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26 U.S. Code § 411 - Minimum vesting standards

(a) General ruleA trust shall not constitute a qualified trust undersection 401(a) unless the plan of which such trust is a part provides that an employee’s right to his normal retirement benefitis nonforfeitable upon the attainment of normal retirement age(as defined in paragraph (8)) and in addition satisfies the requirements of paragraphs (1), (2), and (11) of this subsection and the requirements of subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, in the case of a defined contribution plan, the requirements of subsection (b)(2).

(1) Employee contributions

A plan satisfies the requirements of this paragraph if an employee’s rights in hisaccrued benefit derived from his own contributions are nonforfeitable.

(2) Employer contributions

(A) Defined benefit plans

(i) In general

In the case of adefined benefit plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).

(ii) 5-year vesting

A plan satisfies the requirements of this clause if an employee who has completed at least 5years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefitderived from employer contributions.

(iii) 3 to 7 year vesting

A plan satisfies the requirements of this clause if an employee has a nonforfeitable right to a percentage of the employee’saccrued benefit derived from employer contributions determined under the following table:

Years of service:	The nonforfeitable percentage is:
3	20
4	40
5	60
6	80
7 or more	100.

(B) Defined contribution plans

(i) In general

In the case of adefined contribution plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).

(ii) 3-year vesting

A plan satisfies the requirements of this clause if an employee who has completed at least 3years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefitderived from employer contributions.

(iii) 2 to 6 year vesting

Years of service:	The nonforfeitable percentage is:
2	20
3	40
4	60
5	80
6 or more	100.

(3) Certain permitted forfeitures, suspensions, etc.For purposes of this subsection—

(A) Forfeiture on account of death

A right to anaccrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that it is not payable if the participant dies (except in the case of a survivor annuity which is payable as provided insection 401(a)(11)).

(B) Suspension of benefits upon reemployment of retireeA right to anaccrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that the payment of benefits is suspended for such period as the employee is employed, subsequent to the commencement of payment of such benefits—

(i)

in the case of a plan other than a multi-employer plan, by the employer who maintains the plan under which such benefits were being paid; and

(ii)

in the case of amultiemployer plan, in the same industry, the same trade or craft, and the same geographic area covered by the plan as when such benefits commenced.

The Secretary of Labor shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph, including regulations with respect to the meaning of the term “employed”.

A right to anaccrued benefit derived from employer contributions shall not be treated as forfeitable solely because plan amendments may be given retroactive application as provided in section 412(d)(2).

(D) Withdrawal of mandatory contribution

(i)

A right to anaccrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that, in the case of a participant who does not have a nonforfeitable right to at least 50 percent of hisaccrued benefit derived from employer contributions, suchaccrued benefit may be forfeited on account of the withdrawal by the participant of any amount attributable to the benefit derived frommandatory contributions (as defined in subsection (c)(2)(C)) made by such participant.

(ii)

Clause (i) shall not apply to a plan unless the plan provides that anyaccrued benefit forfeited under a plan provision described in such clause shall be restored upon repayment by the participant of the full amount of the withdrawal described in such clause plus, in the case of a defined benefit plan, interest. Such interest shall be computed on such amount at the rate determined for purposes of subsection (c)(2)(C) on the date of such repayment (computed annually from the date of such withdrawal). The plan provision required under this clause may provide that such repayment must be made (I) in the case of a withdrawal on account of separation from service, before the earlier of 5 yearsafter the first date on which the participant is subsequently re-employed by the employer, or the close of the first period of 5 consecutive 1-yearbreaks in service commencing after the withdrawal; or (II) in the case of any other withdrawal, 5 yearsafter the date of the withdrawal.

(iii)

In the case ofaccrued benefits derived from employer contributions which accrued beforeSeptember 2, 1974, a right to such accrued benefitderived from employer contributions shall not be treated as forfeitable solely because the plan provides that an amount of such accrued benefitmay be forfeited on account of the withdrawal by the participant of an amount attributable to the benefit derived from mandatory contributions(as defined in subsection (c)(2)(C)) made by such participant beforeSeptember 2, 1974 if such amount forfeited is proportional to such amount withdrawn. This clause shall not apply to any plan to which any mandatory contribution is made afterSeptember 2, 1974. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this clause.

(iv)

For purposes of this subparagraph, in the case of any class-year plan, a withdrawal of employee contributions shall be treated as a withdrawal of such contributions on a planyear by planyear basis in succeeding order of time.

(v)

For nonforfeitability where the employee has a nonforfeitable right to at least 50 percent of hisaccrued benefit, see section 401(a)(19).

(E) Cessation of contributions under a multiemployer plan

A right to anaccrued benefit derived from employer contributions under a multiemployer planshall not be treated as forfeitable solely because the plan provides that benefits accrued as a result of service with the participant’s employer before the employer had an obligation to contribute under the plan may not be payable if the employer ceases contributions to the multiemployer plan.

(F) Reduction and suspension of benefits by a multiemployer planA participant’s right to anaccrued benefit derived from employer contributions under a multiemployer planshall not be treated as forfeitable solely because—

(i)

the plan is amended to reduce benefits under section 4281 of theEmployee Retirement Income Security Act of 1974, or

(ii)

benefit payments under the plan may be suspended under section 418E or under section 4281 of theEmployee Retirement Income Security Act of 1974.

(G) Treatment of matching contributions forfeited by reason of excess deferral or contribution or permissible withdrawal

A matching contribution (within the meaning ofsection 401(m)) shall not be treated as forfeitable merely because such contribution is forfeitable if the contribution to which the matching contribution relates is treated as an excess contribution under section 401(k)(8)(B), an excess deferral under section 402(g)(2)(A), a permissible withdrawal under section 414(w), or an excess aggregate contribution under section 401(m)(6)(B).

(4) Service included in determination of nonforfeitable percentageIn computing the period of service under the plan for purposes of determining the nonforfeitable percentage under paragraph (2), all of an employee’syears of service with the employer or employers maintaining the plan shall be taken into account, except that the following may be disregarded:

(A)

years of service before age 18;

(B)

years of service during a period for which the employee declined to contribute to a plan requiring employee contributions;

(C)

years of service with an employer during any period for which the employer did not maintain the plan or a predecessor plan (as defined under regulations prescribed by the Secretary);

(D)

service not required to be taken into account under paragraph (6);

(E)

years of service beforeJanuary 1, 1971, unless the employee has had at least 3 years of serviceafterDecember 31, 1970;

(F)

years of service before the first plan yearto which this section applies, if such service would have been disregarded under the rules of the plan with regard to breaks in service as in effect on the applicable date; and

(G) in the case of amultiemployer plan,years of service—

(i) with an employer after—

(I)

a complete withdrawal of that employer from the plan (within the meaning of section 4203 of theEmployee Retirement Income Security Act of 1974), or

(II)

to the extent permitted in regulations prescribed by the Secretary, a partial withdrawal described in section 4205(b)(2)(A)(i) of such Act in conjunction with the decertification of the collective bargaining representative, and

(ii)

with any employer under the plan after the termination date of the plan under section 4048 of such Act.

(5) Year of service

(A) General rule

For purposes of this subsection, except as provided in subparagraph (C), the term “year of service” means a calendar year, plan year, or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has completed 1,000hours of service.

(B) Hours of service

For purposes of this subsection, the term “hours of service” has the meaning provided by section 410(a)(3)(C).

In the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendaryear, the term “year of service” shall be such period as may be determined under regulations prescribed by the Secretary of Labor.

(D) Maritime industries

For purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as 1,000hours of service. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.

(6) Breaks in service

(A) Definition of 1-year break in service

For purposes of this paragraph, the term “1-year break in service” means a calendar year, plan year, or other 12-consecutive-month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has not completed more than 500 hours of service.

(B) 1 year of service after 1-year break in service

For purposes of paragraph (4), in the case of any employee who has any1-year break in service, years of servicebefore such break shall not be required to be taken into account until he has completed a year of serviceafter his return.

For purposes of paragraph (4), in the case of any participant in adefined contribution plan, or an insured defined benefit planwhich satisfies the requirements of subsection (b)(1)(F), who has 5 consecutive 1-year breaks in service,years of service after such 5-yearperiod shall not be required to be taken into account for purposes of determining the nonforfeitable percentage of his accrued benefitderived from employer contributions which accrued before such 5-yearperiod.

(D) Nonvested participants

(i) In generalFor purposes of paragraph (4), in the case of anonvested participant, years of servicewith the employer or employers maintaining the plan before any period of consecutive 1-yearbreaks in service shall not be required to be taken into account if the number of consecutive 1-yearbreaks in service within such period equals or exceeds the greater of—

(I)

5, or

(II)

the aggregate number ofyears of service before such period.

(ii) Years of service not taken into account

If anyyears of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, suchyears of service shall not be taken into account in applying clause (i) to a subsequent period of breaks in service.

(iii) Nonvested participant defined

For purposes of clause (i), the term “nonvested participant” means a participant who does not have any nonforfeitable right under the plan to an accrued benefitderived from employer contributions.

(E) Special rule for maternity or paternity absences

(i) General ruleIn the case of each individual who is absent from work for any period—

(I)

by reason of the pregnancy of the individual,

(II)

by reason of the birth of a child of the individual,

(III)

by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or

(IV)

for purposes of caring for such child for a period beginning immediately following such birth or placement,

the plan shall treat ashours of service, solely for purposes of determining under this paragraph whether a1-year break in service has occurred, the hours described in clause (ii).

(ii) Hours treated as hours of serviceThe hours described in this clause are—

(I)

thehours of service which otherwise would normally have been credited to such individual but for such absence, or

(II)

in any case in which the plan is unable to determine the hours described in subclause (I), 8hours of service per day of absence,

except that the total number of hours treated ashours of service under this clause by reason of any such pregnancy or placement shall not exceed 501 hours.

(iii) Year to which hours are creditedThe hours described in clause (ii) shall be treated ashours of service as provided in this subparagraph—

(I)

only in theyear in which the absence from work begins, if a participant would be prevented from incurring a1-year break in service in such yearsolely because the period of absence is treated as hours of serviceas provided in clause (i); or

(II)

in any other case, in the immediately followingyear.

(iv) Year defined

For purposes of this subparagraph, the term “year” means the period used in computations pursuant to paragraph (5).

(v) Information required to be filedA plan shall not fail to satisfy the requirements of this subparagraph solely because it provides that no credit will be given pursuant to this subparagraph unless the individual furnishes to theplan administrator such timely information as the plan may reasonably require to establish—

(I)

that the absence from work is for reasons referred to in clause (i), and

(II)

the number of days for which there was such an absence.

(7) Accrued benefit

(A) In generalFor purposes of this section, the term “accrued benefit” means—

(i)

in the case of adefined benefit plan, the employee’saccrued benefit determined under the plan and, except as provided in subsection (c)(3), expressed in the form of an annual benefit commencing atnormal retirement age, or

(ii)

in the case of a plan which is not adefined benefit plan, the balance of the employee’s account.

(B) Effect of certain distributionsNotwithstanding paragraph (4), for purposes of determining the employee’saccrued benefit under the plan, the plan may disregard service performed by the employee with respect to which he has received—

(i)

a distribution of the present value of his entire nonforfeitable benefit if such distribution was in an amount (not more than the dollar limit undersection 411(a)(11)(A)) permitted under regulations prescribed by the Secretary, or

(ii)

a distribution of the present value of his nonforfeitable benefit attributable to such service which he elected to receive.

Clause (i) of this subparagraph shall apply only if such distribution was made on termination of the employee’s participation in the plan. Clause (ii) of this subparagraph shall apply only if such distribution was made on termination of the employee’s participation in the plan or under such other circumstances as may be provided under regulations prescribed by the Secretary.

(C) Repayment of subparagraph (B) distributionsFor purposes of determining the employee’saccrued benefit under a plan, the plan may not disregard service as provided in subparagraph (B) unless the plan provides an opportunity for the participant to repay the full amount of the distribution described in such subparagraph (B) with, in the case of a defined benefit plan, interest at the rate determined for purposes of subsection (c)(2)(C) and provides that upon such repayment the employee’saccrued benefit shall be recomputed by taking into account service so disregarded. This subparagraph shall apply only in the case of a participant who—

(i)

received such a distribution in any planyear to which this section applies, which distribution was less than the present value of hisaccrued benefit,

(ii)

resumes employment covered under the plan, and

(iii)

repays the full amount of such distribution with, in the case of adefined benefit plan, interest at the rate determined for purposes of subsection (c)(2)(C).

The plan provision required under this subparagraph may provide that such repayment must be made (I) in the case of a withdrawal on account of separation from service, before the earlier of 5years after the first date on which the participant is subsequently re-employed by the employer, or the close of the first period of 5 consecutive 1-year breaks in service commencing after the withdrawal; or (II) in the case of any other withdrawal, 5years after the date of the withdrawal.

(D) Accrued benefit attributable to employee contributions

Theaccrued benefit of an employee shall not be less than the amount determined under subsection (c)(2)(B) with respect to the employee’saccumulated contributions.

(8) Normal retirement ageFor purposes of this section, the term “normal retirement age” means the earlier of—

(A)

the time a plan participant attainsnormal retirement age under the plan, or

(B) the later of—

(i)

the time a plan participant attains age 65, or

(ii)

the 5th anniversary of the time a plan participant commenced participation in the plan.

(9) Normal retirement benefitFor purposes of this section, the term “normal retirement benefit” means the greater of the early retirement benefitunder the plan, or the benefit under the plan commencing at normal retirement age. Thenormal retirement benefit shall be determined without regard to—

(A)

medical benefits, and

(B)

disability benefits not in excess of the qualified disability benefit.

For purposes of this paragraph, a qualified disability benefit is a disability benefit provided by a plan which does not exceed the benefit which would be provided for the participant if he separated from the service atnormal retirement age. For purposes of this paragraph, theearly retirement benefit under a plan shall be determined without regard to any benefits commencing before benefits payable under title II of theSocial Security Act become payable which—

(i)

do not exceed such social security benefits, and

(ii)

terminate when such social security benefits commence.

(10) Changes in vesting schedule

(A) General rule

A plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) if the nonforfeitable percentage of theaccrued benefit derived from employer contributions (determined as of the later of the date such amendment is adopted, or the date such amendment becomes effective) of any employee who is a participant in the plan is less than such nonforfeitable percentage computed under the plan without regard to such amendment.

(B) Election of former schedule

A plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) unless each participant having not less than 3years of service is permitted to elect, within a reasonable period after the adoption of such amendment, to have his nonforfeitable percentage computed under the plan without regard to such amendment.

(11) Restrictions on certain mandatory distributions

(A) In general

If the present value of any nonforfeitableaccrued benefit exceeds $7,000, a plan meets the requirements of this paragraph only if such plan provides that such benefit may not be immediately distributed without the consent of the participant.

(B) Determination of present value

For purposes of subparagraph (A), the present value shall be calculated in accordance with section 417(e)(3).

This paragraph shall not apply to any distribution of dividends to whichsection 404(k) applies.

(D) Special rule for rollover contributions

A plan shall not fail to meet the requirements of this paragraph if, under the terms of the plan, the present value of the nonforfeitableaccrued benefit is determined without regard to that portion of such benefit which is attributable torollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term “rollover contributions” means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

[(12) Repealed.Pub. L. 109–280, title IX, § 904(a)(2),Aug. 17, 2006,120 Stat. 1049]

(13) Special rules for plans computing accrued benefits by reference to hypothetical account balance or equivalent amounts

(A) In generalAnapplicable defined benefit plan shall not be treated as failing to meet—

(i)

subject to subparagraph (B), the requirements of subsection (a)(2), or

(ii)

the requirements of subsection (a)(11) or (c), or the requirements of section 417(e), with respect toaccrued benefits derived from employer contributions,

solely because the present value of theaccrued benefit (or any portion thereof) of any participant is, under the terms of the plan, equal to the amount expressed as the balance in the hypothetical account described in subparagraph (C) or as an accumulated percentage of the participant’s final average compensation.

(B) 3-year vesting

In the case of anapplicable defined benefit plan, such plan shall be treated as meeting the requirements of subsection (a)(2) only if an employee who has completed at least 3 years of servicehas a nonforfeitable right to 100 percent of the employee’s accrued benefitderived from employer contributions.

(i) In general

The term “applicable defined benefit plan” means a defined benefit planunder which the accrued benefit(or any portion thereof) is calculated as the balance of a hypothetical account maintained for the participant or as an accumulated percentage of the participant’s final average compensation.

(ii) Regulations to include similar plans

The Secretary shall issue regulations which include in the definition of anapplicable defined benefit plan any defined benefit plan(or any portion of such a plan) which has an effect similar to anapplicable defined benefit plan.

(b) Accrued benefit requirements

(1) Defined benefit plans

(A) 3-percent methodAdefined benefit plan satisfies the requirements of this paragraph if theaccrued benefit to which each participant is entitled upon his separation from the service is not less than—

(i)

3 percent of thenormal retirement benefit to which he would be entitled if he commenced participation at the earliest possible entry age under the plan and served continuously until the earlier of age 65 or the normal retirement agespecified under the plan, multiplied by

(ii)

the number ofyears (not in excess of 33⅓) of his participation in the plan.

In the case of a plan providing retirement benefits based on compensation during any period, thenormal retirement benefit to which a participant would be entitled shall be determined as if he continued to earn annually the average rate of compensation which he earned during consecutive years of service, not in excess of 10, for which his compensation was the highest. For purposes of this subparagraph, social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current yearfor all yearsafter such current year.

(B) 133⅓ percent ruleAdefined benefit plan satisfies the requirements of this paragraph for a particular planyear if under the plan theaccrued benefit payable at thenormal retirement age is equal to thenormal retirement benefit and the annual rate at which any individual who is or could be a participant can accrue the retirement benefits payable at normal retirement ageunder the plan for any later plan yearis not more than 133⅓ percent of the annual rate at which he can accrue benefits for any plan yearbeginning on or after such particular plan yearand before such later plan year. For purposes of this subparagraph—

(i)

any amendment to the plan which is in effect for the currentyear shall be treated as in effect for all other planyears;

(ii)

any change in an accrual rate which does not apply to any individual who is or could be a participant in the currentyear shall be disregarded;

(iii)

the fact that benefits under the plan may be payable to certain employees beforenormal retirement age shall be disregarded; and

(iv)

social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the currentyear for allyears after the currentyear.

A defined benefits plan satisfies the requirements of this paragraph if theaccrued benefit to which any participant is entitled upon his separation from the service is not less than a fraction of the annual benefit commencing atnormal retirement age to which he would be entitled under the plan as in effect on the date of his separation if he continued to earn annually untilnormal retirement age the same rate of compensation upon which hisnormal retirement benefit would be computed under the plan, determined as if he had attained normal retirement ageon the date on which any such determination is made (but taking into account no more than the 10 years of serviceimmediately preceding his separation from service). Such fraction shall be a fraction, not exceeding 1, the numerator of which is the total number of his yearsof participation in the plan (as of the date of his separation from the service) and the denominator of which is the total number of yearshe would have participated in the plan if he separated from the service at the normal retirement age. For purposes of this subparagraph, social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current yearfor all yearsafter such current year.

(D) Accrual for service before effective dateSubparagraphs (A), (B), and (C) shall not apply with respect toyears of participation before the first planyear to which this section applies, but a defined benefit plansatisfies the requirements of this subparagraph with respect to suchyears of participation only if theaccrued benefit of any participant with respect to such yearsof participation is not less than the greater of—

(i)

hisaccrued benefit determined under the plan, as in effect from time to time prior toSeptember 2, 1974, or

(ii)

anaccrued benefit which is not less than one-half of theaccrued benefit to which such participant would have been entitled if subparagraph (A), (B), or (C) applied with respect to such yearsof participation.

(E) First two years of service

Notwithstanding subparagraphs (A), (B), and (C) of this paragraph, a plan shall not be treated as not satisfying the requirements of this paragraph solely because the accrual of benefits under the plan does not become effective until the employee has two continuousyears of service. For purposes of this subparagraph, the term “years of service” has the meaning provided by section 410(a)(3)(A).

(F) Certain insured defined benefit plansNotwithstanding subparagraphs (A), (B), and (C), adefined benefit plan satisfies the requirements of this paragraph if such plan—

(i)

is funded exclusively by the purchase of insurance contracts, and

(ii)

satisfies the requirements of subparagraphs (B) and (C) of section 412(e)(3) (relating to certain insurance contract plans),

but only if an employee’saccrued benefit as of any applicable date is not less than the cash surrender value his insurance contracts would have on such applicable date if the requirements of subparagraphs (D), (E), and (F) ofsection 412(e)(3) were satisfied.

(G) Accrued benefit may not decrease on account of increasing age or serviceNotwithstanding the preceding subparagraphs, adefined benefit plan shall be treated as not satisfying the requirements of this paragraph if the participant’saccrued benefit is reduced on account of any increase in his age or service. The preceding sentence shall not apply to benefits under the plan commencing before entitlement to benefits payable under title II of theSocial Security Act which benefits under the plan—

(i)

do not exceed such social security benefits, and

(ii)

terminate when such social security benefits commence.

(H) Continued accrual beyond normal retirement age

(i) In general

Notwithstanding the preceding subparagraphs, adefined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age.

(ii) Certain limitations permitted

A plan shall not be treated as failing to meet the requirements of this subparagraph solely because the plan imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number ofyears of service or yearsof participation which are taken into account for purposes of determining benefit accrual under the plan.

(iii) Adjustments under plan for delayed retirement taken into accountIn the case of any employee who, as of the end of any planyear under a defined benefit plan, has attainednormal retirement age under such plan—

(I)

if distribution of benefits under such plan with respect to such employee has commenced as of the end of such planyear, then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such planyear shall be treated as satisfied to the extent of the actuarial equivalent of inservice distribution of benefits, and

(II)

if distribution of benefits under such plan with respect to such employee has not commenced as of the end of suchyear in accordance with section 401(a)(14)(C), and the payment of benefits under such plan with respect to such employee is not suspended during such planyear pursuant to subsection (a)(3)(B), then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such planyear shall be treated as satisfied to the extent of any adjustment in the benefit payable under the plan during such planyear attributable to the delay in the distribution of benefits after the attainment ofnormal retirement age.

The preceding provisions of this clause shall apply in accordance with regulations of the Secretary. Such regulations may provide for the application of the preceding provisions of this clause, in the case of any such employee, with respect to any period of time within a planyear.

(iv) Disregard of subsidized portion of early retirement benefit

A plan shall not be treated as failing to meet the requirements of clause (i) solely because the subsidized portion of anyearly retirement benefit is disregarded in determining benefit accruals.

(v) Coordination with other requirements

The Secretary shall provide by regulation for the coordination of the requirements of this subparagraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor ofhighly compensated employees.

(2) Defined contribution plans

(A) In general

Adefined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee’s account are not ceased, and the rate at which amounts are allocated to the employee’s account is not reduced, because of the attainment of any age.

(B) Application to target benefit plans

The Secretary shall provide by regulation for the application of the requirements of this paragraph to target benefit plans.

The Secretary may provide by regulation for the coordination of the requirements of this paragraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor ofhighly compensated employees.

(3) Separate accounting required in certain casesA plan satisfies the requirements of this paragraph if—

(A)

in the case of thedefined benefit plan, the plan requires separate accounting for the portion of each employee’saccrued benefit derived from any voluntary employee contributions permitted under the plan; and

(B)

in the case of any plan which is not adefined benefit plan, the plan requires separate accounting for each employee’saccrued benefit.

(4) Year of participation

(A) Definition

For purposes of determining an employee’saccrued benefit, the term “year of participation” means a period of service (beginning at the earliest date on which the employee is a participant in the plan and which is included in a period of service required to be taken into account under section 410(a)(5), determined without regard tosection 410(a)(5)(E)) as determined under regulations prescribed by the Secretary of Labor which provide for the calculation of such period on any reasonable and consistent basis.

(B) Less than full time service

For purposes of this paragraph, except as provided in subparagraph (C), in the case of any employee whose customary employment is less than full time, the calculation of such employee’s service on any basis which provides less than a ratable portion of theaccrued benefit to which he would be entitled under the plan if his customary employment were full time shall not be treated as made on a reasonable and consistent basis.

For purposes of this paragraph, in the case of any employee whose service is less than 1,000 hours during any calendaryear, planyear or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) the calculation of his period of service shall not be treated as not made on a reasonable and consistent basis solely because such service is not taken into account.

(D) Seasonal industries

In the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendaryear, the term “year of participation” shall be such period as determined under regulations prescribed by the Secretary of Labor.

(E) Maritime industries

For purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as ayear of participation. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.

(5) Special rules relating to age

(A) Comparison to similarly situated younger individual

(i) In general

A plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) if a participant’saccrued benefit, as determined as of any date under the terms of the plan, would be equal to or greater than that of any similarly situated, younger individual who is or could be a participant.

(ii) Similarly situated

For purposes of this subparagraph, a participant is similarly situated to any other individual if such participant is identical to such other individual in every respect (including period of service, compensation, position, date of hire, work history, and any other respect) except for age.

(iii) Disregard of subsidized early retirement benefits

In determining theaccrued benefit as of any date for purposes of this subparagraph, the subsidized portion of anyearly retirement benefit or retirement-type subsidyshall be disregarded.

(iv) Accrued benefit

For purposes of this subparagraph, theaccrued benefit may, under the terms of the plan, be expressed as an annuity payable atnormal retirement age, the balance of a hypothetical account, or the current value of the accumulated percentage of the employee’s final average compensation.

(B) Applicable defined benefit plans

(i) Interest credits

(I) In general

Anapplicable defined benefit plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the terms of the plan provide that any interest credit (or an equivalent amount) for any plan yearshall be at a rate which is not greater than a market rate of return. A plan shall not be treated as failing to meet the requirements of this subclause merely because the plan provides for a reasonable minimum guaranteed rate of return or for a rate of return that is equal to the greater of a fixed or variable rate of return.

(II) Preservation of capital

Anapplicable defined benefit plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the plan provides that an interest credit (or equivalent amount) of less than zero shall in no event result in the account balance or similar amount being less than the aggregate amount of contributions credited to the account.

(III) Market rate of return

The Secretary may provide by regulation for rules governing the calculation of a market rate of return for purposes of subclause (I) and for permissible methods of crediting interest to the account (including fixed or variable interest rates) resulting in effective rates of return meeting the requirements of subclause (I).

(ii) Special rule for plan conversions

If, afterJune 29, 2005, an applicable plan amendmentis adopted, the plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the requirements of clause (iii) are met with respect to each individual who was a participant in the plan immediately before the adoption of the amendment.

(iii) Rate of benefit accrualSubject to clause (iv), the requirements of this clause are met with respect to any participant if theaccrued benefit of the participant under the terms of the plan as in effect after the amendment is not less than the sum of—

(I)

the participant’saccrued benefit foryears of service before the effective date of the amendment, determined under the terms of the plan as in effect before the amendment, plus

(II)

the participant’saccrued benefit foryears of service after the effective date of the amendment, determined under the terms of the plan as in effect after the amendment.

(iv) Special rules for early retirement subsidies

For purposes of clause (iii)(I), the plan shall credit the accumulation account or similar amount [1] with the amount of any early retirement benefitor retirement-type subsidyfor the plan yearin which the participant retires if, as of such time, the participant has met the age, years of service, and other requirements under the plan for entitlement to such benefit or subsidy.

(v) Applicable plan amendmentFor purposes of this subparagraph—

(I) In general

The term “applicable plan amendment” means an amendment to a defined benefit planwhich has the effect of converting the plan to anapplicable defined benefit plan.

(II) Special rule for coordinated benefits

If the benefits of 2 or moredefined 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 subclause (I), the sponsor of thedefined benefit plan or plans providing for such coordination shall be treated as having adopted such a plan amendment as of the date such coordination begins.

(III) 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) Applicable defined benefit plan

For purposes of this subparagraph, the term “applicable defined benefit plan” has the meaning given such term by section 411(a)(13).

(vi) Termination requirementsAnapplicable defined benefit plan shall not be treated as meeting the requirements of clause (i) unless the plan provides that, upon the termination of the plan—

(I)

if the interest credit rate (or an equivalent amount) under the plan is a variable rate, the rate of interest used to determineaccrued benefits under the plan shall be equal to the average of the rates of interest used under the plan during the 5-yearperiod ending on the termination date, and

(II)

the interest rate and mortality table used to determine the amount of any benefit under the plan payable in the form of an annuity payable atnormal retirement age shall be the rate and table specified under the plan for such purpose as of the termination date, except that if such interest rate is a variable rate, the interest rate shall be determined under the rules of subclause (I).

A plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) solely because the plan provides offsets against benefits under the plan to the extent such offsets are otherwise allowable in applying the requirements of section 401(a).

(D) Permitted disparities in plan contributions or benefits

A plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides a disparity in contributions or benefits with respect to which the requirements ofsection 401(l) are met.

(E) Indexing permitted

(i) In general

A plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides forindexing ofaccrued benefits under the plan.

(ii) Protection against loss

Except in the case of any benefit provided in the form of a variable annuity, clause (i) shall not apply with respect to anyindexing which results in anaccrued benefit less than theaccrued benefit determined without regard to such indexing.

(iii) Indexing

For purposes of this subparagraph, the term “indexing” means, in connection with anaccrued benefit, the periodic adjustment of theaccrued benefit by means of the application of a recognized investment index or methodology.

(F) Early retirement benefit or retirement-type subsidy

For purposes of this paragraph, the terms “early retirement benefit” and“retirement-type subsidy” have the meaning given such terms in subsection (d)(6)(B)(i).

(G) Benefit accrued to date

For purposes of this paragraph, any reference to theaccrued benefit shall be a reference to such benefit accrued to date.

(6) Projected interest crediting rate

For purposes of subparagraphs (A), (B), and (C) of paragraph (1), in the case of anapplicable defined benefit plan (as defined in subsection (a)(13)(C)) which provides variable interest crediting rates, the interest crediting rate which is treated as in effect and as the projected interest crediting rate shall be a reasonable projection of such variable interest crediting rate, not to exceed 6 percent.

(1) Accrued benefit derived from employer contributions

For purposes of this section, an employee’saccrued benefit derived from employer contributions as of any applicable date is the excess, if any, of theaccrued benefit for such employee as of such applicable date over theaccrued benefit derived from contributions made by such employee as of such date.

(2) Accrued benefit derived from employee contributions

(A) Plans other than defined benefit plansIn the case of a plan other than adefined benefit plan, theaccrued benefit derived from contributions made by an employee as of any applicable date is—

(i)

except as provided in clause (ii), the balance of the employee’s separate account consisting only of his contributions and the income, expenses, gains, and losses attributable thereto, or

(ii)

if a separate account is not maintained with respect to an employee’s contributions under such a plan, the amount which bears the same ratio to his totalaccrued benefit as the total amount of the employee’s contributions (less withdrawals) bears to the sum of such contributions and the contributions made on his behalf by the employer (less withdrawals).

(B) Defined benefit plans

In the case of adefined benefit plan, theaccrued benefit derived from contributions made by an employee as of any applicable date is the amount equal to the employee’saccumulated contributions expressed as an annual benefit commencing at normal retirement age, using an interest rate which would be used under the plan under section 417(e)(3) (as of the determination date).

(C) Definition of accumulated contributionsFor purposes of this subsection, the term “accumulated contribution” means the total of—

(i)

allmandatory contributions made by the employee,

(ii)

interest (if any) under the plan to the end of the last planyear to which subsection (a)(2) does not apply (by reason of the applicable effective date), and

(iii) interest on the sum of the amounts determined under clauses (i) and (ii) compounded annually—

(I)

at the rate of 120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a planyear) for the period beginning with the 1st planyear to which subsection (a)(2) applies (by reason of the applicable effective date) and ending with the date on which the determination is being made, and

(II)

at the interest rate which would be used under the plan under section 417(e)(3) (as of the determination date) for the period beginning with the determination date and ending on the date on which the employee attainsnormal retirement age.

For purposes of this subparagraph, the term “mandatory contributions” means amounts contributed to the plan by the employee which are required as a condition of employment, as a condition of participation in such plan, or as a condition of obtaining benefits under the plan attributable to employer contributions.

(D) Adjustments

The Secretary is authorized to adjust by regulation the conversion factor described in subparagraph (B) from time to time as he may deem necessary. No such adjustment shall be effective for a planyear beginning before the expiration of 1year after such adjustment is determined and published.

(3) Actuarial adjustment

For purposes of this section, in the case of anydefined benefit plan, if an employee’saccrued benefit is to be determined as an amount other than an annual benefit commencing atnormal retirement age, or if the accrued benefitderived from contributions made by an employee is to be determined with respect to a benefit other than an annual benefit in the form of a single life annuity (without ancillary benefits) commencing atnormal retirement age, the employee’s accrued benefit, or the accrued benefitsderived from contributions made by an employee, as the case may be, shall be the actuarial equivalent of such benefit or amount determined under paragraph (1) or (2).

(d) Special rules

(1) Coordination with section 401(a)(4)A plan which satisfies the requirements of this section shall be treated as satisfying any vesting requirements resulting from the application ofsection 401(a)(4) unless—

(A)

there has been a pattern of abuse under the plan (such as a dismissal of employees before theiraccrued benefits become nonforfeitable) tending to discriminate in favor of employees who are highly compensated employees(within the meaning ofsection 414(q)), or

(B)

there have been, or there is reason to believe there will be, an accrual of benefits or forfeitures tending to discriminate in favor of employees who arehighly compensated employees (within the meaning ofsection 414(q)).

(2) Prohibited discrimination

Subsection (a) shall not apply to benefits which may not be provided for designated employees in the event of early termination of the plan under provisions of the plan adopted pursuant to regulations prescribed by the Secretary to preclude the discrimination prohibited by section 401(a)(4).

(3) Termination or partial termination; discontinuance of contributionsNotwithstanding the provisions of subsection (a), a trust shall not constitute a qualified trust undersection 401(a) unless the plan of which such trust is a part provides that—

(A)

upon its termination or partial termination, or

(B)

in the case of a plan to whichsection 412 does not apply, upon complete discontinuance of contributions under the plan,

the rights of all affected employees to benefits accrued to the date of such termination, partial termination, or discontinuance, to the extent funded as of such date, or the amounts credited to the employees’ accounts, are nonforfeitable. This paragraph shall not apply to benefits or contributions which, under provisions of the plan adopted pursuant to regulations prescribed by the Secretary to preclude the discrimination prohibited by section 401(a)(4), may not be used for designated employees in the event of early termination of the plan. For purposes of this paragraph, in the case of the complete discontinuance of contributions under a profit-sharing or stock bonus plan, such plan shall be treated as having terminated on the day on which theplan administrator notifies the Secretary (in accordance with regulations) of the discontinuance.

[(4) Repealed.Pub. L. 99–514, title XI, § 1113(b),Oct. 22, 1986,100 Stat. 2447]

(5) Treatment of voluntary employee contributions

In the case of adefined benefit plan which permits voluntary employee contributions, the portion of an employee’saccrued benefit derived from such contributions shall be treated as anaccrued benefit derived from employee contributions under a plan other than a defined benefit plan.

(6) Accrued benefit not to be decreased by amendment

(A) In general

A plan shall be treated as not satisfying the requirements of this section if theaccrued benefit of a participant is decreased by an amendment of the plan, other than an amendment described in section 412(d)(2), or section 4281 of theEmployee Retirement Income Security Act of 1974.

(B) Treatment of certain plan amendmentsFor purposes of subparagraph (A), a plan amendment which has the effect of—

(i)

eliminating or reducing anearly retirement benefit or a retirement-type subsidy(as defined in regulations), or

(ii)

eliminating an optional form of benefit,

with respect to benefits attributable to service before the amendment shall be treated as reducingaccrued benefits. In the case of aretirement-type subsidy, the preceding sentence shall apply only with respect to a participant who satisfies (either before or after the amendment) the preamendment conditions for the subsidy. The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment which reduces or eliminates benefits or subsidies which create significant burdens or complexities for the plan and plan participants, unless such amendment adversely affects the rights of any participant in a more than de minimis manner. The Secretary may by regulations provide that this subparagraph shall not apply to a plan amendment described in clause (ii) (other than a plan amendment having an effect described in clause (i)).

(i)

tax credit employee stock ownership plan (as defined insection 409(a)), or

(ii)

employee stock ownership plan (as defined insection 4975(e)(7)),

shall not be treated as failing to meet the requirements of this paragraph merely because it modifies distribution options in a nondiscriminatory manner.

(D) Plan transfers

(i) In generalAdefined contribution plan (in this subparagraph referred to as the “transferee plan”) shall not be treated as failing to meet the requirements of this subsection merely because the transferee plan does not provide some or all of the forms of distribution previously available under anotherdefined contribution plan (in this subparagraph referred to as the “transferor plan”) to the extent that—

(I)

the forms of distribution previously available under the transferor plan applied to the account of a participant or beneficiary under the transferor plan that was transferred from the transferor plan to the transferee plan pursuant to a direct transfer rather than pursuant to a distribution from the transferor plan,

(II)

the terms of both the transferor plan and the transferee plan authorize the transfer described in subclause (I),

(III)

the transfer described in subclause (I) was made pursuant to a voluntary election by the participant or beneficiary whose account was transferred to the transferee plan,

(IV)

the election described in subclause (III) was made after the participant or beneficiary received a notice describing the consequences of making the election, and

(V)

the transferee plan allows the participant or beneficiary described in subclause (III) to receive any distribution to which the participant or beneficiary is entitled under the transferee plan in the form of a single sum distribution.

(ii) Special rule for mergers, etc.

Clause (i) shall apply to plan mergers and other transactions having the effect of a direct transfer, including consolidations of benefits attributable to different employers within a multiple employer plan.

(E) Elimination of form of distributionExcept to the extent provided in regulations, adefined contribution plan shall not be treated as failing to meet the requirements of this section merely because of the elimination of a form of distribution previously available thereunder. This subparagraph shall not apply to the elimination of a form of distribution with respect to any participant unless—

(i)

a single sum payment is available to such participant at the same time or times as the form of distribution being eliminated, and

(ii)

such single sum payment is based on the same or greater portion of the participant’s account as the form of distribution being eliminated.

(e) Application of vesting standards to certain plans

(1) The provisions of this section (other than paragraph (2)) shall not apply to—

(A)

agovernmental plan (within the meaning ofsection 414(d)),

(B)

achurch plan (within the meaning ofsection 414(e)) with respect to which the election provided by section 410(d) has not been made,

(C)

a plan which has not, at any time afterSeptember 2, 1974, provided for employer contributions, and

(D)

a plan established and maintained by a society, order, or association described in section 501(c)(8) or (9), if no part of the contributions to or under such plan are made by employers of participants in such plan.

(2)

A plan described in paragraph (1) shall be treated as meeting the requirements of this section, for purposes of section 401(a), if such plan meets the vesting requirements resulting from the application of sections401(a)(4) and401(a)(7) as in effect onSeptember 1, 1974.

(f) Special rule for determining normal retirement age for certain existing defined benefit plans

(1) In general

Notwithstanding subsection (a)(8), anapplicable plan shall not be treated as failing to meet any requirement of this subchapter, or as failing to have a uniformnormal retirement age for purposes of this subchapter, solely because the plan provides for anormal retirement age described in paragraph (2).

(2) Applicable planFor purposes of this subsection—

(A) In generalThe term “applicable plan” means a defined benefit planthe terms of which, on or beforeDecember 8, 2014, provided for a normal retirement agewhich is the earlier of—

(i)

an age otherwise permitted under subsection (a)(8), or

(ii)

the age at which a participant completes the number ofyears (not less than 30years) of benefit accrual service specified by the plan.

A plan shall not fail to be treated as anapplicable plan solely because thenormal retirement age described in the preceding sentence only applied to certain participants or only applied to employees of certain employers in the case of a plan maintained by more than 1 employer.

(B) Expanded application

Subject to subparagraph (C), if, afterDecember 8, 2014, an applicable planis amended to expand the application of the normal retirement agedescribed in subparagraph (A) to additional participants or to employees of additional employers maintaining the plan, such plan shall also be treated as an applicable planwith respect to such participants or employees.

(C) Limitation on expanded applicationAdefined benefit plan shall be anapplicable plan only with respect to an individual who—

(i)

is a participant in the plan on or beforeJanuary 1, 2017, or

(ii)

is an employee at any time on or beforeJanuary 1, 2017, of any employer maintaining the plan, and who becomes a participant in such plan after such date.

(AddedPub. L. 93–406, title II, § 1012(a),Sept. 2, 1974,88 Stat. 901; amendedPub. L. 94–455, title XIX, §§ 1901(a)(62), 1906(b)(13)(A),Oct. 4, 1976,90 Stat. 1774, 1834;Pub. L. 96–364, title II, § 206,Sept. 26, 1980,94 Stat. 1287;Pub. L. 98–397, title II, § 202(b), (c), (d)(2), (e)(2), (3), (f), 205, title III, § 301(a)(1),Aug. 23, 1984,98 Stat. 1437, 1439, 1440, 1449, 1450;Pub. L. 99–509, title IX, §§ 9202(b), 9203(b)(2),Oct. 21, 1986,100 Stat. 1977, 1979;Pub. L. 99–514, title XI, §§ 1113(a), (b), (d)(B), 1114(b)(10), 1139(a), title XVIII, § 1898(a)(1)(A), (4)(A), (d)(1)(A), (2)(A), (f)(1)(A),Oct. 22, 1986,100 Stat. 2446, 2447, 2451, 2487, 2941, 2943, 2955, 2956;Pub. L. 100–203, title IX, § 9346(b),Dec. 22, 1987,101 Stat. 1330–374;Pub. L. 100–647, title I, § 1018(t)(8)(B),Nov. 10, 1988,102 Stat. 3589;Pub. L. 101–239, title VII, §§ 7861(a)(5)(A), (6)(A), 7871(a)(1), (2), (b)(1), 7881(m)(1),Dec. 19, 1989,103 Stat. 2430, 2435, 2443;Pub. L. 102–318, title V, § 521(b)(44),July 3, 1992,106 Stat. 313;Pub. L. 103–465, title VII, § 767(a)(1),Dec. 8, 1994,108 Stat. 5037;Pub. L. 104–188, title I, § 1442(a),Aug. 20, 1996,110 Stat. 1808;Pub. L. 105–34, title X, § 1071(a)(1), (2)(A),Aug. 5, 1997,111 Stat. 948;Pub. L. 107–16, title VI, §§ 633(a), 645(a)(1), (b)(1), 648(a)(1),June 7, 2001,115 Stat. 115, 123, 125, 127;Pub. L. 108–311, title IV, § 408(a)(14),Oct. 4, 2004,118 Stat. 1192;Pub. L. 109–280, title I, § 114(b), title VII, 701(b), title IX, §§ 902(d)(2)(A), (B), 904(a),Aug. 17, 2006,120 Stat. 853, 984, 1038, 1048;Pub. L. 110–458, title I, §§ 101(d)(2)(D), 107(b), 109(b)(2),Dec. 23, 2008,122 Stat. 5099, 5107, 5111;Pub. L. 113–235, div. P, § 2(b),Dec. 16, 2014,128 Stat. 2828;Pub. L. 115–141, div. U, title IV, § 401(a)(82), (b)(19),Mar. 23, 2018,132 Stat. 1188, 1202;Pub. L. 117–328, div. T, title III, §§ 304(a), 348(a),Dec. 29, 2022,136 Stat. 5341, 5385.)

[1] So in original. Probably should be “similar account”.

Editorial Notes

References in Text

Section 4281 of theEmployee Retirement Income Security Act of 1974, referred to in subsecs. (a)(3)(F)(i), (ii) and (d)(6)(A), is classified tosection 1441 of Title 29, Labor.

Section 4203 of theEmployee Retirement Income Security Act of 1974, referred to in subsec. (a)(4)(G)(i)(I), is classified tosection 1383 of Title 29, Labor.

Section 4205(b)(2)(A)(i) of such Act, referred to in subsec. (a)(4)(G)(i)(II), is classified tosection 1385(b)(2)(A)(i) of Title 29, Labor.

Section 4048 of such Act, referred to in subsec. (a)(4)(G)(ii), is classified tosection 1348 of Title 29, Labor.

TheSocial Security Act, referred to in subsecs. (a)(9) and (b)(1)(G), is act Aug. 14, 1935, ch. 531,49 Stat. 620. Title II of theSocial Security Act is classified generally to subchapter II (§ 401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, seesection 1305 of Title 42 and Tables.

Amendments

2022—Subsec. (a)(11)(A).Pub. L. 117–328, § 304(a), substituted “$7,000” for “$5,000”.

Subsec. (b)(6).Pub. L. 117–328, § 348(a), added par. (6).

2018—Subsec. (a)(3)(F)(i).Pub. L. 115–141, § 401(b)(19), struck out “under section 418D or” before “under section 4281”.

Subsec. (a)(4)(A).Pub. L. 115–141, § 401(a)(82), substituted semicolon for comma at end.

2014—Subsec. (f).Pub. L. 113–235 added subsec. (f).

2008—Subsec. (a)(3)(C).Pub. L. 110–458, § 101(d)(2)(D)(i), substituted “section 412(d)(2)” for “section 412(c)(2)”.

Subsec. (a)(3)(G).Pub. L. 110–458, § 109(b)(2), substituted “permissible withdrawal” for “erroneous automatic contribution” in heading and “a permissible withdrawal” for “an erroneous automatic contribution” in text.

Subsec. (a)(13)(A).Pub. L. 110–458, § 107(b)(2), substituted “subparagraph (B)” for “paragraph (2)” in cl. (i) and “subparagraph (C)” for paragraph (3) in concluding provisions, added cl. (ii), and struck out former cl. (ii) which read as follows: “the requirements of subsection (c) or section 417(e) with respect to contributions other than employee contributions,”.

Subsec. (b)(5)(A)(iii).Pub. L. 110–458, § 107(b)(1)(A), substituted “subparagraph” for “clause”.

Subsec. (b)(5)(B)(i)(II).Pub. L. 110–458, § 107(b)(3), amended subcl. (II) generally. Prior to amendment, text read as follows: “An interest credit (or an equivalent amount) of less than zero shall in no event result in the account balance or similar amount being less than the aggregate amount of contributions credited to the account.”

Subsec. (b)(5)(C).Pub. L. 110–458, § 107(b)(1)(B), inserted “otherwise” before “allowable”.

Subsec. (d)(6)(A).Pub. L. 110–458, § 101(d)(2)(D)(ii), substituted “section 412(d)(2)” for “section 412(e)(2)”.

2006—Subsec. (a)(2).Pub. L. 109–280, § 904(a)(1), reenacted heading without change and amended text of par. (2) generally, substituting provisions relating to vesting requirements under defined benefit plansand defined contribution plansfor provisions relating to 5-yearvesting and 3 to 7 yearvesting under all plans.

Subsec. (a)(3)(C).Pub. L. 109–280, § 114(b)(1), substituted “412(c)(2)” for “412(c)(8)”.

Subsec. (a)(3)(G).Pub. L. 109–280, § 902(d)(2)(A), (B), inserted “or erroneous automatic contribution” after “or contribution” in heading and “an erroneous automatic contribution under section 414(w),” after “402(g)(2)(A),” in text.

Subsec. (a)(12).Pub. L. 109–280, § 904(a)(2), struck out par. (12), which related to faster vesting for matching contributions by employers.

Subsec. (a)(13).Pub. L. 109–280, § 701(b)(2), added par. (13).

Subsec. (b)(1)(F).Pub. L. 109–280, § 114(b)(2), substituted “subparagraphs (B) and (C) of section 412(e)(3)” for “paragraphs (2) and (3) of section 412(i)” in cl. (ii) and “subparagraphs (D), (E), and (F) of section 412(e)(3)” for “paragraphs (4), (5), and (6) of section 412(i)” in concluding provisions.

Subsec. (b)(5).Pub. L. 109–280, § 701(b)(1), added par. (5).

Subsec. (d)(6)(A).Pub. L. 109–280, § 114(b)(3), substituted “412(e)(2)” for “412(c)(8)”.

2004—Subsec. (a)(12)(B).Pub. L. 108–311 substituted “6 or more” for “6” in table.

2001—Subsec. (a)(2).Pub. L. 107–16, § 633(a)(1), substituted “Except as provided in paragraph (12), a plan” for “A plan” in introductory provisions.

Subsec. (a)(11)(D).Pub. L. 107–16, § 648(a)(1), added subpar. (D).

Subsec. (a)(12).Pub. L. 107–16, § 633(a)(2), added par. (12).

Subsec. (d)(6)(B).Pub. L. 107–16, § 645(b)(1), inserted after second sentence “The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment which reduces or eliminates benefits or subsidies which create significant burdens or complexities for the plan and plan participants, unless such amendment adversely affects the rights of any participant in a more than de minimis manner.”

Subsec. (d)(6)(D), (E).Pub. L. 107–16, § 645(a)(1), added subpars. (D) and (E).

1997—Subsec. (a)(7)(B)(i).Pub. L. 105–34, § 1071(a)(2)(A), substituted “the dollar limit under section 411(a)(11)(A)” for “$3,500”.

Subsec. (a)(11)(A).Pub. L. 105–34, § 1071(a)(1), substituted “$5,000” for “$3,500”.

1996—Subsec. (a)(2).Pub. L. 104–188 substituted “subparagraph (A) or (B)” for “subparagraph (A), (B), or (C)” in introductory provisions and struck out subpar. (C) which read as follows: “Multiemployer plans.—A plan satisfies the requirements of this subparagraph if—

“(i) the plan is amultiemployer plan (within the meaning ofsection 414(f)), and

“(ii) under the plan—

“(I) an employee who is covered pursuant to a collective bargaining agreement described in section 414(f)(1)(B) and who has completed at least 10years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefitderived from employer contributions, and

“(II) the requirements of subparagraph (A) or (B) are met with respect to employees not described in subclause (I).”

1994—Subsec. (a)(11)(B).Pub. L. 103–465 reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows:

“(i)In general.—For purposes of subparagraph (A), the present value shall be calculated—

“(I) by using an interest rate no greater than theapplicable interest rate if the vestedaccrued benefit (using such rate) is not in excess of $25,000, and

“(II) by using an interest rate no greater than 120 percent of theapplicable interest rate if the vestedaccrued benefit exceeds $25,000 (as determined under subclause (I)).

In no event shall the present value determined under subclause (II) be less than $25,000.

“(ii)Applicable interest rate.—For purposes of clause (i), the term‘applicable interest rate’ means the interest rate which would be used (as of the date of the distribution) by thePension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”

1992—Subsec. (d)(3).Pub. L. 102–318 inserted at end “For purposes of this paragraph, in the case of the complete discontinuance of contributions under a profit-sharing or stock bonus plan, such plan shall be treated as having terminated on the day on which the plan administratornotifies the Secretary (in accordance with regulations) of the discontinuance.”

1989—Subsec. (a)(3)(G).Pub. L. 101–239, § 7861(a)(5)(A), added subpar. (G).

Subsec. (a)(4)(A).Pub. L. 101–239, § 7861(a)(6)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows:“years of servicebefore age 18, except that in the case of a plan which does not satisfy subparagraph (A) or (B) of paragraph (2), the plan may not disregard any such year of serviceduring which the employee was a participant;”.

Subsec. (a)(7)(D).Pub. L. 101–239, § 7881(m)(1)(D), added subpar. (D).

Subsec. (a)(8)(B).Pub. L. 101–239, § 7871(b)(1), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latest of—

“(i) the time a plan participant attains age 65,

“(ii) in the case of a plan participant who commences participation in the plan within 5years before attainingnormal retirement age under the plan, the 5th anniversary of the time the plan participant commences participation in the plan, or

“(iii) in the case of a plan participant not described in clause (ii), the 10th anniversary of the time the plan participant commences participation in the plan.”

Subsec. (b)(2)(B).Pub. L. 101–239, § 7871(a)(1), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “Disregard of subsidized portion of early retirement benefit.—A plan shall not be treated as failing to meet the requirements of subparagraph (A) solely because the subsidized portion of any early retirement benefitis disregarded in determining benefit accruals.”

Subsec. (b)(2)(C), (D).Pub. L. 101–239, § 7871(a)(1), (2), redesignated subpar. (D) as (C) and substituted “this paragraph” for “this subparagraph”. Former subpar. (C) redesignated (B).

Subsec. (c)(2)(B).Pub. L. 101–239, § 7881(m)(1)(B), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:

“(i)In general.—In the case of a defined benefit planproviding an annual benefit in the form of a single life annuity (without ancillary benefits) commencing at normal retirement age, the accrued benefitderived from contributions made by an employee as of any applicable date is the annual benefit equal to the employee’s accumulated contributionsmultiplied by the appropriate conversion factor.

“(ii)Appropriate conversion factor.—For purposes of clause (i), the term ‘appropriate conversion factor’ means the factor necessary to convert an amount equal to the accumulated contributionsto a single life annuity (without ancillary benefits) commencing at normal retirement ageand shall be 10 percent for a normal retirement ageof 65 years. For other normal retirement agesthe conversion factor shall be determined in accordance with regulations prescribed by the Secretary.”

Subsec. (c)(2)(C)(iii).Pub. L. 101–239, § 7881(m)(1)(A), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “interest on the sum of the amounts determined under clauses (i) and (ii) compounded annually at the rate of 120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year) from the beginning of the first plan yearto which subsection (a)(2) applies (by reason of the applicable effective date) to the date upon which the employee would attain normal retirement age.”

Subsec. (c)(2)(E).Pub. L. 101–239, § 7881(m)(1)(C), struck out subpar. (E) which read as follows: “Limitation.—The accrued benefitderived from employee contributions shall not exceed the greater of—

“(i) the employee’saccrued benefit under the plan, or

“(ii) theaccrued benefit derived from employee contributions determined as though the amounts calculated under clauses (ii) and (iii) of subparagraph (C) were zero.”

1988—Subsec. (a)(11)(A).Pub. L. 100–647 substituted “nonforfeitable” for “vested”.

1987—Subsec. (c)(2)(C)(iii).Pub. L. 100–203, § 9346(b)(1), substituted “120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year)” for “5 percent per annum”.

Subsec. (c)(2)(D).Pub. L. 100–203, § 9346(b)(2), struck out “, the rate of interest described in clause (iii) of subparagraph (C), or both” before “from time to time” in first sentence and struck out second sentence which read as follows: “The rate of interest described in clause (iii) of subparagraph (C), or both, from time to time as he may deem necessary. The rate of interest shall bear the relationship to 5 percent which the Secretary determines to be comparable to the relationship which the long-term money rates and investment yields for the last period of 10 calendar yearsending at least 12 months before the beginning of the plan yearbear to the long-term money rates and investment yields for the 10-calendar yearperiod 1964 through 1973.”

1986—Subsec. (a).Pub. L. 99–514, § 1898(d)(1)(A)(ii), inserted reference to par. (11) in introductory text.

Pub. L. 99–509, § 9202(b)(3), substituted “subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, in the case of a defined contribution plan, the requirements of subsection (b)(2)” for “paragraph (2) of subsection (b), and in the case of a defined benefit plan, also satisfies the requirements of paragraph (1) of subsection (b)” in first sentence.

Subsec. (a)(2).Pub. L. 99–514, § 1113(a), amended par. (2) generally, substituting provisions covering 5-yearvesting, 3 to 7 yearvesting, and multiemployer plans, for former provisions which had covered 10-yearvesting, 5- to 15-yearvesting, and the “rule of 45”.

Subsec. (a)(3)(D)(ii).Pub. L. 99–514, § 1898(a)(4)(A)(i), substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this clause may provide that such repayment must be made before the participant has any one-yearbreak in service commencing after the withdrawal.”

Subsec. (a)(7)(C).Pub. L. 99–514, § 1898(a)(4)(A)(ii), substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this subparagraph may provide that such repayment must be made before the participant has 5 consecutive 1-yearbreaks in service commencing after such withdrawal.”

Subsec. (a)(8)(B).Pub. L. 99–509, § 9203(b)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latter of—

“(i) the time a plan participant attains age 65, or

“(ii) the 10th anniversary of the time a plan participant commenced participation in the plan.”

Subsec. (a)(10)(B).Pub. L. 99–514, § 1113(d)(B), substituted “3 years” for “5 years”.

Subsec. (a)(11)(A).Pub. L. 99–514, § 1898(d)(1)(A)(i), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If the present value of any accrued benefitexceeds $3,500, such benefit shall not be treated as nonforfeitable if the plan provides that the present value of such benefit could be immediately distributed without the consent of the participant.”

Subsec. (a)(11)(B).Pub. L. 99–514, § 1139(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of subparagraph (A), the present value shall be calculated by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by thePension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”

Subsec. (a)(11)(C).Pub. L. 99–514, § 1898(d)(2)(A), added subpar. (C).

Subsec. (b)(1).Pub. L. 99–509, § 9202(b)(1), substituted“Defined benefit plans” for “General rules” in heading and added subpar. (H).

Subsec. (b)(2) to (4).Pub. L. 99–509, § 9202(b)(2), added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.

Subsec. (d)(1)(A), (B).Pub. L. 99–514, § 1114(b)(10), substituted“highly compensated employees(within the meaning of section 414(q))” for “officers, shareholders, or highly compensated”.

Subsec. (d)(4).Pub. L. 99–514, § 1113(b), repealed par. (4) which provided that a class yearplan satisfied the requirements of subsec. (a)(2) if it provided that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan yearwere nonforfeitable not later than the end of the 5th plan yearfollowing the plan yearfor which such contributions were made.

Pub. L. 99–514, § 1898(a)(1)(A), substituted “Class-year” for “Class year” in heading and amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The requirements of subsection (a)(2) shall be deemed to be satisfied in the case of a class yearplan if such plan provides that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan yearare nonforfeitable not later than the end of the 5th plan yearfollowing the plan yearfor which such contributions were made. For purposes of this section, the term ‘class yearplan’ means a profit-sharing, stock bonus, or money purchase plan which provides for the separate nonforfeitability of employees’ rights to or derived from the contributions for each plan year.”

Subsec. (d)(6)(C).Pub. L. 99–514, § 1898(f)(1)(A), added subpar. (C).

1984—Subsec. (a)(4)(A).Pub. L. 98–397, § 202(b), substituted “18” for “22”.

Subsec. (a)(6)(C).Pub. L. 98–397, § 202(c), substituted “5 consecutive 1-yearbreaks” for “1-yearbreak”, in heading, and in text substituted “5 consecutive 1-yearbreaks in service” for “any 1-year break in service” and “such 5-yearperiod” for “such break” in two places.

Subsec. (a)(6)(D).Pub. L. 98–397, § 202(d)(2), amended subpar. (D) generally.

Subsec. (a)(6)(E).Pub. L. 98–397, § 202(e)(2), added subpar. (E).

Subsec. (a)(7)(B)(i).Pub. L. 98–397, § 205(b), substituted “$3,500” for “$1,750”.

Subsec. (a)(7)(C).Pub. L. 98–397, § 202(f), substituted “5 consecutive 1-yearbreaks in service” for “any one-yearbreak in service”.

Subsec. (a)(11).Pub. L. 98–397, § 205(a), added par. (11).

Subsec. (b)(3)(A).Pub. L. 98–397, § 202(e)(3), inserted “, determined without regard to section 410(a)(5)(E)”.

Subsec. (d)(6).Pub. L. 98–397, § 301(a)(1), designated existing provisions as subpar. (A) and added subpar. (B).

1980—Subsec. (a).Pub. L. 96–364, § 206(1)–(4), in par. (3) added subpars. (E) and (F), and in par. (4) added subpar. (G).

Subsec. (d)(6).Pub. L. 96–364, § 206(5), inserted reference to section 4281 of theEmployee Retirement Income Security Act of 1974.

1976—Subsec. (a).Pub. L. 94–455, §§ 1901(a)(62)(A)–(C), 1906(b)(13)(A), substituted “paragraph (8)” for “subsection (a)(8)” in provisions preceding par. (1), substituted references toSept. 2, 1974, for references to the date of enactment of theEmployee Retirement Income Security Act of 1974 in par. (3)(D)(iii), struck out “or his delegate” after “Secretary” in pars. (4)(C) and (7)(B), and substituted “(B)” for “(b)” in heading of par. (7)(C).

Subsec. (b)(1)(D)(i).Pub. L. 94–455, § 1901(a)(62)(D), substituted reference toSept. 2, 1974, for reference to the date of enactment of theEmployee Retirement Income Security Act of 1974.

Subsecs. (c)(2)(B)(ii), (D), (d)(2), (3).Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.

Subsec. (e)(1)(C).Pub. L. 94–455, § 1901(a)(62)(D), substituted reference toSept. 2, 1974, for reference to the date of enactment of theEmployee Retirement Income Security Act of 1974.

Subsec. (e)(2).Pub. L. 94–455, § 1901(a)(62)(E), substituted reference toSept. 1, 1974, for reference to the date before the date of enactment of theEmployee Retirement Income Security Act of 1974.

Statutory Notes and Related Subsidiaries

Effective Date of 2022 Amendment

Amendment bysection 304(a) of Pub. L. 117–328 applicable to distributions made afterDec. 31, 2023, seesection 304(b) of Pub. L. 117–328, set out as a note undersection 401 of this title.

Pub. L. 117–328, div. T, title III, § 348(c),Dec. 29, 2022,136 Stat. 5385, provided that:

“The amendments made by this section [amending this section andsection 1054 of Title 29, Labor] shall apply with respect to plan yearsbeginning after the date of enactment of this Act [Dec. 29, 2022].”

Effective Date of 2014 Amendment

Pub. L. 113–235, div. P, § 2(c),Dec. 16, 2014,128 Stat. 2829, provided that:

“The amendments made by this section [amending this section andsection 1054 of Title 29, Labor] shall apply to all periods before, on, and after the date of enactment of this Act [Dec. 16, 2014].”

Effective Date of 2008 Amendment

Amendment byPub. L. 110–458 effective as if included in the provisions ofPub. L. 109–280 to which the amendment relates, except as otherwise provided, seesection 112 of Pub. L. 110–458, set out as a note undersection 72 of this title.

Effective Date of 2006 Amendment

Amendment bysection 114(b) of Pub. L. 109–280 applicable to plan yearsbeginning after 2007, seesection 114(g)(1) of Pub. L. 109–280, as added byPub. L. 110–458, set out as a note undersection 401 of this title.

Pub. L. 109–280, title VII, § 701(e),Aug. 17, 2006,120 Stat. 991, as amended byPub. L. 110–458, title I, § 107(c)(2),Dec. 23, 2008,122 Stat. 5107, provided that:

“(1) In general.—

The amendments made by this section [amending this section and sections 623, 1053, and 1054 of Title 29, Labor] shall apply to periods beginning on or afterJune 29, 2005.

“(2) Present value of accrued benefit.—

The amendments made by subsections (a)(2) and (b)(2) [amending this section andsection 1053 of Title 29] shall apply to distributions made after the date of the enactment of this Act [Aug. 17, 2006].

“(3) Vesting and interest credit requirements.—

In the case of a plan in existence onJune 29, 2005, the requirements of clause (i) of section 411(b)(5)(B) of theInternal Revenue Code of 1986, clause (i) of section 204(b)(5)(B) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(b)(5)(B)], and clause (i) of section 4(i)(10)(B) of theAge Discrimination in Employment Act of 1967 [29 U.S.C. 623(i)(10)(B)] (as added by this Act) and the requirements of 203(f)(2) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1053(f)(2)] and section 411(a)(13)(B) of theInternal Revenue Code of 1986 (as so added) shall, for purposes of applying the amendments made by subsections (a) and (b) [amending this section and sections 1053 and 1054 of Title 29], apply to yearsbeginning afterDecember 31, 2007, unless the plan sponsor elects the application of such requirements for any period on or afterJune 29, 2005, and before the first yearbeginning afterDecember 31, 2007.

“(4) 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 on or before the date of the enactment of this Act [Aug. 17, 2006], the requirements described in paragraph (3) shall, for purposes of applying the amendments made by subsections (a) and (b) [amending this section and sections 1053 and 1054 of Title 29], not apply to plan yearsbeginning before the earlier of—

“(A) the later of—

“(i)

the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of enactment), or

“(ii)

January 1, 2008, or

“(B)

January 1, 2010.

“(5) Conversions.—

The requirements of clause (ii) of section 411(b)(5)(B) of theInternal Revenue Code of 1986, clause (ii) of section 204(b)(5)(B) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(b)(5)(B)], and clause (ii) of section 4(i)(10)(B) of theAge Discrimination in Employment Act of 1967 [29 U.S.C. 623(i)(10)(B)] (as added by this Act), shall apply to plan amendments adopted on or after, and taking effect on or after,June 29, 2005, except that the plan sponsor may elect to have such amendments apply to plan amendments adopted before, and taking effect on or after, such date.

“(6) Special rule for vesting requirements.—The requirements of section 203(f)(2) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1053(f)(2)] and section 411(a)(13)(B) of theInternal Revenue Code of 1986 (as added by this Act)—

“(A)

shall not apply to a participant who does not have an hour of service after the effective date of such requirements (as otherwise determined under this subsection); and

“(B)

in the case of a plan other than a plan described in paragraph (3) or (4), shall apply to planyears ending on or afterJune 29, 2005.”

[Pub. L. 110–458, § 107(c)(2)(B)(i), which directed insertion of “the earlier of” after “before” in introductory provisions ofsection 701(e)(4) of Pub. L. 109–280, set out above, was executed by making the insertion after the second instance of “before” to reflect the probable intent ofCongress.]

Amendment by section 902(d)(2)(A), (B) ofPub. L. 109–280 applicable to plan yearsbeginning afterDec. 31, 2007, seesection 902(g) of Pub. L. 109–280, set out as a note undersection 401 of this title.

Pub. L. 109–280, title IX, § 904(c),Aug. 17, 2006,120 Stat. 1050, provided that:

“(1) In general.—

Except as provided in paragraphs (2) and (4), the amendments made by this section [amending this section andsection 1053 of Title 29, Labor] shall apply to contributions for plan yearsbeginning afterDecember 31, 2006.

“(2) Collective bargaining agreements.—In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act [Aug. 17, 2006], the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan yearsbeginning before the earlier of—

“(A) the later of—

“(i)

the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of the enactment); or

“(ii)

January 1, 2007; or

“(B)

January 1, 2009.

“(3) Service required.—

With respect to any plan, the amendments made by this section shall not apply to any employee before the date that such employee has 1 hour of service under such plan in any planyear to which the amendments made by this section apply.

“(4) Special rule for stock ownership plans.—Notwithstanding paragraph (1) or (2), in the case of an employee stock ownership plan (as defined in section 4975(e)(7) of theInternal Revenue Code of 1986) which had outstanding onSeptember 26, 2005, a loan incurred for the purpose of acquiring qualifying employer securities (as defined in section 4975(e)(8) of such Code), the amendments made by this section shall not apply to any plan yearbeginning before the earlier of—

“(A)

the date on which the loan is fully repaid, or

“(B)

the date on which the loan was, as ofSeptember 26, 2005, scheduled to be fully repaid.”

Effective Date of 2001 Amendment

Pub. L. 107–16, title VI, § 633(c),June 7, 2001,115 Stat. 116, provided that:

“(1) In general.—

Except as provided in paragraph (2), the amendments made by this section [amending this section andsection 1053 of Title 29, Labor] shall apply to contributions for plan yearsbeginning afterDecember 31, 2001.

“(2) Collective bargaining agreements.—In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified by the date of the enactment of this Act [June 7, 2001], the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan yearsbeginning before the earlier of—

“(A) the later of—

“(i)

the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of the enactment); or

“(ii)

January 1, 2002; or

“(B)

January 1, 2006.

“(3) Service required.—

Pub. L. 107–16, title VI, § 645(a)(3),June 7, 2001,115 Stat. 125, provided that:

“The amendments made by this subsection [amending this section andsection 1054 of Title 29, Labor] shall apply to yearsbeginning afterDecember 31, 2001.”

Pub. L. 107–16, title VI, § 648(c),June 7, 2001,115 Stat. 128, provided that:

“The amendments made by this section [amending this section,section 457 of this title, andsection 1053 of Title 29, Labor] shall apply to distributions afterDecember 31, 2001.”

Effective Date of 1997 Amendment

Pub. L. 105–34, title X, § 1071(c),Aug. 5, 1997,111 Stat. 948, provided that:

“The amendments made by this section [amending this section, sections417 and457 of this title, and sections 1053 to 1055 of Title 29, Labor] shall apply to plan yearsbeginning after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1996 Amendment

Pub. L. 104–188, title I, § 1442(c),Aug. 20, 1996,110 Stat. 1808, provided that:

“The amendments made by this section [amending this section andsection 1053 of Title 29, Labor] shall apply to plan yearsbeginning on or after the earlier of—

“(1) the later of—

“(A)

January 1, 1997, or

“(B)

the date on which the last of the collective bargaining agreements pursuant to which the plan is maintained terminates (determined without regard to any extension thereof after the date of the enactment of this Act [Aug. 20, 1996]), or

“(2)

January 1, 1999.

Such amendments shall not apply to any individual who does not have more than 1 hour of service under the plan on or after the 1st day of the 1st planyear to which such amendments apply.”

Effective Date of 1994 Amendment

Pub. L. 103–465, title VII, § 767(d),Dec. 8, 1994,108 Stat. 5040, as amended byPub. L. 104–188, title I, § 1449(a),Aug. 20, 1996,110 Stat. 1813;Pub. L. 105–34, title XVI, § 1604(b)(3),Aug. 5, 1997,111 Stat. 1097, provided that:

“(1) In general.—

The amendments made by this section [amending this section, sections415 and417 of this title, and sections 1053 and 1055 of Title 29, Labor] shall apply to plan yearsand limitation yearsbeginning afterDecember 31, 1994; except that an employer may elect to treat the amendments made by this section as being effective on or after the date of the enactment of this Act [Dec. 8, 1994].

“(2) No reduction in accrued benefits.—

A participant’saccrued benefit shall not be considered to be reduced in violation of section 411(d)(6) of theInternal Revenue Code of 1986 or section 204(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(g)] merely because (A) the benefit is determined in accordance with section 417(e)(3)(A) of such Code, as amended by this Act, or section 205(g)(3) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1055(g)(3)], as amended by this Act, or (B) the plan applies section 415(b)(2)(E) of such Code, as amended by this Act.

“(3) Section 415.—

“(A) Exception.—A plan that was adopted and in effect beforeDecember 8, 1994, shall not be required to apply the amendments made by subsection (b) [amendingsection 415 of this title] with respect to benefits accrued before the earlier of—

“(i)

the later of the date a plan amendment applying the amendments made by subsection (b) is adopted or made effective, or

“(ii)

the first day of the first limitationyear beginning afterDecember 31, 1999.

Determinations under section 415(b)(2)(E) of theInternal Revenue Code of 1986 before such earlier date shall be made with respect to such benefits on the basis of such section as in effect onDecember 7, 1994, and the provisions of the plan as in effect onDecember 7, 1994, but only if such provisions of the plan meet the requirements of such section (as so in effect).

“(B) Timing of plan amendment.—

A plan that operates in accordance with the amendments made by subsection (b) shall not be treated as failing to satisfy section 401(a) of theInternal Revenue Code of 1986 or as not being operated in accordance with the provisions of the plan until such date as the Secretary of the Treasury provides merely because the plan has not been amended to include the amendments made by subsection (b).”

Effective Date of 1992 Amendment

Amendment byPub. L. 102–318 applicable to distributions afterDec. 31, 1992, seesection 521(e) of Pub. L. 102–318, set out as a note undersection 402 of this title.

Effective Date of 1989 Amendment

Amendment by section 7861(a)(5)(A), (6)(A) ofPub. L. 101–239 effective as if included in the provision of theTax Reform Act of 1986,Pub. L. 99–514, to which such amendment relates, seesection 7863 of Pub. L. 101–239, set out as a note undersection 106 of this title.

Pub. L. 101–239, title VII, § 7871(a)(4),Dec. 19, 1989,103 Stat. 2435, provided that:

“The amendments made by this subsection [amending this section andsection 1054 of Title 29, Labor] shall take effect as if included in the amendments made by section 9202 of theOmnibus Budget Reconciliation Act of 1986 [Pub. L. 99–509].”

Pub. L. 101–239, title VII, § 7871(b)(3),Dec. 19, 1989,103 Stat. 2435, provided that:

“The amendments made by this subsection [amending this section andsection 1002 of Title 29, Labor] shall take effect as if included in the amendments made by section 9203 of theOmnibus Budget Reconciliation Act of 1986 [Pub. L. 99–509].”

Amendment bysection 7881(m)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of thePension Protection Act,Pub. L. 100–203, §§ 9302–9346, to which such amendment relates, seesection 7882 of Pub. L. 101–239, set out as a note undersection 401 of this title.

Effective Date of 1988 Amendment

Amendment byPub. L. 100–647 effective, except as otherwise provided, as if included in the provision of theTax Reform Act of 1986,Pub. L. 99–514, to which such amendment relates, seesection 1019(a) of Pub. L. 100–647, set out as a note undersection 1 of this title.

Effective Date of 1987 Amendment

Amendment byPub. L. 100–203 applicable to plan yearsbeginning afterDec. 31, 1987, with plan amendments not required to be made before first plan yearbeginning on or afterJan. 1, 1989, if certain conditions are met, seesection 9346(c) of Pub. L. 100–203, set out as a note undersection 1054 of Title 29, Labor.

Effective Date of 1986 Amendment

Pub. L. 99–514, title XI, § 1113(f), formerly § 1113(e),Oct. 22, 1986,100 Stat. 2447, as redesignated and amended byPub. L. 101–239, title VII, § 7861(a)(3), (4),Dec. 19, 1989,103 Stat. 2430, provided that:

“(1) In general.—

Except as provided in paragraph (2), the amendments made by this section [amending this section andsection 410 of this title and sections 1052 to 1054 of Title 29, Labor] shall apply to plan yearsbeginning afterDecember 31, 1988.

“(2) Special rule for collective bargaining agreements.—In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified beforeMarch 1, 1986, the amendments made by this section shall not apply to employees covered by any such agreement in plan yearsbeginning before the earlier of—

“(A) the later of—

“(i)

January 1, 1989, or

“(ii)

the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof afterFebruary 28, 1986), or

“(B)

January 1, 1991.

“(3) Participation required.—

The amendments made by this section shall not apply to any employee who does not have 1 hour of service in any planyear to which the amendments made by this section apply.

“(4) Repeal of class year vesting.—If a plan amendment repealing classyear vesting is adopted afterOctober 22, 1986, such amendment shall not apply to any employee for the 1st plan yearto which the amendments made by subsections (b) and (e)(2) [amending this section andsection 1053 of Title 29] apply (and any subsequent plan year) if—

“(A)

such plan amendment would reduce the nonforfeitable right of such employee for suchyear, and

“(B)

such employee has at least 1 hour of service before the adoption of such plan amendment and after the beginning of such 1st planyear.

This paragraph shall not apply to an employee who has 5 consecutive 1-year breaks in service (as defined in section 411(a)(6)(A) of theInternal Revenue Code of 1986) which include the 1st day of the 1st plan yearto which the amendments made by subsection (b) and (e)(2) apply. A plan shall not be treated as failing to meet the requirements of section 401(a)(26) of such Code by reason of complying with the provisions of this paragraph.”

Amendment bysection 1114(b)(10) of Pub. L. 99–514 applicable to yearsbeginning afterDec. 31, 1988, seesection 1114(c)(3) of Pub. L. 99–514, set out as a note undersection 414 of this title.

Pub. L. 99–514, title XI, § 1139(d),Oct. 22, 1986,100 Stat. 2488, as amended byPub. L. 100–647, title I, § 1011A(k),Nov. 10, 1988,102 Stat. 3483, provided that:

“(1) In general.—

The amendments made by this section [amending this section andsection 417 of this title and sections 1053 and 1055 of Title 29, Labor] shall apply to distributions in plan yearsbeginning afterDecember 31, 1984, except that such amendments shall not apply to any distributions in plan yearsbeginning afterDecember 31, 1984, and beforeJanuary 1, 1987, if such distributions were made in accordance with the requirements of the regulations issued under theRetirement Equity Act of 1984 [Pub. L. 98–397, see Short Title of 1984 Amendment note set out undersection 1001 of Title 29].

“(2) Reduction in accrued benefits.—

“(A) In general.—If a plan—

“(i)

adopts a plan amendment before the close of the first planyear beginning on or afterJanuary 1, 1989, which provides for the calculation of the present value of the accrued benefitsin the manner provided by the amendments made by this section, and

“(ii)

the plan reduces theaccrued benefits for any plan yearto which such plan amendment applies in accordance with such plan amendment,

such reduction shall not be treated as a violation of section 411(d)(6) of theInternal Revenue Code of 1986 or section 204(g) of theEmployee Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)).

“(B) Special rule.—In the case of a plan maintained by a corporation incorporated onApril 11, 1934, which is headquartered in Tarrant County, Texas—

“(i) such plan may be amended to remove the option of an employee to receive a lump sum distribution (within the meaning of section 402(e)(5) of such Code) if such amendment—

“(I)

is adopted within 1year of the date of the enactment of this Act [Oct. 22, 1986], and

“(II)

is not effective until 2years after the employees are notified of such amendment, and

“(ii)

the present value of any vestedaccrued benefit of such plan determined during the 3-yearperiod beginning on the date of the enactment of this Act shall be determined under the applicable interest rate(within the meaning of section 411(a)(11)(B)(ii) of such Code), except that if such value (as so determined) exceeds $50,000, then the value of any excess over $50,000 shall be determined by using the interest rate specified in the plan as ofAugust 16, 1986.”

Pub. L. 99–514, title XVIII, § 1898(a)(1)(C),Oct. 22, 1986,100 Stat. 2942, provided that:

“The amendments made by this paragraph [amending this section andsection 1053 of Title 29, Labor] shall apply to contributions made for plan yearsbeginning after the date of the enactment of this Act [Oct. 22, 1986]; except that, in the case of a plan described in section 302(b) of theRetirement Equity Act of 1984 [section 302(b) of Pub. L. 98–397, set out as a note undersection 1001 of Title 29], such amendments shall not apply to any plan yearto which the amendments made by such Act [see Short Title of 1984 Amendment note set out undersection 1001 of Title 29] do not apply by reason of such section 302(b).”

Amendment by section 1898(a)(4)(A), (d)(1)(A), (2)(A), (f)(1)(A) ofPub. L. 99–514 effective as if included in the provision of theRetirement Equity Act of 1984,Pub. L. 98–397, to which such amendment relates, except as otherwise provided, seesection 1898(j) of Pub. L. 99–514, set out as a note undersection 401 of this title.

Amendment bysection 9202(b) of Pub. L. 99–509 applicable only with respect to plan yearsbeginning on or afterJan. 1, 1988, and only to employees who have 1 hour of service in any plan yearto which amendment applies, with special rule for collectively bargained plans, and amendment bysection 9203(b)(2) of Pub. L. 99–509 applicable only with respect to plan yearsbeginning on or afterJan. 1, 1988, and only with respect to service performed on or after such date, see section 9204(a), (b) ofPub. L. 99–509, set out as an Effective and Termination Dates of 1986 Amendments note undersection 623 of Title 29, Labor.

Effective Date of 1984 Amendment

Amendment byPub. L. 98–397 applicable to plan yearsbeginning afterDec. 31, 1984, except as otherwise provided, see sections 302 and 303 ofPub. L. 98–397, set out as a note undersection 1001 of Title 29, Labor.

Effective Date of 1980 Amendment

Amendment byPub. L. 96–364 effectiveSept. 26, 1980, seesection 210(a) of Pub. L. 96–364, set out as an Effective Date note undersection 194A of this title.

Effective Date of 1976 Amendment

Amendment bysection 1901(a)(62) of Pub. L. 94–455 effective for taxable yearsbeginning afterDec. 31, 1976, seesection 1901(d) of Pub. L. 94–455, set out as a note undersection 2 of this title.

Effective Date

Section applicable, except as otherwise provided insection 1017(c) through (i) ofPub. L. 93–406, for plan yearsbeginning afterSept. 2, 1974, and, in the case of plans in existence onJan. 1, 1974, for plan yearsbeginning afterDec. 31, 1975, seesection 1017 of Pub. L. 93–406, set out as an Effective Date; Transitional Rules note undersection 410 of this title.

Regulations

Pub. L. 109–280, title VII, § 702,Aug. 17, 2006,120 Stat. 992, provided that:

“The Secretary of the Treasury or his delegate shall, not later than 12 months after the date of the enactment of this Act [Aug. 17, 2006], prescribe regulations for the application of the amendments made by, and the provisions of, this title [amending this section and sections 623, 1053, and 1054 of Title 29, Labor, and enacting provisions set out as notes under this section] in cases where the conversion of a plan to an applicable defined benefit planis made with respect to a group of employees who become employees by reason of a merger, acquisition, or similar transaction.”

Pub. L. 109–280, title XI, § 1102(b),Aug. 17, 2006,120 Stat. 1056, provided that:

“(1) In general.—

The Secretary of the Treasury shall modify the regulations under section 411(a)(11) of theInternal Revenue Code of 1986 and under section 205 of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1055] to provide that the description of a participant’s right, if any, to defer receipt of a distribution shall also describe the consequences of failing to defer such receipt.

“(2) Effective date.—

“(A) In general.—

The modifications required by paragraph (1) shall apply toyears beginning afterDecember 31, 2006.

“(B) Reasonable notice.—

A plan shall not be treated as failing to meet the requirements of section 411(a)(11) of such Code or section 205 of such Act with respect to any description of consequences described in paragraph (1) made within 90 days after the Secretary of the Treasury issues the modifications required by paragraph (1) if theplan administrator makes a reasonable attempt to comply with such requirements.”

Pub. L. 107–16, title VI, § 645(b)(3),June 7, 2001,115 Stat. 126, provided that:

“Not later thanDecember 31, 2003, the Secretary of the Treasury is directed to issue regulations under section 411(d)(6) of theInternal Revenue Code of 1986 and section 204(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(g)], including the regulations required by the amendment made by this subsection [amending this section andsection 1054 of Title 29, Labor]. Such regulations shall apply to plan yearsbeginning afterDecember 31, 2003, or such earlier date as is specified by the Secretary of the Treasury.”

Secretary of the Treasury or his delegate to issue beforeFeb. 1, 1988, final regulations to carry out amendments made by sections 1113 and 1114 ofPub. L. 99–514, seesection 1141 of Pub. L. 99–514, set out as a note undersection 401 of this title.

Secretary of Labor, Secretary of the Treasury, andEqual Employment Opportunity Commission shall each issue beforeFeb. 1, 1988, final regulations to carry out amendments made by sections 9202 and 9203 ofPub. L. 99–509, seesection 9204 of Pub. L. 99–509, set out as a note undersection 623 of Title 29, Labor.

Savings Provision

For provisions that nothing in amendment byPub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior toMar. 23, 2018, for purposes of determining liability for tax for periods ending afterMar. 23, 2018, seesection 401(e) of Pub. L. 115–141, set out as a note undersection 23 of this title.

Construction of 2006 Amendment

Pub. L. 109–280, title VII, § 701(d),Aug. 17, 2006,120 Stat. 991, as amended byPub. L. 110–458, title I, § 107(c)(1),Dec. 23, 2008,122 Stat. 5107, provided that:

“Nothing in the amendments made by this section [amending this section and sections 623, 1053, and 1054 of Title 29, Labor] shall be construed to create an inference with respect to—

“(1)

the treatment ofapplicable defined benefit plans or conversions toapplicable defined benefit plans under sections 204(b)(1)(H) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(b)(1)(H)], 4(i)(1) of theAge Discrimination in Employment Act of 1967 [29 U.S.C. 623(i)(1)], and 411(b)(1)(H) of theInternal Revenue Code of 1986, as in effect before such amendments, or

“(2)

the determination of whether anapplicable defined benefit plan fails to meet the requirements of sections 203(a)(2), 204(c), or 205(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1053(a)(2), 1054(c), 1055(g)] or sections 411(a)(2), 411(c), or 417(e) of such Code, as in effect before such amendments, solely because the present value of the accrued benefit(or any portion thereof) of any participant is, under the terms of the plan, equal to the amount expressed as the balance in a hypothetical account or as an accumulated percentage of the participant’s final average compensation.

For purposes of this subsection, the term ‘applicable defined benefit plan’ has the meaning given such term by section 203(f)(3) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1053(f)(3)] and section 411(a)(13)(C) of such Code, as in effect after such amendments.”

Temporary Rule Preventing Partial Plan Termination

Pub. L. 116–260, div. EE, title II, § 209,Dec. 27, 2020,134 Stat. 3066, provided that:

“A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of theInternal Revenue Code of 1986) during any plan yearwhich includes the period beginning onMarch 13, 2020, and ending onMarch 31, 2021, if the number of active participants covered by the plan onMarch 31, 2021 is at least 80 percent of the number of active participants covered by the plan onMarch 13, 2020.”

Applicability of Amendments by Subtitles A and B of Title I ofPub. L. 109–280

For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I ofPub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 ofPub. L. 109–280, set out as notes undersection 401 of this title.

Provisions Relating to Plan Amendments

Pub. L. 109–280, title XI, § 1107,Aug. 17, 2006,120 Stat. 1063, provided that:

“(a) In General.—If this section applies to any pension plan or contract amendment—

“(1)

such pension plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A), and

“(2)

except as provided by the Secretary of the Treasury, such pension plan shall not fail to meet the requirements of section 411(d)(6) of theInternal Revenue Code of 1986 and section 204(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(g)] by reason of such amendment.

“(b) Amendments to Which Section Applies.—

“(1) In general.—This section shall apply to any amendment to any pension plan or annuity contract which is made—

“(A)

pursuant to any amendment made by this Act [see Tables for classification] or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor under this Act, and

“(B)

on or before the last day of the first planyear beginning on or afterJanuary 1, 2009.

In the case of agovernmental plan (as defined in section 414(d) of theInternal Revenue Code of 1986), this paragraph shall be applied by substituting ‘2011’ for ‘2009’.

“(2) Conditions.—This section shall not apply to any amendment unless—

“(A) during the period—

“(i)

beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan), and

“(ii)

ending on the date described in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and

“(B)

such plan or contract amendment applies retroactively for such period.”

Pub. L. 108–218, title I, § 101(c),Apr. 10, 2004,118 Stat. 598, as amended byPub. L. 109–280, title III, § 301(c),Aug. 17, 2006,120 Stat. 920;Pub. L. 110–458, title I, § 103(a),Dec. 23, 2008,122 Stat. 5103, provided that:

“(1) In general.—If this subsection applies to any plan or annuity contract amendment—

“(A)

such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i), and

“(B)

except as provided by the Secretary of the Treasury, such plan shall not fail to meet the requirements of section 411(d)(6) of theInternal Revenue Code of 1986 and section 204(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(g)] by reason of such amendment.

“(2) Amendments to which section applies.—

“(A) In general.—This subsection shall apply to any amendment to any plan or annuity contract which is made—

“(i)

pursuant to any amendment made by this section [amending sections404,412, and415 of this title and sections 1082 and 1306 of Title 29, Labor], and

“(ii)

on or before the last day of the first planyear beginning on or afterJanuary 1, 2009.

“(B) Conditions.—This subsection shall not apply to any plan or annuity contract amendment unless—

“(i)

during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and

“(ii)

such plan or contract amendment applies retroactively for such period.”

Pub. L. 105–34, title XV, § 1541,Aug. 5, 1997,111 Stat. 1085, provided that:

“(a) In General.—If this section applies to any plan or contract amendment—

“(1)

such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A), and

“(2)

such plan shall not fail to meet the requirements of section 411(d)(6) of theInternal Revenue Code of 1986 or section 204(g) of theEmployee Retirement Income Security Act of 1974 [29 U.S.C. 1054(g)] by reason of such amendment.

“(b) Amendments to Which Section Applies.—

“(1) In general.—This section shall apply to any amendment to any plan or annuity contract which is made—

“(A)

pursuant to any amendment made by this title [enacting sections9811 and9812 of this title, amending sections101,401 to404,408,409,410,412,414,415,512,664,674,2055,2056,4947,4972,4975,4978,4979A,4980D,9801,9802, and9831 of this title, sections 1021, 1022, 1024, 1026 to 1028, 1056, 1082, 1107, 1108, and 1132 of Title 29, Labor, andsection 1320b–14 of Title 42, The Public Health and Welfare, renumbering sections 9804 to 9806 of this title as sections 9831 to 9833, respectively, of this title, and amending provisions set out as a note undersection 412 of this title] or subtitle H of title X [§§ 1071–1075, amending this section, sections 72, 132, 417, 457, 691, 2013, 2053, 4975, and 6018 of this title, and sections 1053 to 1055 of Title 29 and repealingsection 4980A of this title], and

“(B)

before the first day of the first planyear beginning on or afterJanuary 1, 1999.

In the case of agovernmental plan (as defined in section 414(d) of theInternal Revenue Code of 1986), this paragraph shall be applied by substituting ‘2001’ for ‘1999’.

“(2) Conditions.—This section shall not apply to any amendment unless—

“(A) during the period—

“(i)

beginning on the date the legislative amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative amendment, the effective date specified by the plan), and

“(ii)

ending on the date described in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is adopted),

the plan or contract is operated as if such plan or contract amendment were in effect, and

“(B)

such plan or contract amendment applies retroactively for such period.”

Transitional Rule: Certain Plan Amendments Adopted or Effective On or BeforeAugust 20, 1996

Pub. L. 104–188, title I, § 1449(d),Aug. 20, 1996,110 Stat. 1814, provided that:

“In the case of a plan that was adopted and in effect beforeDecember 8, 1994, if—

“(1)

a plan amendment was adopted or made effective on or before the date of the enactment of this Act [Aug. 20, 1996] applying the amendments made by section 767 of theUruguay Round Agreements Act [Pub. L. 103–465, see Effective Date of 1994 Amendment note set out above], and

“(2)

within 1year after the date of the enactment of this Act [Aug. 20, 1996], a plan amendment is adopted which repeals the amendment referred to in paragraph (1),

the amendment referred to in paragraph (1) shall not be taken into account in applying section 767(d)(3)(A) of theUruguay Round Agreements Act, as amended by subsection (a).”

Plan Amendments Reflecting Amendments bySection 7881(m) of Pub. L. 101–239 Not Treated as Reducing Accrued Benefits

For provisions directing that if during the period beginningDec. 22, 1987, and endingJune 21, 1988, a plan was amended to reflect the amendments bysection 9346 of Pub. L. 100–203 and such plan is amended to reflect the amendments bysection 7881(m) of Pub. L. 101–239, any plan amendments made to reflect the amendments bysection 7881(m) of Pub. L. 101–239 shall not be treated as reducing accrued benefitsfor purposes of subsection (d)(6) of this section orsection 1054(g) of Title 29, Labor, seesection 7881(m)(3) of Pub. L. 101–239, set out as a note undersection 1054 of Title 29.

Plan Amendments Not Required Until January 1, 1998

For provisions directing that if any amendments made by subtitle D [§§ 1401–1465] of title I ofPub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan yearbeginning on or afterJan. 1, 1998, seesection 1465 of Pub. L. 104–188, set out as a note undersection 401 of this title.

Plan Amendments Not Required Until January 1, 1994

For provisions directing that if any amendments made by subtitle B [§§ 521–523] of title V ofPub. L. 102–318 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan yearbeginning on or afterJan. 1, 1994, seesection 523 of Pub. L. 102–318, set out as a note undersection 401 of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and1171–1177] or title XVIII [§§ 1800–1899A] ofPub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan yearbeginning on or afterJan. 1, 1989, seesection 1140 of Pub. L. 99–514, as amended, set out as a note undersection 401 of this title.

For provisions directing that if any amendments made by sections 9202(b) and 9203(b)(2) ofPub. L. 99–509 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan yearbeginning on or afterJan. 1, 1989, seesection 9204 of Pub. L. 99–509, set out as a note undersection 623 of Title 29, Labor.

Alternate Methods of Satisfying Requirements for Vesting and Accrued Benefits

Pub. L. 93–406, title II, § 1012(c),Sept. 2, 1974,88 Stat. 913, as amended byPub. L. 99–514, § 2,Oct. 22, 1986,100 Stat. 2095, provided that:

“In the case of any plan maintained onJanuary 1, 1974, if, not later than 2 yearsafter the date of the enactment of this Act [Sept. 2, 1974], the plan administratorpetitions the Secretary of Labor, the Secretary of Labor may prescribe an alternate method which shall be treated as satisfying the requirements of subsection (a)(2) of section 411 of theInternal Revenue Code of 1986 [formerly I.R.C. 1954], or of subsection (b)(1) (other than subparagraph (D) thereof) of such section 411, or of both such provisions for a period of not more than 4 years. The Secretary may prescribe such alternate method only when he finds that—

“(1)

the application of such requirements would increase the costs of the plan to such an extent that there would result a substantial risk to the voluntary continuation of the plan or a substantial curtailment of benefit levels or the levels of employees’ compensation,

“(2)

the application of such requirements or discontinuance of the plan would be adverse to the interests of plan participants in the aggregate, and

“(3)

a waiver or extension of time granted under [former]section 412(d) or (e) would be inadequate.

In the case of any plan with respect to which an alternate method has been prescribed under the preceding provisions of this subsection for a period of not more than 4years, if, not later than 1year before the expiration of such period, the plan administratorpetitions the Secretary of Labor for an extension of such alternate method, and the Secretary makes the findings required by the preceding sentence, such alternate method may be extended for not more than 3years.”

CFR Title	Parts
26	1
29	2530

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26 U.S. Code § 411 - Minimum vesting standards

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