applicable elective deferral
(2) (A) If this paragraph applies to an eligible individual account plan, the portion of such plan which consists of applicable elective deferrals (and earnings allocable thereto) shall be treated as a separate plan— (i) which is not an eligible individual account plan, and (ii) to which the requirements of this section apply. (B) (i) This paragraph shall apply to any eligible individual account plan if any portion of the plan’s applicable elective deferrals (or earnings allocable thereto) are required to be invested in qualifying employer securities or qualifying employer real property or both— (I) pursuant to the terms of the plan, or (II) at the direction of a person other than the participant on whose behalf such elective deferrals are made to the plan (or a beneficiary). (ii) This paragraph shall not apply to an individual account plan for a plan year if, on the last day of the preceding plan year, the fair market value of the assets of all individual account plans maintained by the employer equals not more than 10 percent of the fair market value of the assets of all pension plans (other than multiemployer plans) maintained by the employer. (iii) This paragraph shall not apply to an individual account plan that is an employee stock ownership plan as defined in section 4975(e)(7) of title 26 . (iv) This paragraph shall not apply to an individual account plan if, pursuant to the terms of the plan, the portion of any employee’s applicable elective deferrals which is required to be invested in qualifying employer securities and qualifying employer real property for any year may not exceed 1 percent of the employee’s compensation which is taken into account under the plan in determining the maximum amount of the employee’s applicable elective deferrals for such year. (C) For purposes of this paragraph, the term “applicable elective deferral” means any elective deferral (as defined in section 402(g)(3)(A) of title 26 ) which is made pursuant to a qualified cash or deferred arrangement as defined in section 401(k) of title 26 .