PUBLIC LAW 109–280—AUG. 17, 2006
120 STAT. 1025
SEC. 865. GRANDFATHER RULE FOR CHURCH PLANS WHICH SELFANNUITIZE.
26 USC 401 note.
(a) IN GENERAL.—In the case of any plan year ending after the date of the enactment of this Act, annuity payments provided with respect to any account maintained for a participant or beneficiary under a qualified church plan shall not fail to satisfy the requirements of section 401(a)(9) of the Internal Revenue Code of 1986 merely because the payments are not made under an annuity contract purchased from an insurance company if such payments would not fail such requirements if provided with respect to a retirement income account described in section 403(b)(9) of such Code. (b) QUALIFIED CHURCH PLAN.—For purposes of this section, the term ‘‘qualified church plan’’ means any money purchase pension plan described in section 401(a) of such Code which— (1) is a church plan (as defined in section 414(e) of such Code) with respect to which the election provided by section 410(d) of such Code has not been made, and (2) was in existence on April 17, 2002. SEC. 866. EXEMPTION FOR INCOME FROM LEVERAGED REAL ESTATE HELD BY CHURCH PLANS.
(a) IN GENERAL.—Section 514(c)(9)(C) of the Internal Revenue Code of 1986 is amended by striking ‘‘or’’ after clause (ii), by striking the period at the end of clause (iii) and inserting ‘‘; or’’, and by inserting after clause (iii) the following: ‘‘(iv) a retirement income account described in section 403(b)(9).’’. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning on or after the date of enactment of this Act.
26 USC 514.
26 USC 514 note.
SEC. 867. CHURCH PLAN RULE.
(a) IN GENERAL.—Paragraph (11) of section 415(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following: ‘‘Subparagraph (B) of paragraph (1) shall not apply to a plan maintained by an organization described in section 3121(w)(3)(A) except with respect to highly compensated benefits. For purposes of this paragraph, the term ‘highly compensated benefits’ means any benefits accrued for an employee in any year on or after the first year in which such employee is a highly compensated employee (as defined in section 414(q)) of the organization described in section 3121(w)(3)(A). For purposes of applying paragraph (1)(B) to highly compensated benefits, all benefits of the employee otherwise taken into account (without regard to this paragraph) shall be taken into account.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to years beginning after December 31, 2006.
26 USC 415 note.
SEC. 868. GRATUITOUS TRANSFER FOR BENEFITS OF EMPLOYEES.
(a) IN GENERAL.—Subparagraph (E) of section 664(g)(3) of the Internal Revenue Code of 1986 is amended by inserting ‘‘(determined on the basis of fair market value of securities when allocated to participants)’’ after ‘‘paragraph (7)’’. (b) EFFECTIVE DATE.—The amendment made by this section shall take effect on the date of the enactment of this Act.
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26 USC 664 note.
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