250
‘‘(iii) 
APPLICABLE
PLAN
AMEND-
MENT.—For 
purposes 
of 
this
subparagraph—
‘‘(I) IN GENERAL.—The term ‘ap-
plicable plan amendment’ means an
amendment to a defined benefit plan
which has the effect of converting the
plan to a cash balance plan.
‘‘(II) EXCEPTION
FOR
CERTAIN
PLAN AMENDMENTS.—A plan amend-
ment shall not be treated as an appli-
cable plan amendment with respect to
any participant who is eligible to con-
tinue to accrue benefits in the same
manner as under the terms of the plan
in effect before the amendment.
‘‘(III) SPECIAL
RULE
FOR
CO-
ORDINATED BENEFITS.—If the benefits
of 2 or more defined benefit plans es-
tablished or maintained by an em-
ployer are coordinated in such a man-
ner as to have the effect of the adoption
of an amendment described in sub-
clause (I), the sponsor of the defined
benefit plan or plans providing for
251
such coordination shall be treated as
having adopted such a plan amend-
ment as of the date such coordination
begins.
‘‘(IV) MULTIPLE AMENDMENTS.—
The Secretary shall issue regulations to
prevent the avoidance of the purposes
of this subparagraph through the use of
2 or more plan amendments rather
than a single amendment.
‘‘(iv) CASH BALANCE PLAN.—For pur-
poses of this subparagraph—
‘‘(I) 
IN
GENERAL.—The 
term
‘cash balance plan’ means a defined
benefit plan under which the accrued
benefit is determined as an amount
other than an annual benefit com-
mencing at normal retirement age.
‘‘(II) REGULATIONS TO INCLUDE
SIMILAR OR OTHER HYBRID PLANS.—
The Secretary shall issue regulations
which provide that a defined benefit
plan (or any portion of such a plan)
which has an effect similar to a plan
described in subclause (I) shall be
252
treated as a cash balance plan. Such
regulations may provide that if a plan
sponsor represents in communications
to participants and beneficiaries that a
plan amendment results in a plan
being described in the preceding sen-
tence, such plan shall be treated as a
cash balance plan.
‘‘(v) COORDINATION
WITH
ACCRUAL
AND NONDISCRIMINATION RULES.—If a plan
amendment is not treated as an applicable
plan amendment with respect to any partic-
ipant because such participant is eligible to
continue to accrue benefits in the same
manner as under the terms of the plan in
effect before the amendment, the Secretary
shall prescribe regulations under which—
‘‘(I) the plan shall be treated as
meeting the requirements of subpara-
graph (A), (B), or (C) of section
411(b)(1) if such requirements are met
separately with respect to each benefit
accrual formula under the terms of the
plan, and
253
‘‘(II) the plan shall, subject to
such terms and conditions as may be
provided in such regulations, not be
treated as failing to meet the require-
ments of section 401(a)(4) merely be-
cause only participants as of the effec-
tive date of the amendment are so eli-
gible, except that this subclause shall
only apply if the plan met the require-
ments of section 401(a)(4) under the
terms of the plan as in effect before the
amendment.’’
(2) ASSUMPTIONS USED IN COMPUTING PRESENT
VALUE OF ACCRUED BENEFIT.—
(A) BENEFITS ACCRUED BEFORE CASH BAL-
ANCE CONVERSION.—Section 417(e)(3) (relating
to determination of present value) is amended—
(i) by inserting ‘‘or (C)’’ after ‘‘sub-
paragraph (B)’’ in subparagraph (A)(i),
and
(ii) by adding at the end the following
new subparagraph:
‘‘(C) SPECIAL RULE FOR CONVERSIONS TO
CASH BALANCE PLANS.—For purposes of deter-
mining the amount initially credited to the par-
254
ticipant’s accumulation account (or its equiva-
lent) under section 411(d)(6)(D)(ii) after adop-
tion of an applicable plan amendment (as de-
fined in section 411(d)(6)(D)(iii)), the present
value of the accrued benefit of any participant
described in section 411(d)(6)(D)(i)(I) for years
of service before the effective date of the amend-
ment shall not be less than the greater of—
‘‘(i) the present value determined by
using the applicable mortality table and the
applicable interest rate under subparagraph
(A) which are in effect under the plan on
such effective date, or
‘‘(ii) the amount of the lump sum dis-
tribution payable as of such effective date,
determined as if the individual were enti-
tled to the distribution and under the terms
of the plan as in effect immediately before
such effective date, but not taking into ac-
count any early retirement benefit or retire-
ment-type subsidy (within the meaning of
section 411(d)(6)(B)(i)).’’
(B) PRESENT VALUE DETERMINATION FOR
CASH
BALANCE
PLANS.—Section 417(e)(3), as
amended by subparagraph (A), is amended—
255
(i) by striking ‘‘or (C)’’ in subpara-
graph (A)(i) and inserting ‘‘, (C), or (D)’’,
and
(ii) by adding at the end the following
new subparagraph:
‘‘(D) PRESENT VALUE OF ACCRUED BEN-
EFIT UNDER CASH BALANCE PLAN.—Except as
provided in regulations, in the case of a cash
balance 
plan 
(as 
defined 
in 
section
411(d)(6)(D)(iv)), the present value of the ac-
crued benefit of any participant shall, for pur-
poses of paragraphs (1) and (2), be equal to the
balance in the participant’s accumulation ac-
count (or its equivalent) as of the time the
present value determination is being made. This
subparagraph shall not apply to any portion of
the 
accrued 
benefit 
described 
in 
section
411(d)(6)(D)(i)(I) except to the extent the plan
meets 
the 
requirements 
of 
section
411(d)(6)(D)(ii) with respect to such portion.’’
(b) AMENDMENTS TO ERISA.—
(1) IN
GENERAL.—Section 204(g) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1054(g)) is amended by adding at the end the
following new paragraph:
256
‘‘(4)(A) For purposes of paragraph (1), an applicable
plan amendment shall be treated as reducing the accrued
benefit of a participant if, under the terms of the plan as
in effect after the amendment, the accrued benefit of the par-
ticipant may at any time be less than the sum of—
‘‘(i) the participant’s accrued benefit for years of
service before the effective date of the amendment, de-
termined under the terms of the plan as in effect be-
fore the amendment and by not taking into account
any early retirement benefit or retirement-type sub-
sidy (within the meaning of paragraph (2)(A)), plus
‘‘(ii) the participant’s accrued benefit for years
of service after the effective date of the amendment,
determined under the terms of the plan as in effect
after the amendment.
‘‘(B) If an applicable plan amendment provides that
the accrued benefit initially credited to a participant’s ac-
cumulation account (or its equivalent) on the effective date
of the amendment is not less than the amount determined
under section 205(g)(3)(C) as of such date, the plan shall
not be treated as failing to meet the requirements of sub-
paragraph (A)(i) at any time after such date merely be-
cause of fluctuations in interest rates.
‘‘(C) For purposes of this paragraph—
257
‘‘(i) The term ‘applicable plan amendment’
means an amendment to a defined benefit plan which
has the effect of converting the plan to a cash balance
plan.
‘‘(ii) A plan amendment shall not be treated as
an applicable plan amendment with respect to any
participant who is eligible to continue to accrue bene-
fits in the same manner as under the terms of the
plan in effect before the amendment.
‘‘(iii) If the benefits of 2 or more defined benefit
plans established or maintained by an employer are
coordinated in such a manner as to have the effect of
the adoption of an amendment described in clause (i),
the sponsor of the defined benefit plan or plans pro-
viding for such coordination shall be treated as hav-
ing adopted such a plan amendment as of the date
such coordination begins.
‘‘(iv) The Secretary of the Treasury shall issue
regulations to prevent the avoidance of the purposes
of this paragraph through the use of 2 or more plan
amendments rather than a single amendment.
‘‘(D) For purposes of this paragraph—
‘‘(i) The term ‘cash balance plan’ means a de-
fined benefit plan under which the accrued benefit is
258
determined as an amount other than an annual ben-
efit commencing at normal retirement age.
‘‘(ii) The Secretary of the Treasury shall issue
regulations which provide that a defined benefit plan
(or any portion of such a plan) which has an effect
similar to a plan described in clause (i) shall be
treated as a cash balance plan. Such regulations may
provide that if a plan sponsor represents in commu-
nications to participants and beneficiaries that a
plan amendment results in a plan being described in
the preceding sentence, such plan shall be treated as
a cash balance plan.
‘‘(E) If a plan amendment is not treated as an appli-
cable plan amendment with respect to any participant be-
cause such participant is eligible to continue to accrue bene-
fits in the same manner as under the terms of the plan
in effect before the amendment, the Secretary shall prescribe
regulations under which the plan shall be treated as meeting
the requirements of subparagraph (A), (B), or (C) of section
204(b)(1) if such requirements are met separately with re-
spect to each benefit accrual formula under the terms of the
plan.’’
(2) ASSUMPTIONS USED IN COMPUTING PRESENT
VALUE OF ACCRUED BENEFIT.—
259
(A) BENEFITS ACCRUED BEFORE CASH BAL-
ANCE
CONVERSION.—Section 205(g)(3) of such
Act (29 U.S.C. 1055(g)(3)) is amended—
(i) by inserting ‘‘or (C)’’ after ‘‘sub-
paragraph (B)’’ in subparagraph (A)(i),
and
(ii) by adding at the end the following
new subparagraph:
‘‘(C) For purposes of determining the amount initially
credited to the participant’s accumulation account (or its
equivalent) under section 204(g)(4)(B) after adoption of an
applicable plan amendment (as defined in section
204(g)(4)(C)), the present value of the accrued benefit of
any participant described in section 204(g)(4)(A)(i) for
years of service before the effective date of the amendment
shall not be less than the greater of—
‘‘(i) the present value determined by using the
applicable mortality table and the applicable interest
rate under paragraph (1) which are in effect under
the plan on such effective date, or
‘‘(ii) the amount of the lump sum distribution
payable as of such effective date, determined as if the
individual were entitled to the distribution and under
the terms of the plan as in effect immediately before
such effective date, but not taking into account any
260
early retirement benefit or retirement-type subsidy
(within the meaning of section 204(g)(2)(A)).’’
(B) INTEREST RATE ASSUMPTION FOR CASH
BALANCE PLANS.—Section 205(g)(3) of such Act
(29 U.S.C. 1055(g)(3)), as amended by subpara-
graph (A), is amended—
(i) by striking ‘‘or (C)’’ in subpara-
graph (A)(i) and inserting ‘‘, (C), or (D)’’,
and
(ii) by adding at the end the following
new subparagraph:
‘‘(D) Except as provided in regulations prescribed by
the Secretary of the Treasury, in the case of a cash balance
plan (as defined in section 204(g)(4)(D)), the present value
of the accrued benefit of any participant shall, for purposes
of paragraphs (1) and (2), be equal to the balance in the
participant’s accumulation account (or its equivalent) as
of the time the present value determination is being made.
This subparagraph shall not apply to any portion of the
accrued benefit described in section 204(g)(4)(A)(i) except
to the extent the plan meets the requirements of section
204(g)(4)(B) with respect to such portion.’’
(c) NO INFERENCE.—Nothing in the amendments
made by this section shall be construed to infer the proper
treatment of cash balance plans or conversions to cash bal-
261
ance plans under the laws in effect before such amendments
or under laws not affected by such amendments.
(d) REGULATIONS RELATING TO EARLY RETIREMENT
SUBSIDIES.—The Secretary of the Treasury or his delegate
shall, not later than 1 year after the date of the enactment
of this Act, issue the regulations relating to early retirement
benefits or retirement-type subsidies described in section
411(d)(6)(B)(i) of the Internal Revenue Code of 1986 and
section 204(g)(2)(A) of the Employee Retirement Income
Security Act of 1974.
SEC. 523. EFFECTIVE DATES.
(a) IN GENERAL.—The amendments made by this sub-
title shall apply to plan amendments taking effect on or
after the date of the enactment of this Act.
(b) SPECIAL RULE FOR COLLECTIVELY BARGAINED
PLANS.—In the case of a plan maintained pursuant to 1
or more collective bargaining agreements between employee
representatives and 1 or more employers ratified by the date
of the enactment of this Act, the amendments made by this
subtitle shall not apply to plan amendments taking effect
before the earlier of—
(1) the later of—
(A) the date on which the last of such collec-
tive bargaining agreements terminates (deter-
262
mined without regard to any extension thereof on
or after such date of enactment), or
(B) January 1, 2001, or
(2) January 1, 2003.
(c) SPECIAL NOTICE RULES.—
(1) IN GENERAL.—The period for providing any
notice required by the amendments made by section
521 shall not end before the date which is 3 months
after the date of the enactment of this Act.
(2) REASONABLE
NOTICE.—The amendments
made by section 521 shall not apply to any plan
amendment taking effect on or after the date of enact-
ment of this Act if, before September 5, 2000, notice
was provided to participants and beneficiaries ad-
versely affected by the plan amendment (or their rep-
resentatives) which was reasonably expected to notify
them of the nature and effective date of the plan
amendment.
TITLE VI—REDUCING
REGULATORY BURDENS
SEC. 601. MODIFICATION OF TIMING OF PLAN VALUATIONS.
(a) IN GENERAL.—Paragraph (9) of section 412(c)(9)
(relating to annual valuation) is amended to read as fol-
lows:
‘‘(9) ANNUAL VALUATION.—
263
‘‘(A) IN
GENERAL.—For purposes of this
section, a determination of experience gains and
losses and a valuation of the plan’s liability
shall be made not less frequently than once every
year, except that such determination shall be
made more frequently to the extent required in
particular cases under regulations prescribed by
the Secretary.
‘‘(B) VALUATION DATE.—
‘‘(i) CURRENT YEAR.—Except as pro-
vided in clause (ii), the valuation referred
to in subparagraph (A) shall be made as of
a date within the plan year to which the
valuation refers or within one month prior
to the beginning of such year.
‘‘(ii) ELECTION TO USE PRIOR YEAR
VALUATION.—The valuation referred to in
subparagraph (A) may be made as of a date
within the plan year prior to the year to
which the valuation refers if—
‘‘(I) an election is in effect under
this clause with respect to the plan,
and
‘‘(II) as of such date, the value of
the assets of the plan are not less than
264
125 percent of the plan’s current liabil-
ity (as defined in paragraph (7)(B)).
‘‘(iii) 
ADJUSTMENTS.—Information
under clause (ii) shall, in accordance with
regulations, be actuarially adjusted to re-
flect significant differences in participants.
‘‘(iv) ELECTION.—An election under
clause (ii), once made, shall be irrevocable
without the consent of the Secretary.’’.
(b) AMENDMENTS TO ERISA.—Paragraph (9) of sec-
tion 302(c) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1053(c)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(9)’’, and
(2) by adding at the end the following:
‘‘(B)(i) Except as provided in clause (ii), if, for any
plan year—
‘‘(I) an election is in effect under this subpara-
graph with respect to a plan, and
‘‘(II) the assets of the plan are not less than 125
percent of the plan’s current liability (as defined in
paragraph (7)(B)), determined as of the valuation
date for the preceding plan year,
then this section shall be applied using the information
available as of such valuation date.
265
‘‘(ii)(I) Clause (i) shall not apply for more than 2 con-
secutive plan years and valuation shall be under subpara-
graph (A) with respect to any plan year to which clause
(i) does not apply by reason of this subclause.
‘‘(II) Clause (i) shall not apply to the extent that more
frequent valuations are required under the regulations
under subparagraph (A).
‘‘(iii) Information under clause (i) shall, in accord-
ance with regulations, be actuarially adjusted to reflect sig-
nificant differences in participants.
‘‘(iv) An election under this subparagraph, once made,
shall be irrevocable without the consent of the Secretary of
the Treasury.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 2000.
SEC. 602. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT
LOSS OF DIVIDEND DEDUCTION.
(a) IN GENERAL.—Section 404(k)(2)(A) (defining ap-
plicable dividends) is amended by striking ‘‘or’’ at the end
of clause (ii), by redesignating clause (iii) as clause (iv),
and by inserting after clause (ii) the following new clause:
‘‘(iii) is, at the election of such partici-
pants or their beneficiaries—
266
‘‘(I) payable as provided in clause
(i) or (ii), or
‘‘(II) paid to the plan and rein-
vested in qualifying employer securi-
ties, or’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2000.
SEC. 603. REPEAL OF TRANSITION RULE RELATING TO CER-
TAIN HIGHLY COMPENSATED EMPLOYEES.
(a) IN GENERAL.—Paragraph (4) of section 1114(c)
of the Tax Reform Act of 1986 is hereby repealed.
(b) EFFECTIVE DATE.—The repeal made by subsection
(a) shall apply to plan years beginning after December 31,
2000.
SEC. 604. EMPLOYEES OF TAX-EXEMPT ENTITIES.
(a) IN GENERAL.—The Secretary of the Treasury shall
modify Treasury Regulations section 1.410(b)–6(g) to pro-
vide that employees of an organization described in section
403(b)(1)(A)(i) of the Internal Revenue Code of 1986 who
are eligible to make contributions under section 403(b) of
such Code pursuant to a salary reduction agreement may
be treated as excludable with respect to a plan under section
401(k) or (m) of such Code that is provided under the same
267
general arrangement as a plan under such section 401(k),
if—
(1) no employee of an organization described in
section 403(b)(1)(A)(i) of such Code is eligible to par-
ticipate in such section 401(k) plan or section 401(m)
plan; and
(2) 95 percent of the employees who are not em-
ployees of an organization described in section
403(b)(1)(A)(i) of such Code are eligible to partici-
pate in such plan under such section 401(k) or (m).
(b) EFFECTIVE DATE.—The modification required by
subsection (a) shall apply as of the same date set forth in
section 1426(b) of the Small Business Job Protection Act
of 1996.
SEC. 605. CLARIFICATION OF TREATMENT OF EMPLOYER-
PROVIDED RETIREMENT ADVICE.
(a) IN GENERAL.—Subsection (a) of section 132 (relat-
ing to exclusion from gross income) is amended by striking
‘‘or’’ at the end of paragraph (5), by striking the period
at the end of paragraph (6) and inserting ‘‘, or’’, and by
adding at the end the following new paragraph:
‘‘(7) qualified retirement planning services.’’.
(b) QUALIFIED RETIREMENT PLANNING SERVICES DE-
FINED.—Section 132 is amended by redesignating sub-
268
section (m) as subsection (n) and by inserting after sub-
section (l) the following:
‘‘(m) QUALIFIED
RETIREMENT
PLANNING
SERV-
ICES.—
‘‘(1) IN GENERAL.—For purposes of this section,
the term ‘qualified retirement planning services’
means any retirement planning advice or informa-
tion provided to an employee and his spouse by an
employer maintaining a qualified employer plan.
‘‘(2) 
NONDISCRIMINATION
RULE.—Subsection
(a)(7) shall apply in the case of highly compensated
employees only if such services are available on sub-
stantially the same terms to each member of the group
of employees normally provided education and infor-
mation regarding the employer’s qualified employer
plan.
‘‘(3) QUALIFIED EMPLOYER PLAN.—For purposes
of this subsection, the term ‘qualified employer plan’
means a plan, contract, pension, or account described
in section 219(g)(5).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to years beginning after December 31,
2000.
269
SEC. 606. REPORTING SIMPLIFICATION.
(a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR
OWNERS AND THEIR SPOUSES.—
(1) IN GENERAL.—The Secretary of the Treasury
shall modify the requirements for filing annual re-
turns with respect to one-participant retirement plans
to ensure that such plans with assets of $250,000 or
less as of the close of the plan year need not file a
return for that year.
(2) ONE-PARTICIPANT
RETIREMENT
PLAN
DE-
FINED.—For purposes of this subsection, the term
‘‘one-participant retirement plan’’ means a retire-
ment plan that—
(A) on the first day of the plan year—
(i) covered only the employer (and the
employer’s spouse) and the employer owned
the entire business (whether or not incor-
porated); or
(ii) covered only one or more partners
(and their spouses) in a business partner-
ship (including partners in an S or C cor-
poration);
(B) meets the minimum coverage require-
ments of section 410(b) of the Internal Revenue
Code of 1986 without being combined with any
270
other plan of the business that covers the employ-
ees of the business;
(C) does not provide benefits to anyone ex-
cept the employer (and the employer’s spouse) or
the partners (and their spouses);
(D) does not cover a business that is a
member of an affiliated service group, a con-
trolled group of corporations, or a group of busi-
nesses under common control; and
(E) does not cover a business that leases em-
ployees.
(3) OTHER DEFINITIONS.—Terms used in para-
graph (2) which are also used in section 414 of the
Internal Revenue Code of 1986 shall have the respec-
tive meanings given such terms by such section.
(b) EFFECTIVE DATE.—The provisions of this section
shall take effect on January 1, 2001.
SEC. 607. IMPROVEMENT OF EMPLOYEE PLANS COMPLI-
ANCE RESOLUTION SYSTEM.
The Secretary of the Treasury shall continue to update
and improve the Employee Plans Compliance Resolution
System (or any successor program) giving special attention
to—
271
(1) increasing the awareness and knowledge of
small employers concerning the availability and use
of the program;
(2) taking into account special concerns and cir-
cumstances that small employers face with respect to
compliance and correction of compliance failures;
(3) extending the duration of the self-correction
period under the Administrative Policy Regarding
Self-Correction for significant compliance failures;
(4) expanding the availability to correct insig-
nificant compliance failures under the Administrative
Policy Regarding Self-Correction during audit; and
(5) assuring that any tax, penalty, or sanction
that is imposed by reason of a compliance failure is
not excessive and bears a reasonable relationship to
the nature, extent, and severity of the failure.
SEC. 608. REPEAL OF THE MULTIPLE USE TEST.
(a) IN GENERAL.—Paragraph (9) of section 401(m) is
amended to read as follows:
‘‘(9) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to carry
out the purposes of this subsection and subsection (k),
including regulations permitting appropriate aggre-
gation of plans and contributions.’’.
272
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to years beginning after December 31,
2000.
SEC. 
609. 
FLEXIBILITY 
IN 
NONDISCRIMINATION, 
COV-
ERAGE, AND LINE OF BUSINESS RULES.
(a) NONDISCRIMINATION.—
(1) IN GENERAL.—The Secretary of the Treasury
shall, by regulation, provide that a plan shall be
deemed to satisfy the requirements of section
401(a)(4) of the Internal Revenue Code of 1986 if
such plan satisfies the facts and circumstances test
under section 401(a)(4) of such Code, as in effect be-
fore January 1, 1994, but only if—
(A) the plan satisfies conditions prescribed
by the Secretary to appropriately limit the
availability of such test; and
(B) the plan is submitted to the Secretary
for a determination of whether it satisfies such
test.
Subparagraph (B) shall only apply to the extent pro-
vided by the Secretary.
(2) EFFECTIVE DATES.—
(A) REGULATIONS.—The regulation re-
quired by paragraph (1) shall apply to years be-
ginning after December 31, 2001.
273
(B) CONDITIONS
OF
AVAILABILITY.—Any
condition of availability prescribed by the Sec-
retary under paragraph (1)(A) shall not apply
before the first year beginning not less than 120
days after the date on which such condition is
prescribed.
(b) COVERAGE TEST.—
(1) IN GENERAL.—Section 410(b)(1) (relating to
minimum coverage requirements) is amended by add-
ing at the end the following:
‘‘(D) In the case that the plan fails to meet
the requirements of subparagraphs (A), (B) and
(C), the plan—
‘‘(i) satisfies subparagraph (B), as in
effect immediately before the enactment of
the Tax Reform Act of 1986,
‘‘(ii) is submitted to the Secretary for
a determination of whether it satisfies the
requirement described in clause (i), and
‘‘(iii) satisfies conditions prescribed by
the Secretary by regulation that appro-
priately limit the availability of this sub-
paragraph.
Clause (ii) shall apply only to the extent pro-
vided by the Secretary.’’.
274
(2) EFFECTIVE DATES.—
(A) IN
GENERAL.—The amendment made
by paragraph (1) shall apply to years beginning
after December 31, 2001.
(B) CONDITIONS
OF
AVAILABILITY.—Any
condition of availability prescribed by the Sec-
retary under regulations prescribed by the Sec-
retary under section 410(b)(1)(D) of the Internal
Revenue Code of 1986 shall not apply before the
first year beginning not less than 120 days after
the date on which such condition is prescribed.
(c) LINE OF BUSINESS RULES.—The Secretary of the
Treasury shall, on or before December 31, 2001, modify the
existing regulations issued under section 414(r) of the Inter-
nal Revenue Code of 1986 in order to expand (to the extent
that the Secretary determines appropriate) the ability of
a pension plan to demonstrate compliance with the line of
business requirements based upon the facts and cir-
cumstances surrounding the design and operation of the
plan, even though the plan is unable to satisfy the mechan-
ical tests currently used to determine compliance.