MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND APPLIED TO ALL DEFINED BENEFIT PLANS.

SEC. 652. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND APPLIED TO ALL DEFINED BENEFIT PLANS. (a) In General.—Subparagraph (D) of section 404(a)(1) (relating to special rule in case of certain plans) is amended to read as follows: “(D) Special rule in case of certain plans.— “(i) In general.—In the case of any defined benefit plan, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded current liability determined under section 412(1). “(ii) Plans with 100 or less participants.—For purposes of this subparagraph, in the case of a plan which has 100 or less participants for the plan year, unfunded current liability shall not include the liability attributable to benefit increases for highly compensated employees (as defined in section 414(q)) resulting from a plan amendment which is made or 115 STAT. 130becomes effective, whichever is later, within the last 2 years. “(iii) Rule for determining number of participants.—For purposes of determining the number of plan participants, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group (within the meaning of section 412(1)(8)(C))) shall be treated as one plan, but only employees of such member or employer shall be taken into account. “(iv) Plans maintained by professional service employers.—In the case of a plan which, subject to section 4041 of the Employee Retirement Income Security Act of 1974, terminates during the plan year, clause (i) shall be applied by substituting for unfunded current liability the amount required to make the plan sufficient for benefit liabilities (within the meaning of section 4041(d) of such Act).”. (b) Conforming Amendment.—Paragraph (6) of section 4972(c), as amended by sections 616 and 637, is amended— (1) by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively, (2) by striking the first sentence following subparagraph (B) (as so redesignated), (3) by striking “subparagraph (B)” in the next to last sentence and inserting “subparagraph (A)”, and (4) by striking “Subparagraph (C)” in the last sentence and inserting “Subparagraph (B)”. (c) Effective Date.—The amendments made by this section shall apply to plan years beginning after December 31, 2001.