Source: https://casetext.com/statute/united-states-code/title-29-labor/chapter-18-employee-retirement-income-security-program/subchapter-i-protection-of-employee-benefit-rights/subtitle-b-regulatory-provisions/part-2-participation-and-vesting/section-1053-minimum-vesting-standards
Timestamp: 2020-04-01 16:44:28
Document Index: 629662257

Matched Legal Cases: ['§ 1053', '§303', '§102', '§1113', '§1898', '§7861', '§767', '§1442', '§1071', '§633', '§408', '§108', '§107', '§701', '§902', '§202', '§107', '§108', '§904', '§108', '§107', '§902', '§904', '§701', '§633', '§633', '§648', '§1442', '§1442', '§7861', '§7861', '§7894', '§7861', '§7861', '§7891', '§7862', '§7862', '§7862', '§7862', '§7891', '§7891', '§7862', '§1101', '§1800']

Section 1053 - Minimum vesting standards, 29 U.S.C. § 1053 | Casetext Search + Citator
(A) For purposes of this section, 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) during which the participant has completed 1,000 hours of service.
(A) 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) during which the participant has not completed more than 500 hours of service.
(i) 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 if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of-
(i) In the case of each individual who is absent from work for any period-
(A) A plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of subsection (a)(2) if the nonforfeitable percentage of the accrued 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.
(4) A plan shall not fail to meet the requirements of this subsection if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover 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) of title 26.
Pub. L. 93-406Sept. 2, 1974, 88 Stat. 854; Pub. L. 96-364, title III, §303, Sept. 26, 1980, 94 Stat. 1292; Pub. L. 98-397, title I, §§102(b), (c), (d)(2), (e)(2), 105(a), Aug. 23, 1984, 98 Stat. 1426-1428, 1436; Pub. L. 99-514, title XI, §§1113(e)(1), (2), (4)(A), 1139(c)(1), title XVIII, §1898(a)(1)(B), (4)(B)(i), (d)(1)(B), (2)(B), Oct. 22, 1986, 100 Stat. 2447, 2448, 2487, 2942, 2944, 2955; Pub. L. 101-239, title VII, §§7861(a)(1), (5)(B), (6)(B), 7862(d)(4), (5), (10), 7891(a)(1), (b)(1), (2), 7894(c)(3), Dec. 19, 1989, 103 Stat. 2430, 2434, 2445, 2449; Pub. L. 103-465, title VII, §767(c)(1), Dec. 8, 1994, 108 Stat. 5039; Pub. L. 104-188, title I, §1442(b), Aug. 20, 1996, 110 Stat. 1808; Pub. L. 105-34, title X, §1071(b)(1), Aug. 5, 1997, 111 Stat. 948; Pub. L. 107-16, title VI, §§633(b), 648(a)(2), June 7, 2001, 115 Stat. 116, 127; Pub. L. 108-311, title IV, §408(b)(8), Oct. 4, 2004, 118 Stat. 1193; Pub. L. 109-280, title I, §108(a)(4), formerly §107(a)(4), title VII, §701(a)(2), title IX, §§902(d)(2)(E), 904(b), Aug. 17, 2006, 120 Stat. 819, 984, 1038, 1049, renumbered Pub. L. 111-192, title II, §202(a), June 25, 2010, 124 Stat. 1297; Pub. L. 110-458, title I, §107(a)(1), Dec. 23, 2008, 122 Stat. 5107.
REFERENCES IN TEXTSection 1425 of this title, referred to in subsec. (a)(3)(E)(ii)(I), was repealed by Pub. L. 113-235, div. O, title I, §108(a)(1), Dec. 16, 2014, 128 Stat. 2786.
AMENDMENTS 2008-Subsec. (f)(1)(B). Pub. L. 110-458 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "the requirements of section 1054(c) of this title or section 1055(g) of this title with respect to contributions other than employee contributions,". 2006-Subsec. (a)(2). Pub. L. 109-280, §904(b)(1), amended par. (2) generally, substituting provisions relating to satisfaction of requirements in the case of a defined benefit plan and in the case of an individual account plan for provisions relating to satisfaction of requirements 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 or if an employee has a nonforfeitable right to a percentage of such benefit based upon number of years of service. Subsec. (a)(3)(C). Pub. L. 109-280, §108(a)(4), formerly §107(a)(4), as renumbered by Pub. L. 111-192, substituted "1082(d)(2)" for "1082(c)(8)".Subsec. (a)(3)(F). Pub. L. 109-280, §902(d)(2)(E), inserted "an erroneous automatic contribution under section 414(w) of title 26," before "or an excess aggregate contribution". Subsec. (a)(4). Pub. L. 109-280, §904(b)(2), struck out par. (4), which related to application of par. (2) in the case of matching contributions, as defined in section 401(m)(4)(A) of title 26.Subsec. (f). Pub. L. 109-280, §701(a)(2), added subsec. (f). 2004-Subsec. (a)(4)(B). Pub. L. 108-311 substituted "6 or more" for "6" in table.2001-Subsec. (a)(2). Pub. L. 107-16, §633(b)(1), substituted "Except as provided in paragraph (4), a plan" for "A plan" in introductory provisions.Subsec. (a)(4). Pub. L. 107-16, §633(b)(2), added par. (4). Subsec. (e)(4). Pub. L. 107-16, §648(a)(2), added par. (4).1997-Subsec. (e)(1). Pub. L. 105-34 substituted "$5,000" for "$3,500".1996-Subsec. (a)(2). Pub. L. 104-188, §1442(b)(1), substituted "subparagraph (A) or (B)" for "subparagraph (A), (B), or (C)" in introductory provisions. Subsec. (a)(2)(C). Pub. L. 104-188, §1442(b)(2), struck out subpar. (C) which read as follows: "A plan satisfies the requirements of this subparagraph if-"(i) the plan is a multiemployer plan (within the meaning of section 1002(37)), and"(ii) under the plan-"(I) an employee who is covered pursuant to a collective bargaining agreement described in section 1002(37)(A)(ii) of this title and who has completed at least 10 years of service has a nonforfeitable right to 100 percent of the employee's accrued benefit derived 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. (e)(2). Pub. L. 103-465 amended par. (2) generally. Prior to amendment, par. (2) read as follows:"(2)(A) For purposes of paragraph (1), the present value shall be calculated-"(i) by using an interest rate no greater than the applicable interest rate if the vested accrued benefit (using such rate) is not in excess of $25,000, and"(ii) by using an interest rate no greater than 120 percent of the applicable interest rate if the vested accrued benefit exceeds $25,000 (as determined under clause (i)).In no event shall the present value determined under subclause (II) be less than $25,000."(B) For purposes of subparagraph (A), the term 'applicable interest rate' means the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination." 1989-Subsec. (a)(2). Pub. L. 101-239, §7861(a)(1)(A), substituted "satisfies the requirements" for "satisfies the following requirements" in introductory provisions. Subsec. (a)(2)(C)(ii)(I). Pub. L. 101-239, §7861(a)(1)(B), substituted "section 1002(37)(A)(ii) of this title" for "section 414(f)(1)(B)".Subsec. (a)(3)(D)(v). Pub. L. 101-239, §7894(c)(3), substituted "nonforfeitability" for "nonforfeitably".Subsec. (a)(3)(F). Pub. L. 101-239, §7861(a)(5)(B), added subpar. (F).Subsec. (b)(1)(A). Pub. L. 101-239, §7861(a)(6)(B), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "years of service before age 18, except that in case of a plan which does not satisfy subparagraph (A) or (B) of subsection (a)(2), the plan may not disregard any such year of service during which the employee was a participant;".Subsec. (c)(2). 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. (e)(1). Pub. L. 101-239, §7862(d)(10), which directed amendment of par. (1) by substituting "nonforfeitable benefit" for "vested accrued benefit", could not be executed because the language "vested accrued benefit" did not appear after the amendment by Pub. L. 101-239, §7862(d)(5), see below.Pub. L. 101-239, §7862(d)(5), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "If the present value of any vested accrued benefit exceeds $3,500, a pension plan shall provide that such benefit may not be immediately distributed without the consent of the participant."Pub. L. 101-239, §7862(d)(4), made technical correction to Pub. L. 99-514see 1986 Amendment note below.Subsec. (e)(2). Pub. L. 101-239, §7891(b)(1), (2), realigned margins of subpars. (A) and (B) and struck out subpar. (B) heading "Applicable interest rate".Subsec. (e)(3). 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.1986-Subsec. (a)(2). Pub. L. 99-514amended par. (2) generally, substituting provisions covering 5-year vesting, 3- to 7-year vesting, and multiemployer plans, for former provisions which covered 10-year vesting, 5- to 15-year vesting, and the "rule of 45" under which a plan satisfied the requirements of this paragraph if an employee who had completed at least 5 years of service and with respect to whom the sum of his age and years of service equalled or exceeded 45 had a right to a percentage of his accrued benefits derived from employer contributions.Subsec. (a)(3)(D)(ii). Pub. L. 99-514inserted last sentence and struck out 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 1-year break in service commencing after the withdrawal."Subsec. (c)(1)(B). Pub. L. 99-514substituted "3 years" for "5 years".Subsec. (c)(3). Pub. L. 99-514struck out par. (3) which provided for class year vesting. Pub. L. 99-514amended par. (3) generally. Prior to amendment, par. (3) read as follows: "The requirements of subsection (a)(2) shall be deemed to be satisfied in the case of a class year plan 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 year are nonforfeitable not later than the end of the 5th year following the plan year for which such contributions were made. For purposes of this part, the term 'class year plan' 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. (e)(1). Pub. L. 99-514as amended by Pub. L. 101-239, §7862(d)(4), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "If the present value of any accrued benefit exceeds $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. (e)(2). Pub. L. 99-514amended par. (2) generally. Prior to amendment, par. (2) read as follows: "For purposes of paragraph (1), 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 the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination."Pub. L. 99-514added par. (3). 1984-Subsec. (b)(1)(A). Pub. L. 98-397substituted "18" for "22".Subsec. (b)(3)(C). Pub. L. 98-397substituted "5 consecutive 1-year breaks in service" for "any 1-year break in service" and substituted "such 5-year period" for "such break" in two places.Subsec. (b)(3)(D). Pub. L. 98-397amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: "For purposes of paragraph (1), in the case of a participant who, under the plan, does not have any nonforfeitable right to an accrued benefit derived from employer contributions, years of service before any 1-year break in service shall not be required to be taken into account if the number of consecutive 1-year breaks in service equals or exceeds the aggregate number of such years of service prior to 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 subparagraph by reason of any prior break in service."Subsec. (b)(3)(E). Pub. L. 98-397added subpar. (E).Subsec. (e). Pub. L. 98-397added subsec. (e). 1980-Subsec. (a)(3)(E). Pub. L. 96-364added subpar. (E).Subsec. (b)(1)(G). Pub. L. 96-364added subpar. (G).
EFFECTIVE DATE OF 2006 AMENDMENT Amendment by section 108(a)(4) of Pub. L. 109-280 applicable to plan years beginning after 2007, see section 108(e) of Pub. L. 109-280, set out as a note under section 1021 of this title.Amendment by section 701(a)(2) of Pub. L. 109-280 applicable to periods beginning on or after June 29, 2005, and to distributions made after Aug. 17, 2006, with provisions relating to vesting and interest credit requirements for plans in existence on June 29, 2005, special rule for collectively bargained plans, and provisions relating to conversions of plan amendments adopted after, and taking effect after, June 29, 2005, see section 701(e) of Pub. L. 109-280, set out as a note under section 411 of Title 26, Internal Revenue Code. Amendment by section 902(d)(2)(E) of Pub. L. 109-280 applicable to plan years beginning after Dec. 31, 2007, see section 902(g) of Pub. L. 109-280, set out as a note under section 401 of Title 26, Internal Revenue Code.Amendment by section 904(b) of Pub. L. 109-280 applicable to contributions for plan years beginning after Dec. 31, 2006, with provisions relating to collective bargaining agreements and amount of service required in any plan year and special rule for stock ownership plans, see section 904(c) of Pub. L. 109-280, set out as a note under section 411 of Title 26, Internal Revenue Code.
EFFECTIVE DATE OF 2001 AMENDMENT Amendment by section 633(b) of Pub. L. 107-16 applicable to contributions for plan years beginning after Dec. 31, 2001, with exception in the case of a plan maintained pursuant to one or more collective bargaining agreements ratified by June 7, 2001, and service requirement with respect to any plan, see section 633(c) of Pub. L. 107-16, set out as a note under section 411 of Title 26, Internal Revenue Code.Amendment by section 648(a)(2) of Pub. L. 107-16 applicable to distributions after Dec. 31, 2001, see section 648(c) of Pub. L. 107-16, set out as a note under section 411 of Title 26, Internal Revenue Code.
EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105-34 applicable to plan years beginning after Aug. 5, 1997, see section 1071(c) of Pub. L. 105-34, set out as a note under section 411 of Title 26, Internal Revenue Code.
EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104-188 applicable to plan years beginning on or after the earlier of (1) the later of (A) Jan. 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 Aug. 20, 1996), or (2) Jan. 1, 1999, but such amendment not applicable 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 plan year to which such amendment applies, see section 1442(c) of Pub. L. 104-188, set out as a note under section 411 of Title 26, Internal Revenue Code.
EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103-465 applicable to plan years and limitation years beginning after Dec. 31, 1994, except that employer may elect to treat such amendment as effective on or after Dec. 8, 1994, with provisions relating to reduction of accrued benefits, exception, and timing of plan amendment, see section 767(d) of Pub. L. 103-465, as amended, set out as a note under section 411 of Title 26, Internal Revenue Code.
EFFECTIVE DATE OF 1989 AMENDMENT Amendment by sections 7861(a)(1), (5)(B), (6)(B) and 7862(d)(4), (5), (10) of Pub. L. 101-239 effective as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-5141986, 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), (b)(1), (2) 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. 99-5141986, 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.Amendment by section 7894(c)(3) 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 AMENDMENT Amendment by section 1113(e)(1), (2), (4)(A) 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 section 1139(c)(1) of Pub. L. 99-514 applicable to distributions in plan years beginning after Dec. 31, 1984, except that such amendments shall not apply to any distributions in plan years beginning after Dec. 31, 1984, and before Jan. 1, 1987, if such distributions were made in accordance with the requirements of the regulations issued under the Retirement Equity Act of 1984, Pub. L. 98-3971984, with additional provisions relating to reductions in accrued benefits, see section 1139(d) of Pub. L. 99-514, set out as a note under section 411 of Title 26. Amendment by section 1898(a)(1)(B) of Pub. L. 99-514 applicable to contributions made for plan years beginning after Oct. 22, 1986, except that in the case of a plan described in section 302(b) of Pub. L. 98-397, set out as a note under section 1001 of this title, such amendments shall not apply to any plan year to which amendments made by Pub. L. 98-397 do not apply by reason of such section 302(b), see section 1898(a)(1)(C) of Pub. L. 99-514, set out as a note under section 411 of Title 26.Amendment by section 1898(a)(4)(B)(i), (d)(1)(B), (2)(B), of Pub. L. 99-514 effective as if included in the provision of the Retirement Equity Act of 1984, Pub. L. 98-3971984, to which such amendment relates, except as otherwise provided, see section 1898(j) of Pub. L. 99-514, set out as a note under section 401 of Title 26.
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.
REGULATIONSSecretary of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out amendments made by section 1113 of Pub. L. 99-514, see section 1141 of Pub. L. 99-514, set out as a note under section 401 of Title 26, Internal Revenue Code.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, 1989For 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.
Section 1052 - Minimum participation standards