September 2, 1974 - 75 Pub. Law 93-406 contributions shall not be treated as forfeitable solely because "(i) in the case of a plan other than a multiemployer "(ii) in the case of a multiemployer plan, in the same industry, the same trade or craft, and the same geographic area covered by the plan as when such benefits commenced. 88 STAT. 903 The Secretary of Labor shall prescribe such regulations as Regulations. "(C) EFFECT OF RETROACTIVE PLAN AMENDMENTS.—A right "(D) WITHDRAWAL OF MANDATORY CONTRIBUTION.— "(i) A right to an accrued 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 his accrued benefit derived from employer contributions, such accrued benefit may be forfeited on account of the withdrawal by the participant of any amount attributable to the benefit derived from mandatory 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 any accrued 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). 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-year break in service commencing after the withdrawal. Post, p. 914. "(iii) In the case of accrued benefits derived from employer contributions which accrued before the date of the enactment of the Employee Retirement Income Security Act of 1974, a right to such accrued benefit Ante, p. 829. derived from employer contributions shall not be treated as forfeitable solely because the plan provides that an amount of such accrued benefit may 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by such participant before the date of the enactment of the Act if such amount forfeited is proportional to such amount withdrawn.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 after the date of the enactment of such Act. The Secretary or Regulations. Pub. Law 93-406 88 STAT. 904 Ante, p. 898. Regulations, his delegate 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 plan year by plan year basis in succeeding order of time. "(v) For nonforfeitability where the employee has a nonforfeitable right to at least 50 percent of his accrued benefit, see section 401 (a) (19). "(4) SERVICE INCLUDED IN DETERMINATION OF NONFORFEITABLE PERCENTAGE. In computing the period of service under the plan for purposes of determining the nonforfeitable percentage under paragraph (2), all of an employee's years 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 22, 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 service during which the employee was a participant; "(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 or his delegate); "(D) service not required to be taken into account under paragraph (6); "(E) years of service before January 1, 1971, unless the employee has had at least 3 years of service after December 31, 1970; and "(F) years of service before the first plan year to 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. "(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 1,000 hours 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). "(C) SEASONAL INDUSTRIES.-In the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, 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 1,000 hours of service. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph. "(6) BREAKS IN SERVICE.— -For pur "(A) DEFINITION OF 1-YEAR BREAK IN SERVICE.— poses of this paragraph, the term '1-year break in service' 30-779 O-78-6 September 2, 1974 - 77 Pub. Law 93-406 means a calendar year, plan year, or other 12-consecutive- "(B) 1 YEAR OF SERVICE AFTER 1-YEAR BREAK IN SERV- return. "(C) 1-YEAR BREAK IN SERVICE UNDER DEFINED CONTRIBUTION PLAN. For purposes of paragraph (4), in the case of any participant in a defined contribution plan, or an insured defined benefit plan which satisfies the requirements of subsection (b) (1) (F), who has any 1-year break in service, years of service after such break shall not be required to be taken into account for purposes of determining the nonforfeitable percentage of his accrued benefit derived from employer contributions which accrued before such break. "(D) NONVESTED PARTICIPANTS.-For purposes of paragraph (4), 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. "(7) ACCRUED BENEFIT.— "(A) IN GENERAL.-For purposes of this section, the term 'accrued benefit' means "(i) in the case of a defined benefit plan, the employee's accrued benefit determined under the plan and, except as provided in subsection (c)(3), expressed in the form of an annual benefit commencing at normal retirement age, or "(ii) in the case of a plan which is not a defined benefit plan, the balance of the employee's account. "(B) EFFECT OF CERTAIN DISTRIBUTIONS.-Notwithstanding paragraph (4), for purposes of determining the employee's accrued 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 $1,750) permitted under regulations prescribed by the Secretary or his delegate, or "(ii) a distribution of the present value of his non- Clause (i) of this subparagraph shall apply only if such dis- 88 STAT. 905 88 STAT. 906 42 USC 401. Pub. Law 93-406 78 September 2, 1974 circumstances as may be provided under regulations prescribed by the Secretary or his delegate. "(C) REPAYMENT OF SUBPARAGRAPH (b) DISTRIBUTIONS. For purposes of determining the employee's accrued 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's accrued 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 plan year to which this section applies, which distribution was less than the present value of his accrued benefit, "(ii) resumes employment covered under the plan, and "(iii) repays the full amount of such distribution with, in the case of a defined benefit plan, interest at the rate determined for purposes of subsection (c) (2) (C). 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 any oneyear break in service commencing after such withdrawal. "(8) NORMAL RETIREMENT AGE.-For purposes of this section, the term 'normal retirement age' means the earlier of "(A) the time a plan participant attains normal retirement age under the plan, or "(B) the later 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. "(9) NORMAL RETIREMENT BENEFIT.-For purposes of this section, the term 'normal retirement benefit' means the greater of the early retirement benefit under the plan, or the benefit under the plan commencing at normal retirement age. The normal 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 at normal retirement age. For purposes of this paragraph, the early retirement benefit under a plan shall be determined without regard to any benefits commencing before benefits payable under title II of the Social Security Act become payable which (i) do not exceed such social security benefits, and (ii) terminate when such social security benefits com mence. "(10) CHANGES IN VESTING SCHEDULE.— "(A) GENERAL RULE.--A pian amendment changing any vesting schedule under the plan shall be treated as not satisfy September 2, 1974 - 79 Pub. Law 93-406 ing the requirements of paragraph (2) if the nonforfeitable "(B) ELECTION OF FORMER SCHEDULE.-A plan amend- "(b) ACCRUED BENEFT REQUIREMENTS.— (1) GENERAL RULES.— "(A) 3-PERCENT METHOD.-A defined benefit plan satisfies the requirements of this paragraph if the accrued benefit to which each participant is entitled upon his separation from the service is not less than— "(i) 3 percent of the normal retirement benefit to "(ii) the number of years (not in excess of 33%) of his "(B) 133% PERCENT RULE.-A defined benefit plan satisfies "(i) any amendment to the plan which is in effect for the current year shall be treated as in effect for all other plan years; "(ii) any change in an accrual rate which does not apply to any individual who is or could be a participant in the current year shall be disregarded; 88 STAT. 907 |