120 STAT. 1034
PUBLIC LAW 109–280—AUG. 17, 2006 ‘‘(ii) ELECTION OUT.—The election treated as having been made under clause (i) shall cease to apply with respect to any employee if such employee makes an affirmative election— ‘‘(I) to not have such contributions made, or ‘‘(II) to make elective contributions at a level specified in such affirmative election. ‘‘(iii) QUALIFIED PERCENTAGE.—For purposes of this subparagraph, the term ‘qualified percentage’ means, with respect to any employee, any percentage determined under the arrangement if such percentage is applied uniformly, does not exceed 10 percent, and is at least— ‘‘(I) 3 percent during the period ending on the last day of the first plan year which begins after the date on which the first elective contribution described in clause (i) is made with respect to such employee, ‘‘(II) 4 percent during the first plan year following the plan year described in subclause (I), ‘‘(III) 5 percent during the second plan year following the plan year described in subclause (I), and ‘‘(IV) 6 percent during any subsequent plan year. DEFERRAL FOR CURRENT ‘‘(iv) AUTOMATIC EMPLOYEES NOT REQUIRED.—Clause (i) may be applied without taking into account any employee who— ‘‘(I) was eligible to participate in the arrangement (or a predecessor arrangement) immediately before the date on which such arrangement becomes a qualified automatic contribution arrangement (determined after application of this clause), and ‘‘(II) had an election in effect on such date either to participate in the arrangement or to not participate in the arrangement. ‘‘(D) MATCHING OR NONELECTIVE CONTRIBUTIONS.— ‘‘(i) IN GENERAL.—The requirements of this subparagraph are met if, under the arrangement, the employer— ‘‘(I) makes matching contributions on behalf of each employee who is not a highly compensated employee in an amount equal to the sum of 100 percent of the elective contributions of the employee to the extent that such contributions do not exceed 1 percent of compensation plus 50 percent of so much of such compensation as exceeds 1 percent but does not exceed 6 percent of compensation, or ‘‘(II) is required, without regard to whether the employee makes an elective contribution or employee contribution, to make a contribution to a defined contribution plan on behalf of each employee who is not a highly compensated employee and who is eligible to participate in the
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