REQUIRED DISTRIBUTIONS.

SEC. 1404. REQUIRED DISTRIBUTIONS. (a) In General.— Section 401(a)(9)(C) (defining required beginning date) is amended to read as follows: “(C) Required beginning date.— For purposes of this paragraph— “(i) In general.— The term ‘required beginning date’ means April 1 of the calendar year following the later of— “(I) the calendar year in which the employee attains age 70½, or “(II) the calendar year in which the employee retires. “(ii) Exception.— Subclause (II) of clause (i) shall not apply— “(I) except as provided in section 409(d), in the case of an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains age 70½, or “(II) for purposes of section 408 (a)(6) or (b)(3). “(iii) Actuarial adjustment.— In the case of an employee to whom clause (i)(II) applies who retires in a calendar year after the calendar year in which the employee attains age 70½, the employee’s accrued benefit shall be actuarially increased to take into account the period after age 70½ in which the employee was not receiving any benefits under the plan. 110 STAT. 1792 “(iv) Exception for governmental and church plans.— Clauses (ii) and (iii) shall not apply in the case of a governmental plan or church plan. For purposes of this clause, the term ‘church plan’ means a plan maintained by a church for church employees, and the term ‘church’ means any church (as defined in section 3121(w)(3)(A)) or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).”. (b) Effective Date.— The amendment made by subsection (a) shall apply to years beginning after December 31, 1996.