INTEREST RATE ON ACCUMULATED CONTRIBUTIONS.

SEC. 9346. INTEREST RATE ON ACCUMULATED CONTRIBUTIONS. (a) Amendments to ERISA.— Section 204(c)(2) of ERISA (29 U.S.C. 1054(c)(2)) is amended— (1) in subparagraph (C)(iii), by striking “5 percent per annum” and inserting “120 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of a plan year)”; and (2) in subparagraph (D)— (A) in the first sentence, by striking “, the rate of interest described in clause (iii) of subparagraph (C), or both,”; and (B) by striking the second sentence. (b) Amendments to 1986 Code.— Section 411(c)(2) of the 1986 Code (relating to accrued benefit derived from employee contributions) is amended— (1) in subparagraph (C)(iii), by striking “5 percent per annum” and inserting “120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year)”; and (2) in subparagraph (D)— (A) in the first sentence, by striking “, the rate of interest described in clause (iii) of subparagraph (C), or both,”; and (B) by striking the second sentence. (c) Effective Date.— (1) In general.— The amendments made by this section shall apply to plan years beginning after December 31, 1987. (2) Plan amendments not required until january 1989.— If any amendment made by this section requires an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after January 1, 1989, if— (A) during the period after such amendments made by this section take effect and before such first plan year, the plan is operated in accordance with the requirements of such amendments or in accordance with an amendment prescribed by the Secretary of the Treasury and adopted by the plan, and (B) such plan amendment applies retroactively to the period after such amendments take effect and such first plan year. A plan shall not be treated as failing to provide definitely determinable benefits or contributions, or to be operated in accordance with the provisions of the plan, merely because it operates in accordance with this subsection.