PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 875
tives and 1 or more employers, the term 'employee representatives' shall not include any organization more than one-half of the members of which are employees who are owners, officers, or executives of the employer." (2) EFFECTIVE DATE.—The amendment made by this subsection 26 USC 7701 shall take effect on April 1, 1984. note, (d) ADDITIONAL REGULATIONS.—
(1) IN GENERAL.—Section 414 (relating to definitions and spe- 26 USC 414. cial rules) is amended by adding at the end thereof the following new subsection: "(o) REGULATIONS.—The Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in subsection (m)(4) or (n)(3) through the use of— "(1) separate organizations, "(2) employee leasing, or "(3) other arrangements." (2) CONFORMING AMENDMENT.—Subsection (m) of section 414
is amended by striking out paragraph (6). (3) EFFECTIVE DATE.—The amendments made by this subsec- 26 USC 414 note. tion shall take effect on the date of the enactment of this Act. SEC. 527. PROVISIONS RELATING TO CASH OR DEFERRED ARRANGEMENTS. (a)
PARTICIPATION AND DISCRIMINATION STANDARDS.—Subpara-
graph (A) of section 401(k)(3) is amended to read as follows: 26 USC 40i. "(A) A cash or deferred arrangement shall not be treated as a qualified cash or deferred arrangement unless— "(i) those employees eligible to benefit under the arrangement satisfy the provisions of subparagraph (A) or (B) of section 410(b)(l), and "(ii) the actual deferral percentage for highly compensated employees (as defined in paragraph (4)) for such year bears a relationship to the actual deferral percentage for all other eligible employees for such plan year which meets either of the following tests: "(I) The actual deferral percentage for the group of highly compensated employees is not more than the actual deferral percentage of all other eligible employees multiplied by 1.5. "(II) The excess of the actual deferral percentage for the group of highly compensated employees over that of all other eligible employees is not more than 3 percentage points, and the actual deferral percentage for the group of highly compensated employees is not more than the actual deferral percentage of all other eligible employees multiplied by 2.5. v! • jf 2 or more plans which include cash or deferred arrangements are considered as 1 plan for purposes of section 401(a)(4) or 410(b), the cash or deferred arrangements included in such plans shall be treated as 1 arrangement for purposes of this subparagraph. The deferral percentage taken into account under this subparagraph for any employee who is a participant under 2 or more cash or deferred arrangements of the employer
�
