100 STAT. 2454
PUBLIC LAW 99-514—OCT. 22, 1986
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"(4)
ALTERNATIVE DETERMINATION OF COMPENSATION.—The
- i i Secretary shall by regulation provide for alternative methods of
determining compensation which may be used by an employer, except that such regulations shall provide that an employer may not use an alternative method if the use of such method discriminates in favor of highly compensated employees (within the meaning of subsection (q))." (b) EFFECTIVE DATES.—The amendment made by subsection (a) shall apply to years beginning after December 31, 1986. Subpart B—Other Provisions
SEC. 1116. CASH OR DEFERRED ARRANGEMENTS.
(a) GENERAL RULE.—Subparagraph (A) of section 401(k)(3) (relating to application of participation and discrimination standards) is amended— (1) by striking out "1.5" in clause (ii)(I) and inserting in lieu .. thereof "1.25", (2) by striking out "3 percentage points" in clause (ii)(II) and inserting in lieu thereof "2 percentage points", and (3) by striking out "2.5" in clause (ii)(II) and inserting in lieu thereof "2". (b) WITHDRAWAL AND OTHER RESTRICTIONS.—
(1) WITHDRAWALS.—Paragraph (2)(B) of section 401(k) (defln.^- J ing qualified cash or deferred arrangement) is amended to read as follows: ..3^Q "(B) under which— "(i) amounts held by the trust which are attributable mii Bit i. fi; *o employer contributions made pursuant to the employee's election may not be distributable to partici^^r,n,i=^o r pants or other beneficiaries earlier than— "(I) separation from service, death, or disability, "(II) termination of the plan without establishment of a successor plan, "(III) the date of the sale by a corporation of u:. >it.t substantially all of the assets (within the meaning of section 409(d)(2)) used by such corporation in a >-.. . trade or business of such corporation with respect ..^4 to an employee who continues employment with the corporation acquiring such assets, "(IV) the date of the sale by a corporation of such corporation's interest in a subsidiary (within the
meaning of section 409(d)(3)) with respect to an employee who continues employment with such subsidiary, ^•,,i ',:;," "(V) in the case of a profit-sharing or stock bonus plan, the attainment of age 59 ¥2, or "(VI) in the case of contributions to a profit81^ ^i-.„ = . sharing or stock bonus plan to which section _ 402(a)(8) applies, upon hardship of the employee, 8A > and
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"(ii) amounts will not be distributable merely by • reason of the completion of a stated period of participation or the lapse of a fixed number of years; and". An^l
(2) N O T MORE THAN 1 YEAR O F SERVICE MAY BE REQUIRED.—
Paragraph (2) of section 401(k) is amended by striking out "and"
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