120 STAT. 1044
29 USC 1060.
Applicability.
Applicability.
VerDate 14-DEC-2004
10:20 Jul 12, 2007
PUBLIC LAW 109–280—AUG. 17, 2006
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.— (1) IN GENERAL.—Section 210 of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new subsection: ‘‘(e) SPECIAL RULES FOR ELIGIBLE COMBINED DEFINED BENEFIT PLANS AND QUALIFIED CASH OR DEFERRED ARRANGEMENTS.— ‘‘(1) GENERAL RULE.—Except as provided in this subsection, this Act shall be applied to any defined benefit plan or applicable individual account plan which are part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. ‘‘(2) ELIGIBLE COMBINED PLAN.—For purposes of this subsection— ‘‘(A) IN GENERAL.—The term ‘eligible combined plan’ means a plan— ‘‘(i) which is maintained by an employer which, at the time the plan is established, is a small employer, ‘‘(ii) which consists of a defined benefit plan and an applicable individual account plan each of which qualifies under section 401(a) of the Internal Revenue Code of 1986, ‘‘(iii) the assets of which are held in a single trust forming part of the plan and are clearly identified and allocated to the defined benefit plan and the applicable individual account plan to the extent necessary for the separate application of this Act under paragraph (1), and ‘‘(iv) with respect to which the benefit, contribution, vesting, and nondiscrimination requirements of subparagraphs (B), (C), (D), (E), and (F) are met. For purposes of this subparagraph, the term ‘small employer’ has the meaning given such term by section 4980D(d)(2) of the Internal Revenue Code of 1986, except that such section shall be applied by substituting ‘500’ for ‘50’ each place it appears. ‘‘(B) BENEFIT REQUIREMENTS.— ‘‘(i) IN GENERAL.—The benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant’s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer. ‘‘(ii) APPLICABLE PERCENTAGE.—For purposes of clause (i), the applicable percentage is the lesser of— ‘‘(I) 1 percent multiplied by the number of years of service with the employer, or ‘‘(II) 20 percent. ‘‘(iii) SPECIAL RULE FOR APPLICABLE DEFINED BENEFIT PLANS.—If the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 203(f)(3)(B) which meets the interest credit
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