S.Amdt. 2759

This amendment aims to change eligibility rules for Opportunity Zones and establish new rules for transferring specific types of retirement plan assets.

Opportunity Zones

• The amendment changes the eligibility threshold for Opportunity Zones by replacing "70 percent" with "80 percent" in two places. This applies to areas designated after the Act is enacted.

Excess Health Assets

• It allows for the transfer of "excess health assets" (assets exceeding 125 percent of the employer's total liability for retiree health benefits) to be used for funding active employee benefits.
• These assets can be transferred to a pension plan or, in certain cases, to a voluntary employees' beneficiary association.
• It sets rules to prevent these transfers from being treated as employer reversions or prohibited transactions and requires notice to participants at least 60 days before a transfer.
• Employers are prohibited from taking tax deductions for these transfers or for the benefits paid from them.

Surplus Defined Benefit Plan Assets

• It allows surplus assets from a defined benefit plan (assets exceeding 110 percent of the value of plan liabilities) to be transferred to a defined contribution plan.
• The amendment specifies that these transfers are not includible in the employer's gross income and are not treated as employer reversions.
• It requires that benefits in the defined benefit plan become nonforfeitable and that no benefits in the replacement plan are reduced for a specific period following the transfer.