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(1) Defined benefit plan and defined contribution plan
For purposes of this title, the term “defined contribution plan” or “defined benefit plan” means a defined contribution plan (within the meaning of section 414(i)) or a defined benefit plan (within the meaning of section 414(j)), whichever applies, which is—
(A) a plan described in section 401(a) which includes a trust which is exempt from tax under section 501(a),
(B) an annuity plan described in section 403(a),
(C) an annuity contract described in section 403(b), or
(D) a simplified employee pension.
a plan described in section 401(a) which includes a trust which is exempt from tax under section 501(a),
an annuity plan described in section 403(a),
an annuity contract described in section 403(b), or
a simplified employee pension.
(A) In general In the case of a defined benefit plan which maintains a qualified cost-of-living arrangement— (i) any contribution made directly by an employee under such an arrangement shall not be treated as an annual addition for purposes of subsection (c), and (ii) any benefit under such arrangement which is allocable to an employer contribution which was transferred from a defined contribution plan and to which the requirements of subsection (c) were applied shall, for purposes of subsection (b), be treated as a benefit derived from an employee contribution (and subsection (c) shall not again apply to such contribution by reason of such transfer).
(B) Qualified cost-of-living arrangement defined For purposes of this paragraph, the term “qualified cost-of-living arrangement” means an arrangement under a defined benefit plan which— (i) provides a cost-of-living adjustment to a benefit provided under such plan or a separate plan subject to the requirements of section 412, and (ii) meets the requirements of subparagraphs (C), (D), (E), and (F) and such other requirements as the Secretary may prescribe.
(C) Determination of amount of benefit An arrangement meets the requirement of this subparagraph only if the cost-of-living adjustment of participants is based— (i) on increases in the cost-of-living after the annuity starting date, and (ii) on average cost-of-living increases determined by reference to 1 or more indexes prescribed by the Secretary, except that the arrangement may provide that the increase for any year will not be less than 3 percent of the retirement benefit (determined without regard to such increase).
(D) Arrangement elective; time for election An arrangement meets the requirements of this subparagraph only if it is elective, it is available under the same terms to all participants, and it provides that such election may at least be made in the year in which the participant— (i) attains the earliest retirement age under the defined benefit plan (determined without regard to any requirement of separation from service), or (ii) separates from service.
(E) Nondiscrimination requirements An arrangement shall not meet the requirements of this subparagraph if the Secretary finds that a pattern of discrimination exists with respect to participation.
(F) Special rules for key employees (i) In general An arrangement shall not meet the requirements of this paragraph if any key employee is eligible to participate. (ii) Key employee For purposes of this subparagraph, the term “key employee” has the meaning given such term by section 416(i)(1), except that in the case of a plan other than a top-heavy plan (within the meaning of section 416(g)), such term shall not include an individual who is a key employee solely by reason of section 416(i)(1)(A)(i).
In the case of a defined benefit plan which maintains a qualified cost-of-living arrangement—
(i) any contribution made directly by an employee under such an arrangement shall not be treated as an annual addition for purposes of subsection (c), and
(ii) any benefit under such arrangement which is allocable to an employer contribution which was transferred from a defined contribution plan and to which the requirements of subsection (c) were applied shall, for purposes of subsection (b), be treated as a benefit derived from an employee contribution (and subsection (c) shall not again apply to such contribution by reason of such transfer).
any contribution made directly by an employee under such an arrangement shall not be treated as an annual addition for purposes of subsection (c), and
any benefit under such arrangement which is allocable to an employer contribution which was transferred from a defined contribution plan and to which the requirements of subsection (c) were applied shall, for purposes of subsection (b), be treated as a benefit derived from an employee contribution (and subsection (c) shall not again apply to such contribution by reason of such transfer).
For purposes of this paragraph, the term “qualified cost-of-living arrangement” means an arrangement under a defined benefit plan which—
(i) provides a cost-of-living adjustment to a benefit provided under such plan or a separate plan subject to the requirements of section 412, and
(ii) meets the requirements of subparagraphs (C), (D), (E), and (F) and such other requirements as the Secretary may prescribe.
provides a cost-of-living adjustment to a benefit provided under such plan or a separate plan subject to the requirements of section 412, and
meets the requirements of subparagraphs (C), (D), (E), and (F) and such other requirements as the Secretary may prescribe.
An arrangement meets the requirement of this subparagraph only if the cost-of-living adjustment of participants is based—
(i) on increases in the cost-of-living after the annuity starting date, and
(ii) on average cost-of-living increases determined by reference to 1 or more indexes prescribed by the Secretary, except that the arrangement may provide that the increase for any year will not be less than 3 percent of the retirement benefit (determined without regard to such increase).
on increases in the cost-of-living after the annuity starting date, and
on average cost-of-living increases determined by reference to 1 or more indexes prescribed by the Secretary, except that the arrangement may provide that the increase for any year will not be less than 3 percent of the retirement benefit (determined without regard to such increase).
An arrangement meets the requirements of this subparagraph only if it is elective, it is available under the same terms to all participants, and it provides that such election may at least be made in the year in which the participant—
(i) attains the earliest retirement age under the defined benefit plan (determined without regard to any requirement of separation from service), or
(ii) separates from service.
attains the earliest retirement age under the defined benefit plan (determined without regard to any requirement of separation from service), or
separates from service.
An arrangement shall not meet the requirements of this subparagraph if the Secretary finds that a pattern of discrimination exists with respect to participation.
(i) In general An arrangement shall not meet the requirements of this paragraph if any key employee is eligible to participate.
(ii) Key employee For purposes of this subparagraph, the term “key employee” has the meaning given such term by section 416(i)(1), except that in the case of a plan other than a top-heavy plan (within the meaning of section 416(g)), such term shall not include an individual who is a key employee solely by reason of section 416(i)(1)(A)(i).
An arrangement shall not meet the requirements of this paragraph if any key employee is eligible to participate.
For purposes of this subparagraph, the term “key employee” has the meaning given such term by section 416(i)(1), except that in the case of a plan other than a top-heavy plan (within the meaning of section 416(g)), such term shall not include an individual who is a key employee solely by reason of section 416(i)(1)(A)(i).
In the case of any repayment of contributions (including interest thereon) to the governmental plan with respect to an amount previously refunded upon a forfeiture of service credit under the plan or under another governmental plan maintained by a State or local government employer within the same State, any such repayment shall not be taken into account for purposes of this section.
For purposes of this section, any annuity contract described in section 403(b) for the benefit of a participant shall be treated as a defined contribution plan maintained by each employer with respect to which the participant has the control required under subsection (b) or (c) of section 414 (as modified by subsection (h)). For purposes of this section, any contribution by an employer to a simplified employee pension plan for an individual for a taxable year shall be treated as an employer contribution to a defined contribution plan for such individual for such year.