Suspension of minimum distribution requirements for interests not greater than $300,000

(a)

In general

In the case of an eligible defined contribution plan of an individual, sections 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 1986 shall not apply with respect to such individual for any year during the suspension period to the extent such individual’s interest in all such plans as of December 31, 2008, is not greater than $300,000. (b)

Suspension period

For purposes of this section, the term suspension period means the period beginning on January 1, 2008, and ending on December 31, 2009. (c)

Eligible defined contribution plan

For purposes of this section, the term eligible defined contribution plan means— (1)a defined contribution plan (within the meaning of section 414(i) of such Code) which is— (A)an employee’s trust described in section 401(a) of such Code which is exempt from tax under section 501(a) of such Code, (B)an annuity plan described in section 403(a) of such Code, (C)an annuity contract described in section 403(b) of such Code, and (D)an eligible deferred compensation plan described in section 457(b) of such Code which is maintained by an eligible employer described in section 457(e)(1)(A) of such Code, and (2)an individual retirement plan (as defined in section 7701(a)(37) of such Code). (d)

Special rules

(1)

Exception for 5-year rule

In the case of a distribution required under section 401(a)(9)(B)(ii) of such Code, subsection (a) shall not apply. (2)

Delay in required minimum distribution for 2008

The required minimum distribution for 2008 (if any) with respect to any eligible defined contribution plan of an individual— (A)shall be determined on the basis of the individual’s interest in such plan determined as of December 31, 2008, and (B)shall be treated as timely made if such distribution is made before April 1, 2009. (3)

Aggregation of employer plans

(A)

In general

A plan shall not be treated as disqualified merely because the plan treats the aggregate interest of the individual in all plans maintained by the employer (and any member of any controlled group which includes the employer) as such individual’s interest in all eligible defined contribution plans. (B)

Controlled group

For purposes of subparagraph (A), the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of such Code. (4)

Exemption of distributions during suspension period from trustee transfer and withholding rules

For purposes of sections 401(a)(31), 402(f), and 3405 of such Code, any distribution during the suspension period which, but for subsection (a), would have been a required distribution under section 401(a)(9) of such Code shall not be treated as an eligible rollover distribution. (e)

Regulations

The Secretary of the Treasury shall prescribe such regulations as may be necessary to carry out the purposes of this section, including rules providing for the allocation of the $300,000 amount described in subsection (a) in the case of an individual with an interest in more than 1 defined contribution plan. (f)

Provisions relating to plan amendments

(1)

In general

If this subsection applies to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i). (2)

Amendments to which subsection applies

(A)

In general

This subsection shall apply to any amendment to any plan or annuity contract which is made— (i)pursuant to this section or pursuant to any regulation issued by the Secretary of the Treasury to carry out this section, and (ii)on or before the last day of the first plan year beginning on or after January 1, 2009. (B)

Conditions

This subsection shall not apply to any amendment unless— (i)during the period beginning on the first day of the suspension period and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted) the plan or contract is operated as if such plan or contract amendment were in effect, and (ii)such plan or contract amendment applies retroactively for such period. (g)

Effective date

This section shall take effect on the date of the enactment of this Act.