MODIFICATION OF ADDITIONAL PARTICIPATION REQUIREMENTS.

SEC. 1432. MODIFICATION OF ADDITIONAL PARTICIPATION REQUIREMENTS. (a) General Rule.— Section 401(a)(26)(A) (relating to additional participation requirements) is amended to read as follows: “(A) In general.— In the case of a trust which is a part of a defined benefit plan, such trust shall not constitute a qualified trust under this subsection unless on110 STAT. 1804 each day of the plan year such trust benefits at least the lesser of— “(i) 50 employees of the employer, or “(ii) the greater of— “(I) 40 percent of all employees of the employer, or “(II) 2 employees (or if there is only 1 employee, such employee).”. (b) Separate Line of Business Test.— Section 401(a)(26)(G) (relating to separate line of business) is amended by striking “paragraph (7)” and inserting “paragraph (2)(A) or (7)”. (c) Effective Date.— The amendments made by this section shall apply to years beginning after December 31, 1996.