PUBLIC LAW 104-188—AUG. 20, 1996 110 STAT. 1791 "(i) such payment shall be taxable under subsection (e) as if received before the annuity starting date, and "(ii) the investment in the contract for purposes of this paragraph shall be determined as if such pay- ment had been so received. "(E) EXCEPTION.— Th is paragraph shall not apply in any case where the primary annuitant has attained age 75 on the annuity starting date unless there are fewer than 5 years of guaranteed payments under the annuity. "(F) ADJUSTMENT WHERE ANNUITY PAYMENTS NOT ON MONTHLY BASIS.— In any case where the annuity payments are not made on a monthly basis, appropriate adjustments in the application of this paragraph shall be made to take into account the period on the basis of which such payments are made. "(G) QUALIFIED EMPLOYER RETIREMENT PLAN.— For purposes of this paragraph, the term 'qualified employer retirement plan' means any plan or contract described in paragraph (1), (2), or (3) of section 4974(c). "(2) TREATMENT OF EMPLOYEE CONTRIBUTIONS UNDER DEFINED CONTRIBUTION PLANS.— For purposes of this section, employee contributions (and any income allocable thereto) under a defined contribution plan may be treated as a separate contract.". (b) EFFECTIVE DATE. —The amendment made by this section 26 USC 72 note. shall apply in cases where the annuity starting date is after the 90th day after the date of the enactment of this Act. SEC. 1404. REQUIRED DISTRIBUTIONS. (a) IN GENERAL. —Section 401(a)(9)(C) (defining required beginning date) is amended to read as follows: "(C) REQUIRED BEGINNING DATE.— For purposes of this paragraph— "(i) IN GENERAL.— The term 'required beginning date' means April 1 of the calendar year following the later of— "(I) the calendar year in which the employee attains age 70V2, or "(II) the calendar year in which the employee retires. "(ii) EXCEPTION. —Subclause (II) of clause (i) shall not apply— "(I) except as provided in section 409(d), in the case of an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains age 70V2, or " (II) for purposes of section 408(a)(6) or (b)(3). "(iii) ACTUARIAL ADJUSTMENT. —In the case of an employee to whom clause (i)(II) applies who retires in a calendar year after the calendar year in which the employee attains age 7OV2, the employee's accrued benefit shall be actuarially increased to take into account the period after age 7OV2 in which the employee was not receiving any benefits under the plan.