ROUNDING RULES FOR COST-OF-LIVING ADJUSTMENTS.

SEC. 732. ROUNDING RULES FOR COST-OF-LIVING ADJUSTMENTS. (a) Cost-of-Living Adjustment for Compensation Limit.—Section 401(a)(17)(B) is amended to read as follows: “(B) Cost-of-living adjustment.—The Secretary shall adjust annually the $150,000 amount in subparagraph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under section 415(d); except that the base period shall be the calendar quarter beginning October 1, 1993, and any increase which is not a multiple of $10,000 shall be rounded to the next lowest multiple of $10,000.” (b) Cost-of-Living Adjustment for Maximum Defined Benefit Amount and Maximum Annual Addition.— (1) In general.—Section 415(d) is amended to read as follows: “(d) Cost-of-Living Adjustments.— “(1) In general.—The Secretary shall adjust annually— “(A) the $90,000 amount in subsection (b)(1)(A), “(B) in the case of a participant who separated from service, the amount taken into account under subsection (b)(1)(B), and “(C) the $30,000 amount in subsection (c)(1)(A), for increases in the cost-of-living in accordance with regulations prescribed by the Secretary. 108 STAT. 5005 “(2) Method.—The regulations prescribed under paragraph (1) shall provide for— “(A) an adjustment with respect to any calendar year based on the increase in the applicable index for the calendar quarter ending September 30 of the preceding calendar year over such index for the base period, and “(B) adjustment procedures which are similar to the procedures used to adjust benefit amounts under section 215(i)(2)(A) of the Social Security Act. “(3) Base period.—For purposes of paragraph (2)— “(A) $90,000 amount.—The base period taken into account for purposes of paragraph (1)(A) is the calendar quarter beginning October 1, 1986. “(B) Separations after December 31, 1994—The base period taken into account for purposes of paragraph (1)(B) with respect to individuals separating from service with the employer after December 31, 1994, is the calendar quarter beginning July 1 of the calendar year preceding the calendar year in which such separation occurs. “(C) Separations before January 1, 1995.—The base period taken into account for purposes of paragraph (1)(B) with respect to individuals separating from service with the employer before January 1, 1995, is the calendar quarter beginning October 1 of the calendar year preceding the calendar year in which such separation occurs. “(D) $30,000 amount.—The base period taken into account for purposes of paragraph (1)(C) is the calendar quarter beginning October 1, 1993. “(4) Rounding.—Any increase under subparagraph (A) or (C) of paragraph (1) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.” (2) Conforming amendment.—Section 415(c)(l)(A) is amended by striking “(or, if greater, ¼ of the dollar limitation in effect under subsection (b)(1)(A))”. (c) Cost-of-Living Adjustment for Maximum Salary Deferral.—Section 402(g)(5) is amended by inserting before the period “; except that any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500”. (d) Cost-of-Living Adjustment for Eligibility for Simplified Employee Pensions.—Section 408(k)(8) is amended by inserting before the period “, except that any increase in the $300 amount which is not a multiple of $50 shall be rounded to the next lowest multiple of $50”. (e) Effective Dates.— (1) In general.—Except as provided in paragraph (2), the amendments made by this section shall apply to years beginning after December 31, 1994. (2) Rounding not to result in decreases.—The amendments made by this section providing for the rounding of indexed amounts shall not apply to any year to the extent the rounding would require the indexed amount to be reduced below the amount in effect for years beginning in 1994.