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PUBLIC LAW 86-667-JULY 14, 1960
[74 S T A T.
Public Law 86-667 Tuly 14. 1960 [H. R. 8229]
AN ACT rjiQ amend the Internal Revenue Code of 1954 to provide an exemption from income tax for supplemental unemployment benefit trusts.
Be it enacted iy the Senate and House of Representatives of the ^^^V^fl^^'f"l^ ""' United States of America in Conqress assembled, That section 501(c) employment
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fit trusts. 01 the Internal Revenue Code oi 1954 (relating to exemption from tax Tax exemptions. QJI corporations, Certain or^^anizations, etc.) is amended by adding 26 USC 501. ' after paragraph (16) the following new paragraph: "(17)(A) A trust or trusts forming part of a plan providing for the payment of supplemental unemployment compensation benefits, if— " (i) under the plan, it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees under the plan, for any part of the corpus or income to ^'^ (within the taxable year or thereafter) used for, or diverted to, any purpose other than the providing of supplemental unemployment compensation benefits, "(ii) such benefits are payable to employees under a classification which is set forth in the plan and which is found by the Secretary or his delegate not to be discriminatory in favor of employees who are officers, shareholders, persons whose principal duties consist of supervising the work of other employees, or highly compensated employees, and "(iii) such benefits do not discriminate in favor of employees who are officers, shareholders, persons whose principal duties consist of supervising the work of other employees, or highly compensated employees. A plan shall not be considered discriminatory within the meaning of this clause merely because the benefits received under the plan bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of the employees covered by the plan. " (B) I n determining whether a plan meets the requirements of subparagraph (A), any benefits provided under any other plan shall not be taken into consideration, except that a plan shall not be considered discriminatory— " (i) merely because the benefits under the plan which are first determined in a nondiscriminatory manner within the meaning of subparagraph (A) are then reduced by any sick, accident, or unemployment compensation benefits received under State or Federal law (or reduced by a portion of such benefits if determined in a nondiscriminatory manner), or "(ii) merely because the plan provides only for employees who are not eligible to receive sick, accident, or unemployment compensation benefits under State or Federal law the same benefits (or a portion of such benefits if determined in a nondiscriminatory manner) which such employees would receive under such laws if such employees were eligible for such benefits, or "(iii) merely because the plan provides only for employees who are not eligible under another plan (which meets the requirements of subparagraph (A)) of supplemental unemployment compensation benefits provided wholly by the employer the same benefits (or a portion of such benefits if determined in a nondiscriminatory manner) which such employees would receive under such other plan if such em-
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