Sec. 218. Modifications of additional participation requirements for defined benefit plans
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/bill/113/s/1270/is/section-218A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 401(a)(26) is amended by redesignating subparagraph
(H)as subparagraph
(J)and by inserting after subparagraph
(G)the following: This paragraph shall not apply to a defined benefit plan of an employer for any plan year if— the defined benefit plan is aggregated with a defined contribution plan of the employer for purposes of subsection (a)(4) and section 410(b), the defined benefit plan and the defined contribution plan, when so aggregated, meet the requirements of subsection (a)(4) and section 410(b), and the contribution requirements of clause
(ii)are met with respect to the defined contribution plan. The requirements of this clause are met with respect to a defined contribution plan if, under the plan, the employer is required to make nonelective contributions for the applicable plan year of at least 7.5 percent of compensation for a number of employees at least equal to the number of employees which the defined benefit plan would have been required to benefit under this paragraph without regard to this subparagraph. No highly compensated employees (within the meaning of section 414(q)) may be taken into account in determining whether the requirements of this clause are met. For purposes of clause (ii), the term applicable plan year means the plan year of the defined contribution plan which ends with or within the plan year of the defined benefit plan to which clause
(i)applies. Except as provided in subclauses
(II)and (III), if a plan is a frozen defined benefit plan for any plan year, an employer may aggregate the plan with any other defined benefit plan or defined contribution plan of the employer for purposes of determining whether the requirements of this paragraph are met with respect to the frozen defined benefit plan. An employer may not apply subclause
(I)unless the employer also aggregates the plans for purposes of subsection (a)(4) and section 410(b). In the case of any other plan aggregated with a frozen defined benefit plan under subclause (I), accrued benefits of highly compensated employees shall not be taken into account in applying subclause (I). Except as provided in subclause (II), this paragraph shall apply to a frozen defined benefit plan of an employer for any plan year only if the employer maintains any other defined benefit plan during the 6-year period beginning with the first day of the plan year. Clause
(i)shall not apply unless the frozen defined benefit plan provides that if the employer establishes or maintains any other defined benefit plan during the 6-year period under subclause (I), each employee (other than a highly compensated employee) shall retroactively accrue benefits under the frozen defined benefit plan for each year of service the employee would have had under the plan during such period (determined as if the employee were one of the employees required to benefit under the plan under this paragraph). For purposes of this subparagraph, the term frozen defined benefit plan means a defined benefit plan which has in effect an amendment that provides that the plan may not accept any new participants after the effective date of the amendment. The term highly compensated employee has the meaning given such term by section 414(q). . The amendment made by this section applies to plan years beginning after December 31, 2013.