3)(B) if, in connection with the exercise of their ministry, the minister— (I) is a self-employed individual (with- in the meaning of section 401(c)(1)(B), or (II) is employed by an organization other than an organization which is de- scribed in section 501(c)(3) and with re- spect to which the minister shares com- mon religious bonds. (ii) Treatment as employer and employee For purposes of sections 403(b)(1)(A) and 404(a)(10), a minister described in clause (i)(I) shall be treated as employed by the minister’s own employer which is an orga- nization described in section 501(c)(3) and exempt from tax under section 501(a). (B) Special rules for applying section 403(b) to self-employed ministers In the case of a minister described in sub- paragraph (A)(i)(I)— (i) the minister’s includible compensa- tion under section 403(b)(3) shall be deter- mined by reference to the minister’s earned income (within the meaning of sec- tion 401(c)(2)) from such ministry rather than the amount of compensation which is received from an employer, and (ii) the years (and portions of years) in which such minister was a self-employed individual (within the meaning of section 401(c)(1)(B)) with respect to such ministry shall be included for purposes of section 403(b)(4). (C) Effect on non-denominational plans If a duly ordained, commissioned, or li- censed minister of a church in the exercise of his or her ministry participates in a church plan (within the meaning of this sec- tion) and in the exercise of such ministry is employed by an employer not otherwise par- ticipating in such church plan, then such employer may exclude such minister from being treated as an employee of such em- ployer for purposes of applying sections 401(a)(3), 401(a)(4), and 401(a)(5), as in effect on September 1, 1974, and sections 401(a)(4), 401(a)(5), 401(a)(26), 401(k)(3), 401(m), 403(b)(1)(D) (including section 403(b)(12)), and 410 to any stock bonus, pension, profit-shar- ing, or annuity plan (including an annuity described in section 403(b) or a retirement income account described in section 403(b)(9)). The Secretary shall prescribe such regulations as may be necessary or appro- priate to carry out the purpose of, and pre- vent the abuse of, this subparagraph. (D) Compensation taken into account only once If any compensation is taken into account in determining the amount of any contribu- tions made to, or benefits to be provided under, any church plan, such compensation shall not also be taken into account in de- termining the amount of any contributions made to, or benefits to be provided under, any other stock bonus, pension, profit-shar- ing, or annuity plan which is not a church plan. (E) Exclusion In the case of a contribution to a church plan made on behalf of a minister described in subparagraph (A)(i)(II), such contribution shall not be included in the gross income of the minister to the extent that such con- tribution would not be so included if the minister was an employee of a church. (f) Multiemployer plan (1) Definition For purposes of this part, the term ‘‘multi- employer plan’’ means a plan— (A) to which more than one employer is re- quired to contribute, (B) which is maintained pursuant to one or more collective bargaining agreements be- Page 1397 TITLE 26—INTERNAL REVENUE CODE § 414 1 So in original. Probably should be ‘‘title’’. tween one or more employee organizations and more than one employer, and (C) which satisfies such other require- ments as the Secretary of Labor may pre- scribe by regulation. (2) Cases of common control For purposes of this subsection, all trades or businesses (whether or not incorporated) which are under common control within the meaning of subsection (c) are considered a sin- gle employer. (3) Continuation of status after termination Notwithstanding paragraph (1), a plan is a multiemployer plan on and after its termi- nation date under title IV of the Employee Re- tirement Income Security Act of 1974 if the plan was a multiemployer plan under this sub- section for the plan year preceding its termi- nation date. (4) Transitional rule For any plan year which began before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, the term ‘‘multiemployer plan’’ means a plan de- scribed in this subsection as in effect imme- diately before that date. (5) Special election Within one year after the date of the enact- ment of the Multiemployer Pension Plan Amendments Act of 1980, a multiemployer plan may irrevocably elect, pursuant to proce- dures established by the Pension Benefit Guar- anty Corporation and subject to the provisions of section 4403(b) and (c) of the Employee Re- tirement Income Security Act of 1974, that the plan shall not be treated as a multiemployer plan for any purpose under such Act or this title, if for each of the last 3 plan years ending prior to the effective date of the Multiem- ployer Pension Plan Amendments Act of 1980— (A) the plan was not a multiemployer plan because the plan was not a plan described in section 3(37)(A)(iii) of the Employee Retire- ment Income Security Act of 1974 and sec- tion 414(f)(1)(C) (as such provisions were in effect on the day before the date of the en- actment of the Multiemployer Pension Plan Amendments Act of 1980); and (B) the plan had been identified as a plan that was not a multiemployer plan in sub- stantially all its filings with the Pension Benefit Guaranty Corporation, the Sec- retary of Labor and the Secretary. (6) Election with regard to multiemployer sta- tus (A) Within 1 year after the enactment of the Pension Protection Act of 2006— (i) An election under paragraph (5) may be revoked, pursuant to procedures prescribed by the Pension Benefit Guaranty Corpora- tion, if, for each of the 3 plan years prior to the date of the enactment of that Act, the plan would have been a multiemployer plan but for the election under paragraph (5), and (ii) a plan that meets the criteria in sub- paragraph (A) and (B) of paragraph (1) of this subsection or that is described in subpara- graph (E) may, pursuant to procedures pre- scribed by the Pension Benefit Guaranty Corporation, elect to be a multiemployer plan, if— (I) for each of the 3 plan years imme- diately preceding the first plan year for which the election under this paragraph is effective with respect to the plan, the plan has met those criteria or is so described, (II) substantially all of the plan’s em- ployer contributions for each of those plan years were made or required to be made by organizations that were exempt from tax under section 501, and (III) the plan was established prior to September 2, 1974. (B) An election under this paragraph shall be effective for all purposes under this Act 1 and under the Employee Retirement Income Secu- rity Act of 1974, starting with any plan year beginning on or after January 1, 1999, and end- ing before January 1, 2008, as designated by the plan in the election made under subpara- graph (A)(ii). (C) Once made, an election under this para- graph shall be irrevocable, except that a plan described in subparagraph (A)(ii) shall cease to be a multiemployer plan as of the plan year beginning immediately after the first plan year for which the majority of its employer contributions were made or required to be made by organizations that were not exempt from tax under section 501. (D) The fact that a plan makes an election under subparagraph (A)(ii) does not imply that the plan was not a multiemployer plan prior to the date of the election or would not be a multiemployer plan without regard to the election. (E) A plan is described in this subparagraph if it is a plan sponsored by an organization which is described in section 501(c)(5) and ex- empt from tax under section 501(a) and which was established in Chicago, Illinois, on August 12, 1881. (F) MAINTENANCE UNDER COLLECTIVE BAR- GAINING AGREEMENT.—For purposes of this title and the Employee Retirement Income Se- curity Act of 1974, a plan making an election under this paragraph shall be treated as main- tained pursuant to a collective bargaining agreement if a collective bargaining agree- ment, expressly or otherwise, provides for or permits employer contributions to the plan by one or more employers that are signatory to such agreement, or participation in the plan by one or more employees of an employer that is signatory to such agreement, regardless of whether the plan was created, established, or maintained for such employees by virtue of another document that is not a collective bar- gaining agreement. (g) Plan administrator For purposes of this part, the term ‘‘plan ad- ministrator’’ means— (1) the person specifically so designated by the terms of the instrument under which the plan is operated; (2) in the absence of a designation referred to in paragraph (1)— Page 1398 TITLE 26—INTERNAL REVENUE CODE § 414 (A) in the case of a plan maintained by a single employer, such employer, (B) in the case of a plan maintained by two or more employers or jointly by one or more employers and one or more employee organi- zations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who main- tained the plan, or (C) in any case to which subparagraph (A) or (B) does not apply, such other person as the Secretary may by regulation, prescribe. (h) Tax treatment of certain contributions (1) In general Effective with respect to taxable years be- ginning after December 31, 1973, for purposes of this title, any amount contributed— (A) to an employees’ trust described in sec- tion 401(a), or (B) under a plan described in section 403(a), shall not be treated as having been made by the employer if it is designated as an em- ployee contribution. (2) Designation by units of government For purposes of paragraph (1), in the case of any plan established by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments), where the contributions of employing units are des- ignated as employee contributions but where any employing unit picks up the contribu- tions, the contributions so picked up shall be treated as employer contributions. (i) Defined contribution plan For purposes of this part, the term ‘‘defined contribution plan’’ means a plan which provides for an individual account for each participant and for benefits based solely on the amount con- tributed to the participant’s account, and any income, expenses, gains and losses, and any for- feitures of accounts of other participants which may be allocated to such participant’s account. (j) Defined benefit plan For purposes of this part, the term ‘‘defined benefit plan’’ means any plan which is not a de- fined contribution plan. (k) Certain plans A defined benefit plan which provides a benefit derived from employer contributions which is based partly on the balance of the separate ac- count of a participant shall— (1) for purposes of section 410 (relating to minimum participation standards), be treated as a defined contribution plan, (2) for purposes of sections 72(d) (relating to treatment of employee contributions as sepa- rate contract), 411(a)(7)(A) (relating to min- imum vesting standards), 415 (relating to limi- tations on benefits and contributions under qualified plans), and 401(m) (relating to non- discrimination tests for matching require- ments and employee contributions), be treated as consisting of a defined contribution plan to the extent benefits are based on the separate account of a participant and as a defined ben- efit plan with respect to the remaining portion of benefits under the plan, and (3) for purposes of section 4975 (relating to tax on prohibited transactions), be treated as a defined benefit plan. (l) Merger and consolidations of plans or trans- fers of plan assets (1) In general A trust which forms a part of a plan shall not constitute a qualified trust under section 401 and a plan shall be treated as not described in section 403(a) unless in the case of any merger or consolidation of the plan with, or in the case of any transfer of assets or liabilities of such plan to, any other trust plan after Sep- tember 2, 1974, each participant in the plan would (if the plan then terminated) receive a benefit immediately after the merger, consoli- dation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated). The preceding sentence does not apply to any multiemployer plan with respect to any transaction to the extent that partici- pants either before or after the transaction are covered under a multiemployer plan to which Title IV of the Employee Retirement Income Security Act of 1974 applies. (2) Allocation of assets in plan spin-offs, etc. (A) In general In the case of a plan spin-off of a defined benefit plan, a trust which forms part of— (i) the original plan, or (ii) any plan spun off from such plan, shall not constitute a qualified trust under this section unless the applicable percentage of excess assets are allocated to each of such plans. (B) Applicable percentage For purposes of subparagraph (A), the term ‘‘applicable percentage’’ means, with respect to each of the plans described in clauses (i) and (ii) of subparagraph (A), the percentage determined by dividing— (i) the excess (if any) of— (I) the sum of the funding target and target normal cost determined under section 430, over (II) the amount of the assets required to be allocated to the plan after the spin- off (without regard to this paragraph), by (ii) the sum of the excess amounts deter- mined separately under clause (i) for all such plans. (C) Excess assets For purposes of subparagraph (A), the term ‘‘excess assets’’ means an amount equal to the excess (if any) of— (i) the fair market value of the assets of the original plan immediately before the spin-off, over (ii) the amount of assets required to be allocated after the spin-off to all plans (de- termined without regard to this para- graph). Page 1399 TITLE 26—INTERNAL REVENUE CODE § 414 (D) Certain spun-off plans not taken into ac- count (i) In general A plan involved in a spin-off which is de- scribed in clause (ii), (iii), or (iv) shall not be taken into account for purposes of this paragraph, except that the amount deter- mined under subparagraph (C)(ii) shall be increased by the amount of assets allo- cated to such plan. (ii) Plans transferred out of controlled groups A plan is described in this clause if, after such spin-off, such plan is maintained by an employer who is not a member of the same controlled group as the employer maintaining the original plan. (iii) Plans transferred out of multiple em- ployer plans A plan as described in this clause if, after the spin-off, any employer maintain- ing such plan (and any member of the same controlled group as such employer) does not maintain any other plan remain- ing after the spin-off which is also main- tained by another employer (or member of the same controlled group as such other employer) which maintained the plan in existence before the spin-off. (iv) Terminated plans A plan is described in this clause if, pur- suant to the transaction involving the spin-off, the plan is terminated. (v) Controlled group For purposes of this subparagraph, the term ‘‘controlled group’’ means any group treated as a single employer under sub- section (b), (c), (m), or (o). (E) Paragraph not to apply to multiemployer plans This paragraph does not apply to any mul- tiemployer plan with respect to any spin-off to the extent that participants either before or after the spin-off are covered under a mul- tiemployer plan to which title IV of the Em- ployee Retirement Income Security Act of 1974 applies. (F) Application to similar transaction Except as provided by the Secretary, rules similar to the rules of this paragraph shall apply to transactions similar to spin-offs. (G) Special rules for bridge depository insti- tutions For purposes of this paragraph, in the case of a bridge depository institution estab- lished under section 11(i) of the Federal De- posit Insurance Act (12 U.S.C. 1821(i))— (i) such bank shall be treated as a mem- ber of any controlled group which includes any insured bank (as defined in section 3(h) of such Act (12 U.S.C. 1813(h)))— (I) which maintains a defined benefit plan, (II) which is closed by the appropriate bank regulatory authorities, and (III) any asset and liabilities of which are received by the bridge depository in- stitution, and (ii) the requirements of this paragraph shall not be treated as met with respect to such plan unless during the 180-day period beginning on the date such insured bank is closed— (I) the bridge depository institution has the right to require the plan to transfer (subject to the provisions of this paragraph) not more than 50 percent of the excess assets (as defined in subpara- graph (C)) to a defined benefit plan main- tained by the bridge depository institu- tion with respect to participants or former participants (including retirees and beneficiaries) in the original plan employed by the bridge depository insti- tution or formerly employed by the closed bank, and (II) no other merger, spin-off, termi- nation, or similar transaction involving the portion of the excess assets described in subclause (I) may occur without the prior written consent of the bridge de- pository institution. (m) Employees of an affiliated service group (1) In general For purposes of the employee benefit re- quirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer. (2) Affiliated service group For purposes of this subsection, the term ‘‘affiliated service group’’ means a group con- sisting of a service organization (hereinafter in this paragraph referred to as the ‘‘first or- ganization’’) and one or more of the following: (A) any service organization which— (i) is a shareholder or partner in the first organization, and (ii) regularly performs services for the first organization or is regularly associ- ated with the first organization in per- forming services for third persons, and (B) any other organization if— (i) a significant portion of the business of such organization is the performance of services (for the first organization, for or- ganizations described in subparagraph (A), or for both) of a type historically per- formed in such service field by employees, and (ii) 10 percent or more of the interests in such organization is held by persons who are highly compensated employees (within the meaning of section 414(q)) of the first organization or an organization described in subparagraph (A). (3) Service organizations For purposes of this subsection, the term ‘‘service organization’’ means an organization the principal business of which is the perform- ance of services. (4) Employee benefit requirements For purposes of this subsection, the em- ployee benefit requirements listed in this paragraph are— Page 1400 TITLE 26—INTERNAL REVENUE CODE § 414 (A) paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a), and (B) sections 408(k), 408(p), 410, 411, 415, and 416. (5) Certain organizations performing manage- ment functions For purposes of this subsection, the term ‘‘affiliated service group’’ also includes a group consisting of— (A) an organization the principal business of which is performing, on a regular and con- tinuing basis, management functions for 1 organization (or for 1 organization and other organizations related to such 1 organiza- tion), and (B) the organization (and related organiza- tions) for which such functions are so per- formed by the organization described in sub- paragraph (A). For purposes of this paragraph, the term ‘‘re- lated organizations’’ has the same meaning as the term ‘‘related persons’’ when used in sec- tion 144(a)(3). (6) Other definitions For purposes of this subsection— (A) Organization defined The term ‘‘organization’’ means a corpora- tion, partnership, or other organization. (B) Ownership (i) In general In determining ownership, the principles of section 318(a) shall apply, except that community property laws shall be dis- regarded for purposes of determining own- ership. (ii) Special rules for applying family attri- bution For purposes of applying the attribution rules under section 318 with respect to clause (i), the following rules apply: (I) Community property laws shall be disregarded for purposes of determining ownership. (II) Except as provided by the Sec- retary, stock of an individual not attrib- uted under section 318(a)(1)(A)(i) to such individual’s spouse shall not be attrib- uted by reason of the combined applica- tion of paragraphs (1)(A)(ii) and (4) of section 318(a) to such spouse from a child who has not attained the age of 21 years. (III) Except as provided by the Sec- retary, in the case of stock in different organizations which is attributed under section 318(a)(1)(A)(ii) from each parent to a child who has not attained the age of 21 years, and is not attributed to such parents as spouses under section 318(a)(1)(A)(i), such attribution to the child shall not by itself result in such or- ganizations being members of the same affiliated service group. (iii) Plan shall not fail to be treated as sat- isfying this section If the application of clause (ii) causes two or more entities to be an affiliated service group, or to no longer be in an af- filiated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. (n) Employee leasing (1) In general For purposes of the requirements listed in paragraph (3), with respect to any person (hereinafter in this subsection referred to as the ‘‘recipient’’) for whom a leased employee performs services— (A) the leased employee shall be treated as an employee of the recipient, but (B) contributions or benefits provided by the leasing organization which are attrib- utable to services performed for the recipi- ent shall be treated as provided by the re- cipient. (2) Leased employee For purposes of paragraph (1), the term ‘‘leased employee’’ means any person who is not an employee of the recipient and who pro- vides services to the recipient if— (A) such services are provided pursuant to an agreement between the recipient and any other person (in this subsection referred to as the ‘‘leasing organization’’), (B) such person has performed such serv- ices for the recipient (or for the recipient and related persons) on a substantially full- time basis for a period of at least 1 year, and (C) such services are performed under pri- mary direction or control by the recipient. (3) Requirements For purposes of this subsection, the require- ments listed in this paragraph are— (A) paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a), (B) sections 408(k), 408(p), 410, 411, 415, and 416, and (C) sections 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, and 4980B. (4) Time when first considered as employee (A) In general In the case of any leased employee, para- graph (1) shall apply only for purposes of de- termining whether the requirements listed in paragraph (3) are met for periods after the close of the period referred to in paragraph (2)(B). (B) Years of service In the case of a person who is an employee of the recipient (whether by reason of this subsection or otherwise), for purposes of the requirements listed in paragraph (3), years of service for the recipient shall be deter- mined by taking into account any period for which such employee would have been a leased employee but for the requirements of paragraph (2)(B). (5) Safe harbor (A) In general In the case of requirements described in subparagraphs (A) and (B) of paragraph (3), this subsection shall not apply to any leased employee with respect to services performed for a recipient if— Page 1401 TITLE 26—INTERNAL REVENUE CODE § 414 (i) such employee is covered by a plan which is maintained by the leasing organi- zation and meets the requirements of sub- paragraph (B), and (ii) leased employees (determined with- out regard to this paragraph) do not con- stitute more than 20 percent of the recipi- ent’s nonhighly compensated work force. (B) Plan requirements A plan meets the requirements of this sub- paragraph if— (i) such plan is a money purchase pen- sion plan with a nonintegrated employer contribution rate for each participant of at least 10 percent of compensation, (ii) such plan provides for full and imme- diate vesting, and (iii) each employee of the leasing organi- zation (other than employees who perform substantially all of their services for the leasing organization) immediately partici- pates in such plan. Clause (iii) shall not apply to any individual whose compensation from the leasing orga- nization in each plan year during the 4-year period ending with the plan year is less than $1,000. (C) Definitions For purposes of this paragraph— (i) Highly compensated employee The term ‘‘highly compensated em- ployee’’ has the meaning given such term by section 414(q). (ii) Nonhighly compensated work force The term ‘‘nonhighly compensated work force’’ means the aggregate number of in- dividuals (other than highly compensated employees)— (I) who are employees of the recipient (without regard to this subsection) and have performed services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, or (II) who are leased employees with re- spect to the recipient (determined with- out regard to this paragraph). (iii) Compensation The term ‘‘compensation’’ has the same meaning as when used in section 415; ex- cept that such term shall include— (I) any employer contribution under a qualified cash or deferred arrangement to the extent not included in gross in- come under section 402(e)(3) or 402(h)(1)(B), (II) any amount which the employee would have received in cash but for an election under a cafeteria plan (within the meaning of section 125), and (III) any amount contributed to an an- nuity contract described in section 403(b) pursuant to a salary reduction agree- ment (within the meaning of section 3121(a)(5)(D)). (6) Other rules For purposes of this subsection— (A) Related persons The term ‘‘related persons’’ has the same meaning as when used in section 144(a)(3). (B) Employees of entities under common con- trol The rules of subsections (b), (c), (m), and (o) shall apply. (o) Regulations The Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in sub- section (m)(4) or (n)(3) or any requirement under section 457 through the use of— (1) separate organizations, (2) employee leasing, or (3) other arrangements. The regulations prescribed under subsection (n) shall include provisions to minimize the record- keeping requirements of subsection (n) in the case of an employer which has no top-heavy plans (within the meaning of section 416(g)) and which uses the services of persons (other than employees) for an insignificant percentage of the employer’s total workload. (p) Qualified domestic relations order defined For purposes of this subsection and section 401(a)(13)— (1) In general (A) Qualified domestic relations order The term ‘‘qualified domestic relations order’’ means a domestic relations order— (i) which creates or recognizes the exist- ence of an alternate payee’s right to, or as- signs to an alternate payee the right to, receive all or a portion of the benefits pay- able with respect to a participant under a plan, and (ii) with respect to which the require- ments of paragraphs (2) and (3) are met. (B) Domestic relations order The term ‘‘domestic relations order’’ means any judgment, decree, or order (in- cluding approval of a property settlement agreement) which— (i) relates to the provision of child sup- port, alimony payments, or marital prop- erty rights to a spouse, former spouse, child, or other dependent of a participant, and (ii) is made pursuant to a State or Tribal domestic relations law (including a com- munity property law). For purposes of clause (ii), the term ‘‘Trib- al’’ with respect to a domestic relations law means such a law which is issued by or under the laws of an Indian tribal government, a subdivision of such an Indian tribal govern- ment, or an agency or instrumentality of ei- ther. (2) Order must clearly specify certain facts A domestic relations order meets the re- quirements of this paragraph only if such order clearly specifies— Page 1402 TITLE 26—INTERNAL REVENUE CODE § 414 (A) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order, (B) the amount or percentage of the par- ticipant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be de- termined, (C) the number of payments or period to which such order applies, and (D) each plan to which such order applies. (3) Order may not alter amount, form, etc., of benefits A domestic relations order meets the re- quirements of this paragraph only if such order— (A) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, (B) does not require the plan to provide in- creased benefits (determined on the basis of actuarial value), and (C) does not require the payment of bene- fits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order. (4) Exception for certain payments made after earliest retirement age (A) In general A domestic relations order shall not be treated as failing to meet the requirements of subparagraph (A) of paragraph (3) solely because such order requires that payment of benefits be made to an alternate payee— (i) in the case of any payment before a participant has separated from service, on or after the date on which the participant attains (or would have attained) the ear- liest retirement age, (ii) as if the participant had retired on the date on which such payment is to begin under such order (but taking into ac- count only the present value of the bene- fits actually accrued and not taking into account the present value of any employer subsidy for early retirement), and (iii) in any form in which such benefits may be paid under the plan to the partici- pant (other than in the form of a joint and survivor annuity with respect to the alter- nate payee and his or her subsequent spouse). For purposes of clause (ii), the interest rate assumption used in determining the present value shall be the interest rate specified in the plan or, if no rate is specified, 5 percent. (B) Earliest retirement age For purposes of this paragraph, the term ‘‘earliest retirement age’’ means the earlier of— (i) the date on which the participant is entitled to a distribution under the plan, or (ii) the later of— (I) the date the participant attains age 50, or (II) the earliest date on which the par- ticipant could begin receiving benefits under the plan if the participant sepa- rated from service. (5) Treatment of former spouse as surviving spouse for purposes of determining sur- vivor benefits To the extent provided in any qualified do- mestic relations order— (A) the former spouse of a participant shall be treated as a surviving spouse of such participant for purposes of sections 401(a)(11) and 417 (and any spouse of the participant shall not be treated as a spouse of the partic- ipant for such purposes), and (B) if married for at least 1 year, the sur- viving former spouse shall be treated as meeting the requirements of section 417(d). (6) Plan procedures with respect to orders (A) Notice and determination by adminis- trator In the case of any domestic relations order received by a plan— (i) the plan administrator shall promptly notify the participant and each alternate payee of the receipt of such order and the plan’s procedures for determining the qualified status of domestic relations or- ders, and (ii) within a reasonable period after re- ceipt of such order, the plan administrator shall determine whether such order is a qualified domestic relations order and no- tify the participant and each alternate payee of such determination. (B) Plan to establish reasonable procedures Each plan shall establish reasonable proce- dures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. (7) Procedures for period during which deter- mination is being made (A) In general During any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the plan administrator, by a court of competent jurisdiction, or other- wise), the plan administrator shall sepa- rately account for the amounts (hereinafter in this paragraph referred to as the ‘‘seg- regated amounts’’) which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order. (B) Payment to alternate payee if order de- termined to be qualified domestic rela- tions order If within the 18-month period described in subparagraph (E) the order (or modification thereof) is determined to be a qualified do- mestic relations order, the plan adminis- trator shall pay the segregated amounts (in- cluding any interest thereon) to the person or persons entitled thereto. (C) Payment to plan participant in certain cases If within the 18-month period described in subparagraph (E)— Page 1403 TITLE 26—INTERNAL REVENUE CODE § 414 (i) it is determined that the order is not a qualified domestic relations order, or (ii) the issue as to whether such order is a qualified domestic relations order is not resolved, then the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order. (D) Subsequent determination or order to be applied prospectively only Any determination that an order is a qualified domestic relations order which is made after the close of the 18-month period described in subparagraph (E) shall be ap- plied prospectively only. (E) Determination of 18-month period For purposes of this paragraph, the 18- month period described in this subparagraph is the 18-month period beginning with the date on which the first payment would be re- quired to be made under the domestic rela- tions order. (8) Alternate payee defined The term ‘‘alternate payee’’ means any spouse, former spouse, child or other depend- ent of a participant who is recognized by a do- mestic relations order as having a right to re- ceive all, or a portion of, the benefits payable under a plan with respect to such participant. (9) Subsection not to apply to plans to which section 401(a)(13) does not apply This subsection shall not apply to any plan to which section 401(a)(13) does not apply. For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies. (10) Waiver of certain distribution require- ments With respect to the requirements of sub- sections (a) and (k) of section 401, section 403(b), section 409(d), and section 457(d), a plan shall not be treated as failing to meet such re- quirements solely by reason of payments to an alternative payee pursuant to a qualified do- mestic relations order. (11) Application of rules to certain other plans For purposes of this title, a distribution or payment from a governmental plan (as defined in subsection (d)) or a church plan (as de- scribed in subsection (e)) or an eligible de- ferred compensation plan (within the meaning of section 457(b)) shall be treated as made pur- suant to a qualified domestic relations order if it is made pursuant to a domestic relations order which meets the requirement of clause (i) of paragraph (1)(A). (12) Tax treatment of payments from a section 457 plan If a distribution or payment from an eligible deferred compensation plan described in sec- tion 457(b) is made pursuant to a qualified do- mestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to such distribution or payment. (13) Consultation with the Secretary In prescribing regulations under this sub- section and section 401(a)(13), the Secretary of Labor shall consult with the Secretary. (q) Highly compensated employee (1) In general The term ‘‘highly compensated employee’’ means any employee who— (A) was a 5-percent owner at any time dur- ing the year or the preceding year, or (B) for the preceding year— (i) had compensation from the employer in excess of $80,000, and (ii) if the employer elects the application of this clause for such preceding year, was in the top-paid group of employees for such preceding year. The Secretary shall adjust the $80,000 amount under subparagraph (B) at the same time and in the same manner as under section 415(d), except that the base period shall be the cal- endar quarter ending September 30, 1996. (2) 5-percent owner An employee shall be treated as a 5-percent owner for any year if at any time during such year such employee was a 5-percent owner (as defined in section 416(i)(1)) of the employer. (3) Top-paid group An employee is in the top-paid group of em- ployees for any year if such employee is in the group consisting of the top 20 percent of the employees when ranked on the basis of com- pensation paid during such year. (4) Compensation For purposes of this subsection, the term ‘‘compensation’’ has the meaning given such term by section 415(c)(3). (5) Excluded employees For purposes of subsection (r) and for pur- poses of determining the number of employees in the top-paid group, the following employees shall be excluded— (A) employees who have not completed 6 months of service, (B) employees who normally work less than 171⁄2 hours per week, (C) employees who normally work during not more than 6 months during any year, (D) employees who have not attained age 21, and (E) except to the extent provided in regu- lations, employees who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and the employer. Except as provided by the Secretary, the em- ployer may elect to apply subparagraph (A), (B), (C), or (D) by substituting a shorter period of service, smaller number of hours or months, or lower age for the period of service, number of hours or months, or age (as the case may be) than that specified in such subparagraph. Page 1404 TITLE 26—INTERNAL REVENUE CODE § 414 (6) Former employees A former employee shall be treated as a highly compensated employee if— (A) such employee was a highly com- pensated employee when such employee sep- arated from service, or (B) such employee was a highly com- pensated employee at any time after attain- ing age 55. (7) Coordination with other provisions Subsections (b), (c), (m), (n), and (o) shall be applied before the application of this sub- section. (8) Special rule for nonresident aliens For purposes of this subsection and sub- section (r), employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)) shall not be treat- ed as employees. (9) Certain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans In the case of a church plan (as defined in subsection (e)), no employee shall be consid- ered an officer, a person whose principal duties consist of supervising the work of other em- ployees, or a highly compensated employee for any year unless such employee is a highly compensated employee under paragraph (1) for such year. (r) Special rules for separate line of business (1) In general For purposes of sections 129(d)(8) and 410(b), an employer shall be treated as operating sep- arate lines of business during any year if the employer for bona fide business reasons oper- ates separate lines of business. (2) Line of business must have 50 employees, etc. A line of business shall not be treated as sep- arate under paragraph (1) unless— (A) such line of business has at least 50 em- ployees who are not excluded under sub- section (q)(5), (B) the employer notifies the Secretary that such line of business is being treated as separate for purposes of paragraph (1), and (C) such line of business meets guidelines prescribed by the Secretary or the employer receives a determination from the Secretary that such line of business may be treated as separate for purposes of paragraph (1). (3) Safe harbor rule (A) In general The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of busi- ness is— (i) not less than one-half, and (ii) not more than twice, the percentage which highly compensated employees are of all employees of the em- ployer. An employer shall be treated as meeting the requirements of clause (i) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business. (B) Determination may be based on pre- ceding year The requirements of subparagraph (A) shall be treated as met with respect to any line of business if such requirements were met with respect to such line of business for the preceding year and if— (i) no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or (ii) the employees shifted to or from the line of business after the close of the pre- ceding year contained a substantially pro- portional number of highly compensated employees. (4) Highly compensated employee percentage defined For purposes of this subsection, the term ‘‘highly compensated employee percentage’’ means the percentage which highly com- pensated employees performing services for the line of business are of all employees per- forming services for the line of business. (5) Allocation of benefits to line of business For purposes of this subsection, benefits which are attributable to services provided to a line of business shall be treated as provided by such line of business. (6) Headquarters personnel, etc. The Secretary shall prescribe rules pro- viding for— (A) the allocation of headquarters per- sonnel among the lines of business of the employer, and (B) the treatment of other employees pro- viding services for more than 1 line of busi- ness of the employer or not in lines of busi- ness meeting the requirements of paragraph (2). (7) Separate operating units For purposes of this subsection, the term ‘‘separate line of business’’ includes an oper- ating unit in a separate geographic area sepa- rately operated for a bona fide business rea- son. (8) Affiliated service groups This subsection shall not apply in the case of any affiliated service group (within the mean- ing of section 414(m)). (s) Compensation For purposes of any applicable provision— (1) In general Except as provided in this subsection, the term ‘‘compensation’’ has the meaning given such term by section 415(c)(3). (2) Employer may elect not to treat certain de- ferrals as compensation An employer may elect not to include as compensation any amount which is contrib- Page 1405 TITLE 26—INTERNAL REVENUE CODE § 414 uted by the employer pursuant to a salary re- duction agreement and which is not includible in the gross income of an employee under sec- tion 125, 132(f)(4), 402(e)(3), 402(h), or 403(b). (3) Alternative determination of compensation The Secretary shall by regulation provide for alternative methods of determining com- pensation which may be used by an employer, except that such regulations shall provide that an employer may not use an alternative meth- od if the use of such method discriminates in favor of highly compensated employees (with- in the meaning of subsection (q)). (4) Applicable provision For purposes of this subsection, the term ‘‘applicable provision’’ means any provision which specifically refers to this subsection. (t) Application of controlled group rules to cer- tain employee benefits (1) In general All employees who are treated as employed by a single employer under subsection (b), (c), or (m) shall be treated as employed by a single employer for purposes of an applicable section. The provisions of subsection (o) shall apply with respect to the requirements of an appli- cable section. (2) Applicable section For purposes of this subsection, the term ‘‘applicable section’’ means section 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, or 4980B. (u) Special rules relating to veterans’ reemploy- ment rights under USERRA and to differen- tial wage payments to members on active duty (1) Treatment of certain contributions made pursuant to veterans’ reemployment rights If any contribution is made by an employer or an employee under an individual account plan with respect to an employee, or by an em- ployee to a defined benefit plan that provides for employee contributions, and such con- tribution is required by reason of such em- ployee’s rights under chapter 43 of title 38, United States Code, resulting from qualified military service, then— (A) such contribution shall not be subject to any otherwise applicable limitation con- tained in section 402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, or 457, and shall not be taken into account in applying such limitations to other contributions or benefits under such plan or any other plan, with respect to the year in which the contribution is made, (B) such contribution shall be subject to the limitations referred to in subparagraph (A) with respect to the year to which the contribution relates (in accordance with rules prescribed by the Secretary), and (C) such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m), 403(b)(12), 408(k)(3), 408(k)(6), 408(p), 410(b), or 416 by reason of the making of (or the right to make) such contribution. For purposes of the preceding sentence, any elective deferral or employee contribution made under paragraph (2) shall be treated as required by reason of the employee’s rights under such chapter 43. (2) Reemployment rights under USERRA with respect to elective deferrals (A) In general For purposes of this subchapter and sec- tion 457, if an employee is entitled to the benefits of chapter 43 of title 38, United States Code, with respect to any plan which provides for elective deferrals, the employer sponsoring the plan shall be treated as meet- ing the requirements of such chapter 43 with respect to such elective deferrals only if such employer— (i) permits such employee to make addi- tional elective deferrals under such plan (in the amount determined under subpara- graph (B) or such lesser amount as is elect- ed by the employee) during the period which begins on the date of the reemploy- ment of such employee with such employer and has the same length as the lesser of— (I) the product of 3 and the period of qualified military service which resulted in such rights, and (II) 5 years, and (ii) makes a matching contribution with respect to any additional elective deferral made pursuant to clause (i) which would have been required had such deferral actu- ally been made during the period of such qualified military service. (B) Amount of makeup required The amount determined under this sub- paragraph with respect to any plan is the maximum amount of the elective deferrals that the individual would have been per- mitted to make under the plan in accord- ance with the limitations referred to in paragraph (1)(A) during the period of quali- fied military service if the individual had continued to be employed by the employer during such period and received compensa- tion as determined under paragraph (7). Proper adjustment shall be made to the amount determined under the preceding sen- tence for any elective deferrals actually made during the period of such qualified military service. (C) Elective deferral For purposes of this paragraph, the term ‘‘elective deferral’’ has the meaning given such term by section 402(g)(3); except that such term shall include any deferral of com- pensation under an eligible deferred com- pensation plan (as defined in section 457(b)). (D) After-tax employee contributions References in subparagraphs (A) and (B) to elective deferrals shall be treated as includ- ing references to employee contributions. (3) Certain retroactive adjustments not re- quired For purposes of this subchapter and sub- chapter E, no provision of chapter 43 of title 38, United States Code, shall be construed as requiring— Page 1406 TITLE 26—INTERNAL REVENUE CODE § 414 (A) any crediting of earnings to an em- ployee with respect to any contribution be- fore such contribution is actually made, or (B) any allocation of any forfeiture with respect to the period of qualified military service. (4) Loan repayment suspensions permitted If any plan suspends the obligation to repay any loan made to an employee from such plan for any part of any period during which such employee is performing service in the uni- formed services (as defined in chapter 43 of title 38, United States Code), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p), 401(a), or 4975(d)(1). (5) Qualified military service For purposes of this subsection, the term ‘‘qualified military service’’ means any service in the uniformed services (as defined in chap- ter 43 of title 38, United States Code) by any individual if such individual is entitled to re- employment rights under such chapter with respect to such service. (6) Individual account plan For purposes of this subsection, the term ‘‘individual account plan’’ means any defined contribution plan (including any tax-sheltered annuity plan under section 403(b), any sim- plified employee pension under section 408(k), any qualified salary reduction arrangement under section 408(p), and any eligible deferred compensation plan (as defined in section 457(b))). (7) Compensation For purposes of sections 403(b)(3), 415(c)(3), and 457(e)(5), an employee who is in qualified military service shall be treated as receiving compensation from the employer during such period of qualified military service equal to— (A) the compensation the employee would have received during such period if the em- ployee were not in qualified military service, determined based on the rate of pay the em- ployee would have received from the em- ployer but for absence during the period of qualified military service, or (B) if the compensation the employee would have received during such period was not reasonably certain, the employee’s aver- age compensation from the employer during the 12-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately pre- ceding the qualified military service). (8) USERRA requirements for qualified retire- ment plans For purposes of this subchapter and section 457, an employer sponsoring a retirement plan shall be treated as meeting the requirements of chapter 43 of title 38, United States Code, only if each of the following requirements is met: (A) An individual reemployed under such chapter is treated with respect to such plan as not having incurred a break in service with the employer maintaining the plan by reason of such individual’s period of quali- fied military service. (B) Each period of qualified military serv- ice served by an individual is, upon reem- ployment under such chapter, deemed with respect to such plan to constitute service with the employer maintaining the plan for the purpose of determining the nonforfeit- ability of the individual’s accrued benefits under such plan and for the purpose of deter- mining the accrual of benefits under such plan. (C) An individual reemployed under such chapter is entitled to accrued benefits that are contingent on the making of, or derived from, employee contributions or elective de- ferrals only to the extent the individual makes payment to the plan with respect to such contributions or deferrals. No such pay- ment may exceed the amount the individual would have been permitted or required to contribute had the individual remained con- tinuously employed by the employer throughout the period of qualified military service. Any payment to such plan shall be made during the period beginning with the date of reemployment and whose duration is 3 times the period of the qualified military service (but not greater than 5 years). (9) Treatment in the case of death or disability resulting from active military service (A) In general For benefit accrual purposes, an employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under the terms of the plan) while performing qualified military service with respect to the employer maintaining the plan as if the individual has resumed em- ployment in accordance with the individ- ual’s reemployment rights under chapter 43 of title 38, United States Code, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability. In the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such plan with respect to the benefit accrual requirements of paragraph (8) with respect to such individual shall be treated for purposes of paragraph (1) as if such compliance were required under such chapter 43. (B) Nondiscrimination requirement Subparagraph (A) shall apply only if all in- dividuals performing qualified military serv- ice with respect to the employer maintain- ing the plan (as determined under sub- sections (b), (c), (m), and (o)) who die or be- came disabled as a result of performing qualified military service prior to reemploy- ment by the employer are credited with service and benefits on reasonably equiva- lent terms. (C) Determination of benefits The amount of employee contributions and the amount of elective deferrals of an indi- vidual treated as reemployed under subpara- graph (A) for purposes of applying paragraph (8)(C) shall be determined on the basis of the individual’s average actual employee con- Page 1407 TITLE 26—INTERNAL REVENUE CODE § 414 2 See References in Text note below. tributions or elective deferrals for the lesser of— (i) the 12-month period of service with the employer immediately prior to quali- fied military service, or (ii) if service with the employer is less than such 12-month period, the actual length of continuous service with the em- ployer. (10) Plans not subject to title 38 This subsection shall not apply to any re- tirement plan to which chapter 43 of title 38, United States Code, does not apply. (11) References For purposes of this section, any reference to chapter 43 of title 38, United States Code, shall be treated as a reference to such chapter as in effect on December 12, 1994 (without re- gard to any subsequent amendment). (12) Treatment of differential wage payments (A) In general Except as provided in this paragraph, for purposes of applying this title to a retire- ment plan to which this subsection applies— (i) an individual receiving a differential wage payment shall be treated as an em- ployee of the employer making the pay- ment, (ii) the differential wage payment shall be treated as compensation, and (iii) the plan shall not be treated as fail- ing to meet the requirements of any provi- sion described in paragraph (1)(C) by rea- son of any contribution or benefit which is based on the differential wage payment. (B) Special rule for distributions (i) In general Notwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii),2 an individual shall be treated as having been severed from em- ployment during any period the individual is performing service in the uniformed services described in section 3401(h)(2)(A). (ii) Limitation If an individual elects to receive a dis- tribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee con- tribution during the 6-month period begin- ning on the date of the distribution. (C) Nondiscrimination requirement Subparagraph (A)(iii) shall apply only if all employees of an employer (as determined under subsections (b), (c), (m), and (o)) per- forming service in the uniformed services de- scribed in section 3401(h)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if eligible to participate in a retirement plan main- tained by the employer, to make contribu- tions based on the payments on reasonably equivalent terms. For purposes of applying this subparagraph, the provisions of para- graphs (3), (4), and (5) of section 410(b) shall apply. (D) Differential wage payment For purposes of this paragraph, the term ‘‘differential wage payment’’ has the mean- ing given such term by section 3401(h)(2). (v) Catch-up contributions for individuals age 50 or over (1) In general An applicable employer plan shall not be treated as failing to meet any requirement of this title solely because the plan permits an eligible participant to make additional elec- tive deferrals in any plan year. (2) Limitation on amount of additional defer- rals (A) In general A plan shall not permit additional elective deferrals under paragraph (1) for any year in an amount greater than the lesser of— (i) the applicable dollar amount, or (ii) the excess (if any) of— (I) the participant’s compensation (as defined in section 415(c)(3)) for the year, over (II) any other elective deferrals of the participant for such year which are made without regard to this subsection. (B) Applicable dollar amount For purposes of this paragraph— (i) In the case of an applicable employer plan other than a plan described in section 401(k)(11) or 408(p), the applicable dollar amount is $5,000 (the adjusted dollar amount, in the case of an eligible partici- pant who would attain age 60 but would not attain age 64 before the close of the taxable year). (ii) In the case of an applicable employer plan described in section 401(k)(11) or 408(p), except as provided in clause (iii), the applicable dollar amount is $2,500 (the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year). (iii) In the case of an applicable em- ployer plan— (I) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(I), or (II) to which an election under section 408(p)(2)(E)(i)(II) applies for the year (in- cluding a plan described in section 401(k)(11) which is maintained by an eli- gible employer described in section 408(p)(2)(E)(i)(II) and to which such elec- tion applies by reason of subparagraphs (B)(i)(I) and (E) of section 401(k)(11)), the applicable dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (ii) for calendar year 2024. (C) Cost-of-living adjustment (i) Certain large employers In the case of a year beginning after De- cember 31, 2006, the Secretary shall adjust Page 1408 TITLE 26—INTERNAL REVENUE CODE § 414 3 So in original. annually the $5,000 amount in subpara- graph (B)(i) and the $2,500 amount in sub- paragraph (B)(ii) for increases in the cost- of-living at the same time and in the same manner as adjustments under section 415(d); except that the base period taken into account shall be the calendar quarter beginning July 1, 2005, and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500. In the case of a year beginning after December 31, 2025, the Secretary shall adjust annually the ad- justed dollar amounts applicable under clauses (i) and (ii) of subparagraph (E) for increases in the cost-of-living at the same time and in the same manner as adjust- ments under the preceding sentence; ex- cept that the base period taken into ac- count shall be the calendar quarter begin- ning July 1, 2024. (ii) Other employers In the case of a year beginning after De- cember 31, 2024, the Secretary shall adjust annually the dollar amount described in subparagraph (B)(iii) in the manner pro- vided under clause (i) of this subparagraph, except that the base period taken into ac- count shall be the calendar quarter begin- ning July 1, 2023. (D) Aggregation of plans For purposes of this paragraph, plans de- scribed in clauses (i), (ii), and (iv) of para- graph (6)(A) that are maintained by the same employer (as determined under sub- section (b), (c), (m) or (o)) shall be treated as a single plan, and plans described in clause (iii) of paragraph (6)(A) that are maintained by the same employer shall be treated as a single plan. (E) Adjusted dollar amount For purposes of subparagraph (B), the ad- justed dollar amount is— (i) in the case of clause (i) of subpara- graph (B), the greater of— (I) $10,000, or (II) an amount equal to 150 percent of the dollar amount which would be in ef- fect under such clause for 2024 for eligi- ble participants not described in the par- enthetical in such clause, or (ii) in the case of clause (ii) of subpara- graph (B), the greater of— (I) $5,000, or (II) an amount equal to equal to 3 150 percent of the dollar amount which would be in effect under such clause for 2025 for eligible participants not de- scribed in the parenthetical in such clause. (3) Treatment of contributions In the case of any contribution to a plan under paragraph (1)— (A) such contribution shall not, with re- spect to the year in which the contribution is made— (i) be subject to any otherwise applicable limitation contained in sections 401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (de- termined without regard to section 457(b)(3)), or (ii) be taken into account in applying such limitations to other contributions or benefits under such plan or any other such plan, and (B) except as provided in paragraph (4), such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making of (or the right to make) such contribution. (4) Application of nondiscrimination rules (A) In general An applicable employer plan shall be treated as failing to meet the non- discrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all eligible participants to make the same election with respect to the additional elective deferrals under this subsection. (B) Aggregation For purposes of subparagraph (A), all plans maintained by employers who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 plan, except that a plan described in clause (i) of section 410(b)(6)(C) shall not be treated as a plan of the employer until the expira- tion of the transition period with respect to such plan (as determined under clause (ii) of such section). (5) Eligible participant For purposes of this subsection, the term ‘‘eligible participant’’ means a participant in a plan— (A) who would attain age 50 by the end of the taxable year, (B) with respect to whom no other elective deferrals may (without regard to this sub- section) be made to the plan for the plan (or other applicable) year by reason of the appli- cation of any limitation or other restriction described in paragraph (3) or comparable limitation or restriction contained in the terms of the plan. (6) Other definitions and rules For purposes of this subsection— (A) Applicable employer plan The term ‘‘applicable employer plan’’ means— (i) an employees’ trust described in sec- tion 401(a) which is exempt from tax under section 501(a), (ii) a plan under which amounts are con- tributed by an individual’s employer for an annuity contract described in section 403(b), (iii) an eligible deferred compensation plan under section 457 of an eligible em- ployer described in section 457(e)(1)(A), and (iv) an arrangement meeting the require- ments of section 408(k) or (p). Page 1409 TITLE 26—INTERNAL REVENUE CODE § 414 (B) Elective deferral The term ‘‘elective deferral’’ has the meaning given such term by subsection (u)(2)(C). (C) Exception for section 457 plans This subsection shall not apply to a partic- ipant for any year for which a higher limita- tion applies to the participant under section 457(b)(3). (7) Certain deferrals must be Roth contribu- tions (A) In general Except as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, para- graph (1) shall apply only if any additional elective deferrals are designated Roth con- tributions (as defined in section 402A(c)(1)) made pursuant to an employee election. (B) Roth option In the case of an applicable employer plan with respect to which subparagraph (A) ap- plies to any participant for a plan year, paragraph (1) shall not apply to the plan un- less the plan provides that any eligible par- ticipant may make the participant’s addi- tional elective deferrals as designated Roth contributions. (C) Exception Subparagraph (A) shall not apply in the case of an applicable employer plan de- scribed in paragraph (6)(A)(iv). (D) Election to change deferrals The Secretary may provide by regulations that an eligible participant may elect to change the participant’s election to make additional elective deferrals if the partici- pant’s compensation is determined to exceed the limitation under subparagraph (A) after the election is made. (E) Cost of living adjustment In the case of a year beginning after De- cember 31, 2024, the Secretary shall adjust annually the $145,000 amount in subpara- graph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under 415(d); except that the base period taken into account shall be the calendar quarter beginning July 1, 2023, and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000. (w) Special rules for certain withdrawals from eligible automatic contribution arrange- ments (1) In general If an eligible automatic contribution ar- rangement allows an employee to elect to make permissible withdrawals— (A) the amount of any such withdrawal shall be includible in the gross income of the employee for the taxable year of the em- ployee in which the distribution is made, (B) no tax shall be imposed under section 72(t) with respect to the distribution, and (C) the arrangement shall not be treated as violating any restriction on distributions under this title solely by reason of allowing the withdrawal. In the case of any distribution to an employee by reason of an election under this paragraph, employer matching contributions shall be for- feited or subject to such other treatment as the Secretary may prescribe. (2) Permissible withdrawal For purposes of this subsection— (A) In general The term ‘‘permissible withdrawal’’ means any withdrawal from an eligible automatic contribution arrangement meeting the re- quirements of this paragraph which— (i) is made pursuant to an election by an employee, and (ii) consists of elective contributions de- scribed in paragraph (3)(B) (and earnings attributable thereto). (B) Time for making election Subparagraph (A) shall not apply to an election by an employee unless the election is made no later than the date which is 90 days after the date of the first elective con- tribution with respect to the employee under the arrangement. (C) Amount of distribution Subparagraph (A) shall not apply to any election by an employee unless the amount of any distribution by reason of the election is equal to the amount of elective contribu- tions made with respect to the first payroll period to which the eligible automatic con- tribution arrangement applies to the em- ployee and any succeeding payroll period be- ginning before the effective date of the elec- tion (and earnings attributable thereto). (3) Eligible automatic contribution arrange- ment For purposes of this subsection, the term ‘‘eligible automatic contribution arrange- ment’’ means an arrangement under an appli- cable employer plan— (A) under which a participant may elect to have the employer make payments as con- tributions under the plan on behalf of the participant, or to the participant directly in cash, (B) under which the participant is treated as having elected to have the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the partici- pant specifically elects not to have such con- tributions made (or specifically elects to have such contributions made at a different percentage), and (C) which meets the requirements of para- graph (4). (4) Notice requirements (A) In general The administrator of a plan containing an arrangement described in paragraph (3) Page 1410 TITLE 26—INTERNAL REVENUE CODE § 414 shall, within a reasonable period before each plan year, give to each employee to whom an arrangement described in paragraph (3) ap- plies for such plan year notice of the em- ployee’s rights and obligations under the ar- rangement which— (i) is sufficiently accurate and com- prehensive to apprise the employee of such rights and obligations, and (ii) is written in a manner calculated to be understood by the average employee to whom the arrangement applies. (B) Time and form of notice A notice shall not be treated as meeting the requirements of subparagraph (A) with respect to an employee unless— (i) the notice includes an explanation of the employee’s right under the arrange- ment to elect not to have elective con- tributions made on the employee’s behalf (or to elect to have such contributions made at a different percentage), (ii) the employee has a reasonable period of time after receipt of the notice de- scribed in clause (i) and before the first elective contribution is made to make such election, and (iii) the notice explains how contribu- tions made under the arrangement will be invested in the absence of any investment election by the employee. (5) Applicable employer plan For purposes of this subsection, the term ‘‘applicable employer plan’’ means— (A) an employees’ trust described in sec- tion 401(a) which is exempt from tax under section 501(a), (B) a plan under which amounts are con- tributed by an individual’s employer for an annuity contract described in section 403(b), (C) an eligible deferred compensation plan described in section 457(b) which is main- tained by an eligible employer described in section 457(e)(1)(A), (D) a simplified employee pension the terms of which provide for a salary reduc- tion arrangement described in section 408(k)(6), and (E) a simple retirement account (as de- fined in section 408(p)). (6) Special rule A withdrawal described in paragraph (1) (subject to the limitation of paragraph (2)(C)) shall not be taken into account for purposes of section 401(k)(3) or for purposes of applying the limitation under section 402(g)(1). (x) Special rules for eligible combined defined benefit plans and qualified cash or deferred arrangements (1) General rule Except as provided in this subsection, the re- quirements of this title shall be applied to any defined benefit plan or applicable defined con- tribution plan which is part of an eligible com- bined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the de- fined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately. (2) Eligible combined plan For purposes of this subsection— (A) In general The term ‘‘eligible combined plan’’ means a plan— (i) which is maintained by an employer which, at the time the plan is established, is a small employer, (ii) which consists of a defined benefit plan and an applicable defined contribu- tion plan, (iii) the assets of which are held in a sin- gle trust forming part of the plan and are clearly identified and allocated to the de- fined benefit plan and the applicable de- fined contribution plan to the extent nec- essary for the separate application of this title under paragraph (1), and (iv) with respect to which the benefit, contribution, vesting, and nondiscrimina- tion requirements of subparagraphs (B), (C), (D), (E), and (F) are met. For purposes of this subparagraph, the term ‘‘small employer’’ has the meaning given such term by section 4980D(d)(2), except that such section shall be applied by substituting ‘‘500’’ for ‘‘50’’ each place it appears. (B) Benefit requirements (i) In general The benefit requirements of this sub- paragraph are met with respect to the de- fined benefit plan forming part of the eligi- ble combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an an- nual retirement benefit, is not less than the applicable percentage of the partici- pant’s final average pay. For purposes of this clause, final average pay shall be de- termined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer. (ii) Applicable percentage For purposes of clause (i), the applicable percentage is the lesser of— (I) 1 percent multiplied by the number of years of service with the employer, or (II) 20 percent. (iii) Special rule for applicable defined benefit plans If the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 411(a)(13)(B) which meets the interest credit requirements of section 411(b)(5)(B)(i), the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each par- ticipant receives a pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table: If the participant’s age as of the beginning of the year is— The per- centage is— 30 or less ...................................... 2 Page 1411 TITLE 26—INTERNAL REVENUE CODE § 414 If the participant’s age as of the beginning of the year is— The per- centage is— Over 30 but less than 40 ............... 4 40 or over but less than 50 ............ 6 50 or over ..................................... 8. (iv) Years of service For purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (4), (5), and (6) of sec- tion 411(a), except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies. (C) Contribution requirements (i) In general The contribution requirements of this subparagraph with respect to any applica- ble defined contribution plan forming part of an eligible combined plan are met if— (I) the qualified cash or deferred ar- rangement included in such plan con- stitutes an automatic contribution ar- rangement, and (II) the employer is required to make matching contributions on behalf of each employee eligible to participate in the arrangement in an amount equal to 50 percent of the elective contributions of the employee to the extent such elective contributions do not exceed 4 percent of compensation. Rules similar to the rules of clauses (ii) and (iii) of section 401(k)(12)(B) shall apply for purposes of this clause. (ii) Nonelective contributions An applicable defined contribution plan shall not be treated as failing to meet the requirements of clause (i) because the em- ployer makes nonelective contributions under the plan but such contributions shall not be taken into account in deter- mining whether the requirements of clause (i)(II) are met. (D) Vesting requirements The vesting requirements of this subpara- graph are met if— (i) in the case of a defined benefit plan forming part of an eligible combined plan an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit under the plan derived from em- ployer contributions, and (ii) in the case of an applicable defined contribution plan forming part of eligible combined plan— (I) an employee has a nonforfeitable right to any matching contribution made under the qualified cash or de- ferred arrangement included in such plan by an employer with respect to any elec- tive contribution, including matching contributions in excess of the contribu- tions required under subparagraph (C)(i)(II), and (II) an employee who has completed at least 3 years of service has a nonforfeit- able right to 100 percent of the employ- ee’s accrued benefit derived under the ar- rangement from nonelective contribu- tions of the employer. For purposes of this subparagraph, the rules of section 411 shall apply to the ex- tent not inconsistent with this subpara- graph. (E) Uniform provision of contributions and benefits In the case of a defined benefit plan or ap- plicable defined contribution plan forming part of an eligible combined plan, the re- quirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants. (F) Requirements must be met without tak- ing into account social security and simi- lar contributions and benefits or other plans (i) In general The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met. (ii) Social security and similar contribu- tions The requirements of this clause are met if— (I) the requirements of subparagraphs (B) and (C) are met without regard to section 401(l), and (II) the requirements of sections 401(a)(4) and 410(b) are met with respect to both the applicable defined contribu- tion plan and defined benefit plan form- ing part of an eligible combined plan without regard to section 401(l). (iii) Other plans and arrangements The requirements of this clause are met if the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan meet the require- ments of sections 401(a)(4) and 410(b) with- out being combined with any other plan. (3) Nondiscrimination requirements for quali- fied cash or deferred arrangement (A) In general A qualified cash or deferred arrangement which is included in an applicable defined contribution plan forming part of an eligible combined plan shall be treated as meeting the requirements of section 401(k)(3)(A)(ii) if the requirements of paragraph (2)(C) are met with respect to such arrangement. (B) Matching contributions In applying section 401(m)(11) to any matching contribution with respect to a contribution to which paragraph (2)(C) ap- plies, the contribution requirement of para- graph (2)(C) and the notice requirements of paragraph (5)(B) shall be substituted for the requirements otherwise applicable under clauses (i) and (ii) of section 401(m)(11)(A). Page 1412 TITLE 26—INTERNAL REVENUE CODE § 414 (4) Satisfaction of top-heavy rules A defined benefit plan and applicable defined contribution plan forming part of an eligible combined plan for any plan year shall be treated as meeting the requirements of section 416 for the plan year. (5) Automatic contribution arrangement For purposes of this subsection— (A) In general A qualified cash or deferred arrangement shall be treated as an automatic contribu- tion arrangement if the arrangement— (i) provides that each employee eligible to participate in the arrangement is treat- ed as having elected to have the employer make elective contributions in an amount equal to 4 percent of the employee’s com- pensation unless the employee specifically elects not to have such contributions made or to have such contributions made at a different rate, and (ii) meets the notice requirements under subparagraph (B). (B) Notice requirements (i) In general The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met. (ii) Reasonable period to make election The requirements of this clause are met if each employee to whom subparagraph (A)(i) applies— (I) receives a notice explaining the em- ployee’s right under the arrangement to elect not to have elective contributions made on the employee’s behalf or to have the contributions made at a dif- ferent rate, and (II) has a reasonable period of time after receipt of such notice and before the first elective contribution is made to make such election. (iii) Annual notice of rights and obligations The requirements of this clause are met if each employee eligible to participate in the arrangement is, within a reasonable period before any year, given notice of the employee’s rights and obligations under the arrangement. The requirements of clauses (i) and (ii) of section 401(k)(12)(D) shall be met with re- spect to the notices described in clauses (ii) and (iii) of this subparagraph. (6) Coordination with other requirements (A) Treatment of separate plans Section 414(k) shall not apply to an eligi- ble combined plan. (B) Reporting An eligible combined plan shall be treated as a single plan for purposes of sections 6058 and 6059. (7) Applicable defined contribution plan For purposes of this subsection— (A) In general The term ‘‘applicable defined contribution plan’’ means a defined contribution plan which includes a qualified cash or deferred arrangement. (B) Qualified cash or deferred arrangement The term ‘‘qualified cash or deferred ar- rangement’’ has the meaning given such term by section 401(k)(2). (y) Cooperative and small employer charity pen- sion plans (1) In general For purposes of this title, except as provided in this subsection, a CSEC plan is a defined benefit plan (other than a multiemployer plan)— (A) to which section 104 of the Pension Protection Act of 2006 applies, without re- gard to— (i) section 104(a)(2) of such Act; (ii) the amendments to such section 104 by section 202(b) of the Preservation of Ac- cess to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and (iii) paragraph (3)(B); (B) that, as of June 25, 2010, was main- tained by more than one employer and all of the employers were organizations described in section 501(c)(3); (C) that, as of June 25, 2010, was main- tained by an employer— (i) described in section 501(c)(3), (ii) chartered under part B of subtitle II of title 36, United States Code, (iii) with employees in at least 40 States, and (iv) whose primary exempt purpose is to provide services with respect to children; or (D) that, as of January 1, 2000, was main- tained by an employer— (i) described in section 501(c)(3), (ii) who has been in existence since at least 1938, (iii) who conducts medical research di- rectly or indirectly through grant making, and (iv) whose primary exempt purpose is to provide services with respect to mothers and children. (2) Aggregation All employers that are treated as a single employer under subsection (b) or (c) shall be treated as a single employer for purposes of determining if a plan was maintained by more than one employer under subparagraphs (B) and (C) of paragraph (1). (3) Election (A) In general If a plan falls within the definition of a CSEC plan under this subsection (without regard to this paragraph), such plan shall be a CSEC plan unless the plan sponsor elects not later than the close of the first plan year of the plan beginning after December 31, 2013, not to be treated as a CSEC plan. An election under the preceding sentence shall take effect for such plan year and, once made, may be revoked only with the consent of the Secretary. Page 1413 TITLE 26—INTERNAL REVENUE CODE § 414 (B) Special rule If a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the Pension Protection Act of 2006, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, shall cease to apply to such plan as of the first date as of which such plan is treated as a CSEC plan. (z) Certain plan transfers and mergers (1) In general Under rules prescribed by the Secretary, ex- cept as provided in paragraph (2), no amount shall be includible in gross income by reason of— (A) a transfer of all or a portion of the ac- crued benefit of a participant or beneficiary, whether or not vested, from a church plan that is a plan described in section 401(a) or an annuity contract described in section 403(b) to an annuity contract described in section 403(b), if such plan and annuity con- tract are both maintained by the same church or convention or association of churches, (B) a transfer of all or a portion of the ac- crued benefit of a participant or beneficiary, whether or not vested, from an annuity con- tract described in section 403(b) to a church plan that is a plan described in section 401(a), if such plan and annuity contract are both maintained by the same church or con- vention or association of churches, or (C) a merger of a church plan that is a plan described in section 401(a), or an annuity contract described in section 403(b), with an annuity contract described in section 403(b), if such plan and annuity contract are both maintained by the same church or conven- tion or association of churches. (2) Limitation Paragraph (1) shall not apply to a transfer or merger unless the participant’s or bene- ficiary’s total accrued benefit immediately after the transfer or merger is equal to or greater than the participant’s or beneficiary’s total accrued benefit immediately before the transfer or merger, and such total accrued benefit is nonforfeitable after the transfer or merger. (3) Qualification A plan or annuity contract shall not fail to be considered to be described in section 401(a) or 403(b) merely because such plan or annuity contract engages in a transfer or merger de- scribed in this subsection. (4) Definitions For purposes of this subsection— (A) Church or convention or association of churches The term ‘‘church or convention or asso- ciation of churches’’ includes an organiza- tion described in subparagraph (A) or (B)(ii) of subsection (e)(3). (B) Annuity contract The term ‘‘annuity contract’’ includes a custodial account described in section 403(b)(7) and a retirement income account described in section 403(b)(9). (C) Accrued benefit The term ‘‘accrued benefit’’ means— (i) in the case of a defined benefit plan, the employee’s accrued benefit determined under the plan, and (ii) in the case of a plan other than a de- fined benefit plan, the balance of the em- ployee’s account under the plan. (aa) Special rules applicable to benefit overpay- ments (1) In general A plan shall not fail to be treated as de- scribed in clause (i), (ii), (iii), or (iv) of section 219(g)(5)(A) (and shall not fail to be treated as satisfying the requirements of section 401(a) or 403) merely because— (A) the plan fails to obtain payment from any participant, beneficiary, employer, plan sponsor, fiduciary, or other party on account of any inadvertent benefit overpayment made by the plan, or (B) the plan sponsor amends the plan to in- crease past, or decrease future, benefit pay- ments to affected participants and bene- ficiaries in order to adjust for prior inad- vertent benefit overpayments. (2) Reduction in future benefit payments and recovery from responsible party Paragraph (1) shall not fail to apply to a plan merely because, after discovering a ben- efit overpayment, such plan— (A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or (B) seeks recovery from the person or per- sons responsible for such overpayment. (3) Employer funding obligations Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the min- imum funding standards under sections 412 and 430 or to prevent or restore an impermis- sible forfeiture in accordance with section 411. (4) Observance of benefit limitations Notwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allo- cations previously made in excess of such limi- tations. (5) Coordination with other qualification re- quirements The Secretary may issue regulations or other guidance of general applicability speci- fying how benefit overpayments and their recoupment or non-recoupment from a partici- pant or beneficiary shall be taken into ac- count for purposes of satisfying any require- ment applicable to a plan to which paragraph (1) applies. (bb) Eliminating unnecessary plan requirements related to unenrolled participants (1) In general Notwithstanding any other provision of this title, with respect to any defined contribution Page 1414 TITLE 26—INTERNAL REVENUE CODE § 414 plan, no disclosure, notice, or other plan docu- ment (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant is furnished— (A) an annual reminder notice of such par- ticipant’s eligibility to participate in such plan and any applicable election deadlines under the plan, and (B) any document requested by such par- ticipant that the participant would be enti- tled to receive notwithstanding this sub- section. (2) Unenrolled participant For purposes of this subsection, the term ‘‘unenrolled participant’’ means an employee who— (A) is eligible to participate in a defined contribution plan, (B) has been furnished— (i) the summary plan description pursu- ant to section 104(b) of the Employee Re- tirement Income Security Act of 1974, and (ii) any other notices related to eligi- bility under the plan and required to be furnished under this title, or the Employee Retirement Income Security Act of 1974, in connection with such participant’s initial eligibility to participate in such plan, (C) is not participating in such plan, and (D) satisfies such other criteria as the Sec- retary of the Treasury may determine ap- propriate, as prescribed in guidance issued in consultation with the Secretary of Labor. For purposes of this subsection, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligi- bility. (3) Annual reminder notice For purposes of this subsection, the term ‘‘annual reminder notice’’ means the notice described in section 111(c) of the Employee Re- tirement Income Security Act of 1974. (cc) Correcting automatic contribution errors (1) In general Any plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error. (2) Corrected error defined For purposes of this subsection, the term ‘‘corrected error’’ means a reasonable adminis- trative error— (A)(i) made in implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible em- ployee covered by such feature), or (ii) made by failing to afford an eligible employee the opportunity to make an af- firmative election because such employee was improperly excluded from the plan],3 and (B) that is corrected prospectively by im- plementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative elec- tion made by an eligible employee) deter- mined in accordance with the terms of an el- igible automatic contribution arrangement (as defined under subsection (w)(3)), provided that— (i) such implementation error is cor- rected not later than— (I) the date of the first payment of compensation made by the employer to the employee on or after the last day of the 91⁄2 month-period after the end of the plan year during which such error with respect to the employee first occurred, or (II) if earlier in the case of an em- ployee who notifies the plan sponsor of such error, the date of the first payment of compensation made by the employer to the employee on or after the last day of the month following the month in which such notification was made, (ii) in the case of an employee who would have been entitled to additional matching contributions had any missed elective de- ferral been made, the plan sponsor makes a corrective allocation, not later than the deadline specified by the Secretary in reg- ulations or other guidance prescribed under paragraph (3), of matching contribu- tions on behalf of the employee in an amount equal to the additional matching contributions to which the employee would have been so entitled (adjusted to account for earnings had the missed elec- tive deferrals been made). (iii) such implementation error is of a type which is so corrected for all similarly situated participants in a nondiscrim- inatory manner, (iv) notice of such error is given to the employee not later than 45 days after the date on which correct deferrals begin, and (v) the notice under clause (iv) satisfies such regulations or other guidance as the Secretary prescribes under paragraph (4). Such correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the Secretary. (3) No obligation for employer to restore missed elective deferrals If the requirements of paragraph (2)(B) are satisfied, the employer will not be required to provide eligible employees with the missed amount of elective deferrals resulting from a reasonable administrative error described in paragraph (2)(A)(i) or (ii) through a qualified nonelective contribution, or otherwise. (4) Regulations and guidance for favorable cor- rection methods The Secretary shall by regulations or other guidance of general applicability prescribe— (A) the deadline for making a corrective allocation of matching contributions re- quired by paragraph (2)(B)(ii), (B) the content of the notice required by paragraph (2)(B)(iv), Page 1415 TITLE 26—INTERNAL REVENUE CODE § 414 (C) the manner in which the amount of the corrective allocation under paragraph (2)(B)(ii) is determined, (D) the manner of adjustment to account for earnings on matching contributions under paragraph (2)(B)(ii), and (E) such other rules as are necessary to carry out the purposes of the subsection. (Added Pub. L. 93–406, title II, § 1015, Sept. 2, 1974, 88 Stat. 925; amended Pub. L. 94–455, title XIX, §§ 1901(a)(64), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1775, 1834; Pub. L. 95–600, title I, § 152(d), Nov. 6, 1978, 92 Stat. 2799; Pub. L. 96–364, title II, §§ 207, 208(a), title IV, § 407(b), Sept. 26, 1980, 94 Stat. 1288, 1289, 1305; Pub. L. 96–605, title II, § 201(a), Dec. 28, 1980, 94 Stat. 3526; Pub. L. 96–613, § 5(a), Dec. 28, 1980, 94 Stat. 3580; Pub. L. 97–248, title II, §§ 240(c), 246(a), 248(a), Sept. 3, 1982, 96 Stat. 520, 525, 526; Pub. L. 98–369, div. A, title IV, § 491(d)(26), (27), title V, § 526(a)(1), (b)(1), (d)(1), (2), title VII, § 713(i), July 18, 1984, 98 Stat. 850, 874, 875, 960; Pub. L. 98–397, title II, § 204(b), Aug. 23, 1984, 98 Stat. 1445; Pub. L. 99–514, title XI, §§ 1114(a), (b)(11), 1115(a), 1117(c), 1146(a), (b), 1151(e)(1), (i), title XIII, § 1301(j)(4), title XVIII, §§ 1852(f), 1898(c)(2)(A), (4)(A), (6)(A), (7)(A)(ii)–(vii), 1899A(12), Oct. 22, 1986, 100 Stat. 2448, 2451, 2452, 2462, 2491, 2506, 2507, 2657, 2868, 2951, 2953, 2954, 2958; Pub. L. 100–203, title IX, § 9305(c), Dec. 22, 1987, 101 Stat. 1330–352; Pub. L. 100–647, title I, §§ 1011(d)(8), (e)(4), (h)(5), (i)(1)–(4)(A), (j)(1), (2), 1011A(b)(3), 1011B(a)(16), (17), (19), (20), 1018(t)(8)(E)–(G), title II, § 2005(c)(1), (2), title III, §§ 3011(b)(4), (5), 3021(b)(1), (2)(A), title VI, § 6067(a), Nov. 10, 1988, 102 Stat. 3460, 3461, 3465, 3467, 3468, 3473, 3485, 3589, 3611, 3612, 3625, 3631, 3632, 3703; Pub. L. 101–140, title II, §§ 203(a)(6), 204(b)(2), Nov. 8, 1989, 103 Stat. 831, 833; Pub. L. 101–239, title VII, §§ 7811(m)(5), 7813(b), 7841(a)(2), Dec. 19, 1989, 103 Stat. 2412, 2413, 2427; Pub. L. 101–508, title XI, § 11703(b)(1), Nov. 5, 1990, 104 Stat. 1388–517; Pub. L. 102–318, title V, § 521(b)(20)–(22), July 3, 1992, 106 Stat. 311; Pub. L. 104–188, title I, §§ 1421(b)(9)(C), 1431(a), (b)(1), (c)(1)(A), (D), (E), 1434(b), 1454(a), 1461(a), 1462(a), 1704(n)(1), Aug. 20, 1996, 110 Stat. 1798, 1802, 1803, 1807, 1817, 1822, 1824, 1883; Pub. L. 105–34, title XV, § 1522(a), title XVI, § 1601(d)(6)(A), (7), (h)(2)(D)(i), (ii), Aug. 5, 1997, 111 Stat. 1070, 1089, 1090, 1092; Pub. L. 105–206, title VI, § 6018(c), July 22, 1998, 112 Stat. 822; Pub. L. 106–554, § 1(a)(7) [title III, § 314(e)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A–643; Pub. L. 107–16, title VI, §§ 631(a), 635(a)–(c), June 7, 2001, 115 Stat. 111, 117; Pub. L. 107–147, title IV, § 411(o)(3)–(8), Mar. 9, 2002, 116 Stat. 48, 49; Pub. L. 108–311, title IV, § 408(a)(15), Oct. 4, 2004, 118 Stat. 1192; Pub. L. 109–280, title I, § 114(c), title IX, §§ 902(d)(1), 903(a), 906(a)(1), (b)(1)(C), title XI, § 1106(b), Aug. 17, 2006, 120 Stat. 853, 1036, 1040, 1051, 1052, 1062; Pub. L. 110–28, title VI, § 6611(a)(2), (b)(2), May 25, 2007, 121 Stat. 180, 181; Pub. L. 110–245, title I, §§ 104(b), 105(b)(1), June 17, 2008, 122 Stat. 1626, 1628; Pub. L. 110–289, div. A, title VI, § 1604(b)(4), July 30, 2008, 122 Stat. 2829; Pub. L. 110–458, title I, §§ 101(d)(2)(E), 109(b)(4)–(c)(1), Dec. 23, 2008, 122 Stat. 5099, 5111; Pub. L. 113–97, title II, §§ 201, 203(a), Apr. 7, 2014, 128 Stat. 1121, 1138; Pub. L. 113–235, div. P, § 3(b), Dec. 16, 2014, 128 Stat. 2829; Pub. L. 113–295, div. A, title II, § 221(a)(19)(B)(i), (ii), (55), Dec. 19, 2014, 128 Stat. 4039, 4045; Pub. L. 114–113, div. Q, title III, § 336(a)(1), (d)(1), Dec. 18, 2015, 129 Stat. 3109, 3112; Pub. L. 115–141, div. U, title IV, § 401(a)(87)–(91), Mar. 23, 2018, 132 Stat. 1188; Pub. L. 116–136, div. A, title III, § 3609(b), Mar. 27, 2020, 134 Stat. 413; Pub. L. 117–328, div. T, title I, §§ 109(a)–(c), 117(b), title III, §§ 301(b)(1), 315(a), 320(b), 339(a), 350(a), title VI, § 603(a), Dec. 29, 2022, 136 Stat. 5290, 5300, 5337, 5351, 5355, 5374, 5386, 5391.) INFLATION ADJUSTED ITEMS FOR CERTAIN YEARS For inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under section 401 of this title. Editorial Notes REFERENCES IN TEXT The Railroad Retirement Act of 1935 or 1937, referred to in subsec. (d), means act Aug. 29, 1935, ch. 812, 49 Stat. 867, known as the Railroad Retirement Act of 1935. The Railroad Retirement Act of 1935 was amended generally by act June 24, 1937, ch. 382, part I, 50 Stat. 307, and was known as the Railroad Retirement Act of 1937. The Railroad Retirement Act of 1937 was amended generally and redesignated the Railroad Retirement Act of 1974 by Pub. L. 93–444, title I, Oct. 16, 1974, 88 Stat. 1305 and is classified generally to subchapter IV (§ 231 et seq.) of chapter 9 of Title 45, Railroads. For complete classification of this Act to the Code, see Ta- bles. The International Organizations Immunities Act (59 Stat. 669), referred to in subsec. (d), is act Dec. 29, 1945, ch. 652, title I, 59 Stat. 669, which is classified prin- cipally to subchapter XVIII (§ 288 et seq.) of chapter 7 of Title 22, Foreign Relations and Intercourse. The Act also amended several other laws including the Internal Revenue Code of 1939. For exemption from taxation of income of international organizations and of the com- pensation of employees thereof, see sections 892 and 893 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 288 of Title 22 and Tables. The Employee Retirement Income Security Act of 1974, referred to in subsecs. (f)(3), (5), (6)(B), (F), (l)(1), (2)(E), and (bb)(2)(B), (3), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. Title IV of the Act is classified principally to subchapter III (§ 1301 et seq.) of chapter 18 of Title 29. Sections 3(37)(A)(iii), 104(b), and 111(c) of the Act are classified to sections 1002(37)(A)(iii), 1024(b), and 1031(c), respectively, of Title 29. Section 4403(b) and (c) of the Employee Retirement Income Security Act of 1974 probably means section 4303(b) and (c) of such Act which is classified to section 1453(b) and (c) of Title 29. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables. The date of the enactment of the Multiemployer Pen- sion Plan Amendments Act of 1980, referred to in sub- sec. (f)(4), (5), means the date of the enactment of Pub. L. 96–364, which was approved Sept. 26, 1980. Effective date of the Multiemployer Pension Plan Amendments Act of 1980, referred to in subsec. (f)(5), probably means the date of enactment of the Multiem- ployer Pension Plan Amendments Act of 1980, which was approved Sept. 26, 1980. The Pension Protection Act of 2006, referred to in subsecs. (f)(6)(A) and (y)(1)(A), (3)(B), is Pub. L. 109–280, Aug. 17, 2006, 120 Stat. 780. Section 104 of the Act is set out as a note under section 401 of this title. For com- plete classification of this Act to the Code, see Short Title of 2006 Amendment note set out under section 1001 of Title 29, Labor, and Tables. Section 403(b)(7)(A)(ii), referred to in subsec. (u)(12)(B)(i), probably means section 403(b)(7)(A)(ii) of this title prior to amendment by Pub. L. 116–94, div. O, title I, § 109(c)(2), Dec. 20, 2019, 133 Stat. 3151. Page 1416 TITLE 26—INTERNAL REVENUE CODE § 414 The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, referred to in subsec. (y)(1)(A)(ii), (3)(B), is Pub. L. 111–192, June 25, 2010, 124 Stat. 1280. For complete classification of this Act to the Code, see Short Title of 2010 Amendment note set out under section 1001 of Title 29, Labor, and Tables. AMENDMENTS 2022—Subsec. (b). Pub. L. 117–328, § 315(a)(1), des- ignated existing provisions as par. (1), inserted heading, and added par. (2). Subsec. (m)(6)(B). Pub. L. 117–328, § 315(a)(2)(A), (B), designated existing provisions as cl. (i), inserted head- ing, and added cls. (ii) and (iii). Subsec. (m)(6)(B)(i). Pub. L. 117–328, § 315(a)(2)(C), sub- stituted ‘‘apply, except that community property laws shall be disregarded for purposes of determining owner- ship’’ for ‘‘apply’’. Subsec. (p)(1)(B). Pub. L. 117–328, § 339(a)(2), inserted concluding provisions. Subsec. (p)(1)(B)(ii). Pub. L. 117–328, § 339(a)(1), in- serted ‘‘or Tribal’’ after ‘‘State’’. Subsec. (v)(2)(B)(i). Pub. L. 117–328, § 109(a)(1), inserted before period at end ‘‘(the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)’’. Subsec. (v)(2)(B)(ii). Pub. L. 117–328, § 117(b)(1)(A), sub- stituted ‘‘except as provided in clause (iii), the applica- ble’’ for ‘‘the applicable’’. Pub. L. 117–328, § 109(a)(2), inserted before period at end ‘‘(the adjusted dollar amount, in the case of an eli- gible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)’’. Subsec. (v)(2)(B)(iii). Pub. L. 117–328, § 117(b)(1)(B), added cl. (iii). Subsec. (v)(2)(C). Pub. L. 117–328, § 117(b)(2), des- ignated existing provisions as cl. (i), inserted heading, and added cl. (ii). Pub. L. 117–328, § 109(c), inserted at end ‘‘In the case of a year beginning after December 31, 2025, the Sec- retary shall adjust annually the adjusted dollar amounts applicable under clauses (i) and (ii) of sub- paragraph (E) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base pe- riod taken into account shall be the calendar quarter beginning July 1, 2024.’’ Subsec. (v)(2)(E). Pub. L. 117–328, § 109(b), added sub- par. (E). Subsec. (v)(7). Pub. L. 117–328, § 603(a), added par. (7). Subsec. (aa). Pub. L. 117–328, § 301(b)(1), added subsec. (aa). Subsec. (bb). Pub. L. 117–328, § 320(b), added subsec. (bb). Subsec. (cc). Pub. L. 117–328, § 350(a), added subsec. (cc). 2020—Subsec. (y)(1)(D). Pub. L. 116–136 added subpar. (D). 2018—Subsec. (l)(2)(G). Pub. L. 115–141, § 401(a)(87), sub- stituted ‘‘depository institutions’’ for ‘‘banks’’ in head- ing. Subsec. (u)(6). Pub. L. 115–141, § 401(a)(88), substituted ‘‘section 457(b)))’’ for ‘‘section 457(b))’’. Subsec. (x)(1). Pub. L. 115–141, § 401(a)(89), substituted ‘‘is’’ for ‘‘are’’. Subsec. (y)(1)(C)(i). Pub. L. 115–141, § 401(a)(90), struck out ‘‘of such Code’’ after ‘‘section 501(c)(3)’’. Subsec. (y)(2). Pub. L. 115–141, § 401(a)(91), substituted ‘‘subparagraphs’’ for ‘‘subparagraph’’. 2015—Subsec. (c). Pub. L. 114–113, § 336(a)(1), des- ignated existing provisions as par. (1), inserted heading, substituted ‘‘Except as provided in paragraph (2), for purposes’’ for ‘‘For purposes’’, and added par. (2). Subsec. (z). Pub. L. 114–113, § 336(d)(1), added subsec. (z). 2014—Subsec. (n)(3)(C). Pub. L. 113–295, § 221(a)(19)(B)(i), struck out ‘‘120,’’ after ‘‘117(d),’’. Subsec. (t)(2). Pub. L. 113–295, § 221(a)(19)(B)(ii), struck out ‘‘120,’’ after ‘‘117(d),’’. Subsec. (v)(2)(B)(i), (ii). Pub. L. 113–295, § 221(a)(55), amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) listed applicable dollar amounts for tax- able years 2002 to 2006 and thereafter for an applicable employer plan other than a plan described in section 401(k)(11) or 408(p) and an applicable employer plan de- scribed in section 401(k)(11) or 408(p), respectively. Subsec. (y). Pub. L. 113–97, § 201, added subsec. (y). Subsec. (y)(1)(C). Pub. L. 113–235, § 3(b)(1), added sub- par. (C). Subsec. (y)(2). Pub. L. 113–235, § 3(b)(2), substituted ‘‘subparagraph (B) and (C) of paragraph (1)’’ for ‘‘para- graph (1)(B)’’. Subsec. (y)(3). Pub. L. 113–97, § 203(a), added par. (3). 2008—Subsec. (l)(2)(B)(i)(I). Pub. L. 110–458, § 101(d)(2)(E), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: ‘‘the amount de- termined under section 431(c)(6)(A)(i) in the case of a multiemployer plan (and the sum of the funding short- fall and target normal cost determined under section 430 in the case of any other plan), over’’. Subsec. (l)(2)(G). Pub. L. 110–289, § 1604(b)(4), which di- rected substitution of ‘‘bridge depository institution’’ for ‘‘bridge bank’’, was executed by making the substi- tution wherever appearing in text, to reflect the prob- able intent of Congress. Subsec. (u). Pub. L. 110–245, § 105(b)(1)(B), inserted ‘‘and to differential wage payments to members on ac- tive duty’’ after ‘‘USERRA’’ in heading. Subsec. (u)(9) to (11). Pub. L. 110–245, § 104(b), added par. (9) and redesignated former pars. (9) and (10) as (10) and (11), respectively. Subsec. (u)(12). Pub. L. 110–245, § 105(b)(1)(A), added par. (12). Subsec. (w)(3)(B) to (D). Pub. L. 110–458, § 109(b)(4), in- serted ‘‘and’’ after comma at end of subpar. (B), redes- ignated subpar. (D) as (C), and struck out former sub- par. (C) which read as follows: ‘‘under which, in the ab- sence of an investment election by the participant, contributions described in subparagraph (B) are in- vested in accordance with regulations prescribed by the Secretary of Labor under section 404(c)(5) of the Em- ployee Retirement Income Security Act of 1974, and’’. Subsec. (w)(5)(D), (E). Pub. L. 110–458, § 109(b)(5), added subpars. (D) and (E). Subsec. (w)(6). Pub. L. 110–458, § 109(b)(6), inserted ‘‘or for purposes of applying the limitation under section 402(g)(1)’’ before period at end. Subsec. (x)(1). Pub. L. 110–458, § 109(c)(1), inserted at end ‘‘In the case of a termination of the defined benefit plan and the applicable defined contribution plan form- ing part of an eligible combined plan, the plan adminis- trator shall terminate each such plan separately.’’ 2007—Subsec. (f)(6)(A)(ii)(I). Pub. L. 110–28, § 6611(a)(2)(A), substituted ‘‘for each of the 3 plan years immediately preceding the first plan year for which the election under this paragraph is effective with respect to the plan,’’ for ‘‘for each of the 3 plan years imme- diately before the date of enactment of the Pension Protection Act of 2006,’’. Subsec. (f)(6)(B). Pub. L. 110–28, § 6611(a)(2)(B), sub- stituted ‘‘starting with any plan year beginning on or after January 1, 1999, and ending before January 1, 2008, as designated by the plan in the election made under subparagraph (A)(ii)’’ for ‘‘starting with the first plan year ending after the date of the enactment of the Pen- sion Protection Act of 2006’’. Subsec. (f)(6)(E). Pub. L. 110–28, § 6611(b)(2), sub- stituted ‘‘if it is a plan sponsored by an organization which is described in section 501(c)(5) and exempt from tax under section 501(a) and which was established in Chicago, Illinois, on August 12, 1881.’’ for ‘‘if it is a plan— ‘‘(i) that was established in Chicago, Illinois, on Au- gust 12, 1881; and ‘‘(ii) sponsored by an organization described in sec- tion 501(c)(5) and exempt from tax under section 501(a).’’ Subsec. (f)(6)(F). Pub. L. 110–28, § 6611(a)(2)(C), added subpar. (F). Page 1417 TITLE 26—INTERNAL REVENUE CODE § 414 2006—Subsec. (d). Pub. L. 109–280, § 906(a)(1), inserted at end ‘‘The term ‘governmental plan’ includes a plan which is established and maintained by an Indian tribal government (as defined in section 7701(a)(40)), a subdivi- sion of an Indian tribal government (determined in ac- cordance with section 7871(d)), or an agency or instru- mentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the per- formance of commercial activities (whether or not an essential government function).’’ Subsec. (f)(6). Pub. L. 109–280, § 1106(b), added par. (6). Subsec. (h)(2). Pub. L. 109–280, § 906(b)(1)(C), inserted ‘‘or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal gov- ernments),’’ after ‘‘foregoing,’’. Subsec. (l)(2)(B)(i)(I). Pub. L. 109–280, § 114(c), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: ‘‘the amount determined under section 412(c)(7)(A)(i) with respect to the plan, over’’. Subsec. (w). Pub. L. 109–280, § 902(d)(1), added subsec. (w). Subsec. (x). Pub. L. 109–280, § 903(a), added subsec. (x). 2004—Subsec. (q)(7). Pub. L. 108–311 substituted ‘‘sub- section’’ for ‘‘section’’. 2002—Subsec. (v)(2)(D). Pub. L. 107–147, § 411(o)(3), added subpar. (D). Subsec. (v)(3)(A)(i). Pub. L. 107–147, § 411(o)(4), sub- stituted ‘‘sections 401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (determined without regard to section 457(b)(3))’’ for ‘‘section 402(g), 402(h), 403(b), 404(a), 404(h), 408(k), 408(p), 415, or 457’’. Subsec. (v)(3)(B). Pub. L. 107–147, § 411(o)(5), sub- stituted ‘‘section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416’’ for ‘‘section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 403(b)(12), 408(k), 408(p), 408B, 410(b), or 416’’. Subsec. (v)(4)(B). Pub. L. 107–147, § 411(o)(6), inserted before period at end ‘‘, except that a plan described in clause (i) of section 410(b)(6)(C) shall not be treated as a plan of the employer until the expiration of the tran- sition period with respect to such plan (as determined under clause (ii) of such section)’’. Subsec. (v)(5). Pub. L. 107–147, § 411(o)(7)(A), struck out ‘‘, with respect to any plan year,’’ before ‘‘a partic- ipant’’ in introductory provisions. Subsec. (v)(5)(A). Pub. L. 107–147, § 411(o)(7)(B), amend- ed subpar. (A) generally. Prior to amendment, subpar (A) read as follows: ‘‘who has attained the age of 50 be- fore the close of the plan year, and’’. Subsec. (v)(5)(B). Pub. L. 107–147, § 411(o)(7)(C), sub- stituted ‘‘plan (or other applicable) year’’ for ‘‘plan year’’. Subsec. (v)(6)(C). Pub. L. 107–147, § 411(o)(8), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: ‘‘This sub- section shall not apply to an applicable employer plan described in subparagraph (A)(iii) for any year to which section 457(b)(3) applies.’’ 2001—Subsec. (p)(10). Pub. L. 107–16, § 635(b), sub- stituted ‘‘section 409(d), and section 457(d)’’ for ‘‘and section 409(d)’’. Subsec. (p)(11). Pub. L. 107–16, § 635(a), in heading sub- stituted ‘‘certain other plans’’ for ‘‘governmental and church plans’’ and in text inserted ‘‘or an eligible de- ferred compensation plan (within the meaning of sec- tion 457(b))’’ after ‘‘subsection (e))’’. Subsec. (p)(12), (13). Pub. L. 107–16, § 635(c), added par. (12) and redesignated former par. (12) as (13). Subsec. (v). Pub. L. 107–16, § 631(a), added subsec. (v). 2000—Subsec. (s)(2). Pub. L. 106–554 substituted ‘‘sec- tion 125, 132(f)(4), 402(e)(3)’’ for ‘‘section 125, 402(e)(3)’’. 1998—Subsec. (q)(5). Pub. L. 105–206 made technical amendment to Pub. L. 104–188, § 1434(c)(1)(E). See 1996 Amendment note below. 1997—Subsec. (e)(5)(A). Pub. L. 105–34, § 1601(d)(6)(A), amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: ‘‘For pur- poses of this part— ‘‘(i) IN GENERAL.—An employee of a church or a con- vention or association of churches shall include a duly ordained, commissioned, or licensed minister of a church who, in connection with the exercise of his or her ministry— ‘‘(I) is a self-employed individual (within the meaning of section 401(c)(1)(B)), or ‘‘(II) is employed by an organization other than an organization described in section 501(c)(3). ‘‘(ii) TREATMENT AS EMPLOYER AND EMPLOYEE.— ‘‘(I) SELF-EMPLOYED.—A minister described in clause (i)(I) shall be treated as his or her own em- ployer which is an organization described in section 501(c)(3) and which is exempt from tax under sec- tion 501(a). ‘‘(II) OTHERS.—A minister described in clause (i)(II) shall be treated as employed by an organiza- tion described in section 501(c)(3) and exempt from tax under section 501(a).’’ Subsec. (e)(5)(C). Pub. L. 105–34, § 1522(a)(1), sub- stituted ‘‘not otherwise participating’’ for ‘‘not eligible to participate’’. Subsec. (e)(5)(E). Pub. L. 105–34, § 1522(a)(2), added sub- par. (E). Subsec. (n)(3)(C). Pub. L. 105–34, § 1601(h)(2)(D)(i), in- serted ‘‘137,’’ after ‘‘132,’’. Subsec. (q)(7), (9). Pub. L. 105–34, § 1601(d)(7), redesig- nated par. (7), relating to certain employees not consid- ered highly compensated and excluded employees under pre-ERISA rules for church plans, as (9). Subsec. (t)(2). Pub. L. 105–34, § 1601(h)(2)(D)(ii), in- serted ‘‘137,’’ after ‘‘132,’’. 1996—Subsecs. (b), (c). Pub. L. 104–188, § 1421(b)(9)(C), inserted ‘‘408(p),’’ after ‘‘408(k),’’. Subsec. (e)(5). Pub. L. 104–188, § 1461(a), added par. (5). Subsec. (m)(4)(B). Pub. L. 104–188, § 1421(b)(9)(C), in- serted ‘‘408(p),’’ after ‘‘408(k),’’. Subsec. (n)(2)(C). Pub. L. 104–188, § 1454(a), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: ‘‘such services are of a type historically performed, in the business field of the recipient, by em- ployees.’’ Subsec. (n)(3)(B). Pub. L. 104–188, § 1421(b)(9)(C), in- serted ‘‘408(p),’’ after ‘‘408(k),’’. Subsec. (q)(1). Pub. L. 104–188, § 1431(a), amended par. (1) generally. Prior to amendment, par. (1) read as fol- lows: ‘‘IN GENERAL.—The term ‘highly compensated em- ployee’ means any employee who, during the year or the preceding year— ‘‘(A) was at any time a 5-percent owner, ‘‘(B) received compensation from the employer in excess of $75,000, ‘‘(C) received compensation from the employer in excess of $50,000 and was in the top-paid group of em- ployees for such year, or ‘‘(D) was at any time an officer and received com- pensation greater than 50 percent of the amount in effect under section 415(b)(1)(A) for such year. The Secretary shall adjust the $75,000 and $50,000 amounts under this paragraph at the same time and in the same manner as under section 415(d).’’ Subsec. (q)(2), (3). Pub. L. 104–188, § 1431(c)(1)(A), re- designated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: ‘‘SPECIAL RULE FOR CURRENT YEAR.—In the case of the year for which the relevant determination is being made, an employee not described in subparagraph (B), (C), or (D) of paragraph (1) for the preceding year (with- out regard to this paragraph) shall not be treated as de- scribed in subparagraph (B), (C), or (D) of paragraph (1) unless such employee is a member of the group con- sisting of the 100 employees paid the greatest com- pensation during the year for which such determina- tion is being made.’’ Subsec. (q)(4). Pub. L. 104–188, § 1434(b)(1), amended heading and text of par. (4) generally. Prior to amend- ment, text read as follows: ‘‘For purposes of this sub- section— ‘‘(A) IN GENERAL.—The term ‘compensation’ means compensation within the meaning of section 415(c)(3). Page 1418 TITLE 26—INTERNAL REVENUE CODE § 414 ‘‘(B) CERTAIN PROVISIONS NOT TAKEN INTO ACCOUNT.— The determination under subparagraph (A) shall be made— ‘‘(i) without regard to sections 125, 402(e)(3), and 402(h)(1)(B), and ‘‘(ii) in the case of employer contributions made pursuant to a salary reduction agreement, without regard to section 403(b).’’ Pub. L. 104–188, § 1431(c)(1)(A), redesignated par. (7) as (4). Subsec. (q)(5). Pub. L. 104–188, § 1434(c)(1)(E), as amended by Pub. L. 105–206, § 6018(c), struck out ‘‘under paragraph (4) or the number of officers taken into ac- count under paragraph (5)’’ after ‘‘top-paid group’’ in introductory provisions. Pub. L. 104–188, § 1431(c)(1)(A), redesignated par. (8) as (5) and struck out former par. (5) which read as follows: ‘‘SPECIAL RULES FOR TREATMENT OF OFFICERS.— ‘‘(A) NOT MORE THAN 50 OFFICERS TAKEN INTO AC- COUNT.—For purposes of paragraph (1)(D), no more than 50 employees (or, if lesser, the greater of 3 em- ployees or 10 percent of the employees) shall be treat- ed as officers. ‘‘(B) AT LEAST 1 OFFICER TAKEN INTO ACCOUNT.—If for any year no officer of the employer is described in paragraph (1)(D), the highest paid officer of the em- ployer for such year shall be treated as described in such paragraph.’’ Subsec. (q)(6). Pub. L. 104–188, § 1431(b)(1), (c)(1)(A), re- designated par. (9) as (6) and struck out former par. (6) which related to treatment of families of 5-percent owners or of highly compensated employees. Subsec. (q)(7). Pub. L. 104–188, § 1462(a), added par. (7) relating to certain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans. Pub. L. 104–188, § 1431(c)(1)(A), redesignated par. (10), relating to coordination with other provisions, as (7). Former par. (7) redesignated (4). Subsec. (q)(8) to (12). Pub. L. 104–188, § 1431(c)(1)(A), re- designated pars. (8) to (11) as (5) to (8), respectively, and struck out par. (12) which related to simplified method for determining highly compensated employees. Subsec. (r)(2)(A). Pub. L. 104–188, § 1431(c)(1)(D), sub- stituted ‘‘subsection (q)(5)’’ for ‘‘subsection (q)(8)’’. Subsec. (s)(2). Pub. L. 104–188, § 1434(b)(2), inserted ‘‘not’’ after ‘‘elect’’ in heading and in text. Subsec. (u). Pub. L. 104–188, § 1704(n)(1), added subsec. (u). 1992—Subsec. (n)(5)(C)(iii)(I). Pub. L. 102–318, § 521(b)(20), substituted ‘‘402(e)(3)’’ for ‘‘402(a)(8)’’. Subsec. (q)(7)(B)(i). Pub. L. 102–318, § 521(b)(21), sub- stituted ‘‘402(e)(3)’’ for ‘‘402(a)(8)’’. Subsec. (s)(2). Pub. L. 102–318, § 521(b)(22), substituted ‘‘402(e)(3)’’ for ‘‘402(a)(8)’’. 1990—Subsec. (n)(2)(B). Pub. L. 101–508 struck out ‘‘(6 months in the case of core health benefits)’’ after ‘‘1 year’’. 1989—Subsec. (n)(3)(C). Pub. L. 101–239, § 7813(b), amended directory language of Pub. L. 100–647, § 3011(b)(4), see 1988 Amendment note below. Pub. L. 101–140, § 203(a)(6)(A), struck out ‘‘89,’’ after ‘‘79,’’. Subsec. (p)(10). Pub. L. 101–239, § 7811(m)(5), inserted ‘‘section’’ before ‘‘403(b)’’. Subsec. (p)(11). Pub. L. 101–239, § 7841(a)(2), added par. (11) and redesignated former par. (11) as (12). Subsec. (r)(1). Pub. L. 101–140, § 204(b)(2), substituted ‘‘sections 129(d)(8) and 410(b)’’ for ‘‘section 410(b)’’. Pub. L. 101–140, § 203(a)(6)(B), substituted ‘‘section 410(b)’’ for ‘‘sections 89 and 410(b)’’. Subsec. (t)(2). Pub. L. 101–239, § 7813(b), amended direc- tory language of Pub. L. 100–647, § 3011(b)(5), see 1988 Amendment note below. Pub. L. 101–140, § 203(a)(6)(C), struck out ‘‘89,’’ after ‘‘79,’’. 1988—Subsec. (k)(2). Pub. L. 100–647, § 1011A(b)(3), in- serted ‘‘72(d) (relating to treatment of employee con- tributions as separate contract),’’ after ‘‘purposes of sections’’. Subsec. (l). Pub. L. 100–647, § 2005(c)(1), (2), substituted ‘‘Merger’’ for ‘‘Mergers’’ in heading, designated exist- ing provision as par. (1), inserted par. (1) heading, and added par. (2). Subsec. (l)(2)(G). Pub. L. 100–647, § 6067(a), added sub- par. (G). Subsec. (m)(4)(A). Pub. L. 100–647, § 1011(h)(5), sub- stituted ‘‘(16), (17), and (26)’’ for ‘‘and (16)’’. Subsec. (m)(4)(C), (D). Pub. L. 100–647, § 1011B(a)(16), struck out subpars. (C) and (D) which read as follows: ‘‘(C) section 105(h), and ‘‘(D) section 125.’’ Subsec. (n)(3)(A). Pub. L. 100–647, § 1011(h)(5), sub- stituted ‘‘(16), (17), and (26)’’ for ‘‘and (16)’’. Subsec. (n)(3)(C). Pub. L. 100–647, § 3011(b)(4), as amended by Pub. L. 101–239, § 7813(b), struck out ‘‘162(i)(2), 162(k),’’ after ‘‘132,’’ and substituted ‘‘505, and 4980B’’ for ‘‘and 505’’. Pub. L. 100–647, § 1011B(a)(19), inserted ‘‘162(i)(2), 162(k),’’ after ‘‘132,’’. Subsec. (o). Pub. L. 100–647, § 1011(e)(4), inserted ‘‘or any requirement under section 457’’ after ‘‘or (n)(3)’’. Subsec. (p)(4)(B). Pub. L. 100–647, § 1018(t)(8)(E), sub- stituted ‘‘means the earlier of’’ for ‘‘means earlier of’’ and struck out ‘‘in’’ at beginning of cls. (i) and (ii). Subsec. (p)(9). Pub. L. 100–647, § 1018(t)(8)(G), inserted at end ‘‘For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.’’ Subsec. (p)(10). Pub. L. 100–647, § 1018(t)(8)(F), inserted ‘‘, 403(b),’’ after ‘‘section 401’’. Subsec. (q)(1). Pub. L. 100–647, § 1011(i)(1), inserted at end ‘‘The Secretary shall adjust the $75,000 and $50,000 amounts under this paragraph at the same time and in the same manner as under section 415(d).’’ Subsec. (q)(1)(D). Pub. L. 100–647, § 1011(d)(8), sub- stituted ‘‘50’’ for ‘‘150’’ and ‘‘415(b)(1)(A)’’ for ‘‘415(c)(1)(A)’’. Subsec. (q)(6)(C). Pub. L. 100–647, § 1011(i)(2), added subpar. (C). Subsec. (q)(8). Pub. L. 100–647, § 1011(i)(4)(A), inserted ‘‘or the number of officers taken into account under paragraph (5)’’ after ‘‘under paragraph (4)’’. Pub. L. 100–647, § 1011(i)(3)(A)(ii), substituted ‘‘Except as provided by the Secretary, the employer’’ for ‘‘The employer’’ in last sentence. Subsec. (q)(8)(F). Pub. L. 100–647, § 1011(i)(3)(A)(i), struck out subpar. (F) which read as follows: ‘‘employ- ees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).’’ Subsec. (q)(11). Pub. L. 100–647, § 1011(i)(3)(B), added par. (11). Subsec. (q)(12). Pub. L. 100–647, § 3021(b)(1), added par. (12). Subsec. (r)(3). Pub. L. 100–647, § 3021(b)(2)(A), amended par. (3) generally. Prior to amendment, par. (3) read as follows: ‘‘The requirements of subparagraph (C) of para- graph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is— ‘‘(A) not less than one-half, and ‘‘(B) not more than twice, the percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of subpara- graph (A) if at least 10 percent of all highly com- pensated employees of the employer perform services solely for such line of business.’’ Subsec. (s). Pub. L. 100–647, § 1011(j)(1), substituted ‘‘any applicable provision’’ for ‘‘this part’’ in introduc- tory provisions. Subsec. (s)(1). Pub. L. 100–647, § 1011(j)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: ‘‘The term ‘compensation’ means compensa- Page 1419 TITLE 26—INTERNAL REVENUE CODE § 414 tion for service performed for an employer which (tak- ing into account the provisions of this chapter) is cur- rently includible in gross income.’’ Subsec. (s)(2) to (4). Pub. L. 100–647, § 1011(j)(2), added par. (4), redesignated former pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: ‘‘The Secretary shall prescribe regula- tions for the determination of the compensation of an employee who is a self-employed individual (within the meaning of section 401(c)(1)) which are based on the principles of paragraph (1).’’ Subsec. (t)(1). Pub. L. 100–647, § 1011B(a)(20), struck out ‘‘of section 414’’ before ‘‘shall be treated’’ and ‘‘shall apply with’’. Subsec. (t)(2). Pub. L. 100–647, § 3011(b)(5), as amended by Pub. L. 101–239, § 7813(b), struck out ‘‘162(i)(2), 162(k),’’ after ‘‘132,’’ and substituted ‘‘505, or 4980B’’ for ‘‘or 505’’. Pub. L. 100–647, § 1011B(a)(17), inserted ‘‘162(i)(2), 162(k),’’ after ‘‘132,’’. 1987—Subsec. (b). Pub. L. 100–203 struck out ‘‘the min- imum funding standard of section 412, the tax imposed by section 4971, and’’ after ‘‘one such corporation,’’. 1986—Subsec. (k)(2). Pub. L. 99–514, § 1117(c), inserted reference to section 401(m) (relating to nondiscrimina- tion tests for matching requirements and employee contributions). Subsec. (m)(2)(B)(ii). Pub. L. 99–514, § 1114(b)(11), sub- stituted ‘‘highly compensated employees (within the meaning of section 414(q))’’ for ‘‘officers, highly com- pensated employees, or owners’’. Subsec. (m)(5). Pub. L. 99–514, § 1301(j)(4), substituted ‘‘section 144(a)(3)’’ for ‘‘section 103(b)(6)(C)’’. Subsec. (m)(7). Pub. L. 99–514, § 1852(f), amended direc- tory language of Pub. L. 98–369, § 526(d)(2), to correct an error, and did not involve any change in text. See 1984 Amendment note below. Subsec. (n)(1). Pub. L. 99–514, § 1151(i)(1), substituted ‘‘requirements’’ for ‘‘pension requirements’’. Pub. L. 99–514, § 1146(b)(2), struck out ‘‘except to the extent otherwise provided in regulations,’’ after ‘‘listed in paragraph (3),’’. Subsec. (n)(2)(B). Pub. L. 99–514, § 1151(i)(2), inserted ‘‘(6 months in the case of core health benefits)’’ after ‘‘1 year’’. Subsec. (n)(3). Pub. L. 99–514, § 1151(i)(3), substituted ‘‘Requirements’’ for ‘‘Pension requirements’’ in head- ing, substituted ‘‘requirements’’ for ‘‘pension require- ments’’ in text, and added subpar. (C). Subsec. (n)(4). Pub. L. 99–514, § 1146(a)(2), substituted ‘‘Time when first considered as employee’’ for ‘‘Time when leased employee is first considered as employee’’ in heading and amended text generally. Prior to amendment, text read as follows: ‘‘In the case of any leased employee, paragraph (1) shall apply only for pur- poses of determining whether the pension requirements listed in paragraph (3) are met for periods after the close of the 1-year period referred to in paragraph (2); except that years of service for the recipient shall be determined by taking into account the entire period for which the leased employee performed services for the recipient (or related persons).’’ Subsec. (n)(5). Pub. L. 99–514, § 1146(a)(1), amended par. (5) generally. Prior to amendment, par. (5) read as fol- lows: ‘‘This subsection shall not apply to any leased employee if such employee is covered by a plan which is maintained by the leasing organization if, with re- spect to such employee, such plan— ‘‘(A) is a money purchase pension plan with a non- integrated employer contribution rate of at least 71⁄2 percent, and ‘‘(B) provides for immediate participation and for full and immediate vesting.’’ Subsec. (n)(6). Pub. L. 99–514, § 1301(j)(4), substituted ‘‘section 144(a)(3)’’ for ‘‘section 103(b)(6)(C)’’ in subpar. (A). Pub. L. 99–514, § 1146(a)(3), substituted ‘‘Other rules’’ for ‘‘Related persons’’ in heading and amended text generally. Prior to amendment, text read as follows: ‘‘For purposes of this subsection, the term ‘related per- sons’ has the same meaning as when used in section 103(b)(6)(C).’’ Subsec. (o). Pub. L. 99–514, § 1146(b)(1), inserted provi- sion relating to regulations to minimize recordkeeping requirements in case of employer which has no top- heavy plans and uses the services of persons other than employees for an insignificant percentage of the em- ployer’s total workload. Subsec. (p)(1)(B)(i). Pub. L. 99–514, § 1898(c)(7)(A)(ii), inserted ‘‘former spouse,’’. Subsec. (p)(3)(B). Pub. L. 99–514, § 1899A(12), struck out the comma after ‘‘benefits’’. Subsec. (p)(4)(A). Pub. L. 99–514, § 1898(c)(7)(A)(vi), substituted ‘‘A’’ for ‘‘In the case of any payment before a participant has separated from service, a’’ in intro- ductory provisions and inserted ‘‘in the case of any payment before a participant has separated from serv- ice,’’ in cl. (i). Subsec. (p)(4)(B). Pub. L. 99–514, § 1898(c)(7)(A)(vii), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘‘For purposes of this para- graph, the term ‘earliest retirement age’ has the mean- ing given such term by section 417(f)(3), except that in the case of any defined contribution plan, the earliest retirement age shall be the date which is 10 years be- fore the normal retirement age (within the meaning of section 411(a)(8)).’’ Subsec. (p)(5). Pub. L. 99–514, § 1898(c)(7)(A)(v), struck out last sentence which read as follows: ‘‘A plan shall not be treated as failing to meet the requirements of subsection (a) or (k) of section 401 which prohibit pay- ment of benefits before termination of employment solely by reason of payments to an alternate payee pur- suant to a qualified domestic relations order.’’ Subsec. (p)(5)(A). Pub. L. 99–514, § 1898(c)(6)(A), in- serted ‘‘(and any spouse of the participant shall not be treated as a spouse of the participant for such pur- poses)’’. Subsec. (p)(5)(B). Pub. L. 99–514, § 1898(c)(7)(A)(iv), substituted ‘‘the surviving former spouse’’ for ‘‘the sur- viving spouse’’. Subsec. (p)(6)(A)(i). Pub. L. 99–514, § 1898(c)(7)(A)(iii), substituted ‘‘each alternate payee’’ for ‘‘any other al- ternate payee’’. Subsec. (p)(7)(A). Pub. L. 99–514, § 1898(c)(2)(A)(i), sub- stituted ‘‘shall separately account for the amounts (hereinafter in this paragraph referred to as the ‘seg- regated amounts’)’’ for ‘‘shall segregate in a separate account in the plan or in an escrow account the amounts’’. Subsec. (p)(7)(B). Pub. L. 99–514, § 1898(c)(2)(A)(ii), sub- stituted ‘‘the 18-month period described in subpara- graph (E)’’ for ‘‘18 months’’ and ‘‘including any inter- est’’ for ‘‘plus any interest’’. Subsec. (p)(7)(C). Pub. L. 99–514, § 1898(c)(2)(A)(iii), substituted ‘‘the 18-month period described in subpara- graph (E)’’ for ‘‘18 months’’ and ‘‘including any inter- est’’ for ‘‘plus any interest’’. Subsec. (p)(7)(D). Pub. L. 99–514, § 1898(c)(2)(A)(iv), in- serted ‘‘described in subparagraph (E)’’. Subsec. (p)(7)(E). Pub. L. 99–514, § 1898(c)(2)(A)(v), added subpar. (E). Subsec. (p)(9). Pub. L. 99–514, § 1898(c)(4)(A), added par. (9). Former par. (9) redesignated (11). Subsec. (p)(10). Pub. L. 99–514, § 1898(c)(7)(A)(v), added par. (10). Subsec. (p)(11). Pub. L. 99–514, § 1898(c)(4)(A), redesig- nated former par. (9) as (11). Subsec. (q). Pub. L. 99–514, § 1114(a), added subsec. (q). Subsecs. (r), (s). Pub. L. 99–514, § 1115(a), added sub- secs. (r) and (s). Subsec. (t). Pub. L. 99–514, § 1151(e)(1), added subsec. (t). 1984—Subsec. (h)(1)(B). Pub. L. 98–369, § 491(d)(26), struck out ‘‘or 405(a)’’ after ‘‘section 403(a)’’. Subsec. (l). Pub. L. 98–369, § 491(d)(27), struck out ‘‘or 405’’ after ‘‘section 403(a)’’. Subsec. (m)(6)(B). Pub. L. 98–369, § 526(a)(1), sub- stituted ‘‘section 318(a)’’ for ‘‘section 267(c)’’. Subsec. (m)(7). Pub. L. 98–369, § 526(d)(2), as amended by Pub. L. 99–514, § 1852(f), struck out par. (7) relating to regulations. See subsec. (o) of this section. Page 1420 TITLE 26—INTERNAL REVENUE CODE § 414 Subsec. (n)(2). Pub. L. 98–369, §§ 526(b)(1), 713(i), made identical amendments, substituting ‘‘any person who is not an employee of the recipient and’’ for ‘‘any person’’ in text preceding subpar. (A). Subsec. (o). Pub. L. 98–369, § 526(d)(1), added subsec. (o). Subsec. (p). Pub. L. 98–397 added subsec. (p). 1982—Subsecs. (b), (c). Pub. L. 97–248, § 240(c)(1), in- serted reference to section 416. Subsec. (m)(4)(B). Pub. L. 97–248, § 240(c)(2), inserted reference to section 416. Subsec. (m)(5) to (7). Pub. L. 97–248, § 246(a), added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), respectively. Subsec. (n). Pub. L. 97–248, § 248(a), added subsec. (n). 1980—Subsec. (e). Pub. L. 96–364, § 407(b), substituted provisions defining ‘‘church plan’’ with respect to gen- eral requirements, exclusion of certain plans, defini- tions and other provisions, and correction of failures to meet church plan requirements, for provisions defining ‘‘church plan’’ with respect to general requirements, certain unrelated business or multiemployer plans, and special temporary rules for certain church agencies under church plan. Subsec. (f). Pub. L. 96–364, § 207, substituted provisions setting forth definition, cases of common control, con- tinuation of status after termination, transitional rule, and special election with respect to a multiemployer plan, for provisions setting forth definition and special rules with respect to a multiemployer plan. Subsec. (l). Pub. L. 96–364, § 208(a), substituted provi- sions relating to applicability to multiemployer plans subject to title IV of the Employee Retirement Income Security Act of 1974 of provisions of preceding sentence, for provisions relating to applicability of paragraph to multiemployer plans to extent determined by Corpora- tion. Subsec. (m). Pub. L. 96–605 and Pub. L. 96–613 added an identical subsec. (m). 1978—Subsecs. (b), (c). Pub. L. 95–600 inserted ‘‘408(k),’’ after ‘‘sections 401,’’ wherever appearing. 1976—Subsecs. (a) to (c). Pub. L. 94–455, § 1906(b)(13)(A), struck out ‘‘or his delegate’’ after ‘‘Sec- retary’’. Subsec. (f). Pub. L. 94–455, § 1901(a)(64)(A), substituted ‘‘Plan’’ for ‘‘plan’’ in heading. Subsec. (g)(2)(C). Pub. L. 94–455, § 1906(b)(13)(A), struck out ‘‘or his delegate’’ after ‘‘Secretary’’. Subsec. (l). Pub. L. 94–455, § 1901(a)(64)(B), substituted reference to Sept. 2, 1974, for reference to the date of enactment of the Employee Retirement Income Secu- rity Act of 1974. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2022 AMENDMENT Pub. L. 117–328, div. T, title I, § 109(d), Dec. 29, 2022, 136 Stat. 5290, provided that: ‘‘The amendments made by this section [amending this section] shall apply to tax- able years beginning after December 31, 2024.’’ Amendment by section 117(b) of Pub. L. 117–328 appli- cable to taxable years beginning after Dec. 31, 2023, see section 117(h) of Pub. L. 117–328, set out as a note under section 401 of this title. Pub. L. 117–328, div. T, title III, § 315(b), Dec. 29, 2022, 136 Stat. 5352, provided that: ‘‘The amendments made by this section [amending this section] shall apply to plan years beginning after December 31, 2023.’’ Pub. L. 117–328, div. T, title III, § 320(c), Dec. 29, 2022, 136 Stat. 5356, provided that: ‘‘The amendments made by this section [enacting section 1030a of Title 29, Labor, and amending this section, sections 664, 1027, and 1954 of Title 18, Crimes and Criminal Procedure, and sections 441 and 1031 of Title 29] shall apply to plan years beginning after December 31, 2022.’’ Pub. L. 117–328, div. T, title III, § 339(c), Dec. 29, 2022, 136 Stat. 5375, provided that: ‘‘The amendments made by this section [amending this section and section 1056 of Title 29, Labor] shall apply to domestic relations or- ders received by plan administrators after December 31, 2022, including any such order which is submitted for reconsideration after such date.’’ Pub. L. 117–328, div. T, title III, § 350(b), Dec. 29, 2022, 136 Stat. 5387, provided that: ‘‘The amendment made by this section [amending this section] shall apply with respect to any errors with respect to which the date re- ferred to in section 414(cc) (as added by this section) is after December 31, 2023. Prior to the application of any regulations or other guidance prescribed under para- graph (3) of section 414(cc) of the Internal Revenue Code of 1986 (as added by this section), taxpayers may rely upon their reasonable good faith interpretations of the provisions of such section.’’ Amendment by section 603(a) of Pub. L. 117–328 appli- cable to taxable years beginning after Dec. 31, 2023, see section 603(c) of Pub. L. 117–328, set out as a note under section 402 of this title. EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–136, div. A, title III, § 3609(c), Mar. 27, 2020, 134 Stat. 414, provided that: ‘‘The amendments made by this section [amending this section and section 1060 of Title 29, Labor] shall apply to plan years beginning after December 31, 2018.’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–113, div. Q, title III, § 336(a)(3), Dec. 18, 2015, 129 Stat. 3110, provided that: ‘‘The amendments made by paragraph (1) [amending this section] shall apply to years beginning before, on, or after the date of the enactment of this Act [Dec. 18, 2015].’’ Pub. L. 114–113, div. Q, title III, § 336(d)(2), Dec. 18, 2015, 129 Stat. 3113, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to transfers or mergers occurring after the date of the enactment of this Act [Dec. 18, 2015].’’ EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. Pub. L. 113–235, div. P, § 3(c), Dec. 16, 2014, 128 Stat. 2829, provided that: ‘‘The amendments made by this section [amending this section and section 1060 of Title 29, Labor] shall take effect as if included in the amend- ments made by the Cooperative and Small Employer Charity Pension Flexibility Act [Pub. L. 113–97] (29 U.S.C. 401 note) [probably means 26 U.S.C. 401 note].’’ Amendment by section 201 of Pub. L. 113–97 applicable to years beginning after Dec. 31, 2013, see section 3 of Pub. L. 113–97, set out as a note under section 401 of this title. Pub. L. 113–97, title II, § 203(b), Apr. 7, 2014, 128 Stat. 1139, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply as of the date of enactment of this Act [Apr. 7, 2014].’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amend- ment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of this title. Amendment by section 104(b) of Pub. L. 110–245 appli- cable with respect to deaths and disabilities occurring on or after Jan. 1, 2007, see section 104(d)(1) of Pub. L. 110–245, set out as a note under section 401 of this title. Amendment by section 105(b)(1) of Pub. L. 110–245 ap- plicable to years beginning after December 31, 2008, see section 105(b)(3) of Pub. L. 110–245, set out as a note under section 219 of this title. EFFECTIVE DATE OF 2007 AMENDMENT Pub. L. 110–28, title VI, § 6611(c), May 25, 2007, 121 Stat. 181, provided that: ‘‘The amendments made by this sec- tion [amending this section and section 1002 of Title 29, Labor] shall take effect as if included in section 1106 of the Pension Protection Act of 2006 [Pub. L. 109–280].’’ Page 1421 TITLE 26—INTERNAL REVENUE CODE § 414 EFFECTIVE DATE OF 2006 AMENDMENT Amendment by section 114(c) of Pub. L. 109–280 appli- cable to plan years beginning after 2007, see section 114(g)(1) of Pub. L. 109–280, as added by Pub. L. 110–458, set out as a note under section 401 of this title. Amendment by section 902(d)(1) of Pub. L. 109–280 ap- plicable to plan years beginning after Dec. 31, 2007, see section 902(g) of Pub. L. 109–280, set out as a note under section 401 of this title. Pub. L. 109–280, title IX, § 903(c), Aug. 17, 2006, 120 Stat. 1048, provided that: ‘‘The amendments made by this section [amending this section and section 1060 of Title 29, Labor] shall apply to plan years beginning after December 31, 2009.’’ Pub. L. 109–280, title IX, § 906(c), Aug. 17, 2006, 120 Stat. 1052, provided that: ‘‘The amendments made by this section [amending this section, section 415 of this title, and sections 1002 and 1321 of Title 29, Labor] shall apply to any year beginning on or after the date of the enactment of this Act [Aug. 17, 2006].’’ EFFECTIVE DATE OF 2002 AMENDMENT Amendment by Pub. L. 107–147 effective as if included in the provisions of the Economic Growth and Tax Re- lief Reconciliation Act of 2001, Pub. L. 107–16, to which such amendment relates, see section 411(x) of Pub. L. 107–147, set out as a note under section 25B of this title. EFFECTIVE DATE OF 2001 AMENDMENT Pub. L. 107–16, title VI, § 631(b), June 7, 2001, 115 Stat. 113, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to contribu- tions in taxable years beginning after December 31, 2001.’’ Pub. L. 107–16, title VI, § 635(d), June 7, 2001, 115 Stat. 117, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to transfers, distributions, and payments made after December 31, 2001.’’ EFFECTIVE DATE OF 2000 AMENDMENT Amendment by Pub. L. 106–554 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 1(a)(7) [title III, § 314(g)] of Pub. L. 106–554, set out as a note under section 56 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Amendment by section 6018 of Pub. L. 105–206 effec- tive as if included in the provisions of the Small Busi- ness Job Protection Act of 1996, Pub. L. 104–188, to which such amendment relates, see section 6018(h) of Pub. L. 105–206, set out as a note under section 23 of this title. EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title XV, § 1522(b), Aug. 5, 1997, 111 Stat. 1070, provided that: ‘‘The amendments made by this section [amending this section] shall apply to years beginning after December 31, 1997.’’ Amendment by section 1601(d)(6)(A), (7), (h)(2)(D)(i), (ii) of Pub. L. 105–34 effective as if included in the pro- visions of the Small Business Job Protection Act of 1996, Pub. L. 104–188, to which it relates, see section 1601(j) of Pub. L. 105–34, set out as a note under section 23 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 1421(b)(9)(C) of Pub. L. 104–188 applicable to taxable years beginning after Dec. 31, 1996, see section 1421(e) of Pub. L. 104–188, set out as a note under section 72 of this title. Pub. L. 104–188, title I, § 1431(d), Aug. 20, 1996, 110 Stat. 1803, provided that: ‘‘(1) IN GENERAL.—The amendments made by this sec- tion [amending this section, sections 129, 401, 404, 408, and 416 of this title, and provisions set out as a note below] shall apply to years beginning after December 31, 1996, except that in determining whether an em- ployee is a highly compensated employee for years be- ginning in 1997, such amendments shall be treated as having been in effect for years beginning in 1996. ‘‘(2) FAMILY AGGREGATION.—The amendments made by subsection (b) [amending this section and sections 401 and 404 of this title] shall apply to years beginning after December 31, 1996.’’ Pub. L. 104–188, title I, § 1434(c), Aug. 20, 1996, 110 Stat. 1807, provided that: ‘‘The amendments made by this section [amending this section and section 415 of this title] shall apply to years beginning after December 31, 1997.’’ Pub. L. 104–188, title I, § 1454(b), Aug. 20, 1996, 110 Stat. 1817, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to years beginning after December 31, 1996, but shall not apply to any relationship determined under an Internal Rev- enue Service ruling issued before the date of the enact- ment of this Act [Aug. 20, 1996] pursuant to section 414(n)(2)(C) of the Internal Revenue Code of 1986 (as in effect on the day before such date) not to involve a leased employee.’’ Amendment by section 1461(a) of Pub. L. 104–188 ap- plicable to years beginning after Dec. 31, 1996, see sec- tion 1461(c) of Pub. L. 104–188, set out as a note under section 404 of this title. Pub. L. 104–188, title I, § 1462(c), Aug. 20, 1996, 110 Stat. 1824, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply to years beginning after December 31, 1996.’’ Pub. L. 104–188, title I, § 1704(n)(3), Aug. 20, 1996, 110 Stat. 1886, provided that: ‘‘The amendments made by this subsection [amending this section and section 1108 of Title 29, Labor] shall be effective as of December 12, 1994.’’ EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–318 applicable to distribu- tions after Dec. 31, 1992, see section 521(e) of Pub. L. 102–318, set out as a note under section 402 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–508, title XI, § 11703(b)(2), Nov. 5, 1990, 104 Stat. 1388–517, provided that: ‘‘The amendment made by subsection (a) [probably means par. (1), which amended this section] shall take effect as if included in the amendments made by section 1151 of the Tax Reform Act of 1986 [Pub. L. 99–514].’’ EFFECTIVE DATE OF 1989 AMENDMENTS Amendment by sections 7811(m)(5) and 7813(b) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscella- neous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title. Amendment by section 7841(a)(2) of Pub. L. 101–239 ap- plicable to transfers after Dec. 19, 1989, in taxable years ending after such date, see section 7841(a)(3) of Pub. L. 101–239, set out as a note under section 408 of this title. Amendment by section 203(a)(6) of Pub. L. 101–140 ef- fective as if included in section 1151 of Pub. L. 99–514, see section 203(c) of Pub. L. 101–140, set out as a note under section 79 of this title. Amendment by section 204(b)(2) of Pub. L. 101–140 ap- plicable to years beginning after Dec. 31, 1988, see sec- tion 204(d)(1) of Pub. L. 101–140, set out as a note under section 129 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Amendment by sections 1011(d)(8), (e)(4), (h)(5), (i)(1)–(4)(A), (j)(1), (2), 1011A(b)(3), 1011B(a)(16), (17), (19), (20), and 1018(t)(8)(E)–(G) of Pub. L. 100–647 effective, ex- cept as otherwise provided, as if included in the provi- sion of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. Page 1422 TITLE 26—INTERNAL REVENUE CODE § 414 Pub. L. 100–647, title II, § 2005(c)(3), Nov. 10, 1988, 102 Stat. 3612, provided that: ‘‘(A) Except as provided in subparagraph (B), the amendments made by this subsection [amending this section] shall apply with respect to transactions occur- ring after July 26, 1988. ‘‘(B) The amendments made by this subsection shall not apply to any transaction occurring after July 26, 1988, if on or before such date the board of directors of the employer, approves such transaction or the em- ployer took similar binding action.’’ Amendment by section 3011(b)(4), (5) of Pub. L. 100–647 applicable to taxable years beginning after Dec. 31, 1988, but not applicable to any plan for any plan year to which section 162(k) of this title (as in effect on the day before Nov. 10, 1988) did not apply by reason of sec- tion 10001(e)(2) of Pub. L. 99–272, see section 3011(d) of Pub. L. 100–647, set out as a note under section 162 of this title. Amendment by section 3021(b)(1), (2)(A) of Pub. L. 100–647 applicable to years beginning after Dec. 31, 1986, see section 3021(d)(2) of Pub. L. 100–647, set out as a note under section 129 of this title. Pub. L. 100–647, title VI, § 6067(c), Nov. 10, 1988, 102 Stat. 3703, as amended by Pub. L. 101–239, title VII, § 7816(k), Dec. 19, 1989, 103 Stat. 2421, provided that: ‘‘The amendment made by this section [amending this section] shall take effect as if included in the amend- ments made by section 2005(c) of this Act [amending this section].’’ EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–203 applicable with re- spect to plan years beginning after Dec. 31, 1987, see section 9305(d) of Pub. L. 100–203, set out as a note under section 412 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XI, § 1114(c), Oct. 22, 1986, 100 Stat. 2452, as amended by Pub. L. 104–188, title I, § 1431(c)(2), Aug. 20, 1996, 110 Stat. 1803; Pub. L. 107–16, title VI, § 663(a), June 7, 2001, 115 Stat. 142, provided that: ‘‘(1) IN GENERAL.—Except as provided in this sub- section, the amendment made by this section [amend- ing this section and sections 106, 274, 423, and 501 of this title] shall apply to years beginning after December 31, 1986. ‘‘(2) CONFORMING AMENDMENTS TO EMPLOYEE BENEFIT PROVISIONS.—The amendments made by paragraphs (2), (3), (4), (5), and (16) of subsection (b) [amending sections 117, 120, 127, 129, 132, and 505 of this title] shall apply to years beginning after December 31, 1987. ‘‘(3) CONFORMING AMENDMENTS TO PENSION PROVI- SIONS.—The amendments made by paragraphs (7), (8), (9), (10), (11), (12), and (15) of subsection (b) [amending this section and sections 401, 404A, 406, 407, 411, 415, and 4975 of this title and section 1108 of Title 29, Labor] shall apply to years beginning after December 31, 1988.’’ [Pub. L. 107–16, title VI, § 663(b), June 7, 2001, 115 Stat. 143, provided that: ‘‘The repeal made by subsection (a) [repealing par. (4) of section 1114(c) of Pub. L. 99–514, set out above] shall apply to plan years beginning after De- cember 31, 2001.’’] Pub. L. 99–514, title XI, § 1115(b), Oct. 22, 1986, 100 Stat. 2454, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to years beginning after December 31, 1986.’’ Amendment by section 1117(c) of Pub. L. 99–514 appli- cable to plan years beginning after Dec. 31, 1986, with special provisions for plans maintained pursuant to col- lective bargaining agreements ratified before Mar. 1, 1986, and for annuity contracts under section 403(b) of this title, see section 1117(d) of Pub. L. 99–514, set out as a note under section 401 of this title. Pub. L. 99–514, title XI, § 1146(c), Oct. 22, 1986, 100 Stat. 2493, provided that: ‘‘(1) IN GENERAL.—Except as provided in this sub- section, the amendments made by this section [amend- ing this section] shall apply to taxable years beginning after December 31, 1983. ‘‘(2) SUBSECTION (a)(1).—The amendment made by sub- section (a)(1) shall apply to services performed after December 31, 1986. ‘‘(3) RECORDKEEPING REQUIREMENTS.—In the case of years beginning before the date of the enactment of this Act [Oct. 22, 1986], the last sentence of section 414(o) shall be applied without regard to the require- ment that an insignificant percentage of the workload be performed by persons other than employees.’’ Amendment by section 1151(e)(1), (i) of Pub. L. 99–514 applicable, with certain qualifications and exceptions, to years beginning after Dec. 31, 1988, see section 1151(k) of Pub. L. 99–514, as amended, set out as a note under section 79 of this title. Amendment by section 1301(j)(4) of Pub. L. 99–514 ap- plicable to bonds issued after Aug. 15, 1986, except as otherwise provided, see sections 1311 to 1318 of Pub. L. 99–514, set out as an Effective Date; Transitional Rules note under section 141 of this title. Amendment by section 1852(f) of Pub. L. 99–514 effec- tive, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title. Amendment by section 1898(c)(2)(A), (4)(A), (6)(A), (7)(A)(ii)–(vii) of Pub. L. 99–514 effective as if included in the provision of the Retirement Equity Act of 1984, Pub. L. 98–397, to which such amendment relates, ex- cept as otherwise provided, see section 1898(j) of Pub. L. 99–514, set out as a note under section 401 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–397 effective Jan. 1, 1985, except as otherwise provided, see section 303(d) of Pub. L. 98–397, set out as a note under section 1001 of Title 29, Labor. Amendment by section 491(d)(26), (27) of Pub. L. 98–369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98–369, set out as a note under section 62 of this title. Pub. L. 98–369, div. A, title V, § 526(a)(2), July 18, 1984, 98 Stat. 874, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to taxable years beginning after December 31, 1984.’’ Pub. L. 98–369, div. A, title V, § 526(b)(2), July 18, 1984, 98 Stat. 874, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to taxable years beginning after December 31, 1983.’’ Pub. L. 98–369, div. A, title V, § 526(d)(3), July 18, 1984, 98 Stat. 875, provided that: ‘‘The amendments made by this subsection [amending this section] shall take ef- fect on the date of the enactment of this Act [July 18, 1984].’’ Amendment by section 713(i) of Pub. L. 98–369 effec- tive as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title. EFFECTIVE DATE OF 1982 AMENDMENT Amendment by section 240(c) of Pub. L. 97–248, appli- cable to years beginning after Dec. 31, 1983, see section 241(a) of Pub. L. 97–248, set out as a note under section 416 of this title. Pub. L. 97–248, title II, § 246(b), Sept. 3, 1982, 96 Stat. 525, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply to tax- able years beginning after December 31, 1983.’’ Pub. L. 97–248, title II, § 248(b), Sept. 3, 1982, 96 Stat. 527, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to tax- able years beginning after December 31, 1983.’’ EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96–605, title II, § 201(c), Dec. 28, 1980, 94 Stat. 3527, and Pub. L. 96–613, § 5(c), Dec. 28, 1980, 94 Stat. 3582, provided that: ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section [amending this Page 1423 TITLE 26—INTERNAL REVENUE CODE § 414 section and sections 105 and 125 of this title] shall apply to plan years ending after November 30, 1980. ‘‘(2) PLANS IN EXISTENCE ON NOVEMBER 30, 1980.—In the case of a plan in existence on November 30, 1980, the amendments made by this section [amending this sec- tion and sections 105 and 125 of this title] shall apply to plan years beginning after November 30, 1980.’’ Pub. L. 96–364, title IV, § 407(c), Sept. 26, 1980, 94 Stat. 1307, provided that: ‘‘The amendments made by this section [amending this section and section 1002 of Title 29, Labor] shall be effective as of January 1, 1974.’’ Amendment by sections 207 and 208(a) of Pub. L. 96–364 effective Sept. 26, 1980, see section 210(a) of Pub. L. 96–364, set out as an Effective Date note under sec- tion 194A of this title. EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–600 applicable to taxable years beginning after Dec. 31, 1978, see section 152(h) of Pub. L. 95–600, set out as a note under section 408 of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 1901(a)(64) of Pub. L. 94–455 ef- fective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. EFFECTIVE DATE Section applicable, except as otherwise provided in section 1017(c) through (i) of Pub. L. 93–406, for plan years beginning after Sept. 2, 1974, and, in the case of plans in existence on Jan. 1, 1974, for plan years begin- ning after Dec. 31, 1975, see section 1017 of Pub. L. 93–406, set out as an Effective Date; Transitional Rules note under section 410 of this title. REGULATIONS Pub. L. 109–280, title X, § 1001, Aug. 17, 2006, 120 Stat. 1052, provided that: ‘‘Not later than 1 year after the date of the enactment of this Act [Aug. 17, 2006], the Secretary of Labor shall issue regulations under sec- tion 206(d)(3) of the Employee Retirement Security Act of 1974 [29 U.S.C. 1056(d)(3)] and section 414(p) of the In- ternal Revenue Code of 1986 which clarify that— ‘‘(1) a domestic relations order otherwise meeting the requirements to be a qualified domestic relations order, including the requirements of section 206(d)(3)(D) of such Act and section 414(p)(3) of such Code, shall not fail to be treated as a qualified domes- tic relations order solely because— ‘‘(A) the order is issued after, or revises, another domestic relations order or qualified domestic rela- tions order; or ‘‘(B) of the time at which it is issued; and ‘‘(2) any order described in paragraph (1) shall be subject to the same requirements and protections which apply to qualified domestic relations orders, including the provisions of section 206(d)(3)(H) of such Act and section 414(p)(7) of such Code.’’ Secretary of the Treasury or his delegate to issue be- fore Feb. 1, 1988, final regulations to carry out amend- ments made by sections 1114, 1115, and 1117 of Pub. L. 99–514, see section 1141 of Pub. L. 99–514, set out as a note under section 401 of this title. PROVISIONS RELATING TO PLAN AMENDMENTS PURSUANT TO PUB. L. 117–328 Pub. L. 117–328, div. T, title V, § 501(a), (b), Dec. 29, 2022, 136 Stat. 5388, provided that: ‘‘(a) IN GENERAL.—If this section applies to any re- tirement plan or contract amendment— ‘‘(1) such retirement plan or contract shall be treat- ed as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and ‘‘(2) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retire- ment plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement In- come Security Act of 1974 [29 U.S.C. 1054(g)] by reason of such amendment. ‘‘(b) AMENDMENTS TO WHICH SECTION APPLIES.— ‘‘(1) IN GENERAL.—This section shall apply to any amendment to any retirement plan or annuity con- tract which is made— ‘‘(A) pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act [div. T of Pub. L. 117–328, see Tables for classi- fication]; and ‘‘(B) on or before the last day of the first plan year beginning on or after January 1, 2025, or such later date as the Secretary of the Treasury may prescribe. In the case of a governmental plan (as defined in sec- tion 414(d) of the Internal Revenue Code of 1986), or an applicable collectively bargained plan, this para- graph shall be applied by substituting ‘2027’ for ‘2025’. For purposes of the preceding sentence, the term ‘ap- plicable collectively bargained plan’ means a plan maintained pursuant to 1 or more collective bar- gaining agreements between employee representa- tives and 1 or more employers ratified before the date of enactment of this Act [Dec. 29, 2022]. ‘‘(2) CONDITIONS.—This section shall not apply to any amendment unless— ‘‘(A) during the period— ‘‘(i) beginning on the date the legislative or reg- ulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date speci- fied by the plan); and ‘‘(ii) ending on the date described in paragraph (1)(B) (as modified by the second sentence of para- graph (1)) (or, if earlier, the date the plan or con- tract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and ‘‘(B) such plan or contract amendment applies retroactively for such period.’’ PROVISIONS RELATING TO PLAN AMENDMENTS PURSUANT TO PUB. L. 116–94 Pub. L. 116–94, div. O, title VI, § 601, Dec. 20, 2019, 133 Stat. 3181, as amended by Pub. L. 117–328, div. T, title V, § 501(c)(1), Dec. 29, 2022, 136 Stat. 5389, provided that: ‘‘(a) IN GENERAL.—If this section applies to any re- tirement plan or contract amendment— ‘‘(1) such retirement plan or contract shall be treat- ed as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and ‘‘(2) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retire- ment plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement In- come Security Act of 1974 [29 U.S.C. 1054(g)] by reason of such amendment. ‘‘(b) AMENDMENTS TO WHICH SECTION APPLIES.— ‘‘(1) IN GENERAL.—This section shall apply to any amendment to any retirement plan or annuity con- tract which is made— ‘‘(A) pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act [div. O of Pub. L. 116–94, see Tables for classi- fication]; and ‘‘(B) on or before the last day of the first plan year beginning on or after January 1, 2025, or such later date as the Secretary of the Treasury may prescribe. In the case of a governmental plan (as defined in sec- tion 414(d) of the Internal Revenue Code of 1986), or Page 1424 TITLE 26—INTERNAL REVENUE CODE § 414 an applicable collectively bargained plan in the case of section 401 (and the amendments made thereby), this paragraph shall be applied by substituting ‘2027’ for ‘2025’. For purposes of the preceding sentence, the term ‘applicable collectively bargained plan’ means a plan maintained pursuant to 1 or more collective bar- gaining agreements between employee representa- tives and 1 or more employers ratified before the date of enactment of this Act [Dec. 20, 2019]. ‘‘(2) CONDITIONS.—This section shall not apply to any amendment unless— ‘‘(A) during the period— ‘‘(i) beginning on the date the legislative or reg- ulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date speci- fied by the plan); and ‘‘(ii) ending on the date described in paragraph (1)(B) (as modified by the second sentence of para- graph (1)) (or, if earlier, the date the plan or con- tract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and ‘‘(B) such plan or contract amendment applies retroactively for such period.’’ PROVISIONS RELATING TO PLAN AMENDMENTS PURSUANT TO PUB. L. 110–245 Pub. L. 110–245, title I, § 105(c), June 17, 2008, 122 Stat. 1629, provided that: ‘‘(1) IN GENERAL.—If this subsection applies to any plan or annuity contract amendment, such plan or con- tract shall be treated as being operated in accordance with the terms of the plan or contract during the pe- riod described in paragraph (2)(B)(i). ‘‘(2) AMENDMENTS TO WHICH SECTION APPLIES.— ‘‘(A) IN GENERAL.—This subsection shall apply to any amendment to any plan or annuity contract which is made— ‘‘(i) pursuant to any amendment made by sub- section (b)(1) [amending this section], and ‘‘(ii) on or before the last day of the first plan year beginning on or after January 1, 2010. In the case of a governmental plan (as defined in sec- tion 414(d) of the Internal Revenue Code of 1986), this subparagraph shall be applied by substituting ‘2012’ for ‘2010’ in clause (ii). ‘‘(B) CONDITIONS.—This subsection shall not apply to any plan or annuity contract amendment unless— ‘‘(i) during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subpara- graph (A)(ii) (or, if earlier, the date the plan or con- tract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect, and ‘‘(ii) such plan or contract amendment applies retroactively for such period.’’ CLARIFICATION RELATING TO APPLICATION OF ANTI- ABUSE RULE Pub. L. 114–113, div. Q, title III, § 336(a)(2), Dec. 18, 2015, 129 Stat. 3110, provided that: ‘‘The rule of 26 CFR 1.414(c)–5(f) shall continue to apply to each paragraph of section 414(c) of the Internal Revenue Code of 1986, as amended by paragraph (1).’’ AUTOMATIC ENROLLMENT BY CHURCH PLANS Pub. L. 114–113, div. Q, title III, § 336(c), Dec. 18, 2015, 129 Stat. 3110, provided that: ‘‘(1) IN GENERAL.—This subsection shall supersede any law of a State that relates to wage, salary, or payroll payment, collection, deduction, garnishment, assign- ment, or withholding which would directly or indi- rectly prohibit or restrict the inclusion in any church plan (as defined in section 414(e) of the Internal Rev- enue Code of 1986) of an automatic contribution ar- rangement. ‘‘(2) DEFINITION OF AUTOMATIC CONTRIBUTION ARRANGE- MENT.—For purposes of this subsection, the term ‘auto- matic contribution arrangement’ means an arrange- ment— ‘‘(A) under which a participant may elect to have the plan sponsor or the employer make payments as contributions under the plan on behalf of the partici- pant, or to the participant directly in cash, ‘‘(B) under which a participant is treated as having elected to have the plan sponsor or the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the participant specifically elects not to have such contributions made (or specifically elects to have such contributions made at a different percentage), and ‘‘(C) under which the notice and election require- ments of paragraph (3), and the investment require- ments of paragraph (4), are satisfied. ‘‘(3) NOTICE REQUIREMENTS.— ‘‘(A) IN GENERAL.—The plan sponsor of, or plan ad- ministrator or employer maintaining, an automatic contribution arrangement shall, within a reasonable period before the first day of each plan year, provide to each participant to whom the arrangement applies for such plan year notice of the participant’s rights and obligations under the arrangement which— ‘‘(i) is sufficiently accurate and comprehensive to apprise the participant of such rights and obliga- tions, and ‘‘(ii) is written in a manner calculated to be un- derstood by the average participant to whom the arrangement applies. ‘‘(B) ELECTION REQUIREMENTS.—A notice shall not be treated as meeting the requirements of subpara- graph (A) with respect to a participant unless— ‘‘(i) the notice includes an explanation of the par- ticipant’s right under the arrangement not to have elective contributions made on the participant’s be- half (or to elect to have such contributions made at a different percentage), ‘‘(ii) the participant has a reasonable period of time, after receipt of the explanation described in clause (i) and before the first elective contribution is made, to make such election, and ‘‘(iii) the notice explains how contributions made under the arrangement will be invested in the ab- sence of any investment election by the partici- pant. ‘‘(4) DEFAULT INVESTMENT.—If no affirmative invest- ment election has been made with respect to any auto- matic contribution arrangement, contributions to such arrangement shall be invested in a default investment selected with the care, skill, prudence, and diligence that a prudent person selecting an investment option would use. ‘‘(5) EFFECTIVE DATE.—This subsection shall take ef- fect on the date of the enactment of this Act [Dec. 18, 2015].’’ INVESTMENTS BY CHURCH PLANS IN COLLECTIVE TRUSTS Pub. L. 114–113, div. Q, title III, § 336(e), Dec. 18, 2015, 129 Stat. 3113, provided that: ‘‘(1) IN GENERAL.—In the case of— ‘‘(A) a church plan (as defined in section 414(e) of the Internal Revenue Code of 1986), including a plan described in section 401(a) of such Code and a retire- ment income account described in section 403(b)(9) of such Code, and ‘‘(B) an organization described in section 414(e)(3)(A) of such Code the principal purpose or function of which is the administration of such a plan or account, the assets of such plan, account, or organization (in- cluding any assets otherwise permitted to be commin- gled for investment purposes with the assets of such a plan, account, or organization) may be invested in a group trust otherwise described in Internal Revenue Service Revenue Ruling 81–100 (as modified by Internal Revenue Service Revenue Rulings 2004–67, 2011–1, and Page 1425 TITLE 26—INTERNAL REVENUE CODE § 414A 2014–24), or any subsequent revenue ruling that super- sedes or modifies such revenue ruling, without ad- versely affecting the tax status of the group trust, such plan, account, or organization, or any other plan or trust that invests in the group trust. ‘‘(2) EFFECTIVE DATE.—This subsection shall apply to investments made after the date of the enactment of this Act [Dec. 18, 2015].’’ APPLICABILITY OF AMENDMENTS BY SUBTITLES A AND B OF TITLE I OF PUB. L. 109–280 For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of this title. SAMPLE LANGUAGE FOR SPOUSAL CONSENT AND QUALIFIED DOMESTIC RELATIONS FORMS Pub. L. 104–188, title I, § 1457, Aug. 20, 1996, 110 Stat. 1818, provided that: ‘‘(a) DEVELOPMENT OF SAMPLE LANGUAGE.—Not later than January 1, 1997, the Secretary of the Treasury shall develop— ‘‘(1) sample language for inclusion in a form for the spousal consent required under section 417(a)(2) of the Internal Revenue Code of 1986 and section 205(c)(2) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1055(c)(2)] which— ‘‘(A) is written in a manner calculated to be un- derstood by the average person, and ‘‘(B) discloses in plain form— ‘‘(i) whether the waiver to which the spouse consents is irrevocable, and ‘‘(ii) whether such waiver may be revoked by a qualified domestic relations order, and ‘‘(2) sample language for inclusion in a form for a qualified domestic relations order described in sec- tion 414(p)(1)(A) of such Code and section 206(d)(3)(B)(i) of such Act [29 U.S.C. 1056(d)(3)(B)(i)] which— ‘‘(A) meets the requirements contained in such sections, and ‘‘(B) the provisions of which focus attention on the need to consider the treatment of any lump sum payment, qualified joint and survivor annuity, or qualified preretirement survivor annuity. ‘‘(b) PUBLICITY.—The Secretary of the Treasury shall include publicity for the sample language developed under subsection (a) in the pension outreach efforts un- dertaken by the Secretary.’’ SAFEHARBOR AUTHORITY Pub. L. 104–188, title I, § 1462(b), Aug. 20, 1996, 110 Stat. 1824, provided that: ‘‘The Secretary of the Treasury may design nondiscrimination and coverage safe har- bors for church plans.’’ APPLICATION OF LINE OF BUSINESS TEST FOR PERIOD BEFORE GUIDELINES ISSUED Pub. L. 101–140, title II, § 204(b)(1), Nov. 8, 1989, 103 Stat. 833, provided that: ‘‘In the case of any plan year beginning on or before the date the Secretary of the Treasury or his delegate issues guidelines and begins issuing determinations under section 414(r)(2)(C) of the Internal Revenue Code of 1986, an employer shall be treated as operating separate lines of business if the employer reasonably determines that it meets the re- quirements of section 414(r) (other than paragraph (2)(C) thereof) of such Code.’’ [Pub. L. 101–140, title II, § 204(d)(3), Nov. 8, 1989, 103 Stat. 833, provided that: ‘‘The provisions of subsection (b)(1) [set out above] shall apply to years beginning after December 31, 1986.’’] NONENFORCEMENT OF AMENDMENT MADE BY SECTION 1151 OF PUB. L. 99–514 FOR FISCAL YEAR 1990 No monies appropriated by Pub. L. 101–136 to be used to implement or enforce section 1151 of Pub. L. 99–514 or the amendments made by such section, see section 528 of Pub. L. 101–136, set out as a note under section 89 of this title. STUDY REFLECTING ALLOCATION OF ASSETS Pub. L. 100–647, title VI, § 6067(b), Nov. 10, 1988, 102 Stat. 3703, directed Secretary of the Treasury or his delegate, in consultation with Federal Deposit Insur- ance Corporation, to conduct a study with respect to proper method of allocating assets in case of a trans- action to which the amendment made by such section and, not later than Jan. 1, 1990 (due date extended to Jan. 1, 1992, by Pub. L. 101–508, title XI, § 11831(b), Nov. 5, 1990, 104 Stat. 1388–559) to report results of such study to Committee on Ways and Means of House of Rep- resentatives and to Committee on Finance of Senate. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1998 For provisions directing that if any amendments made by subtitle D [§§ 1401–1465] of title I of Pub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year begin- ning on or after Jan. 1, 1998, see section 1465 of Pub. L. 104–188, set out as a note under section 401 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1994 For provisions directing that if any amendments made by subtitle B [§§ 521–523] of title V of Pub. L. 102–318 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1994, see section 523 of Pub. L. 102–318, set out as a note under section 401 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. § 414A. Requirements related to automatic enroll- ment (a) In general Except as otherwise provided in this section— (1) an arrangement shall not be treated as a qualified cash or deferred arrangement de- scribed in section 401(k) unless such arrange- ment meets the automatic enrollment require- ments of subsection (b), and (2) an annuity contract otherwise described in section 403(b) which is purchased under a salary reduction agreement shall not be treat- ed as described in such section unless such agreement meets the automatic enrollment requirements of subsection (b). (b) Automatic enrollment requirements (1) In general An arrangement or agreement meets the re- quirements of this subsection if such arrange- ment or agreement is an eligible automatic contribution arrangement (as defined in sec- tion 414(w)(3)) which meets the requirements of paragraphs (2) through (4). (2) Allowance of permissible withdrawals An eligible automatic contribution arrange- ment meets the requirements of this para-