PUBLIC LAW 102-318—JULY 3, 1992 106 STAT. 307 meaning of section 414(p)) of the balance to the credit of an alternate payee who is the spouse or former spouse of the employee shall be treated as a lump sum distribution. For purposes of this subparagraph, the balance to the credit of the alternate payee shall not include any amount payable to the employee.
- (K) TREATMENT OP PORTION NOT ROLLED OVER.— If any
portion of a lump sum distribution is transferred in a transfer to which subsection (c) applies, parajg^phs (1) and (3) shall not apply with respect to the distribution. "(L) SECURITIES.— For purposes of this subsection, the terms 'securities' and 'securities of the employer corporation' have the respective meanings provided by subsection (e)(4)(E). "(5) SPECIAL RULE WHERE PORTIONS OF LUMP SUM DIS- TRIBUTION ATTRIBUTABLE TO ROLLOVER OF BOND PURCHASED UNDER QUALIFIED BOND PURCHASE PLAN.— If any portion of a lump sum distribution is attributable to a transfer described in section 405(d)(3)(A)(ii) (as in effect before its repeal by the Tax Reform Act of 1984), paragraphs (1) and (3) of this subsection shall not apply to such portion.
- (6) TREATMENT OF POTENTIAL FUTURE VESTING.—
"(A) IN GENERAL.— For purposes of determining whether any distribution which becomes payable to the recipient on account of the employee's separation from service is a lump sum distribution, the balance to the credit of the employee shall be determined without regard to any increase in vesting which may occur if the employee is reemployed by the employer. "(B) RECAPTURE IN CERTAIN CASES.—I f — Regulations. "(i) an amount is treated as a lump sum distribution by reason of subparagraph (A), "(ii) special limip sum treatment applies to such distribution, "(iii) the employee is subsequently reemployed by the employer, and "(iv) as a result of services performed after being so reemployed, there is an increase in the employee's vesting for benefits accrued before the separation referred to in subparagraph (A), under regulations prescribed by the Secretary, the tax imposed by this chapter for the taxable year (in which the increase in vesting first occurs) shall be increased by the reduction in tax which resulted from the special lump sum treatment (and any election under paragraph (4)(B) shall not be taken into account for purposes of determining whether the employee may make another election under paragraph (4)(B)). "(C) SPECIAL LUMP SUM TREATMENT.—For purposes of this paragraph, special lump sum treatment apphes to any distribution if any portion of such distribution is taxed under the subsection by reason of an election under paragraph (4)(B). "(D) VESTING.—For purposes of this paragraph, the term Vesting^ means the portion of the accrued benefits derived from employer contributions to which the participant has a nonforfeitable right.
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