100 STAT. 2424
PUBLIC LAW 99-514—OCT. 22, 1986 amended by inserting after paragraph (16) the following new paragraph: "(17) A trust shall not constitute a qualified trust under this section unless, under the plan of which such trust is a part, the annual compensation of each employee taken into account under the plan for any year does not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time and in the same manner as under section 415(d)." (2) DEDUCTION FOR EMPLOYER CONTRIBUTIONS.—Section 404
(relating to deduction for contributions of employers to plans) is amended by adding at the end thereof the following new subsection: "(1) LIMITATION ON AMOUNT OF ANNUAL COMPENSATION TAKEN INTO ACCOUNT.—For purposes of applying the limitations of this
section, the amount of annual compensation of each employee taken into account under the plan for any year shall not exceed $200,000. The Secretary shall adjust the $2(30,000 amount at the same time and in the same manner as under section 415(d)." ,.
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(3) CONFORMING AMENDMENTS.—
(A) Subsection (a) of section 416 is amended by inserting "and" at the end of paragraph (1), by striking out ", and" at the end of paragraph (2) and inserting in lieu thereof a period, and by striking out paragraph (3). (B)(i) Subsection (d) of section 416 is hereby repealed. (ii) Section 416(c)(2)(B) is amended by striking out clause (ii) and by redesignating clause (iii) as clause (ii). (C) Paragraph (3) of section 818(a) is amended by inserting "(17)," after "(16),".
(e) TREATMENT OF EMPLOYEE CONTRIBUTIONS FOR PURPOSES OF DETERMINING ANNUAL ADDITION.—
(1) IN GENERAL.—Subparagraph (B) of section 415(c)(2) (defining annual addition) is amended to read as follows: "(B) the employee contributions, and". (2) ANNUAL COMPENSATION LIMIT NOT TO APPLY TO CONTRIBUTIONS FOR POST-RETIREMENT MEDICAL BENEFITS.—Section 415(c)(2)
is amended by adding at the end thereof the following new sentence: "Subparagraph (B) of paragraph (1) shall not apply to any contribution for medical benefits (within the meaning of section 419A(f)(2)) after separation from service which is treated as an annual addition." (f) PHASE-IN OF LIMITATION FOR DEFINED BENEFIT PLANS BASED ON YEARS OF PARTICIPATION.—Paragraph (5) of section 415(b) (relating
to reduction for service less than 10 years) is amended to read as follows: "(5) REDUCTION FOR PARTICIPATION OR SERVICE OF LESS THAN lo YEARS.—
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"(A) DOLLAR LIMITATION.—In the case of an employee who has less than 10 years of participation in a defined benefit plan, the limitation referred to in paragraph (1)(A) shall be the limitation determined under such paragraph (without regard to this paragraph) multiplied by a fraction— "(i) the numerator of which is the number of years (or part thereof) of participation in the defined benefit ' plan of the employer, and "(ii) the denominator of which is 10. "(B)
COMPENSATION
AND BENEFITS
LIMITATIONS.—The
provisions of subparagraph (A) shall apply to the limita-
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