transition period
(6) Definitions and special rules For purposes of this subsection— (A) Highly compensated employee The term “highly compensated employee” has the meaning given such term by section 414(q). (B) Aggregation rules An employer may elect to designate— (i) 2 or more trusts, (ii) 1 or more trusts and 1 or more annuity plans, or (iii) 2 or more annuity plans, as part of 1 plan intended to qualify under section 401(a) to determine whether the requirements of this subsection are met with respect to such trusts or annuity plans. If an employer elects to treat any trusts or annuity plans as 1 plan under this subparagraph, such trusts or annuity plans shall be treated as 1 plan for purposes of section 401(a)(4). (C) Special rules for certain dispositions or acquisitions (i) In general If a person becomes, or ceases to be, a member of a group described in subsection (b), (c), (m), or (o) of section 414, then the requirements of this subsection shall be treated as having been met during the transition period with respect to any plan covering employees of such person or any other member of such group if— (I) such requirements were met immediately before each such change, and (II) the coverage under such plan is not significantly changed during the transition period (other than by reason of the change in members of a group) or such plan meets such other requirements as the Secretary may prescribe by regulation. (ii) Transition period For purposes of clause (i), the term “transition period” means the period— (I) beginning on the date of the change in members of a group, and (II) ending on the last day of the 1st plan year beginning after the date of such change. (D) Special rule for certain employee stock ownership plans A trust which is part of a tax credit employee stock ownership plan which is the only plan of an employer intended to qualify under section 401(a) shall not be treated as not a qualified trust under section 401(a) solely because it fails to meet the requirements of this subsection if— (i) such plan benefits 50 percent or more of all the employees who are eligible under a nondiscriminatory classification under the plan, and (ii) the sum of the amounts allocated to each participant’s account for the year does not exceed 2 percent of the compensation of that participant for the year. (E) Eligibility to contribute In the case of contributions which are subject to section 401(k) or 401(m), employees who are eligible to contribute (or elect to have contributions made on their behalf) shall be treated as benefiting under the plan (other than for purposes of paragraph (2)(A)(ii)). (F) Employers with only highly compensated employees A plan maintained by an employer which has no employees other than highly compensated employees for any year shall be treated as meeting the requirements of this subsection for such year. (G) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.