PUBLIC LAW 100-647—NOV. 10, 1988 102 STAT. 3459

(10) Notwithstanding any other provision of law, a plan may 26 USC 402 note.
incorporate by reference the dollar limitations under section

402(g) of the Internal Revenue Code of 1986.

(11) Section 402(gX3) of the 1986 Code is amended by inserting Wages.
at the end thereof the following new sentence: "An employer
contribution shall not be treated as an elective deferral de-
scribed in subparagraph (C) if under the salary reduction
agreement such contribution is made pursuant to a one-time
irrevocable election made by the employee at the time of initial
eligibility to participate in the agreement or is made pursuant

to a similar arrangement specified in regulations."

(12) Subparagraph (A) of section 403(bX12) of the 1986 Code is
amended oy inserting after clause (ii) the following new
sentence:

"For purposes of clause (i), a contribution shall be treated
as not made pursuant to a salary reduction agreement if
under the agreement it is made pursuant to a 1-time irrev-
ocable election made by the employee at the time of initial
eligibility to participate in the agreement or is made pursu-
ant to a similar arrangement specified in regulations."
(d) AMENDMENTS RELATED TO SECTION 1106 OP THE REFORM ACT.—

(1) Section 404(1) of the 1986 Code (relating to limitation on
amount of compensation which may be taken into account) is
amended by adding at the end thereof the following new sen-
tence: "For purposes of clause (i), (ii), or (iii) of subsection
(aXlXA), and in computing the full funding limitation, any
adjustment under the preceding sentence shall not be taken
into account for any year before the year for which such
adjustment first takes effect.".

(2) Section 415(bX5XD) of the 1986 Code (relating to applica-
tion to changes in benefit structures) is amended by striking out
"this paragraph" and inserting in lieu thereof "subparagraph
(A)".

(3) Paragraph (2) of section 415(k) of the 1986 Code (relating to
contributions to provide cost-of4iving protection under defined
benefit plans), as added by section 1106(c) of the Reform Act, is
amended—

(A) by striking out "to the arrangement" in subparagraph
(CXii) and inserting in lieu thereof "to such increase*, and

(B) by striking out subparagraph (D) and inserting in lieu
thereof:

"(D) ARRANGEMENT ELECTIVE; TIME FOR ELECTION.—An
arrangement meets the requirements of this subparagraph
only if it is elective, it is available under the same terms to
all participants, and it provides that such election may at
least be made in the year in which the participant—

"(i) attains the earliest retirement age under the
defined benefit plan (determined without regard to any
requirement of separation from service), or
(ii) separates from service."

(4) Sections 401(aX17) and 404(1) of the 1986 Code are each
amended by adding at the end thereof the following new sen-
tence: "In determining the compensation of an employee, the
rules of section 414(qX6) shall apply, except that in applying

' shall include only the i

such rules, the term 'family' shall include only the spouse of the
employee and any lineal descendants of the em
not attained age 19 before the close of the year.1