26 C.F.R. § 1.411(a)-9 Amendment of break in service rules; transitional period.
Title 26 - Internal Revenue
(a) In general. Under section 1017(f)(2) of the Employee Retirement Income Security Act of 1974, a plan is not a qualified plan (and a trust forming a part of such plan is not a qualified trust) if the rules of the plan relating to breaks in service are amended, and— (1) Such amendment is effective after January 1, 1974, and before the effective date of section 411, and (2) Under such amendment, the nonforfeitable percentage of any employee's right to his employer-derived accrued benefit is less than the lesser of the nonforfeitable percentage of such employee's right to such benefit— (i) Under the break in service rules provided by section 411(a)(6) and §1.411(a)–6(c), or (ii) The greatest such percentage under the plan as in effect on or after January 1, 1974 (provided the break in service rules of the plan were not in violation of any law or rule of law on January 1, 1974). (b) Break in service rules. For purposes of paragraph (a), the term “break in service rules” means the rules provided by a plan relating to circumstances under which a period of an employee's service or plan participation is disregarded, for purposes of determining the extent to which his rights to his accrued benefit under the plan are unconditional, if under such rules such service is disregarded by reason of the employee's failure to complete a required period of service within a specified period of time. For this purpose, plan rules which result in the loss of prior vesting or benefit accruals of an employee, or which deny an employee eligibility to participate, by reason of separation or failure to complete a required period of service within a specified period of time (e.g., 300 hours in one year) will be considered break in service rules. For purposes of section 411(b)(3), service described under the plan's break in service rules, as in effect before the effective date of section 411, need not be counted. (Sec. 411 (88 Stat. 901; 26 U.S.C. 411)) [T.D. 7501, 42 FR 42333, Aug. 23, 1977]
Title 26: Internal Revenue
PART 1—INCOME TAXES
§ 1.411(a)-9 Amendment of break in service rules; transitional period.
