1.Clarification of treatment of
certain retirement plan contributions picked up by governmental
employers
(a)Paragraph (2) of
section 414(h) of the Internal Revenue Code of 1986 is amended—
(1)by striking
For purposes of paragraph (1)
and inserting the
following:
(A)For purposes of
paragraph (1)
,
and
(2)by adding at the
end the following new subparagraph:
(B)Treatment of
elections between alternative benefit formulas
(i)For purposes of
subparagraph (A), a contribution shall not fail to be treated as picked up by
an employing unit merely because the employee may make an irrevocable election
between the application of two alternative benefit formulas involving the same
or different levels of employee contributions.
(ii)Application to
existing employeesClause (i) shall be applied without regard to
whether the employee is already covered by one of the benefit formulas referred
to
therein.
.
(b)The amendment made by this section shall apply to years
ending after the date of the enactment of this Act.