26 U.S.C. § 405 — Untitled legal text

Page 1301 TITLE 26—INTERNAL REVENUE CODE § 406 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. [§ 405. Repealed. Pub. L. 98–369, div. A, title IV, § 491(a), July 18, 1984, 98 Stat. 848] Section, added Pub. L. 87–792, § 5(a), Oct. 10, 1962, 76 Stat. 826; amended Pub. L. 89–97, title I, § 106(d)(5), July 30, 1965, 79 Stat. 337; Pub. L. 91–172, title V, § 515(c)(1), Dec. 30, 1969, 83 Stat. 645; Pub. L. 93–406, title II, §§ 2004(c)(2), 2005(c)(11), Sept. 2, 1974, 88 Stat. 986, 992; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97–34, title III, § 313(a), (b)(1), Aug. 13, 1981, 95 Stat. 285, 286; Pub. L. 97–452, § 2(c)(1), Jan. 12, 1983, 96 Stat. 2478; Pub. L. 98–369, div. A, title I, § 42(a)(6), July 18, 1984, 98 Stat. 557, related to qualified bond purchase plans. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98–369, set out as an Effective Date of 1984 Amendment note under section 62 of this title. ROLLOVER OF EXISTING BONDS INTO QUALIFIED EMPLOYER PLANS Pub. L. 98–369, div. A, title IV, § 491(c)(1), (f)(2), July 18, 1984, 98 Stat. 848, 853, provided that, applicable to re- demptions after July 18, 1984, in taxable years ending after such date, subsec. (d)(3)(A) of this section, as in effect before its repeal, is amended to read as follows: ‘‘(A) IN GENERAL.—If— ‘‘(i) any qualified bond is redeemed, ‘‘(ii) any portion of the excess of the proceeds from such redemption over the basis of such bond is trans- ferred to an individual retirement plan which is maintained for the benefit of the individual redeem- ing such bond, or to a qualified trust (as defined in section 402(a)(5)(D)(iii)) for the benefit of such indi- vidual, and ‘‘(iii) such transfer is made on or before the 60th day after the individual received the proceeds of such redemption, then gross income shall not include the proceeds to the extent so transferred and the transfer shall be treated as a rollover contribution described in section 408(d)(3).’’ BONDS UNDER QUALIFIED BOND PURCHASE PLANS REDEEMABLE AT ANY TIME AFTER JULY 18, 1984 Pub. L. 98–369, div. A, title IV, § 491(f)(4), July 18, 1984, 98 Stat. 853, provided that: ‘‘Notwithstanding— ‘‘(A) subparagraph (D) of section 405(b)(1) of the In- ternal Revenue Code of 1954 (as in effect before its re- peal by this section) [see above], and ‘‘(B) the terms of any bond described in subsection (b) of such section 405, such a bond may be redeemed at any time after the date of the enactment of this Act [July 18, 1984] in the same manner as if the individual redeeming the bond had attained age 591⁄2.’’ § 406. Employees of foreign affiliates covered by section 3121(l) agreements (a) Treatment as employees of American em- ployer For purposes of applying this part with respect to a pension, profit-sharing, or stock bonus plan described in section 401(a) or an annuity plan de- scribed in section 403(a), of an American em- ployer (as defined in section 3121(h)), an indi- vidual who is a citizen or resident of the United States and who is an employee of a foreign affil- iate (as defined in section 3121(l)(6)) of such American employer shall be treated as an em- ployee of such American employer, if— (1) such American employer has entered into an agreement under section 3121(l) which ap- plies to the foreign affiliate of which such in- dividual is an employee; (2) the plan of such American employer ex- pressly provides for contributions or benefits for individuals who are citizens or residents of the United States and who are employees of its foreign affiliates to which an agreement entered into by such American employer under section 3121(l) applies; and (3) contributions under a funded plan of de- ferred compensation (whether or not a plan de- scribed in section 401(a) or 403(a)) are not pro- vided by any other person with respect to the remuneration paid to such individual by the foreign affiliate. (b) Special rules for application of section 401(a) (1) Nondiscrimination requirements For purposes of applying section 401(a)(4) and section 410(b) with respect to an indi- vidual who is treated as an employee of an American employer under subsection (a)— (A) if such individual is a highly com- pensated employee (within the meaning of section 414(q)), he shall be treated as having such capacity with respect to such American employer; and (B) the determination of whether such in- dividual is a highly compensated employee (as so defined) shall be made by treating such individual’s total compensation (deter- mined with the application of paragraph (2) of this subsection) as compensation paid by such American employer and by determining such individual’s status with regard to such American employer. (2) Determination of compensation For purposes of applying paragraph (5) of section 401(a) with respect to an individual who is treated as an employee of an American employer under subsection (a)— (A) the total compensation of such indi- vidual shall be the remuneration paid to such individual by the foreign affiliate which would constitute his total compensa- tion if his services had been performed for such American employer, and the basic or regular rate of compensation of such indi- vidual shall be determined under regulations prescribed by the Secretary; and (B) such individual shall be treated as hav- ing paid the amount paid by such American employer which is equivalent to the tax im- posed by section 3101. [(c) Repealed. Pub. L. 104–188, title I, § 1401(b)(7), Aug. 20, 1996, 110 Stat. 1789] (d) Deductibility of contributions For purposes of applying section 404 with re- spect to contributions made to or under a pen-