Sec. 4. Secure deferral arrangements
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Subsection
(k)of section 401 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: A secure deferral arrangement shall be treated as meeting the requirements of paragraph (3)(A)(ii). For purposes of this paragraph, the term secure deferral arrangement means any cash or deferred arrangement which meets the requirements of subparagraphs (C), (D), and
(E)of paragraph (13), except as modified by this paragraph. For purposes of this paragraph, with respect to any employee, the term qualified percentage means, in lieu of the meaning given such term in paragraph (13)(C)(iii), any percentage determined under the arrangement if such percentage is applied uniformly and is— at least 6 percent, but not greater than 10 percent, during the period ending on the last day of the first plan year which begins after the date on which the first elective contribution described in paragraph (13)(C)(i) is made with respect to such employee, at least 8 percent during the first plan year following the plan year described in clause (i), and at least 10 percent during any subsequent plan year. For purposes of this paragraph, an arrangement shall be treated as having met the requirements of paragraph (13)(D)(i) if and only if the employer makes matching contributions on behalf of each employee who is not a highly compensated employee in an amount equal to the sum of— 100 percent of the elective contributions of the employee to the extent that such contributions do not exceed 1 percent of compensation, 50 percent of so much of such contributions as exceed 1 percent but do not exceed 6 percent of compensation, plus 25 percent of so much of such contributions as exceed 6 percent but do not exceed 10 percent of compensation. The rules of clause
(ii)of paragraph (12)(B) and clauses
(iii)and
(iv)of paragraph (13)(D) shall apply for purposes of clause
(i)but the rule of clause
(iii)of paragraph (12)(B) shall not apply for such purposes. The rate of matching contribution for each incremental deferral must be at least as high as the rate specified in clause (i), and may be higher, so long as such rate does not increase as an employee’s rate of elective contributions increases. . Subsection
(m)of section 401 of the Internal Revenue Code of 1986 is amended by redesignating paragraph
(13)as paragraph
(14)and by inserting after paragraph
(12)the following new paragraph: A defined contribution plan shall be treated as meeting the requirements of paragraph
(2)with respect to matching contributions and employee contributions if the plan— is a secure deferral arrangement (as defined in subsection (k)(14)), meets the requirements of clauses
(ii)and
(iii)of paragraph (11)(B), and provides that matching contributions on behalf of any employee may not be made with respect to an employee’s contributions or elective deferrals in excess of 10 percent of the employee’s compensation. . The amendments made by this section shall apply to plan years beginning after December 31, 2014.