100 STAT. 2488
PUBLIC LAW 99-514—OCT. 22, 1986
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"(ii) by using an interest rate no greater than 120 percent of the applicable interest rate if the vested accrued benefit exceeds $25,000 (as determined under clause (i)). In no event shall the present value determined under subclause (II) be less than $25,000.
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"(B) APPLICABLE INTEREST RATE.—For purposes of subpara-
graph (A), the term 'applicable interest rate' means the interest rate which would be used (as of the date of the distribution) by % the Pension Benefit Guaranty Corporation for purposes of deter, mining the present value of a lump sum distribution on plan >,. termination." 1 ^
(2) CONFORMING AMENDMENT.—Paragraph (3) of section 205(g)
of such Act (29 U.S.C. 1055(g)(3)) is amended to read as follows: "(3)(A) For purposes of paragraphs (1) and (2), the present value shall be calculated— "(i) by using an interest rate no greater than the applicable interest rate if the vested accrued benefit (using such rate) is not in excess of $25,000, and "(ii) by using an interest rate no greater than 120 percent of the applicable interest rate if the vested accrued benefit exceeds $25,000 (as determined under clause (i)). In no event shall the present value determined under subclause (II) be less than $25,000. "(B) For purposes of subparagraph (A), the term 'applicable interest rate' means the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.", (d) EFFECTIVE DATE.—
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(1) IN GENERAL.—The amendments made by this section shall apply to distributions in plan years beginning after December 31, 1984, except that such amendments shall not apply to any distributions in plan years beginning after December 31, 1984, and before January 1, 1987, if such distributions were made in accordance with the requirements of the regulations issued under the Retirement Equity Act of 1984. (2) REDUCTION IN ACCRUED BENEFITS.— (A) IN GENERAL.—If a plan—
(i) adopts a plan amendment before the close of the ^,.. first plan year beginning on or before January 1, 1989, which provides for the calculation of the present value of the accrued benefits in the manner provided by the amendments made by this section, and (ii) the plan reduces the accrued benefits for any plan year to which such plan amendment applies in accordance with such plan amendment, • ^ such reduction shall not be treated as a violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)). (B) SPECIAL RULE.—In the case of a plan maintained by a corporation incorporated on April 11, 1934, which is headquartered in 'Tarrant County, Texas— (i) such plan may be amended to remove the option of y an employee to receive a lump sum distribution (within « the meaning of section 402(e)(5) of such Code) if such amendment—
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