PUBLIC LAW 97-248—SEPT. 3, 1982
96 STAT. 519
"(A) IN GENERAL.—The term 'key employee' means any participant in a n employer plan who, a t any time during the plan year or any of the 4 preceding plan years, is— "(i) a n officer of the employer, "(ii) 1 of the 10 employees owning (or considered a s owning within the m e a n i n g of section 318) the largest interests in the employer, "(iii) a 5-percent owner of the employer, or "(iv) a 1-percent owner of the employer having a n annual compensation from the employer of more than $150,000. For purposes of clause (i), no more than 50 employees (or, if lesser, the g r e a t e r of 3 or 10 percent of the employees) shall be t r e a t e d as officers. "(B) P E R C E N T A G E O W N E R S. — "(i) 5-PERCENT O W N E R. — For purposes of t h i s
para-
g r a p h, the term *5-percent owner' means — "(I) if the employer is a corporation, any person who owns (or is considered as owning within the m e a n i n g of section 318) more than 5 percent of the o u t s t and i n g stock of the corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the corporation, or "(II) if the employer is not a corporation, any person who owns more than 5 percent of the capital or profits interest in the employer. "(ii) 1-PERCENT OWNER.—For purposes of this paragraph, the term '1-percent owner' means any person who would be described in clause (i) if '1 percent' were substituted for '5 percent' each place it a p p e a r s in clause (i). "(iii) CONSTRUCTIVE O W N E R S H I P RULES.—For purposes
of this subparagraph and subparagraph (A)(ii)((II)— "(I) subparagraph (C) of section 318(a)(2) shall be applied by substituting '5 percent' for '50 percent', and "(II) in the case of any employer which is not a corporation, ownership in such employer shall be determined in accordance with regulations prescribed by the Secretary which shall be based on principles similar to the principles of section 318 (as modified by subclause (I)). "(C) AGGREGATION RULES DO NOT APPLY FOR PURPOSES O F DETERMINING 5-PERCENT OR 1-PERCENT OWNERS.—The r u l e s
of subsections (b), (c), and (m) of section 414 shall not apply for purposes of determining ownership in the employer. "(2) NON-KEY EMPLOYEE.—The term 'non-key employee' means any employee who is not a key employee. "(3)
SELF-EMPLOYED INDIVIDUALS.—In
the
case
of
a
self-
employed individual described in section 401(c)(1)— "(A) such individual shall be t r e a t e d as a n employee, and "(B) such individual's e a r n e d income (within the m e a n i n g of section 401(c)(2)) shall be t r e a t e d as compensation. "(4) T R E A T M E N T OF EMPLOYEES COVERED BY COLLECTIVE BAR-
GAINING AGREEMENTS.—The requirements of subsections (b), (c), and (d) shall not apply with respect to any employee included in a unit of employees covered by a n a g r e e m e n t which the Secre-
26 USC 318.
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