§ 1052 TITLE 29—LABOR Page 380

made by employers of participants in such

plan, or

(B) a trust described in section 501(c)(18) of

title 26;

(4) a plan which is established and maintained by a labor organization described in

section 501(c)(5) of title 26 and which does not

at any time after September 2, 1974, provide

for employer contributions;

(5) any agreement providing payments to a

retired partner or a deceased partner’s successor in interest, as described in section 736 of

title 26;

(6) an individual retirement account or annuity described in section 408 of title 26, or a

retirement bond described in section 409 of

title 26 (as effective for obligations issued before January 1, 1984);

(7) an excess benefit plan; or

(8) any plan, fund or program under which an

employer, all of whose stock is directly or indirectly owned by employees, former employees or their beneficiaries, proposes through an

unfunded arrangement to compensate retired

employees for benefits which were forfeited by

such employees under a pension plan maintained by a former employer prior to the date

such pension plan became subject to this chapter.

(Pub. L. 93–406, title I, §201, Sept. 2, 1974, 88 Stat.

852; Pub. L. 96–364, title IV, §411(a), Sept. 26, 1980,

94 Stat. 1308; Pub. L. 101–239, title VII,

§§7891(a)(1), 7894(c)(1)(A), (11)(A), Dec. 19, 1989,

103 Stat. 2445, 2448, 2449.)

REFERENCES IN TEXT

Section 409 of title 26, referred to in par. (6), means

section 409 of Title 26, Internal Revenue Code, prior to

its repeal by Pub. L. 98–369, div. A, title IV, §491(b),

July 18, 1984, 98 Stat. 848, applicable to obligations issued after Dec. 31, 1983.

This chapter, referred to in par. (8), was in the original ‘‘this Act’’, meaning Pub. L. 93–406, known as the

Employee Retirement Income Security Act of 1974.

Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of

this Act to the Code, see Short Title note set out under

section 1001 of this title and Tables.

AMENDMENTS

1989—Pars. (3)(A), (4), (5). Pub. L. 101–239, §7891(a)(1),

substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for purposes of codification was translated as ‘‘title 26’’ thus requiring no

change in text.

Par. (6). Pub. L. 101–239, §7891(a)(1), substituted ‘‘section 408 of the Internal Revenue Code of 1986’’ for ‘‘section 408 of the Internal Revenue Code of 1954’’, which

for purposes of codification was translated as ‘‘section

408 of title 26’’ thus requiring no change in text.

Pub. L. 101–239, §7894(c)(11)(A), substituted ‘‘section

409 of title 26 (as effective for obligations issued before

January 1, 1984)’’ for ‘‘section 409 of title 26’’.

Pub. L. 101–239, §7894(c)(1)(A)(i), struck out ‘‘or’’ after

semicolon at end.

Par. (7). Pub. L. 101–239, §7894(c)(1)(A)(ii), substituted

‘‘plan; or’’ for ‘‘plan.’’

Par. (8). Pub. L. 101–239, §7894(c)(1)(A)(iii), substituted

‘‘any plan’’ for ‘‘Any plan’’.

1980—Par. (8). Pub. L. 96–364 added par. (8).

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Tax Reform Act of 1986, Pub. L.

99–514, to which such amendment relates, see section

7891(f) of Pub. L. 101–239, set out as a note under section

1002 of this title.

Section 7894(c)(1)(B) of Pub. L. 101–239 provided that:

‘‘The amendments made by subparagraph (A) [amending this section] shall take effect as if included in section 411 of the Multiemployer Pension Plan Amendments Act of 1980 [Pub. L. 96–364].’’

Section 7894(c)(11)(B) of Pub. L. 101–239 provided that:

‘‘The amendment made by subparagraph (A) [amending

this section] shall take effect as if originally included

in section 491(b) of Public Law 98–369.’’

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96–364 effective Sept. 26, 1980,

except as specifically provided, see section 1461(e) of

this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1003 of this title.

§ 1052. Minimum participation standards

(a)(1)(A) No pension plan may require, as a

condition of participation in the plan, that an

employee complete a period of service with the

employer or employers maintaining the plan extending beyond the later of the following dates—

(i) the date on which the employee attains

the age of 21; or

(ii) the date on which he completes 1 year of

service.

(B)(i) In the case of any plan which provides

that after not more than 2 years of service each

participant has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable at the time such benefit accrues, clause (ii)

of subparagraph (A) shall be applied by substituting ‘‘2 years of service’’ for ‘‘1 year of service’’.

(ii) In the case of any plan maintained exclusively for employees of an educational organization (as defined in section 170(b)(1)(A)(ii) of title

26) by an employer which is exempt from tax

under section 501(a) of title 26, which provides

that each participant having at least 1 year of

service has a right to 100 percent of his accrued

benefit under the plan which is nonforfeitable at

the time such benefit accrues, clause (i) of subparagraph (A) shall be applied by substituting

‘‘26’’ for ‘‘21’’. This clause shall not apply to any

plan to which clause (i) applies.

(2) No pension plan may exclude from participation (on the basis of age) employees who have

attained a specified age.

(3)(A) For purposes of this section, the term

‘‘year of service’’ means a 12-month period during which the employee has not less than 1,000

hours of service. For purposes of this paragraph,

computation of any 12-month period shall be

made with reference to the date on which the

employee’s employment commenced, except

that, in accordance with regulations prescribed

by the Secretary, such computation may be

made by reference to the first day of a plan year

in the case of an employee who does not complete 1,000 hours of service during the 12-month

period beginning on the date his employment

commenced.

(B) In the case of any seasonal industry where

the customary period of employment is less

than 1,000 hours during a calendar year, the
Page 381 TITLE 29—LABOR § 1052

term ‘‘year of service’’ shall be such period as

may be determined under regulations prescribed

by the Secretary.

(C) For purposes of this section, the term

‘‘hour of service’’ means a time of service determined under regulations prescribed by the Secretary.

(D) For purposes of this section, in the case of

any maritime industry, 125 days of service shall

be treated as 1,000 hours of service. The Secretary may prescribe regulations to carry out

the purposes of this subparagraph.

(4) A plan shall be treated as not meeting the

requirements of paragraph (1) unless it provides

that any employee who has satisfied the minimum age and service requirements specified in

such paragraph, and who is otherwise entitled to

participate in the plan, commences participation in the plan no later than the earlier of—

(A) the first day of the first plan year beginning after the date on which such employee

satisfied such requirements, or

(B) the date 6 months after the date on

which he satisfied such requirements,

unless such employee was separated from the

service before the date referred to in subparagraph (A) or (B), whichever is applicable.

(b)(1) Except as otherwise provided in paragraphs (2), (3), and (4), all years of service with

the employer or employers maintaining the plan

shall be taken into account in computing the period of service for purposes of subsection (a)(1) of

this section.

(2) In the case of any employee who has any 1-

year break in service (as defined in section

1053(b)(3)(A) of this title) under a plan to which

the service requirements of clause (i) of subsection (a)(1)(B) of this section apply, if such

employee has not satisfied such requirements,

service before such break shall not be required

to be taken into account.

(3) In computing an employee’s period of service for purposes of subsection (a)(1) of this section in the case of any participant who has any

1-year break in service (as defined in section

1053(b)(3)(A) of this title), service before such

break shall not be required to be taken into account under the plan until he has completed a

year of service (as defined in subsection (a)(3) of

this section) after his return.

(4)(A) For purposes of paragraph (1), in the

case of a nonvested participant, years of service

with the employer or employers maintaining the

plan before any period of consecutive 1-year

breaks in service shall not be required to be

taken into account in computing the period of

service if the number of consecutive 1-year

breaks in service within such period equals or

exceeds the greater of—

(i) 5, or

(ii) the aggregate number of years of service

before such period.

(B) If any years of service are not required to

be taken into account by reason of a period of

breaks in service to which subparagraph (A) applies, such years of service shall not be taken

into account in applying subparagraph (A) to a

subsequent period of breaks in service.

(C) For purposes of subparagraph (A), the term

‘‘nonvested participant’’ means a participant

who does not have any nonforfeitable right

under the plan to an accrued benefit derived

from employer contributions.

(5)(A) In 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 as hours of service, solely

for purposes of determining under this subsection whether a 1-year break in service (as defined in section 1053(b)(3)(A) of this title) has occurred, the hours described in subparagraph (B).

(B) The hours described in this subparagraph

are—

(i) the hours 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 clause (i),

8 hours of service per day of such absence,

except that the total number of hours treated as

hours of service under this subparagraph by reason of any such pregnancy or placement shall

not exceed 501 hours.

(C) The hours described in subparagraph (B)

shall be treated as hours of service as provided

in this paragraph—

(i) only in the year in which the absence

from work begins, if a participant would be

prevented from incurring a 1-year break in

service in such year solely because the period

of absence is treated as hours of service as provided in subparagraph (A); or

(ii) in any other case, in the immediately

following year.

(D) For purposes of this paragraph, the term

‘‘year’’ means the period used in computations

pursuant to subsection (a)(3)(A) of this section.

(E) A plan may provide that no credit will be

given pursuant to this paragraph unless the individual furnishes to the plan administrator

such timely information as the plan may reasonably require to establish—

(i) that the absence from work is for reasons

referred to in subparagraph (A), and

(ii) the number of days for which there was

such an absence.

(Pub. L. 93–406, title I, §202, Sept. 2, 1974, 88 Stat.

853; Pub. L. 98–397, title I, §102(a), (d)(1), (e)(1),

Aug. 23, 1984, 98 Stat. 1426, 1427; Pub. L. 99–509,

title IX, §9203(a)(1), Oct. 21, 1986, 100 Stat. 1979;

Pub. L. 99–514, title XI, §1113(e)(3), Oct. 22, 1986,

100 Stat. 2448; Pub. L. 101–239, title VII,

§§7861(a)(2), 7891(a)(1), 7892(a), 7894(c)(2), Dec. 19,

1989, 103 Stat. 2430, 2445, 2447, 2449.)

AMENDMENTS

1989—Subsec. (a)(1)(B)(i). Pub. L. 101–239, §7861(a)(2),

made technical correction to directory language of

Pub. L. 99–514. See 1986 Amendment note below.

Subsec. (a)(1)(B)(ii). Pub. L. 101–239, §7894(c)(2)(A),

substituted ‘‘educational organization’’ for ‘‘educational institution’’.
§ 1053 TITLE 29—LABOR Page 382

Pub. L. 101–239, §7891(a)(1), substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’,

which for purposes of codification was translated as

‘‘title 26’’ thus requiring no change in text.

Subsec. (a)(2). Pub. L. 101–239, §7892(a), struck out

comma after ‘‘specified age’’.

Subsec. (b)(2). Pub. L. 101–239, §7894(c)(2)(B), substituted ‘‘a plan’’ for ‘‘the plan’’.

1986—Subsec. (a)(1)(B)(i). Pub. L. 99–514, as amended

by Pub. L. 101–239, §7861(a)(2), substituted ‘‘2 years of

service’’ for ‘‘3 years of service’’ in two places.

Subsec. (a)(2). Pub. L. 99–509 substituted a period for

‘‘unless—

‘‘(A) the plan is a—

‘‘(i) defined benefit plan, or

‘‘(ii) target benefit plan (as defined under regulations prescribed by the Secretary of the Treasury),

and

‘‘(B) such employees begin employment with the

employer after they have attained a specified age

which is not more than 5 years before the normal retirement age under the plan.’’

1984—Subsec. (a)(1). Pub. L. 98–397, §102(a), substituted ‘‘21’’ for ‘‘25’’ in subpar. (A)(i) and ‘‘‘26’ for

‘21’’’ for ‘‘‘30’ for ‘25’’’ in subpar. (B)(ii).

Subsec. (b)(4). Pub. L. 98–397, §102(d)(1), amended par.

(4) generally. Prior to amendment, par. (4) read as follows: ‘‘In the case of an employee who does not have

any nonforfeitable right to an accrued benefit derived

from employer contributions, years of service with the

employer or employers maintaining the plan before a

break in service shall not be required to be taken into

account in computing the period of service for purposes

of subsection (a)(1) of this section if the number of consecutive 1-year breaks in service equals or exceeds the

aggregate number of such years of service before such

break. Such aggregate number of years of service before such break shall be deemed not to include any

years of service not required to be taken into account

under this paragraph by reason of any prior break in

service.’’

Subsec. (b)(5). Pub. L. 98–397, §102(e)(1), added par. (5).

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7861(a)(2) of Pub. L. 101–239 effective as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7863 of Pub. L. 101–239, set out

as a note under section 106 of Title 26, Internal Revenue

Code.

Amendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Tax Reform Act of 1986, Pub. L.

99–514, to which such amendment relates, see section

7891(f) of Pub. L. 101–239, set out as a note under section

1002 of this title.

Section 7892(c) of Pub. L. 101–239 provided that: ‘‘Any

amendment made by this section [amending this section and section 1082 of this title] shall take effect as

if included in the provision of the Omnibus Budget Reconciliation Act of 1987 [Pub. L. 100–203, probably should

refer to Omnibus Budget Reconciliation Act of 1986,

Pub. L. 99–509] or Pension Protection Act [Pub. L.

100–203, §§9302–9346, probably should refer to Omnibus

Budget Reconciliation Act of 1987, Pub. L. 100–203] to

which such amendment relates.’’

Amendment by section 7894(c)(2) of Pub. L. 101–239 effective, except as otherwise provided, as if originally

included in the provision of the Employee Retirement

Income Security Act of 1974, Pub. L. 93–406, to which

such amendment relates, see section 7894(i) of Pub. L.

101–239, set out as a note under section 1002 of this title.

EFFECTIVE DATE OF 1986 AMENDMENTS

Amendment by section 1113(e)(3) of Pub. L. 99–514 applicable to plan years beginning after Dec. 31, 1988, with

special rule for plans maintained pursuant to collective

bargaining agreements ratified before Mar. 1, 1986, and

not applicable to employees who do not have 1 hour of

service in any plan year to which the amendment applies, see section 1113(f) of Pub. L. 99–514, as amended,

set out as a note under section 411 of Title 26, Internal

Revenue Code.

Amendment by Pub. L. 99–509 applicable only with respect to plan years beginning on or after Jan. 1, 1988,

and only with respect to service performed on or after

such date, see section 9204 of Pub. L. 99–509, set out as

an Effective and Termination Dates of 1986 Amendments note under section 623 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98–397 applicable to plan years

beginning after Dec. 31, 1984, except as otherwise provided, see sections 302 and 303 of Pub. L. 98–397, set out

as a note under section 1001 of this title.

REGULATIONS

Secretary of Labor, Secretary of the Treasury, and

Equal Employment Opportunity Commission each to

issue before Feb. 1, 1988, final regulations to carry out

amendments made by Pub. L. 99–509, see section 9204 of

Pub. L. 99–509, set out as an Effective and Termination

Dates of 1986 Amendment note under section 623 of this

title.

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this subchapter call for the promulgation of regulations, see

section 1031 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

and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L.

99–514 require an amendment to any plan, such plan

amendment shall not be required to be made before the

first plan year beginning on or after Jan. 1, 1989, see

section 1140 of Pub. L. 99–514, as amended, set out as a

note under section 401 of Title 26, Internal Revenue

Code.

For provisions directing that if any amendments

made by Pub. L. 99–509 require an amendment to any

plan, such plan amendment shall not be required to be

made before the first plan year beginning on or after

Jan. 1, 1989, see section 9204 of Pub. L. 99–509, set out as

an Effective and Termination Dates of 1986 Amendment

note under section 623 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1002, 1053, 1054,

1060, 1061 of this title.

§ 1053. Minimum vesting standards

(a) Nonforfeitability requirements

Each pension plan shall provide that an employee’s right to his normal retirement benefit

is nonforfeitable upon the attainment of normal

retirement age and in addition shall satisfy the

requirements of paragraphs (1) and (2) of this

subsection.

(1) A plan satisfies the requirements of this

paragraph if an employee’s rights in his accrued benefit derived from his own contributions are nonforfeitable.

(2) A plan satisfies the requirements of this

paragraph if it satisfies the requirements of

subparagraph (A) or (B).

(A) A plan satisfies the requirements of

this subparagraph if an employee who has

completed at least 5 years of service has a

nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions.

(B) A plan satisfies the requirements of

this subparagraph if an employee has a non-