SINGLE SUM DISTRIBUTIONS.

SEC. 767. SINGLE SUM DISTRIBUTIONS. (a) Amendments to Internal Revenue Code of 1986 Relating to Minimum Benefits.— 108 STAT. 5038 (1) Determination of present value for purposes of restrictions on mandatory distributions.—Subparagraph (B) of section 411(a)(11) is amended to read as follows: “(B) Determination of present value.—For purposes of subparagraph (A), the present value shall be calculated in accordance with section 417(e)(3).” (2) Determination of present value for purposes of restrictions on cash-outs.—Paragraph (3) of section 417(e) is amended to read as follows: “(3) Determination of present value.— “(A) In general.— “(i) Present value.—Except as provided in subparagraph (B), for purposes of paragraphs (1) and (2), the present value shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate. “(ii) Definitions.—For purposes of clause (i)— “(I) Applicable mortality table.—The term ‘applicable mortality table’ means the table prescribed by the Secretary. Such table shall be based on the prevailing commissioners’ standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on the date as of which present value is being determined (without regard to any other subparagraph of section 807(d)(5)). “(II) Applicable interest rate.—The term ‘applicable interest rate’ means the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary may by regulations prescribe. “(B) Exception.— In the case of a distribution from a plan that was adopted and in effect before the date of the enactment of the Retirement Protection Act of 1994, the present value of any distribution made before the earlier of— “(i) the later of the date a plan amendment applying subparagraph (A) is adopted or made effective, or “(ii) the first day of the first plan year beginning after December 31, 1999, shall be calculated, for purposes of paragraphs (1) and (2), using the interest rate determined under the regulations of the Pension Benefit Guaranty Corporation for determining the present value of a lump sum distribution on plan termination that were in effect on September 1, 1993, and using the provisions of the plan as in effect on the day before such date of enactment; but only if such provisions of the plan met the requirements of section 417(e)(3) as in effect on the day before such date of enactment.” (b) Amendments to Internal Revenue Code of 1986 Relating to Maximum Benefits.— Subparagraph (E) of section 415(b)(2) is amended— (1) by redesignating clauses (ii) and (iii) as clauses (iii) and (iv), respectively, 108 STAT. 5039 (2) by striking clause (i) and inserting the following new clauses: “(i) Except as provided in clause (ii), for purposes of adjusting any benefit or limitation under subparagraph (B) or (C), the interest rate assumption shall not be less than the greater of 5 percent or the rate specified in the plan. “(ii) For purposes of adjusting the benefit or limitation of any form of benefit subject to section 417(e)(3), the applicable interest rate (as defined in section 417(e)(3)) shall be substituted for ‘5 percent’ in clause (i).”, and (3) by adding at the end the following new clause: “(v) For purposes of adjusting any benefit or limitation under subparagraph (B), (C), or (D), the mortality table used shall be the table prescribed by the Secretary. Such table shall be based on the prevailing commissioners’ standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on the date the adjustment is being made (without regard to any other subparagraph of section 807(d)(5)).” (c) Amendments to Employee Retirement Income Security Act of 1974.— (1) Determination of present value for purposes of restrictions on mandatory distributions.—Section 203(e)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(e)(2)) is amended to read as follows: “(2) For purposes of paragraph (1), the present value shall be calculated in accordance with section 205(g)(3).” (2) Determination of present value for purposes of restrictions on cash-outs.—Section 205(g)(3) of such Act (29 U.S.C. 1055(g)(3)) is amended to read as follows: “(3) Determination of present value.— “(A) In general.— “(i) Present value.—Except as provided in subparagraph (B), for purposes of paragraphs (1) and (2), the present value shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate. “(ii) Definitions.—For purposes of clause (i)— “(I) Applicable mortality table.—The term ‘applicable mortality table’ means the table prescribed by the Secretary of the Treasury. Such table shall be based on the prevailing commissioners’ standard table (described in section 807(d)(5)(A) of the Internal Revenue Code of 1986) used to determine reserves for group annuity contracts issued on the date as of which present value is being determined (without regard to any other subparagraph of section 807(d)(5) of such Code). “(II) Applicable interest rate.—The term ‘applicable interest rate’ means the annual rate of interest on 30-year Treasury securities for the month before the date of distribution or such other time as the Secretary of the Treasury may by regulations prescribe. 108 STAT. 5040 “(B) Exception.— In the case of a distribution from a plan that was adopted and in effect prior to the date of the enactment of the Retirement Protection Act of 1994, the present value of any distribution made before the earlier of— “(i) the later of when a plan amendment applying subparagraph (A) is adopted or made effective, or “(ii) the first day of the first plan year beginning after December 31, 1999, shall be calculated, for purposes of paragraphs (1) and (2), using the interest rate determined under the regulations of the Pension Benefit Guaranty Corporation for determining the present value of a lump sum distribution on plan termination that were in effect on September 1, 1993, and using the provisions of the plan as in effect on the day before such date of enactment; but only if such provisions of the plan met the requirements of section 205(g)(3) as in effect on the day before such date of enactment.” (d) Effective Date.— (1) In general.—The amendments made by this section shall apply to plan years and limitation years beginning after December 31, 1994; except that an employer may elect to treat the amendments made by this section as being effective on or after the date of the enactment of this Act (2) No reduction in accrued benefits.—A participant’s accrued benefit shall not be considered to be reduced in violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the Employee Retirement Income Security Act of 1974 merely because (A) the benefit is determined in accordance with section 417(e)(3)(A) of such Code, as amended by this Act, or section 205(g)(3) of the Employee Retirement Income Security Act of 1974, as amended by this Act, or (B) the plan applies section 415(b)(2)(E) of such Code, as amended by this Act (3) Section 415.— (A) No reduction required.—An accrued benefit shall not be required to be reduced below the accrued benefit as of the last day of the last plan year beginning before January 1, 1995, merely because of me amendments made by subsection (b). (B) Timing of plan amendment.—A plan that operates in accordance with the amendments made by subsection (b) shall not be treated as failing to satisfy section 401(a) of the Internal Revenue Code of 1986 or as not being operated in accordance with the provisions of the plan until such date as the Secretary of the Treasury provides merely because the plan has not been amended to include the amendments made by subsection (b).