Page:United States Statutes at Large Volume 104 Part 2.djvu/970

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104 STAT. 1388-562 PUBLIC LAW 101-508—NOV. 5, 1990 TITLE XII—PENSIONS Subtitle A—Treatment of Reversions of QualiHed Plan Assets to Employers SEC. 12001. INCREASE IN REVERSION TAX. 26 USC 4980. Section 4980(a) (relating to tax on reversion of qualified plan assets to employer) is amended by striking "15 percent" and inserting "20 percent'^'. SEC. 12002. ADDITIONAL TAX IF NO REPLACEMENT PLAN. (a) IN GENERAL. — Section 4980 is amended by adding at the end thereof the following new subsection: "(d) INCREASE IN TAX FOR FAILURE TO ESTABLISH REPLACEMENT PLAN OR INCREASE BENEFITS.— "(1) IN GENERAL. —Subsection (a) shall be applied by substituting '50 percent' for '20 percent' with respect to any employer reversion from a qualified plan unless— "(A) the employer establishes or maintains a qualified replacement plan, or "(B) the plan provides benefit increases meeting the requirements of paragraph (3). "(2) QuAUFiED REPLACEMENT PLAN. — For purposes of this subsection, the term 'qualified replacement plan' means a qualified plan established or maintained by the employer in connection with a qualified plan termination (hereinafter referred to —---^ as the 'replacement plan') with respect to which the following requirements are met: "(A) PARTICIPATION REQUIREMENT. —At least 95 percent of the active participants in the terminated plan who remain as employees of the employer after the termination are active participants in the replacement plan. " (B) ASSET TRANSFER REQUIREMENT. — - "(i) 25 PERCENT CUSHION. — A direct transfer from the terminated plan to the replacement plan is made before any employer reversion, and the transfer is in an amount equal to the excess (if any) of— "(I) 25 percent of the maximum amount which the employer could receive as an employer reversion without regard to this subsection, over "(II) the amount determined under clause (ii). "(ii) REDUCTION FOR INCREASE IN BENEFITS. — The amount determined under this clause is an amount equal to the present value of the aggregate increases in the accrued benefits under the terminated plan of any participants or beneficiaries pursuant to a plan amendment which— "(I) is adopted during the 60-day period ending on the date of termination of the qualified plan, and "(II) takes effect immediately on the termination date, "(iii) TREATMENT OF AMOUNT TRANSFERRED. —In the case of the transfer of any amount under clause (i)—