PUBLIC LAW 95-600—NOV. 6, 1978
92 STAT. 2797
Subtitle E—Retirement Plans SEC. 152. SIMPLIFIED EMPLOYEE PENSIONS. (a) INCREASE IN MAXIMUM LIMITATION UNDER SECTION 408 TO 26 USC 408.
$7,500.—Section 408 (relating to individual retirement account) is amended by redesignating subsection (j) as subsection (m) and by inserting after subsection (i) the following new subsection: "(j) INCREASE IN MAXIMUM LIMITATIONS FOR SIMPLIFIED EMPLOYEE
PENSIONS.—In the case of a simplified employee pension, this section shall be applied by substituting '$7,500' for '$1,500' in the following provisions: "(1) paragraph (1) of subsection (a), "(2) paragraph (2) of subsection (b), and "(3) paragraph (5) of subsection (b)." (b)
SIMPLIFIED EMPLOYEE PENSION DEFINED.—Section
408
is
amended by inserting after subsection (j) the following new subsection: "(k) SiMPUFiED EMPLOYEE PENSION DEFINED.—
"(1) IN GENERAL.—For purposes of this title, the term 'simplified employee pension' means an individual retirement account or individual retirement annuity with respect to which the requirements of paragraphs (2), (3), (4), and (5) of this subsection are met. "(2) PARTICIPATION REQUIREMENTS.—This paragraph is satisfied with respect to a simplified employee pension for a calendar \ year only if for such year the employer contributes to the 1 simplified employee pension of each employee who— \ "(A) has attained age 25, and \ "(B) has performed service for the employer during at least 3 of the immediately preceding 5 calendar years. \ "(3) CONTRIBUTIONS MAY NOT DISCRIMINATE IN FAVOR OF THE \ HIGHLY COMPENSATED, ETC.—
\ I
"(A) IN GENERAL.—The requirements of this paragraph are met with respect to a simplified employee pension for a calendar year if for such year the contributions made by the employer to simplified employee pensions for his employees do not discriminate in favor of any employee who is— "(i) an officer, "(ii) a shareholder, "(iii) a self-employed individual, or "(iv) highly compensated. "(B) SPECIAL RULES.—For purposes of subparagraph (A)— "(i) there shall be excluded from consideration employees described in subparagraph (A) or (C) of section 410(b)(2), and 26 USC 410. "(ii) an individual shall be considered a shareholder if he owns (with the application of section 318) more than 26 USC 318. 10 percent of the value of the stock of the employer. "(C) CONTRIBUTIONS MUST BEAR A UNIFORM RELATIONSHIP
TO TOTAL COMPENSATION.—For purposes of Subparagraph (A), employer contributions to simplified employee pensions shall be considered discriminatory unless contributions thereto bear a uniform relationship to the total compensation (not in excess of the first $100,000) of each employee maintaining a simplified employee pension.
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