Page 287

TITLE 26-INTERNAL REVENUE CODE tions or benefits of or on behalf of em- ployees under the plan bear a uniform re- lationship to the total compensation, or the basic or regular rate of compensation, of such employees, and (ii) such plan shall not be considered discriminatory within the meaning of paragraph (4) solely because under the plan contributions described in subsection (e) which are in excess of the amounts which may be deducted under section 404 for the taxable year may be made on behalf of any owner-employee; and (B) a trust forming a part of such plan shall constitute a qualified trust under this section only if the requirements in subsec- tion (d) are also met. (11)(A) A trust shall not constitute a quali- fied trust under this section if the plan of which such trust is a part provides for the payment of benefits in the form of an annu- ity unless such plan provides for the payment of annuity benefits in a form having the effect of a qualified joint and survivor annu- ity. (B) Notwithstanding the provisions of sub- paragraph (A), in the case of a plan which provides for the payment of benefits before the normal retirement age (as defined in sec- tion 411(a)(8)), the plan is not required to provide for the payment of annuity benefits in a form having the effect of a qualified Joint and survivor annuity during the period beginning on the date on which the employee enters into the plan as a participant and ending on the later of- (i) the date the employee reaches the ear- liest retirement age under the plan, or (ii) the first day of the 120th month be- ginning before the date on which the em- ployee reaches normal retirement age. (C) A plan described in subparagraph (B) does not meet the requirements of subpara- graph (A) unless, under the plan, a partici- pant has a reasonable period during which he may elect the qualified joint and survivor an- nuity form with respect to the period begin- ning on the date on which the period de- scribed in subparagraph (B) ends and ending on the date on which he reaches normal re- tirement age (as defined in section 411(a)(8)) if he continues his employment during that period. A plan does not meet the require- ments of this subparagraph unless, in the case of such an election, the payments under the survivor annuity are not less than the payments which would have been made under the joint annuity to which the participant would have been entitled if he made an elec- tion described in this subparagraph immedi- ately prior to his retirement and if his retire- ment had occurred on the day before his death and within the period within which an election can be made. (D) A plan shall not be treated as not satis- fying the requirements of this paragraph solely because the spouse of the participant is not entitled to receive a survivor annuity (whether or not an election described in sub- paragraph (C) has been made under subpara- graph (C)) unless the participant and his spouse have been married throughout the 1- year period ending on the date of such par- ticipant's death. (E) A plan shall not be treated as satisfying the requirements of this paragraph unless, under the plan, each participant has a reason- able period (as described by the Secretary by regulations) before the annuity starting date during which he may elect in writing (after having received a written explanation of the terms and conditions of the joint and survivor annuity and effect of an election under this subparagraph) not to take such Joint and sur- vivor annuity. (F) A plan shall not be treated as not satis- fying the requirements of this paragraph solely because under the plan there is a provi- sion that any election described in subpara- graph (C) or (E), and any revocation of any such election, does not become effective (or ceases to be effective) if the participant dies within a period (not in excess of 2 years) be- ginning on the date of such election or revo- cation, as the case may be. The preceding sen- tence does not apply unless the plan provision described in the preceding sentence also pro- vides that such an election or revocation will be given effect in any case in which- (I) the participant dies from accidental causes, (ii) a failure to give effect to the election or revocation would deprive the partici- pant's survivor of a survivor annuity, and (iii) such election or revocation is made before such accident occurred. (G) For purposes of this paragraph- (I) the term "annuity starting date" means the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or by reason of disability), (ii) the term "earliest retirement age" means the earliest date on which, under the plan, the participant could elect to receive retirement benefits, and (ill) the term "qualified joint and survivor annuity" means an annuity for the life of the participant with a survivor annuity for the life of his spouse which is not less than one-half of, or greater than, the amount of the annuity payable during the joint lives of the participant and his spouse and which is the actuarial equivalent of a single life annuity for the life of the participant. For purposes of this paragraph, a plan may take into account in any equitable manner (as determined by the Secretary) any increased costs resulting from providing joint and survi- vor annuity benefits. (H) This paragraph shall apply only if- (I) the annuity starting date did not occur before the effective date of this paragraph, and (ii) the participant was an active partici- pant in the plan on or after such effective date. (12) A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other Page 287/