September 2, 1974 - 105 Pub. Law 93-406 88 STAT. 933 1954 solely by reason of a supplementary or special plan Ante, p. 901. provision (within the meaning of subparagraph (D)). (B) SPECIAL TEMPORARY WAIVER PERIOD.-For purposes of this paragraph, the term "special temporary waiver period" means plan years beginning after December 31, 1975, and before the earlier of (i) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or (ii) January 1, 1981. For purposes of clause (i), any plan amendment made pur- (C) DETERMINATION BY SECRETARY OF LABOR REQUIRED.— (D) SUPPLEMENTARY OR SPECIAL PLAN PROVISIONS.-For purposes of this paragraph, the term "supplementary or special plan provision" means any plan provision which- (i) provides supplementary benefits, not in excess of one-third of the basic benefit, in the form of an annuity for the life of the participant, or (ii) provides that, under a contractual agreement based on medical evidence as to the effects of working in an adverse environment for an extended period of time, a participant having 25 years of service is to be treated as having 30 years of service. (2) APPLICATION OF FUNDING RULES.— Ante, pp. 898, 901. (A) IN GENERAL.-In the case of a plan maintained on January 1, 1974, pursuant to one or more agreements which the Secretary of Labor finds to be collective bargaining agreements between employee representatives and one or more employers, section 412 of the Internal Revenue Code of 1954, Ante, p. 914. and other amendments made by this part to the extent such amendments relate to such section 412, shall not apply during the special temporary waiver period (as defined in paragraph (1) (B)). (B) WAIVER OF UNDERFUNDING.-In the case of a plan main- Code of 1954 apply without regard to the amendment of such 26 USC 401. (C) LABOR ORGANIZATION CONVENTIONS.-In the case of a Pub. Law 93-406 - 106 September 2, 1974 Code of 1954, exclusively for the benefit of its employees and their beneficiaries, section 412 of such Code and other amendments made by this part to the extent such amendments relate to such section 412, shall be applied by substituting for the term "December 31, 1975" in subsection (b), the earlier of— (i) the date on which the second convention of such labor organization held after the date of the enactment of this Act ends, or (ii) December 31, 1980, but in no event shall a date earlier than the later of December 31, 1975, or the date determined under subparagraph (A) or (B) be substituted. (d) EXISTING PLANS MAY ELECT NEW PROVISIONS.-In the case of a plan in existence on January 1, 1974, the provisions of the Internal Revenue Code of 1954 relating to participation, vesting, funding, and form of benefit (as in effect from time to time) shall apply in the case of the plan year (which begins after the date of the enactment of this Act but before the applicable effective date determined under subsection (b) or (c)) selected by the plan administrator and to all subsequent plan years, if the plan administrator elects (in such manner and at such time as the Secretary of the Treasury or his delegate shall by regulations prescribe) to have such provisions so apply. Any election made under this subsection, once made, shall be irrevocable. (e) CERTAIN DEFINITIONS AND SPECIAL RULES.-Section 414 of the Internal Revenue Code of 1954 (other than subsections (b) and (c) of such section 414), as added by section 1015 (a) of this Act, shall take effect on the date of the enactment of this Act. (f) TRANSITIONAL RULES WITH RESPECT TO BREAKS IN SERVICE.— (1) PARTICIPATION.-In the case of a plan to which section 410 of the Internal Revenue Code of 1954 applies, if any plan amendment with respect to breaks in service (which amendment is made or becomes effective after January 1, 1974, and before the date on which such section 410 first becomes effective with respect to such plan) provides that any employee's participation in the plan would commence at any date later than the later of (A) the date on which his participation would commence under the break in service rules of section 410 (a) (5) of such Code, or (B) the date on which his participation would commence under the plan as in effect on January 1, 1974, such plan shall not constitute a plan described in section 403 (a) or 405 (a) of such Code and a trust forming a part of such plan shall not constitute a qualified trust under section 401 (a) of such Code. (2) VESTING.-In the case of a plan to which section 411 of the Internal Revenue Code of 1954 applies, if any plan amendment with respect to breaks in service (which amendment is made or becomes effective after January 1, 1974, and before the date on which such section 411 first becomes effective with respect to such plan) provides that the nonforfeitable benefit derived from employer contributions to which any employee would be entitled is less than the lesser of the nonforfeitable benefit derived from employer contributions to which he would be entitled under(A) the break in service rules of section 411 (a) (6) of such Code, or (B) the plan as in effect on January 1, 1974, such plan shall not constitute a plan described in section 403(a) or 405 (a) of such Code and a trust forming a part of such plan shall not constitute a qualified trust under section 401(a) of such Code. Subparagraph (B) shall not apply if the break in service rules under the plan would have been in violation of any law or rule of law. inff on January 1, 1974. September 2, 1974 - 107 Pub. Law 93-406 88 STAT. 935 (g) 3-YEAR DELAY FOR CERTAIN PROVISIONS.Subparagraphs (B) and (C) of section 404 (a) (1) shall apply only in the case of plan years Ante, p. 921. beginning on or after 3 years after the date of the enactment of this Act. (h) (1) Except as provided in paragraph (2), section 413 of the Ante, p. 924. Internal Revenue Code of 1954 shall apply to plan years beginning after December 31, 1953. (2) (A) For plan years beginning before the applicable effective date of section 410 of such Code, the provisions of paragraphs (1) Ante, p. 898. and (8) of subsection (b) of such section 413 shall be applied by substituting "401 (a) (3)" for "410". (B) For plan years beginning before the applicable effective date of section 411 of such Code, the provisions of subsection (b) (2) of Ante, p. 901. such section 413 shall be applied by substituting "401(a) (7)” for "411(d) (3)". (C)(i) The provisions of subsection (b)(4) of such section 413 shall not apply to plan years beginning before the applicable effective date of section 411 of such Code. (ii) The provisions of subsection (b) (5) (other than the second sentence thereof) of such section 413 shall not apply to plan years beginning before the applicable effective date of section 412 of such Code. PART 2-CERTAIN OTHER PROVISIONS RELATING TO SEC. 1021. ADDITIONAL PLAN REQUIREMENTS. (a) JOINT AND SURVIVOR ANNUITY REQUIREMENT. (1) IN GENERAL.-Effective with respect to plan years beginning 26 USC 401 after December 31, 1975, section 401(a) (relating to requirements note. for qualification) is amended by inserting after paragraph (10) 26 USC 401. the following new paragraph: "(11)(A) A trust shall not constitute a qualified trust under this section if the plan of which such trust is a part provides for the payment of benefits in the form of an annuity unless such plan provides for the payment of annuity benefits in a form having the effect of a qualified joint and survivor annuity. "(B) Notwithstanding the provisions of subparagraph (A), in the case of a plan which provides for the payment of benefits before the normal retirement age (as defined in section 411 (a) (8)), the plan is not required to provide for the payment of annuity benefits in a form having the effect of a qualified joint and survivor annuity during the period beginning on the date on which the employee enters into the plan as a participant and ending on the later of "(i) the date the employee reaches the earliest retirement age under the plan, or "(ii) the first day of the 120th month beginning before the date on which the employee reaches normal retirement age. "(C) A plan described in subparagraph (B) does not meet the requirements of subparagraph (A) unless, under the plan, a participant has a reasonable period during which he may elect the qualified joint and survivor annuity form with respect to the period beginning on the date on which the period described in subparagraph (B) ends and ending on the date on which he reaches normal retirement age (as defined in section 411(a) (8)) if he continues his employment during that period. A plan does not meet the requirements of this subparagraph unless, in the case of such an election, the payments under the survivor annuity are not less than the payments which would have been made under the joint annuity to which the participant would have been entitled if he made an election described in this subparagraph immediately prior to his retirement and if his retirement had occurred on the day before his death and within the period within which an election can be made. "(D) A plan shall not be treated as not satisfying the requirements of this paragraph solely because the spouse of the participant is not entitled to receive a survivor annuity (whether or not an election described in subparagraph (C) has been made under subparagraph (C)) unless the participant and his spouse have been married throughout the 1-year period ending on the date of such participant's death. "(E) A plan shall not be treated as satisfying the requirements of this paragraph unless, under the plan, each participant has a reasonable period (as described by the Secretary or his delegate by regulations) before the annuity starting date during which he may elect in writing (after having received a written explanation of the terms and conditions of the joint and survivor annuity and the effect of an election under this subparagraph) not to take such joint and survivor annuity. "(F) A plan shall not be treated as not satisfying the requirements of this paragraph solely because under the plan there is a provision that any election described in subparagraph (C) or (E), and any revocation of any such election, does not become effective (or ceases to be effective) if the participant dies within a period (not in excess of 2 years) beginning on the date of such election or revocation, as the case may be. The preceding sentence does not apply unless the plan provision described in the preceding sentence also provides that such an election or revocation will be given effect in any case in which— "(i) the participant dies from accidental causes, "(ii) a failure to give effect to the election or revocation would deprive the participant's survivor of a survivor annuity, and "(iii) such election or revocation is made before such accident occurred. "(G) For purposes of this paragraph "(i) the term 'annuity starting date' means the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or by reason of disability), "(ii) the term 'earliest retirement age' means the earliest date on which, under the plan, the participant could elect to receive retirement benefits, and "(iii) the term 'qualified joint and survivor annuity' means an annuity for the life of the participant with a survivor annuity for the life of his spouse which is not less than onehalf of, or greater than, the amount of the annuity payable during the joint lives of the participant and his spouse and which is the actuarial equivalent of a single life annuity for the life of the participant. For purposes of this paragraph, a plan may take into account in any equitable manner (as determined by the Secretary or his delegate) any increased costs resulting from providing joint and survivor annuity benefits. "(H) This paragraph shall apply only if 30-779 0-78-8 September 2, 1974 - 109 Pub. Law 93-406 "(i) the annuity starting date did not occur before the effective date of this paragraph, and "(ii) the participant was an active participant in the plan on or after such effective date." (2) CERTAIN ADDITIONAL REQUIREMENTS APPLY ONLY TO PLANS 28 STAT. 937 TO WHICH VESTING REQUIREMENTS APPLY.-Section 401(a) (relating 26 USC 401. to requirements for qualification) is amended by adding at the end thereof the following new sentence: "Paragraphs (11), (12), (13), (14), (15), and (19) shall apply only in the case of a plan 26 USC 401 to which section 411 (relating to minimum vesting standards) Ante, p. 901. applies without regard to subsection (e) (2) of such section." (b) REQUIREMENTS IN CASE OF MERGERS AND CONSOLIDATIONS OF PLANS OR TRANSFERS OF PLAN ASSETS.-Effective with respect to plan years beginning after December 31, 1975, section 401 (a) is amended by inserting after paragraph (11) the following new paragraph: note. "(12) A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan after the date of the enactment of the Employee Retirement Income Security Act of 1974, each Ante, p. 829. participant in the plan would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, 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). This paragraph shall apply in the case of a multiemployer plan only to the extent determined by the Pension Benefit Guaranty Corporation." (c) RETIREMENT BENEFITS MAY NOT BE ASSIGNED OR ALIENATED.Section 401 (a) is amended by inserting after paragraph (12) the fol- Supra. lowing new paragraph: "(13) A trust shall not constitute a qualified trust under thi section unless the plan of which such trust is a part provides that benefits provided under the plan may not be assigned or alienated. For purposes of the preceding sentence, there shall not be taken into account any voluntary and revocable assignment of not to exceed 10 percent of any benefit payment made by any participant who is receiving benefits under the plan unless the assignment or alienation is made for purposes of defraying plan administration costs. For purposes of this paragraph a loan made to a participant or beneficiary shall not be treated as an assignment or alienation if such loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax imposed by section 4975 (relat- Post, p. 971. (d) REQUIREMENT THAT PAYMENT OF BENEFITS BEGIN NOT LATER THAN WHEN THE PARTICIPANT ATTAINS AGE 65 OR HAS COMPLETED 10 YEARS OF PARTICIPATION.-Section 401 (a) is amended by inserting after paragraph (13) the following new paragraph: "(14) A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that, unless the participant otherwise elects, the payment of benefits under the plan to the participant will begin not later than the 60th day after the latest of the close of the plan year in which Supra. |