LEVEL PREMIUM PLANS COVERING OWNER-EMPLOYEES.

SEC. 1511. LEVEL PREMIUM PLANS COVERING OWNER-EMPLOYEES. (a) In General.— Section 415(c) (relating to limitation for defined contribution plans) is amended by adding after paragraph (6) the following new paragraph: “(7) Certain level premium annuity contracts under plans benefiting owner-employees.— Paragraph (1)(B) shall not apply to contribution described in section 401 (e) which is made on behalf of a participant for a year to a plan which benefits an owner-employee (within the meaning of section 401 (c)(3)), if— 90 STAT. 1742 “(A) the annual addition determined under this section with respect to the participant for such year consists solely of such contribution, and “(B) the participant is not an active participant at any time during such year in a defined benefit plan maintained by the employer. For purposes of this section and section 401(e), in the case of a plan which provides contributions or benefits for employees who are not owner-employees, such plan will not be treated as failing to satisfy section 401 (a)(4) merely because contributions made on behalf of employees who are not owner-employees are not permitted to exceed the limitations of paragraph (1)(B).” (b) Effective Date.— The amendment made by this section shall apply for years beginning after December 31, 1975.