{"identifier":"/us/usc/t26/s414","title":26,"num":"\u00a7\u202f414.","heading":"Definitions and special rules","text":"\u00a7\u202f414.\nDefinitions and special rules\n(a)\nService for predecessor employer\nFor purposes of this part\u2014\n(1) in any case in which the employer maintains a plan of a predecessor employer, service for such predecessor shall be treated as service for the employer, and\n(2) in any case in which the employer maintains a plan which is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided in regulations prescribed by the Secretary, be treated as service for the employer.\n(b)\nEmployees of controlled group of corporations\n(1)\nIn general\nFor purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C)) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the applicable limitations provided by section 404(a) shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary.\n(2)\nSpecial rules for applying family attribution\nFor purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply:\n(A) Community property laws shall be disregarded for purposes of determining ownership.\n(B) Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual\u2019s spouse shall not be attributed to such spouse by reason of the combined application of paragraphs (1) and (6)(A) of section 1563(e).\n(C) Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such corporations being members of the same controlled group.\n(3)\nPlan shall not fail to be treated as satisfying this section\nIf application of paragraph (2) causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.\n(c)\nEmployees of partnerships, proprietorships, etc., which are under common control\n(1)\nIn general\nExcept as provided in paragraph (2), for purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (b).\n(2)\nSpecial rules relating to church plans\n(A)\nGeneral rule\nExcept as provided in subparagraphs (B) and (C), for purposes of this subsection and subsection (m), an organization that is otherwise eligible to participate in a church plan shall not be aggregated with another such organization and treated as a single employer with such other organization for a plan year beginning in a taxable year unless\u2014\n(i) one such organization provides (directly or indirectly) at least 80 percent of the operating funds for the other organization during the preceding taxable year of the recipient organization, and\n(ii) there is a degree of common management or supervision between the organizations such that the organization providing the operating funds is directly involved in the day-to-day operations of the other organization.\n(B)\nNonqualified church-controlled organizations\nNotwithstanding subparagraph (A), for purposes of this subsection and subsection (m), an organization that is a nonqualified church-controlled organization shall be aggregated with 1 or more other nonqualified church-controlled organizations, or with an organization that is not exempt from tax under section 501, and treated as a single employer with such other organization, if at least 80 percent of the directors or trustees of such other organization are either representatives of, or directly or indirectly controlled by, such nonqualified church-controlled organization. For purposes of this subparagraph, the term \u201cnonqualified church-controlled organization\u201d means a church-controlled tax-exempt organization described in section 501(c)(3) that is not a qualified church-controlled organization (as defined in section 3121(w)(3)(B)).\n(C)\nPermissive aggregation among church-related organizations\nThe church or convention or association of churches with which an organization described in subparagraph (A) is associated (within the meaning of subsection (e)(3)(D)), or an organization designated by such church or convention or association of churches, may elect to treat such organizations as a single employer for a plan year. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.\n(D)\nPermissive disaggregation of church-related organizations\nFor purposes of subparagraph (A), in the case of a church plan, an employer may elect to treat churches (as defined in section 403(b)(12)(B)) separately from entities that are not churches (as so defined), without regard to whether such entities maintain separate church plans. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.\n(d)\nGovernmental plan\nFor purposes of this part, the term \u201cgovernmental plan\u201d means a plan established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term \u201cgovernmental plan\u201d also includes any plan to which the Railroad Retirement Act of 1935 or 1937 applies and which is financed by contributions required under that Act and any plan of an international organization which is exempt from taxation by reason of the International Organizations Immunities Act (\n59 Stat. 669\n(e)\nChurch plan\n(1)\nIn general\nFor purposes of this part, the term \u201cchurch plan\u201d means a plan established and maintained (to the extent required in paragraph (2)(B)) for its employees (or their benefici\u00adaries) by a church or by a convention or association of churches which is exempt from tax under section 501.\n(2)\nCertain plans excluded\nThe term \u201cchurch plan\u201d does not include a plan\u2014\n(A) which is established and maintained primarily for the benefit of employees (or their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513); or\n(B) if less than substantially all of the individuals included in the plan are individuals described in paragraph (1) or (3)(B) (or their beneficiaries).\n(3)\nDefinitions and other provisions\nFor purposes of this subsection\u2014\n(A)\nTreatment as church plan\nA plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.\n(B)\nEmployee defined\nThe term employee of a church or a convention or association of churches shall include\u2014\n(i) a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, regardless of the source of his compensation;\n(ii) an employee of an organization, whether a civil law corporation or otherwise, which is exempt from tax under section 501 and which is controlled by or associated with a church or a convention or association of churches; and\n(iii) an individual described in subparagraph (E).\n(C)\nChurch treated as employer\nA church or a convention or association of churches which is exempt from tax under section 501 shall be deemed the employer of any individual included as an employee under subparagraph (B).\n(D)\nAssociation with church\nAn organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches.\n(E)\nSpecial rule in case of separation from plan\nIf an employee who is included in a church plan separates from the service of a church or a convention or association of churches or an organization described in clause (ii) of paragraph (3)(B), the church plan shall not fail to meet the requirements of this subsection merely because the plan\u2014\n(i) retains the employee\u2019s accrued benefit or account for the payment of benefits to the employee or his beneficiaries pursuant to the terms of the plan; or\n(ii) receives contributions on the employee\u2019s behalf after the employee\u2019s separation from such service, but only for a period of 5 years after such separation, unless the employee is disabled (within the meaning of the disability provisions of the church plan or, if there are no such provisions in the church plan, within the meaning of section 72(m)(7)) at the time of such separation from service.\n(4)\nCorrection of failure to meet church plan requirements\n(A)\nIn general\nIf a plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 fails to meet one or more of the requirements of this subsection and corrects its failure to meet such requirements within the correction period, the plan shall be deemed to meet the requirements of this subsection for the year in which the correction was made and for all prior years.\n(B)\nFailure to correct\nIf a correction is not made within the correction period, the plan shall be deemed not to meet the requirements of this subsection beginning with the date on which the earliest failure to meet one or more of such requirements occurred.\n(C)\nCorrection period defined\nThe term \u201ccorrection period\u201d means\u2014\n(i) the period, ending 270 days after the date of mailing by the Secretary of a notice of default with respect to the plan\u2019s failure to meet one or more of the requirements of this subsection;\n(ii) any period set by a court of competent jurisdiction after a final determination that the plan fails to meet such requirements, or, if the court does not specify such period, any reasonable period determined by the Secretary on the basis of all the facts and circumstances, but in any event not less than 270 days after the determination has become final; or\n(iii) any additional period which the Secretary determines is reasonable or necessary for the correction of the default,\nwhichever has the latest ending date.\n(5)\nSpecial rules for chaplains and self-employed ministers\n(A)\nCertain ministers may participate\nFor purposes of this part\u2014\n(i)\nIn general\nA duly ordained, commissioned, or licensed minister of a church is described in paragraph (3)(B) if, in connection with the exercise of their ministry, the minister\u2014\n(I) is a self-employed individual (within the meaning of section 401(c)(1)(B), or\n(II) is employed by an organization other than an organization which is described in section 501(c)(3) and with respect to which the minister shares common religious bonds.\n(ii)\nTreatment as employer and employee\nFor purposes of sections 403(b)(1)(A) and 404(a)(10), a minister described in clause (i)(I) shall be treated as employed by the minister\u2019s own employer which is an organization described in section 501(c)(3) and exempt from tax under section 501(a).\n(B)\nSpecial rules for applying section 403(b) to self-employed ministers\nIn the case of a minister described in subparagraph (A)(i)(I)\u2014\n(i) the minister\u2019s includible compensation under section 403(b)(3) shall be determined by reference to the minister\u2019s earned income (within the meaning of section 401(c)(2)) from such ministry rather than the amount of compensation which is received from an employer, and\n(ii) the years (and portions of years) in which such minister was a self-employed individual (within the meaning of section 401(c)(1)(B)) with respect to such ministry shall be included for purposes of section 403(b)(4).\n(C)\nEffect on non-denominational plans\nIf a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry participates in a church plan (within the meaning of this section) and in the exercise of such ministry is employed by an employer not otherwise participating in such church plan, then such employer may exclude such minister from being treated as an employee of such employer for purposes of applying sections 401(a)(3), 401(a)(4), and 401(a)(5), as in effect on\nSeptember 1, 1974\n(D)\nCompensation taken into account only once\nIf any compensation is taken into account in determining the amount of any contributions made to, or benefits to be provided under, any church plan, such compensation shall not also be taken into account in determining the amount of any contributions made to, or benefits to be provided under, any other stock bonus, pension, profit-sharing, or annuity plan which is not a church plan.\n(E)\nExclusion\nIn the case of a contribution to a church plan made on behalf of a minister described in subparagraph (A)(i)(II), such contribution shall not be included in the gross income of the minister to the extent that such contribution would not be so included if the minister was an employee of a church.\n(f)\nMultiemployer plan\n(1)\nDefinition\nFor purposes of this part, the term \u201cmultiemployer plan\u201d means a plan\u2014\n(A) to which more than one employer is required to contribute,\n(B) which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer, and\n(C) which satisfies such other requirements as the Secretary of Labor may prescribe by regulation.\n(2)\nCases of common control\nFor purposes of this subsection, all trades or businesses (whether or not incorporated) which are under common control within the meaning of subsection (c) are considered a single employer.\n(3)\nContinuation of status after termination\nNotwithstanding paragraph (1), a plan is a multiemployer plan on and after its termination date under title IV of the Employee Retirement Income Security Act of 1974 if the plan was a multiemployer plan under this subsection for the plan year preceding its termination date.\n(4)\nTransitional rule\nFor any plan year which began before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, the term \u201cmultiemployer plan\u201d means a plan described in this subsection as in effect immediately before that date.\n(5)\nSpecial election\nWithin one year after the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, a multiemployer plan may irrevocably elect, pursuant to procedures established by the Pension Benefit Guaranty Corporation and subject to the provisions of section 4403(b) and (c) of the Employee Retirement Income Security Act of 1974, that the plan shall not be treated as a multiemployer plan for any purpose under such Act or this title, if for each of the last 3 plan years ending prior to the effective date of the Multiemployer Pension Plan Amendments Act of 1980\u2014\n(A) the plan was not a multiemployer plan because the plan was not a plan described in section 3(37)(A)(iii) of the Employee Retirement Income Security Act of 1974 and section 414(f)(1)(C) (as such provisions were in effect on the day before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980); and\n(B) the plan had been identified as a plan that was not a multiemployer plan in substantially all its filings with the Pension Benefit Guaranty Corporation, the Secretary of Labor and the Secretary.\n(6)\nElection with regard to multiemployer status\n(A) Within 1 year after the enactment of the Pension Protection Act of 2006\u2014\n(i) An election under paragraph (5) may be revoked, pursuant to procedures prescribed by the Pension Benefit Guaranty Corporation, if, for each of the 3 plan years prior to the date of the enactment of that Act, the plan would have been a multiemployer plan but for the election under paragraph (5), and\n(ii) a plan that meets the criteria in subparagraph (A) and (B) of paragraph (1) of this subsection or that is described in subparagraph (E) may, pursuant to procedures prescribed by the Pension Benefit Guaranty Corporation, elect to be a multiemployer plan, if\u2014\n(I) for each of the 3 plan years immediately preceding the first plan year for which the election under this paragraph is effective with respect to the plan, the plan has met those criteria or is so described,\n(II) substantially all of the plan\u2019s employer contributions for each of those plan years were made or required to be made by organizations that were exempt from tax under section 501, and\n(III) the plan was established prior to\nSeptember 2, 1974\n(B) An election under this paragraph shall be effective for all purposes under this Act\n1\n1 So in original. Probably should be \u201ctitle\u201d.\nJanuary 1, 1999\nJanuary 1, 2008\n(C) Once made, an election under this paragraph shall be irrevocable, except that a plan described in subparagraph (A)(ii) shall cease to be a multiemployer plan as of the plan year beginning immediately after the first plan year for which the majority of its employer contributions were made or required to be made by organizations that were not exempt from tax under section 501.\n(D) The fact that a plan makes an election under subparagraph (A)(ii) does not imply that the plan was not a multiemployer plan prior to the date of the election or would not be a multiemployer plan without regard to the election.\n(E) A plan is described in this subparagraph if it is a plan sponsored by an organization which is described in section 501(c)(5) and exempt from tax under section 501(a) and which was established in Chicago, Illinois, on\nAugust 12, 1881\n(F)\nMaintenance under collective bargaining agreement.\u2014\nFor purposes of this title and the Employee Retirement Income Security Act of 1974, a plan making an election under this paragraph shall be treated as maintained pursuant to a collective bargaining agreement if a collective bargaining agreement, expressly or otherwise, provides for or permits employer contributions to the plan by one or more employers that are signatory to such agreement, or participation in the plan by one or more employees of an employer that is signatory to such agreement, regardless of whether the plan was created, established, or maintained for such employees by virtue of another document that is not a collective bargaining agreement.\n(g)\nPlan administrator\nFor purposes of this part, the term \u201cplan administrator\u201d means\u2014\n(1) the person specifically so designated by the terms of the instrument under which the plan is operated;\n(2) in the absence of a designation referred to in paragraph (1)\u2014\n(A) in the case of a plan maintained by a single employer, such employer,\n(B) in the case of a plan maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who maintained the plan, or\n(C) in any case to which subparagraph (A) or (B) does not apply, such other person as the Secretary may by regulation, prescribe.\n(h)\nTax treatment of certain contributions\n(1)\nIn general\nEffective with respect to taxable years beginning after\n(A) to an employees\u2019 trust described in section 401(a), or\n(B) under a plan described in section 403(a), shall not be treated as having been made by the employer if it is designated as an employee contribution.\n(2)\nDesignation by units of government\nFor purposes of paragraph (1), in the case of any plan established by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments), where the contributions of employing units are designated as employee contributions but where any employing unit picks up the contributions, the contributions so picked up shall be treated as employer contributions.\n(i)\nDefined contribution plan\nFor purposes of this part, the term \u201cdefined contribution plan\u201d means a plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant\u2019s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant\u2019s account.\n(j)\nDefined benefit plan\nFor purposes of this part, the term \u201cdefined benefit plan\u201d means any plan which is not a defined contribution plan.\n(k)\nCertain plans\nA defined benefit plan which provides a benefit derived from employer contributions which is based partly on the balance of the separate account of a participant shall\u2014\n(1) for purposes of section 410 (relating to minimum participation standards), be treated as a defined contribution plan,\n(2) for purposes of sections 72(d) (relating to treatment of employee contributions as separate contract), 411(a)(7)(A) (relating to minimum vesting standards), 415 (relating to limitations on benefits and contributions under qualified plans), and 401(m) (relating to nondiscrimination tests for matching requirements and employee contributions), be treated as consisting of a defined contribution plan to the extent benefits are based on the separate account of a participant and as a defined benefit plan with respect to the remaining portion of benefits under the plan, and\n(3) for purposes of section 4975 (relating to tax on prohibited transactions), be treated as a defined benefit plan.\n(l)\nMerger and consolidations of plans or transfers of plan assets\n(1)\nIn general\nA trust which forms a part of a plan shall not constitute a qualified trust under section 401 and a plan shall be treated as not described in section 403(a) unless in the case of any merger or consolidation of the plan with, or in the case of any transfer of assets or liabilities of such plan to, any other trust plan after\nSeptember 2, 1974\n(2)\nAllocation of assets in plan spin-offs, etc.\n(A)\nIn general\nIn the case of a plan spin-off of a defined benefit plan, a trust which forms part of\u2014\n(i) the original plan, or\n(ii) any plan spun off from such plan,\nshall not constitute a qualified trust under this section unless the applicable percentage of excess assets are allocated to each of such plans.\n(B)\nApplicable percentage\nFor purposes of subparagraph (A), the term \u201capplicable percentage\u201d means, with respect to each of the plans described in clauses (i) and (ii) of subparagraph (A), the percentage determined by dividing\u2014\n(i) the excess (if any) of\u2014\n(I) the sum of the funding target and target normal cost determined under section 430, over\n(II) the amount of the assets required to be allocated to the plan after the spin-off (without regard to this paragraph), by\n(ii) the sum of the excess amounts determined separately under clause (i) for all such plans.\n(C)\nExcess assets\nFor purposes of subparagraph (A), the term \u201cexcess assets\u201d means an amount equal to the excess (if any) of\u2014\n(i) the fair market value of the assets of the original plan immediately before the spin-off, over\n(ii) the amount of assets required to be allocated after the spin-off to all plans (determined without regard to this paragraph).\n(D)\nCertain spun-off plans not taken into account\n(i)\nIn general\nA plan involved in a spin-off which is described in clause (ii), (iii), or (iv) shall not be taken into account for purposes of this paragraph, except that the amount determined under subparagraph (C)(ii) shall be increased by the amount of assets allocated to such plan.\n(ii)\nPlans transferred out of controlled groups\nA plan is described in this clause if, after such spin-off, such plan is maintained by an employer who is not a member of the same controlled group as the employer maintaining the original plan.\n(iii)\nPlans transferred out of multiple employer plans\nA plan as described in this clause if, after the spin-off, any employer maintaining such plan (and any member of the same controlled group as such employer) does not maintain any other plan remaining after the spin-off which is also maintained by another employer (or member of the same controlled group as such other employer) which maintained the plan in existence before the spin-off.\n(iv)\nTerminated plans\nA plan is described in this clause if, pursuant to the transaction involving the spin-off, the plan is terminated.\n(v)\nControlled group\nFor purposes of this subparagraph, the term \u201ccontrolled group\u201d means any group treated as a single employer under subsection (b), (c), (m), or (\no\n(E)\nParagraph not to apply to multiemployer plans\nThis paragraph does not apply to any multiemployer plan with respect to any spin-off to the extent that participants either before or after the spin-off are covered under a multiemployer plan to which title IV of the Employee Retirement Income Security Act of 1974 applies.\n(F)\nApplication to similar transaction\nExcept as provided by the Secretary, rules similar to the rules of this paragraph shall apply to transactions similar to spin-offs.\n(G)\nSpecial rules for bridge depository institutions\nFor purposes of this paragraph, in the case of a bridge depository institution established under section 11(i) of the Federal Deposit Insurance Act (\n(i) such bank shall be treated as a member of any controlled group which includes any insured bank (as defined in section 3(h) of such Act (\n(I) which maintains a defined benefit plan,\n(II) which is closed by the appropriate bank regulatory authorities, and\n(III) any asset and liabilities of which are received by the bridge depository institution, and\n(ii) the requirements of this paragraph shall not be treated as met with respect to such plan unless during the 180-day period beginning on the date such insured bank is closed\u2014\n(I) the bridge depository institution has the right to require the plan to transfer (subject to the provisions of this paragraph) not more than 50 percent of the excess assets (as defined in subparagraph (C)) to a defined benefit plan maintained by the bridge depository institution with respect to participants or former participants (including retirees and beneficiaries) in the original plan employed by the bridge depository institution or formerly employed by the closed bank, and\n(II) no other merger, spin-off, termination, or similar transaction involving the portion of the excess assets described in subclause (I) may occur without the prior written consent of the bridge depository institution.\n(m)\nEmployees of an affiliated service group\n(1)\nIn general\nFor purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.\n(2)\nAffiliated service group\nFor purposes of this subsection, the term \u201caffiliated service group\u201d means a group consisting of a service organization (hereinafter in this paragraph referred to as the \u201cfirst organization\u201d) and one or more of the following:\n(A) any service organization which\u2014\n(i) is a shareholder or partner in the first organization, and\n(ii) regularly performs services for the first organization or is regularly associated with the first organization in performing services for third persons, and\n(B) any other organization if\u2014\n(i) a significant portion of the business of such organization is the performance of services (for the first organization, for organizations described in subparagraph (A), or for both) of a type historically performed in such service field by employees, and\n(ii) 10 percent or more of the interests in such organization is held by persons who are highly compensated employees (within the meaning of section 414(q)) of the first organization or an organization described in subparagraph (A).\n(3)\nService organizations\nFor purposes of this subsection, the term \u201cservice organization\u201d means an organization the principal business of which is the performance of services.\n(4)\nEmployee benefit requirements\nFor purposes of this subsection, the employee benefit requirements listed in this paragraph are\u2014\n(A) paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a), and\n(B) sections 408(k), 408(p), 410, 411, 415, and 416.\n(5)\nCertain organizations performing management functions\nFor purposes of this subsection, the term \u201caffiliated service group\u201d also includes a group consisting of\u2014\n(A) an organization the principal business of which is performing, on a regular and continuing basis, management functions for 1 organization (or for 1 organization and other organizations related to such 1 organization), and\n(B) the organization (and related organizations) for which such functions are so performed by the organization described in subparagraph (A).\nFor purposes of this paragraph, the term \u201crelated organizations\u201d has the same meaning as the term \u201crelated persons\u201d when used in section 144(a)(3).\n(6)\nOther definitions\nFor purposes of this subsection\u2014\n(A)\nOrganization defined\nThe term \u201corganization\u201d means a corporation, partnership, or other organization.\n(B)\nOwnership\n(i)\nIn general\nIn determining ownership, the principles of section 318(a) shall apply, except that community property laws shall be disregarded for purposes of determining ownership.\n(ii)\nSpecial rules for applying family attribution\nFor purposes of applying the attribution rules under section 318 with respect to clause (i), the following rules apply:\n(I) Community property laws shall be disregarded for purposes of determining ownership.\n(II) Except as provided by the Secretary, stock of an individual not attributed under section 318(a)(1)(A)(i) to such individual\u2019s spouse shall not be attributed by reason of the combined application of paragraphs (1)(A)(ii) and (4) of section 318(a) to such spouse from a child who has not attained the age of 21 years.\n(III) Except as provided by the Secretary, in the case of stock in different organizations which is attributed under section 318(a)(1)(A)(ii) from each parent to a child who has not attained the age of 21 years, and is not attributed to such parents as spouses under section 318(a)(1)(A)(i), such attribution to the child shall not by itself result in such organizations being members of the same affiliated service group.\n(iii)\nPlan shall not fail to be treated as satisfying this section\nIf the application of clause (ii) causes two or more entities to be an affiliated service group, or to no longer be in an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.\n(n)\nEmployee leasing\n(1)\nIn general\nFor purposes of the requirements listed in paragraph (3), with respect to any person (hereinafter in this subsection referred to as the \u201crecipient\u201d) for whom a leased employee performs services\u2014\n(A) the leased employee shall be treated as an employee of the recipient, but\n(B) contributions or benefits provided by the leasing organization which are attributable to services performed for the recipient shall be treated as provided by the recipient.\n(2)\nLeased employee\nFor purposes of paragraph (1), the term \u201cleased employee\u201d means any person who is not an employee of the recipient and who provides services to the recipient if\u2014\n(A) such services are provided pursuant to an agreement between the recipient and any other person (in this subsection referred to as the \u201cleasing organization\u201d),\n(B) such person has performed such services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, and\n(C) such services are performed under primary direction or control by the recipient.\n(3)\nRequirements\nFor purposes of this subsection, the requirements listed in this paragraph are\u2014\n(A) paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a),\n(B) sections 408(k), 408(p), 410, 411, 415, and 416, and\n(C) sections 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, and 4980B.\n(4)\nTime when first considered as employee\n(A)\nIn general\nIn the case of any leased employee, paragraph (1) shall apply only for purposes of determining whether the requirements listed in paragraph (3) are met for periods after the close of the period referred to in paragraph (2)(B).\n(B)\nYears of service\nIn the case of a person who is an employee of the recipient (whether by reason of this subsection or otherwise), for purposes of the requirements listed in paragraph (3), years of service for the recipient shall be determined by taking into account any period for which such employee would have been a leased employee but for the requirements of paragraph (2)(B).\n(5)\nSafe harbor\n(A)\nIn general\nIn the case of requirements described in subparagraphs (A) and (B) of paragraph (3), this subsection shall not apply to any leased employee with respect to services performed for a recipient if\u2014\n(i) such employee is covered by a plan which is maintained by the leasing organization and meets the requirements of subparagraph (B), and\n(ii) leased employees (determined without regard to this paragraph) do not constitute more than 20 percent of the recipient\u2019s nonhighly compensated work force.\n(B)\nPlan requirements\nA plan meets the requirements of this subparagraph if\u2014\n(i) such plan is a money purchase pension plan with a nonintegrated employer contribution rate for each participant of at least 10 percent of compensation,\n(ii) such plan provides for full and immediate vesting, and\n(iii) each employee of the leasing organization (other than employees who perform substantially all of their services for the leasing organization) immediately participates in such plan.\nClause (iii) shall not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000.\n(C)\nDefinitions\nFor purposes of this paragraph\u2014\n(i)\nHighly compensated employee\nThe term \u201chighly compensated employee\u201d has the meaning given such term by section 414(q).\n(ii)\nNonhighly compensated work force\nThe term \u201cnonhighly compensated work force\u201d means the aggregate number of individuals (other than highly compensated employees)\u2014\n(I) who are employees of the recipient (without regard to this subsection) and have performed services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, or\n(II) who are leased employees with respect to the recipient (determined without regard to this paragraph).\n(iii)\nCompensation\nThe term \u201ccompensation\u201d has the same meaning as when used in section 415; except that such term shall include\u2014\n(I) any employer contribution under a qualified cash or deferred arrangement to the extent not included in gross income under section 402(e)(3) or 402(h)(1)(B),\n(II) any amount which the employee would have received in cash but for an election under a cafeteria plan (within the meaning of section 125), and\n(III) any amount contributed to an annuity contract described in section 403(b) pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)).\n(6)\nOther rules\nFor purposes of this subsection\u2014\n(A)\nRelated persons\nThe term \u201crelated persons\u201d has the same meaning as when used in section 144(a)(3).\n(B)\nEmployees of entities under common control\nThe rules of subsections (b), (c), (m), and (\no\n(o)\nRegulations\nThe Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in subsection (m)(4) or (n)(3) or any requirement under section 457 through the use of\u2014\n(1) separate organizations,\n(2) employee leasing, or\n(3) other arrangements.\nThe regulations prescribed under subsection (n) shall include provisions to minimize the recordkeeping requirements of subsection (n) in the case of an employer which has no top-heavy plans (within the meaning of section 416(g)) and which uses the services of persons (other than employees) for an insignificant percentage of the employer\u2019s total workload.\n(p)\nQualified domestic relations order defined\nFor purposes of this subsection and section 401(a)(13)\u2014\n(1)\nIn general\n(A)\nQualified domestic relations order\nThe term \u201cqualified domestic relations order\u201d means a domestic relations order\u2014\n(i) which creates or recognizes the existence of an alternate payee\u2019s right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan, and\n(ii) with respect to which the requirements of paragraphs (2) and (3) are met.\n(B)\nDomestic relations order\nThe term \u201cdomestic relations order\u201d means any judgment, decree, or order (including approval of a property settlement agreement) which\u2014\n(i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and\n(ii) is made pursuant to a State or Tribal domestic relations law (including a community property law).\nFor purposes of clause (ii), the term \u201cTribal\u201d with respect to a domestic relations law means such a law which is issued by or under the laws of an Indian tribal government, a subdivision of such an Indian tribal government, or an agency or instrumentality of either.\n(2)\nOrder must clearly specify certain facts\nA domestic relations order meets the requirements of this paragraph only if such order clearly specifies\u2014\n(A) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order,\n(B) the amount or percentage of the participant\u2019s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined,\n(C) the number of payments or period to which such order applies, and\n(D) each plan to which such order applies.\n(3)\nOrder may not alter amount, form, etc., of benefits\nA domestic relations order meets the requirements of this paragraph only if such order\u2014\n(A) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan,\n(B) does not require the plan to provide increased benefits (determined on the basis of actuarial value), and\n(C) does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order.\n(4)\nException for certain payments made after earliest retirement age\n(A)\nIn general\nA domestic relations order shall not be treated as failing to meet the requirements of subparagraph (A) of paragraph (3) solely because such order requires that payment of benefits be made to an alternate payee\u2014\n(i) in the case of any payment before a participant has separated from service, on or after the date on which the participant attains (or would have attained) the earliest retirement age,\n(ii) as if the participant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of the benefits actually accrued and not taking into account the present value of any employer subsidy for early retirement), and\n(iii) in any form in which such benefits may be paid under the plan to the participant (other than in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse).\nFor purposes of clause (ii), the interest rate assumption used in determining the present value shall be the interest rate specified in the plan or, if no rate is specified, 5 percent.\n(B)\nEarliest retirement age\nFor purposes of this paragraph, the term \u201cearliest retirement age\u201d means the earlier of\u2014\n(i) the date on which the participant is entitled to a distribution under the plan, or\n(ii) the later of\u2014\n(I) the date the participant attains age 50, or\n(II) the earliest date on which the participant could begin receiving benefits under the plan if the participant separated from service.\n(5)\nTreatment of former spouse as surviving spouse for purposes of determining survivor benefits\nTo the extent provided in any qualified domestic relations order\u2014\n(A) the former spouse of a participant shall be treated as a surviving spouse of such participant for purposes of sections 401(a)(11) and 417 (and any spouse of the participant shall not be treated as a spouse of the participant for such purposes), and\n(B) if married for at least 1 year, the surviving former spouse shall be treated as meeting the requirements of section 417(d).\n(6)\nPlan procedures with respect to orders\n(A)\nNotice and determination by administrator\nIn the case of any domestic relations order received by a plan\u2014\n(i) the plan administrator shall promptly notify the participant and each alternate payee of the receipt of such order and the plan\u2019s procedures for determining the qualified status of domestic relations orders, and\n(ii) within a reasonable period after receipt of such order, the plan administrator shall determine whether such order is a qualified domestic relations order and notify the participant and each alternate payee of such determination.\n(B)\nPlan to establish reasonable procedures\nEach plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders.\n(7)\nProcedures for period during which determination is being made\n(A)\nIn general\nDuring any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the plan administrator, by a court of competent jurisdiction, or otherwise), the plan administrator shall separately account for the amounts (hereinafter in this paragraph referred to as the \u201csegregated amounts\u201d) which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order.\n(B)\nPayment to alternate payee if order determined to be qualified domestic relations order\nIf within the 18-month period described in subparagraph (E) the order (or modification thereof) is determined to be a qualified domestic relations order, the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons entitled thereto.\n(C)\nPayment to plan participant in certain cases\nIf within the 18-month period described in subparagraph (E)\u2014\n(i) it is determined that the order is not a qualified domestic relations order, or\n(ii) the issue as to whether such order is a qualified domestic relations order is not resolved,\nthen the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order.\n(D)\nSubsequent determination or order to be applied prospectively only\nAny determination that an order is a qualified domestic relations order which is made after the close of the 18-month period described in subparagraph (E) shall be applied prospectively only.\n(E)\nDetermination of 18-month period\nFor purposes of this paragraph, the 18-month period described in this subparagraph is the 18-month period beginning with the date on which the first payment would be required to be made under the domestic relations order.\n(8)\nAlternate payee defined\nThe term \u201calternate payee\u201d means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.\n(9)\nSubsection not to apply to plans to which section 401(a)(13) does not apply\nThis subsection shall not apply to any plan to which section 401(a)(13) does not apply. For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.\n(10)\nWaiver of certain distribution requirements\nWith respect to the requirements of subsections (a) and (k) of section 401, section 403(b), section 409(d), and section 457(d), a plan shall not be treated as failing to meet such requirements solely by reason of payments to an alternative payee pursuant to a qualified domestic relations order.\n(11)\nApplication of rules to certain other plans\nFor purposes of this title, a distribution or payment from a governmental plan (as defined in subsection (d)) or a church plan (as described in subsection (e)) or an eligible deferred compensation plan (within the meaning of section 457(b)) shall be treated as made pursuant to a qualified domestic relations order if it is made pursuant to a domestic relations order which meets the requirement of clause (i) of paragraph (1)(A).\n(12)\nTax treatment of payments from a section 457 plan\nIf a distribution or payment from an eligible deferred compensation plan described in section 457(b) is made pursuant to a qualified domestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to such distribution or payment.\n(13)\nConsultation with the Secretary\nIn prescribing regulations under this subsection and section 401(a)(13), the Secretary of Labor shall consult with the Secretary.\n(q)\nHighly compensated employee\n(1)\nIn general\nThe term \u201chighly compensated employee\u201d means any employee who\u2014\n(A) was a 5-percent owner at any time during the year or the preceding year, or\n(B) for the preceding year\u2014\n(i) had compensation from the employer in excess of $80,000, and\n(ii) if the employer elects the application of this clause for such preceding year, was in the top-paid group of employees for such preceding year.\nThe Secretary shall adjust the $80,000 amount under subparagraph (B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter ending\nSeptember 30, 1996\n(2)\n5-percent owner\nAn employee shall be treated as a 5-percent owner for any year if at any time during such year such employee was a 5-percent owner (as defined in section 416(i)(1)) of the employer.\n(3)\nTop-paid group\nAn employee is in the top-paid group of employees for any year if such employee is in the group consisting of the top 20 percent of the employees when ranked on the basis of compensation paid during such year.\n(4)\nCompensation\nFor purposes of this subsection, the term \u201ccompensation\u201d has the meaning given such term by section 415(c)(3).\n(5)\nExcluded employees\nFor purposes of subsection (r) and for purposes of determining the number of employees in the top-paid group, the following employees shall be excluded\u2014\n(A) employees who have not completed 6 months of service,\n(B) employees who normally work less than 17\u00bd hours per week,\n(C) employees who normally work during not more than 6 months during any year,\n(D) employees who have not attained age 21, and\n(E) except to the extent provided in regulations, employees who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and the employer.\nExcept as provided by the Secretary, the employer may elect to apply subparagraph (A), (B), (C), or (D) by substituting a shorter period of service, smaller number of hours or months, or lower age for the period of service, number of hours or months, or age (as the case may be) than that specified in such subparagraph.\n(6)\nFormer employees\nA former employee shall be treated as a highly compensated employee if\u2014\n(A) such employee was a highly compensated employee when such employee separated from service, or\n(B) such employee was a highly compensated employee at any time after attaining age 55.\n(7)\nCoordination with other provisions\nSubsections (b), (c), (m), (n), and (\no\n(8)\nSpecial rule for nonresident aliens\nFor purposes of this subsection and subsection (r), employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)) shall not be treated as employees.\n(9)\nCertain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans\nIn the case of a church plan (as defined in subsection (e)), no employee shall be considered an officer, a person whose principal duties consist of supervising the work of other employees, or a highly compensated employee for any year unless such employee is a highly compensated employee under paragraph (1) for such year.\n(r)\nSpecial rules for separate line of business\n(1)\nIn general\nFor purposes of sections 129(d)(8) and 410(b), an employer shall be treated as operating separate lines of business during any year if the employer for bona fide business reasons operates separate lines of business.\n(2)\nLine of business must have 50 employees, etc.\nA line of business shall not be treated as separate under paragraph (1) unless\u2014\n(A) such line of business has at least 50 employees who are not excluded under subsection (q)(5),\n(B) the employer notifies the Secretary that such line of business is being treated as separate for purposes of paragraph (1), and\n(C) such line of business meets guidelines prescribed by the Secretary or the employer receives a determination from the Secretary that such line of business may be treated as separate for purposes of paragraph (1).\n(3)\nSafe harbor rule\n(A)\nIn general\nThe requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is\u2014\n(i) not less than one-half, and\n(ii) not more than twice,\nthe percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of clause (i) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business.\n(B)\nDetermination may be based on preceding year\nThe requirements of subparagraph (A) shall be treated as met with respect to any line of business if such requirements were met with respect to such line of business for the preceding year and if\u2014\n(i) no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or\n(ii) the employees shifted to or from the line of business after the close of the preceding year contained a substantially proportional number of highly compensated employees.\n(4)\nHighly compensated employee percentage defined\nFor purposes of this subsection, the term \u201chighly compensated employee percentage\u201d means the percentage which highly compensated employees performing services for the line of business are of all employees performing services for the line of business.\n(5)\nAllocation of benefits to line of business\nFor purposes of this subsection, benefits which are attributable to services provided to a line of business shall be treated as provided by such line of business.\n(6)\nHeadquarters personnel, etc.\nThe Secretary shall prescribe rules providing for\u2014\n(A) the allocation of headquarters personnel among the lines of business of the employer, and\n(B) the treatment of other employees providing services for more than 1 line of business of the employer or not in lines of business meeting the requirements of paragraph (2).\n(7)\nSeparate operating units\nFor purposes of this subsection, the term \u201cseparate line of business\u201d includes an operating unit in a separate geographic area separately operated for a bona fide business reason.\n(8)\nAffiliated service groups\nThis subsection shall not apply in the case of any affiliated service group (within the meaning of section 414(m)).\n(s)\nCompensation\nFor purposes of any applicable provision\u2014\n(1)\nIn general\nExcept as provided in this subsection, the term \u201ccompensation\u201d has the meaning given such term by section 415(c)(3).\n(2)\nEmployer may elect not to treat certain deferrals as compensation\nAn employer may elect not to include as compensation any amount which is contributed by the employer pursuant to a salary reduction agreement and which is not includible in the gross income of an employee under section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b).\n(3)\nAlternative determination of compensation\nThe Secretary shall by regulation provide for alternative methods of determining compensation which may be used by an employer, except that such regulations shall provide that an employer may not use an alternative method if the use of such method discriminates in favor of highly compensated employees (within the meaning of subsection (q)).\n(4)\nApplicable provision\nFor purposes of this subsection, the term \u201capplicable provision\u201d means any provision which specifically refers to this subsection.\n(t)\nApplication of controlled group rules to certain employee benefits\n(1)\nIn general\nAll employees who are treated as employed by a single employer under subsection (b), (c), or (m) shall be treated as employed by a single employer for purposes of an applicable section. The provisions of subsection (\no\n(2)\nApplicable section\nFor purposes of this subsection, the term \u201capplicable section\u201d means section 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, or 4980B.\n(u)\nSpecial rules relating to veterans\u2019 reemployment rights under USERRA and to differential wage payments to members on active duty\n(1)\nTreatment of certain contributions made pursuant to veterans\u2019 reemployment rights\nIf any contribution is made by an employer or an employee under an individual account plan with respect to an employee, or by an employee to a defined benefit plan that provides for employee contributions, and such contribution is required by reason of such employee\u2019s rights under chapter 43 of title 38, United States Code, resulting from qualified military service, then\u2014\n(A) such contribution shall not be subject to any otherwise applicable limitation contained in section 402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, or 457, and shall not be taken into account in applying such limitations to other contributions or benefits under such plan or any other plan, with respect to the year in which the contribution is made,\n(B) such contribution shall be subject to the limitations referred to in subparagraph (A) with respect to the year to which the contribution relates (in accordance with rules prescribed by the Secretary), and\n(C) such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m), 403(b)(12), 408(k)(3), 408(k)(6), 408(p), 410(b), or 416 by reason of the making of (or the right to make) such contribution.\nFor purposes of the preceding sentence, any elective deferral or employee contribution made under paragraph (2) shall be treated as required by reason of the employee\u2019s rights under such chapter 43.\n(2)\nReemployment rights under USERRA with respect to elective deferrals\n(A)\nIn general\nFor purposes of this subchapter and section 457, if an employee is entitled to the benefits of chapter 43 of title 38, United States Code, with respect to any plan which provides for elective deferrals, the employer sponsoring the plan shall be treated as meeting the requirements of such chapter 43 with respect to such elective deferrals only if such employer\u2014\n(i) permits such employee to make additional elective deferrals under such plan (in the amount determined under subparagraph (B) or such lesser amount as is elected by the employee) during the period which begins on the date of the reemployment of such employee with such employer and has the same length as the lesser of\u2014\n(I) the product of 3 and the period of qualified military service which resulted in such rights, and\n(II) 5 years, and\n(ii) makes a matching contribution with respect to any additional elective deferral made pursuant to clause (i) which would have been required had such deferral actually been made during the period of such qualified military service.\n(B)\nAmount of makeup required\nThe amount determined under this subparagraph with respect to any plan is the maximum amount of the elective deferrals that the individual would have been permitted to make under the plan in accordance with the limitations referred to in paragraph (1)(A) during the period of qualified military service if the individual had continued to be employed by the employer during such period and received compensation as determined under paragraph (7). Proper adjustment shall be made to the amount determined under the preceding sentence for any elective deferrals actually made during the period of such qualified military service.\n(C)\nElective deferral\nFor purposes of this paragraph, the term \u201celective deferral\u201d has the meaning given such term by section 402(g)(3); except that such term shall include any deferral of compensation under an eligible deferred compensation plan (as defined in section 457(b)).\n(D)\nAfter-tax employee contributions\nReferences in subparagraphs (A) and (B) to elective deferrals shall be treated as including references to employee contributions.\n(3)\nCertain retroactive adjustments not required\nFor purposes of this subchapter and subchapter E, no provision of chapter 43 of title 38, United States Code, shall be construed as requiring\u2014\n(A) any crediting of earnings to an employee with respect to any contribution before such contribution is actually made, or\n(B) any allocation of any forfeiture with respect to the period of qualified military service.\n(4)\nLoan repayment suspensions permitted\nIf any plan suspends the obligation to repay any loan made to an employee from such plan for any part of any period during which such employee is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p), 401(a), or 4975(d)(1).\n(5)\nQualified military service\nFor purposes of this subsection, the term \u201cqualified military service\u201d means any service in the uniformed services (as defined in chapter 43 of title 38, United States Code) by any individual if such individual is entitled to reemployment rights under such chapter with respect to such service.\n(6)\nIndividual account plan\nFor purposes of this subsection, the term \u201cindividual account plan\u201d means any defined contribution plan (including any tax-sheltered annuity plan under section 403(b), any simplified employee pension under section 408(k), any qualified salary reduction arrangement under section 408(p), and any eligible deferred compensation plan (as defined in section 457(b))).\n(7)\nCompensation\nFor purposes of sections 403(b)(3), 415(c)(3), and 457(e)(5), an employee who is in qualified military service shall be treated as receiving compensation from the employer during such period of qualified military service equal to\u2014\n(A) the compensation the employee would have received during such period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for absence during the period of qualified military service, or\n(B) if the compensation the employee would have received during such period was not reasonably certain, the employee\u2019s average compensation from the employer during the 12-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service).\n(8)\nUSERRA requirements for qualified retirement plans\nFor purposes of this subchapter and section 457, an employer sponsoring a retirement plan shall be treated as meeting the requirements of chapter 43 of title 38, United States Code, only if each of the following requirements is met:\n(A) An individual reemployed under such chapter is treated with respect to such plan as not having incurred a break in service with the employer maintaining the plan by reason of such individual\u2019s period of qualified military service.\n(B) Each period of qualified military service served by an individual is, upon reemployment under such chapter, deemed with respect to such plan to constitute service with the employer maintaining the plan for the purpose of determining the nonforfeitability of the individual\u2019s accrued benefits under such plan and for the purpose of determining the accrual of benefits under such plan.\n(C) An individual reemployed under such chapter is entitled to accrued benefits that are contingent on the making of, or derived from, employee contributions or elective deferrals only to the extent the individual makes payment to the plan with respect to such contributions or deferrals. No such payment may exceed the amount the individual would have been permitted or required to contribute had the individual remained continuously employed by the employer throughout the period of qualified military service. Any payment to such plan shall be made during the period beginning with the date of reemployment and whose duration is 3 times the period of the qualified military service (but not greater than 5 years).\n(9)\nTreatment in the case of death or disability resulting from active military service\n(A)\nIn general\nFor benefit accrual purposes, an employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under the terms of the plan) while performing qualified military service with respect to the employer maintaining the plan as if the individual has resumed employment in accordance with the individual\u2019s reemployment rights under chapter 43 of title 38, United States Code, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability. In the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such plan with respect to the benefit accrual requirements of paragraph (8) with respect to such individual shall be treated for purposes of paragraph (1) as if such compliance were required under such chapter 43.\n(B)\nNondiscrimination requirement\nSubparagraph (A) shall apply only if all individuals performing qualified military service with respect to the employer maintaining the plan (as determined under subsections (b), (c), (m), and (\no\n(C)\nDetermination of benefits\nThe amount of employee contributions and the amount of elective deferrals of an individual treated as reemployed under subparagraph (A) for purposes of applying paragraph (8)(C) shall be determined on the basis of the individual\u2019s average actual employee contributions or elective deferrals for the lesser of\u2014\n(i) the 12-month period of service with the employer immediately prior to qualified military service, or\n(ii) if service with the employer is less than such 12-month period, the actual length of continuous service with the employer.\n(10)\nPlans not subject to title 38\nThis subsection shall not apply to any retirement plan to which chapter 43 of title 38, United States Code, does not apply.\n(11)\nReferences\nFor purposes of this section, any reference to chapter 43 of title 38, United States Code, shall be treated as a reference to such chapter as in effect on\nDecember 12, 1994\n(12)\nTreatment of differential wage payments\n(A)\nIn general\nExcept as provided in this paragraph, for purposes of applying this title to a retirement plan to which this subsection applies\u2014\n(i) an individual receiving a differential wage payment shall be treated as an employee of the employer making the payment,\n(ii) the differential wage payment shall be treated as compensation, and\n(iii) the plan shall not be treated as failing to meet the requirements of any provision described in paragraph (1)(C) by reason of any contribution or benefit which is based on the differential wage payment.\n(B)\nSpecial rule for distributions\n(i)\nIn general\nNotwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii),\n2\n2 See References in Text note below.\n(ii)\nLimitation\nIf an individual elects to receive a distribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution.\n(C)\nNondiscrimination requirement\nSubparagraph (A)(iii) shall apply only if all employees of an employer (as determined under subsections (b), (c), (m), and (\no\n(D)\nDifferential wage payment\nFor purposes of this paragraph, the term \u201cdifferential wage payment\u201d has the meaning given such term by section 3401(h)(2).\n(v)\nCatch-up contributions for individuals age 50 or over\n(1)\nIn general\nAn applicable employer plan shall not be treated as failing to meet any requirement of this title solely because the plan permits an eligible participant to make additional elective deferrals in any plan year.\n(2)\nLimitation on amount of additional deferrals\n(A)\nIn general\nA plan shall not permit additional elective deferrals under paragraph (1) for any year in an amount greater than the lesser of\u2014\n(i) the applicable dollar amount, or\n(ii) the excess (if any) of\u2014\n(I) the participant\u2019s compensation (as defined in section 415(c)(3)) for the year, over\n(II) any other elective deferrals of the participant for such year which are made without regard to this subsection.\n(B)\nApplicable dollar amount\nFor purposes of this paragraph\u2014\n(i) In the case of an applicable employer plan other than a plan described in section 401(k)(11) or 408(p), the applicable dollar amount is $5,000 (the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year).\n(ii) In the case of an applicable employer plan described in section 401(k)(11) or 408(p), except as provided in clause (iii), the applicable dollar amount is $2,500 (the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year).\n(iii) In the case of an applicable employer plan\u2014\n(I) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(I), or\n(II) to which an election under section 408(p)(2)(E)(i)(II) applies for the year (including a plan described in section 401(k)(11) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(II) and to which such election applies by reason of subparagraphs (B)(i)(I) and (E) of section 401(k)(11)),\nthe applicable dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (ii) for calendar year 2024.\n(C)\nCost-of-living adjustment\n(i)\nCertain large employers\nIn the case of a year beginning after\nDecember 31, 2006\nJuly 1, 2005\nDecember 31, 2025\nJuly 1, 2024\n(ii)\nOther employers\nIn the case of a year beginning after\nDecember 31, 2024\nJuly 1, 2023\n(D)\nAggregation of plans\nFor purposes of this paragraph, plans described in clauses (i), (ii), and (iv) of paragraph (6)(A) that are maintained by the same employer (as determined under subsection (b), (c), (m) or (\no\n(E)\nAdjusted dollar amount\nFor purposes of subparagraph (B), the adjusted dollar amount is\u2014\n(i) in the case of clause (i) of subparagraph (B), the greater of\u2014\n(I) $10,000, or\n(II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause, or\n(ii) in the case of clause (ii) of subparagraph (B), the greater of\u2014\n(I) $5,000, or\n(II) an amount equal to equal to\n3\n3 So in original.\n(3)\nTreatment of contributions\nIn the case of any contribution to a plan under paragraph (1)\u2014\n(A) such contribution shall not, with respect to the year in which the contribution is made\u2014\n(i) be subject to any otherwise applicable limitation contained in sections 401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (determined without regard to section 457(b)(3)), or\n(ii) be taken into account in applying such limitations to other contributions or benefits under such plan or any other such plan, and\n(B) except as provided in paragraph (4), such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making of (or the right to make) such contribution.\n(4)\nApplication of nondiscrimination rules\n(A)\nIn general\nAn applicable employer plan shall be treated as failing to meet the nondiscrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all eligible participants to make the same election with respect to the additional elective deferrals under this subsection.\n(B)\nAggregation\nFor purposes of subparagraph (A), all plans maintained by employers who are treated as a single employer under subsection (b), (c), (m), or (\no\n(5)\nEligible participant\nFor purposes of this subsection, the term \u201celigible participant\u201d means a participant in a plan\u2014\n(A) who would attain age 50 by the end of the taxable year,\n(B) with respect to whom no other elective deferrals may (without regard to this subsection) be made to the plan for the plan (or other applicable) year by reason of the application of any limitation or other restriction described in paragraph (3) or comparable limitation or restriction contained in the terms of the plan.\n(6)\nOther definitions and rules\nFor purposes of this subsection\u2014\n(A)\nApplicable employer plan\nThe term \u201capplicable employer plan\u201d means\u2014\n(i) an employees\u2019 trust described in section 401(a) which is exempt from tax under section 501(a),\n(ii) a plan under which amounts are contributed by an individual\u2019s employer for an annuity contract described in section 403(b),\n(iii) an eligible deferred compensation plan under section 457 of an eligible employer described in section 457(e)(1)(A), and\n(iv) an arrangement meeting the requirements of section 408(k) or (p).\n(B)\nElective deferral\nThe term \u201celective deferral\u201d has the meaning given such term by subsection (u)(2)(C).\n(C)\nException for section 457 plans\nThis subsection shall not apply to a participant for any year for which a higher limitation applies to the participant under section 457(b)(3).\n(7)\nCertain deferrals must be Roth contributions\n(A)\nIn general\nExcept as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, paragraph (1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)) made pursuant to an employee election.\n(B)\nRoth option\nIn the case of an applicable employer plan with respect to which subparagraph (A) applies to any participant for a plan year, paragraph (1) shall not apply to the plan unless the plan provides that any eligible participant may make the participant\u2019s additional elective deferrals as designated Roth contributions.\n(C)\nException\nSubparagraph (A) shall not apply in the case of an applicable employer plan described in paragraph (6)(A)(iv).\n(D)\nElection to change deferrals\nThe Secretary may provide by regulations that an eligible participant may elect to change the participant\u2019s election to make additional elective deferrals if the participant\u2019s compensation is determined to exceed the limitation under subparagraph (A) after the election is made.\n(E)\nCost of living adjustment\nIn the case of a year beginning after\nDecember 31, 2024\nJuly 1, 2023\n(w)\nSpecial rules for certain withdrawals from eligible automatic contribution arrangements\n(1)\nIn general\nIf an eligible automatic contribution arrangement allows an employee to elect to make permissible withdrawals\u2014\n(A) the amount of any such withdrawal shall be includible in the gross income of the employee for the taxable year of the employee in which the distribution is made,\n(B) no tax shall be imposed under section 72(t) with respect to the distribution, and\n(C) the arrangement shall not be treated as violating any restriction on distributions under this title solely by reason of allowing the withdrawal.\nIn the case of any distribution to an employee by reason of an election under this paragraph, employer matching contributions shall be forfeited or subject to such other treatment as the Secretary may prescribe.\n(2)\nPermissible withdrawal\nFor purposes of this subsection\u2014\n(A)\nIn general\nThe term \u201cpermissible withdrawal\u201d means any withdrawal from an eligible automatic contribution arrangement meeting the requirements of this paragraph which\u2014\n(i) is made pursuant to an election by an employee, and\n(ii) consists of elective contributions described in paragraph (3)(B) (and earnings attributable thereto).\n(B)\nTime for making election\nSubparagraph (A) shall not apply to an election by an employee unless the election is made no later than the date which is 90 days after the date of the first elective contribution with respect to the employee under the arrangement.\n(C)\nAmount of distribution\nSubparagraph (A) shall not apply to any election by an employee unless the amount of any distribution by reason of the election is equal to the amount of elective contributions made with respect to the first payroll period to which the eligible automatic contribution arrangement applies to the employee and any succeeding payroll period beginning before the effective date of the election (and earnings attributable thereto).\n(3)\nEligible automatic contribution arrangement\nFor purposes of this subsection, the term \u201celigible automatic contribution arrangement\u201d means an arrangement under an applicable employer plan\u2014\n(A) under which a participant may elect to have the employer make payments as contributions under the plan on behalf of the participant, or to the participant directly in cash,\n(B) under which the participant is treated as having elected to have the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the participant specifically elects not to have such contributions made (or specifically elects to have such contributions made at a different percentage), and\n(C) which meets the requirements of paragraph (4).\n(4)\nNotice requirements\n(A)\nIn general\nThe administrator of a plan containing an arrangement described in paragraph (3) shall, within a reasonable period before each plan year, give to each employee to whom an arrangement described in paragraph (3) applies for such plan year notice of the employee\u2019s rights and obligations under the arrangement which\u2014\n(i) is sufficiently accurate and comprehensive to apprise the employee of such rights and obligations, and\n(ii) is written in a manner calculated to be understood by the average employee to whom the arrangement applies.\n(B)\nTime and form of notice\nA notice shall not be treated as meeting the requirements of subparagraph (A) with respect to an employee unless\u2014\n(i) the notice includes an explanation of the employee\u2019s right under the arrangement to elect not to have elective contributions made on the employee\u2019s behalf (or to elect to have such contributions made at a different percentage),\n(ii) the employee has a reasonable period of time after receipt of the notice described in clause (i) and before the first elective contribution is made to make such election, and\n(iii) the notice explains how contributions made under the arrangement will be invested in the absence of any investment election by the employee.\n(5)\nApplicable employer plan\nFor purposes of this subsection, the term \u201capplicable employer plan\u201d means\u2014\n(A) an employees\u2019 trust described in section 401(a) which is exempt from tax under section 501(a),\n(B) a plan under which amounts are contributed by an individual\u2019s employer for an annuity contract described in section 403(b),\n(C) an eligible deferred compensation plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A),\n(D) a simplified employee pension the terms of which provide for a salary reduction arrangement described in section 408(k)(6), and\n(E) a simple retirement account (as defined in section 408(p)).\n(6)\nSpecial rule\nA withdrawal described in paragraph (1) (subject to the limitation of paragraph (2)(C)) shall not be taken into account for purposes of section 401(k)(3) or for purposes of applying the limitation under section 402(g)(1).\n(x)\nSpecial rules for eligible combined defined benefit plans and qualified cash or deferred arrangements\n(1)\nGeneral rule\nExcept as provided in this subsection, the requirements of this title shall be applied to any defined benefit plan or applicable defined contribution plan which is part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.\n(2)\nEligible combined plan\nFor purposes of this subsection\u2014\n(A)\nIn general\nThe term \u201celigible combined plan\u201d means a plan\u2014\n(i) which is maintained by an employer which, at the time the plan is established, is a small employer,\n(ii) which consists of a defined benefit plan and an applicable defined contribution plan,\n(iii) the assets of which are held in a single trust forming part of the plan and are clearly identified and allocated to the defined benefit plan and the applicable defined contribution plan to the extent necessary for the separate application of this title under paragraph (1), and\n(iv) with respect to which the benefit, contribution, vesting, and nondiscrimination requirements of subparagraphs (B), (C), (D), (E), and (F) are met.\nFor purposes of this subparagraph, the term \u201csmall employer\u201d has the meaning given such term by section 4980D(d)(2), except that such section shall be applied by substituting \u201c500\u201d for \u201c50\u201d each place it appears.\n(B)\nBenefit requirements\n(i)\nIn general\nThe benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant\u2019s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.\n(ii)\nApplicable percentage\nFor purposes of clause (i), the applicable percentage is the lesser of\u2014\n(I) 1 percent multiplied by the number of years of service with the employer, or\n(II) 20 percent.\n(iii)\nSpecial rule for applicable defined benefit plans\nIf the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 411(a)(13)(B) which meets the interest credit requirements of section 411(b)(5)(B)(i), the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each participant receives a pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table:\nIf the participant\u2019s age as of the\nbeginning of the year is\u2014\nThe percentage is\u2014\n30 or less\n2\nOver 30 but less than 40\n4\n40 or over but less than 50\n6\n50 or over\n8.\n(iv)\nYears of service\nFor purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (4), (5), and (6) of section 411(a), except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies.\n(C)\nContribution requirements\n(i)\nIn general\nThe contribution requirements of this subparagraph with respect to any applicable defined contribution plan forming part of an eligible combined plan are met if\u2014\n(I) the qualified cash or deferred arrangement included in such plan constitutes an automatic contribution arrangement, and\n(II) the employer is required to make matching contributions on behalf of each employee eligible to participate in the arrangement in an amount equal to 50 percent of the elective contributions of the employee to the extent such elective contributions do not exceed 4 percent of compensation.\nRules similar to the rules of clauses (ii) and (iii) of section 401(k)(12)(B) shall apply for purposes of this clause.\n(ii)\nNonelective contributions\nAn applicable defined contribution plan shall not be treated as failing to meet the requirements of clause (i) because the employer makes nonelective contributions under the plan but such contributions shall not be taken into account in determining whether the requirements of clause (i)(II) are met.\n(D)\nVesting requirements\nThe vesting requirements of this subparagraph are met if\u2014\n(i) in the case of a defined benefit plan forming part of an eligible combined plan an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee\u2019s accrued benefit under the plan derived from employer contributions, and\n(ii) in the case of an applicable defined contribution plan forming part of eligible combined plan\u2014\n(I) an employee has a nonforfeitable right to any matching contribution made under the qualified cash or deferred arrangement included in such plan by an employer with respect to any elective contribution, including matching contributions in excess of the contributions required under subparagraph (C)(i)(II), and\n(II) an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee\u2019s accrued benefit derived under the arrangement from nonelective contributions of the employer.\nFor purposes of this subparagraph, the rules of section 411 shall apply to the extent not inconsistent with this subparagraph.\n(E)\nUniform provision of contributions and benefits\nIn the case of a defined benefit plan or applicable defined contribution plan forming part of an eligible combined plan, the requirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants.\n(F)\nRequirements must be met without taking into account social security and similar contributions and benefits or other plans\n(i)\nIn general\nThe requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.\n(ii)\nSocial security and similar contributions\nThe requirements of this clause are met if\u2014\n(I) the requirements of subparagraphs (B) and (C) are met without regard to section 401(\nl\n(II) the requirements of sections 401(a)(4) and 410(b) are met with respect to both the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan without regard to section 401(\nl\n(iii)\nOther plans and arrangements\nThe requirements of this clause are met if the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan meet the requirements of sections 401(a)(4) and 410(b) without being combined with any other plan.\n(3)\nNondiscrimination requirements for qualified cash or deferred arrangement\n(A)\nIn general\nA qualified cash or deferred arrangement which is included in an applicable defined contribution plan forming part of an eligible combined plan shall be treated as meeting the requirements of section 401(k)(3)(A)(ii) if the requirements of paragraph (2)(C) are met with respect to such arrangement.\n(B)\nMatching contributions\nIn applying section 401(m)(11) to any matching contribution with respect to a contribution to which paragraph (2)(C) applies, the contribution requirement of paragraph (2)(C) and the notice requirements of paragraph (5)(B) shall be substituted for the requirements otherwise applicable under clauses (i) and (ii) of section 401(m)(11)(A).\n(4)\nSatisfaction of top-heavy rules\nA defined benefit plan and applicable defined contribution plan forming part of an eligible combined plan for any plan year shall be treated as meeting the requirements of section 416 for the plan year.\n(5)\nAutomatic contribution arrangement\nFor purposes of this subsection\u2014\n(A)\nIn general\nA qualified cash or deferred arrangement shall be treated as an automatic contribution arrangement if the arrangement\u2014\n(i) provides that each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to 4 percent of the employee\u2019s compensation unless the employee specifically elects not to have such contributions made or to have such contributions made at a different rate, and\n(ii) meets the notice requirements under subparagraph (B).\n(B)\nNotice requirements\n(i)\nIn general\nThe requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.\n(ii)\nReasonable period to make election\nThe requirements of this clause are met if each employee to whom subparagraph (A)(i) applies\u2014\n(I) receives a notice explaining the employee\u2019s right under the arrangement to elect not to have elective contributions made on the employee\u2019s behalf or to have the contributions made at a different rate, and\n(II) has a reasonable period of time after receipt of such notice and before the first elective contribution is made to make such election.\n(iii)\nAnnual notice of rights and obligations\nThe requirements of this clause are met if each employee eligible to participate in the arrangement is, within a reasonable period before any year, given notice of the employee\u2019s rights and obligations under the arrangement.\nThe requirements of clauses (i) and (ii) of section 401(k)(12)(D) shall be met with respect to the notices described in clauses (ii) and (iii) of this subparagraph.\n(6)\nCoordination with other requirements\n(A)\nTreatment of separate plans\nSection 414(k) shall not apply to an eligible combined plan.\n(B)\nReporting\nAn eligible combined plan shall be treated as a single plan for purposes of sections 6058 and 6059.\n(7)\nApplicable defined contribution plan\nFor purposes of this subsection\u2014\n(A)\nIn general\nThe term \u201capplicable defined contribution plan\u201d means a defined contribution plan which includes a qualified cash or deferred arrangement.\n(B)\nQualified cash or deferred arrangement\nThe term \u201cqualified cash or deferred arrangement\u201d has the meaning given such term by section 401(k)(2).\n(y)\nCooperative and small employer charity pension plans\n(1)\nIn general\nFor purposes of this title, except as provided in this subsection, a CSEC plan is a defined benefit plan (other than a multiemployer plan)\u2014\n(A) to which section 104 of the Pension Protection Act of 2006 applies, without regard to\u2014\n(i) section 104(a)(2) of such Act;\n(ii) the amendments to such section 104 by section 202(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and\n(iii) paragraph (3)(B);\n(B) that, as of\nJune 25, 2010\n(C) that, as of\n(i) described in section 501(c)(3),\n(ii) chartered under part B of subtitle II of title 36, United States Code,\n(iii) with employees in at least 40 States, and\n(iv) whose primary exempt purpose is to provide services with respect to children; or\n(D) that, as of\n(i) described in section 501(c)(3),\n(ii) who has been in existence since at least 1938,\n(iii) who conducts medical research directly or indirectly through grant making, and\n(iv) whose primary exempt purpose is to provide services with respect to mothers and children.\n(2)\nAggregation\nAll employers that are treated as a single employer under subsection (b) or (c) shall be treated as a single employer for purposes of determining if a plan was maintained by more than one employer under subparagraphs (B) and (C) of paragraph (1).\n(3)\nElection\n(A)\nIn general\nIf a plan falls within the definition of a CSEC plan under this subsection (without regard to this paragraph), such plan shall be a CSEC plan unless the plan sponsor elects not later than the close of the first plan year of the plan beginning after\nDecember 31, 2013\n(B)\nSpecial rule\nIf a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the Pension Protection Act of 2006, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, shall cease to apply to such plan as of the first date as of which such plan is treated as a CSEC plan.\n(z)\nCertain plan transfers and mergers\n(1)\nIn general\nUnder rules prescribed by the Secretary, except as provided in paragraph (2), no amount shall be includible in gross income by reason of\u2014\n(A) a transfer of all or a portion of the accrued benefit of a participant or beneficiary, whether or not vested, from a church plan that is a plan described in section 401(a) or an annuity contract described in section 403(b) to an annuity contract described in section 403(b), if such plan and annuity contract are both maintained by the same church or convention or association of churches,\n(B) a transfer of all or a portion of the accrued benefit of a participant or beneficiary, whether or not vested, from an annuity contract described in section 403(b) to a church plan that is a plan described in section 401(a), if such plan and annuity contract are both maintained by the same church or convention or association of churches, or\n(C) a merger of a church plan that is a plan described in section 401(a), or an annuity contract described in section 403(b), with an annuity contract described in section 403(b), if such plan and annuity contract are both maintained by the same church or convention or association of churches.\n(2)\nLimitation\nParagraph (1) shall not apply to a transfer or merger unless the participant\u2019s or beneficiary\u2019s total accrued benefit immediately after the transfer or merger is equal to or greater than the participant\u2019s or beneficiary\u2019s total accrued benefit immediately before the transfer or merger, and such total accrued benefit is nonforfeitable after the transfer or merger.\n(3)\nQualification\nA plan or annuity contract shall not fail to be considered to be described in section 401(a) or 403(b) merely because such plan or annuity contract engages in a transfer or merger described in this subsection.\n(4)\nDefinitions\nFor purposes of this subsection\u2014\n(A)\nChurch or convention or association of churches\nThe term \u201cchurch or convention or association of churches\u201d includes an organization described in subparagraph (A) or (B)(ii) of subsection (e)(3).\n(B)\nAnnuity contract\nThe term \u201cannuity contract\u201d includes a custodial account described in section 403(b)(7) and a retirement income account described in section 403(b)(9).\n(C)\nAccrued benefit\nThe term \u201caccrued benefit\u201d means\u2014\n(i) in the case of a defined benefit plan, the employee\u2019s accrued benefit determined under the plan, and\n(ii) in the case of a plan other than a defined benefit plan, the balance of the employee\u2019s account under the plan.\n(aa)\nSpecial rules applicable to benefit overpayments\n(1)\nIn general\nA plan shall not fail to be treated as described in clause (i), (ii), (iii), or (iv) of section 219(g)(5)(A) (and shall not fail to be treated as satisfying the requirements of section 401(a) or 403) merely because\u2014\n(A) the plan fails to obtain payment from any participant, beneficiary, employer, plan sponsor, fiduciary, or other party on account of any inadvertent benefit overpayment made by the plan, or\n(B) the plan sponsor amends the plan to increase past, or decrease future, benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments.\n(2)\nReduction in future benefit payments and recovery from responsible party\nParagraph (1) shall not fail to apply to a plan merely because, after discovering a benefit overpayment, such plan\u2014\n(A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or\n(B) seeks recovery from the person or persons responsible for such overpayment.\n(3)\nEmployer funding obligations\nNothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under sections 412 and 430 or to prevent or restore an impermissible forfeiture in accordance with section 411.\n(4)\nObservance of benefit limitations\nNotwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations.\n(5)\nCoordination with other qualification requirements\nThe Secretary may issue regulations or other guidance of general applicability specifying how benefit overpayments and their recoupment or non-recoupment from a participant or beneficiary shall be taken into account for purposes of satisfying any requirement applicable to a plan to which paragraph (1) applies.\n(bb)\nEliminating unnecessary plan requirements related to unenrolled participants\n(1)\nIn general\nNotwithstanding any other provision of this title, with respect to any defined contribution plan, no disclosure, notice, or other plan document (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant is furnished\u2014\n(A) an annual reminder notice of such participant\u2019s eligibility to participate in such plan and any applicable election deadlines under the plan, and\n(B) any document requested by such participant that the participant would be entitled to receive notwithstanding this subsection.\n(2)\nUnenrolled participant\nFor purposes of this subsection, the term \u201cunenrolled participant\u201d means an employee who\u2014\n(A) is eligible to participate in a defined contribution plan,\n(B) has been furnished\u2014\n(i) the summary plan description pursuant to section 104(b) of the Employee Retirement Income Security Act of 1974, and\n(ii) any other notices related to eligibility under the plan and required to be furnished under this title, or the Employee Retirement Income Security Act of 1974, in connection with such participant\u2019s initial eligibility to participate in such plan,\n(C) is not participating in such plan, and\n(D) satisfies such other criteria as the Secretary of the Treasury may determine appropriate, as prescribed in guidance issued in consultation with the Secretary of Labor.\nFor purposes of this subsection, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligibility.\n(3)\nAnnual reminder notice\nFor purposes of this subsection, the term \u201cannual reminder notice\u201d means the notice described in section 111(c) of the Employee Retirement Income Security Act of 1974.\n(cc)\nCorrecting automatic contribution errors\n(1)\nIn general\nAny plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error.\n(2)\nCorrected error defined\nFor purposes of this subsection, the term \u201ccorrected error\u201d means a reasonable administrative error\u2014\n(A)\n(i) made in implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee covered by such feature), or\n(ii) made by failing to afford an eligible employee the opportunity to make an affirmative election because such employee was improperly excluded from the plan],\n3\n(B) that is corrected prospectively by implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee) determined in accordance with the terms of an eligible automatic contribution arrangement (as defined under subsection (w)(3)), provided that\u2014\n(i) such implementation error is corrected not later than\u2014\n(I) the date of the first payment of compensation made by the employer to the employee on or after the last day of the 9\u00bd month-period after the end of the plan year during which such error with respect to the employee first occurred, or\n(II) if earlier in the case of an employee who notifies the plan sponsor of such error, the date of the first payment of compensation made by the employer to the employee on or after the last day of the month following the month in which such notification was made,\n(ii) in the case of an employee who would have been entitled to additional matching contributions had any missed elective deferral been made, the plan sponsor makes a corrective allocation, not later than the deadline specified by the Secretary in regulations or other guidance prescribed under paragraph (3), of matching contributions on behalf of the employee in an amount equal to the additional matching contributions to which the employee would have been so entitled (adjusted to account for earnings had the missed elective deferrals been made).\n(iii) such implementation error is of a type which is so corrected for all similarly situated participants in a nondiscriminatory manner,\n(iv) notice of such error is given to the employee not later than 45 days after the date on which correct deferrals begin, and\n(v) the notice under clause (iv) satisfies such regulations or other guidance as the Secretary prescribes under paragraph (4).\nSuch correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the Secretary.\n(3)\nNo obligation for employer to restore missed elective deferrals\nIf the requirements of paragraph (2)(B) are satisfied, the employer will not be required to provide eligible employees with the missed amount of elective deferrals resulting from a reasonable administrative error described in paragraph (2)(A)(i) or (ii) through a qualified nonelective contribution, or otherwise.\n(4)\nRegulations and guidance for favorable correction methods\nThe Secretary shall by regulations or other guidance of general applicability prescribe\u2014\n(A) the deadline for making a corrective allocation of matching contributions required by paragraph (2)(B)(ii),\n(B) the content of the notice required by paragraph (2)(B)(iv),\n(C) the manner in which the amount of the corrective allocation under paragraph (2)(B)(ii) is determined,\n(D) the manner of adjustment to account for earnings on matching contributions under paragraph (2)(B)(ii), and\n(E) such other rules as are necessary to carry out the purposes of the subsection.","url":"https://projectusc.org/usc/t26/s414.html","content":[{"t":"sec","id":"/us/usc/t26/s414","children":[{"t":"num","text":"\u00a7\u202f414."},{"t":"heading","text":"Definitions and special rules"},{"t":"subsec","id":"/us/usc/t26/s414/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Service for predecessor employer"},{"t":"chapeau","text":"For purposes of this part\u2014"},{"t":"para","id":"/us/usc/t26/s414/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" in any case in which the employer maintains a plan of a predecessor employer, service for such predecessor shall be treated as service for the employer, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" in any case in which the employer maintains a plan which is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided in regulations prescribed by the Secretary, be treated as service for the employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Employees of controlled group of corporations"},{"t":"para","id":"/us/usc/t26/s414/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C)) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the applicable limitations provided by section 404(a) shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Special rules for applying family attribution"},{"t":"chapeau","text":"For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply:"},{"t":"subpara","id":"/us/usc/t26/s414/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" Community property laws shall be disregarded for purposes of determining ownership.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" Except as provided by the Secretary, stock of an individual not attributed under section 1563(e)(5) to such individual\u2019s spouse shall not be attributed to such spouse by reason of the combined application of paragraphs (1) and (6)(A) of section 1563(e).","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/b/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" Except as provided by the Secretary, in the case of stock in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), such attribution to the child shall not by itself result in such corporations being members of the same controlled group.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/b/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Plan shall not fail to be treated as satisfying this section"},{"t":"content","children":[{"t":"p","text":"If application of paragraph (2) causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Employees of partnerships, proprietorships, etc., which are under common control"},{"t":"para","id":"/us/usc/t26/s414/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in paragraph (2), for purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (b).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Special rules relating to church plans"},{"t":"subpara","id":"/us/usc/t26/s414/c/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"General rule"},{"t":"chapeau","text":"Except as provided in subparagraphs (B) and (C), for purposes of this subsection and subsection (m), an organization that is otherwise eligible to participate in a church plan shall not be aggregated with another such organization and treated as a single employer with such other organization for a plan year beginning in a taxable year unless\u2014"},{"t":"clause","id":"/us/usc/t26/s414/c/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" one such organization provides (directly or indirectly) at least 80 percent of the operating funds for the other organization during the preceding taxable year of the recipient organization, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/c/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" there is a degree of common management or supervision between the organizations such that the organization providing the operating funds is directly involved in the day-to-day operations of the other organization.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/c/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Nonqualified church-controlled organizations"},{"t":"content","children":[{"t":"p","text":"Notwithstanding subparagraph (A), for purposes of this subsection and subsection (m), an organization that is a nonqualified church-controlled organization shall be aggregated with 1 or more other nonqualified church-controlled organizations, or with an organization that is not exempt from tax under section 501, and treated as a single employer with such other organization, if at least 80 percent of the directors or trustees of such other organization are either representatives of, or directly or indirectly controlled by, such nonqualified church-controlled organization. For purposes of this subparagraph, the term \u201cnonqualified church-controlled organization\u201d means a church-controlled tax-exempt organization described in section 501(c)(3) that is not a qualified church-controlled organization (as defined in section 3121(w)(3)(B)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/c/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Permissive aggregation among church-related organizations"},{"t":"content","children":[{"t":"p","text":"The church or convention or association of churches with which an organization described in subparagraph (A) is associated (within the meaning of subsection (e)(3)(D)), or an organization designated by such church or convention or association of churches, may elect to treat such organizations as a single employer for a plan year. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/c/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Permissive disaggregation of church-related organizations"},{"t":"content","children":[{"t":"p","text":"For purposes of subparagraph (A), in the case of a church plan, an employer may elect to treat churches (as defined in section 403(b)(12)(B)) separately from entities that are not churches (as so defined), without regard to whether such entities maintain separate church plans. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Governmental plan"},{"t":"content","children":[{"t":"p","text":"For purposes of this part, the term \u201cgovernmental plan\u201d means a plan established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term \u201cgovernmental plan\u201d also includes any plan to which the Railroad Retirement Act of 1935 or 1937 applies and which is financed by contributions required under that Act and any plan of an international organization which is exempt from taxation by reason of the International Organizations Immunities Act (","children":[{"t":"ref","text":"59 Stat. 669","href":"/us/stat/59/669","tail":"). The term \u201cgovernmental plan\u201d includes a plan which is established and maintained by an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), or an agency or instrumentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities (whether or not an essential government function)."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Church plan"},{"t":"para","id":"/us/usc/t26/s414/e/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For purposes of this part, the term \u201cchurch plan\u201d means a plan established and maintained (to the extent required in paragraph (2)(B)) for its employees (or their benefici\u00adaries) by a church or by a convention or association of churches which is exempt from tax under section 501.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/e/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Certain plans excluded"},{"t":"chapeau","text":"The term \u201cchurch plan\u201d does not include a plan\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/e/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" which is established and maintained primarily for the benefit of employees (or their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513); or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" if less than substantially all of the individuals included in the plan are individuals described in paragraph (1) or (3)(B) (or their beneficiaries).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/e/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Definitions and other provisions"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/e/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Treatment as church plan"},{"t":"content","children":[{"t":"p","text":"A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Employee defined"},{"t":"chapeau","text":"The term employee of a church or a convention or association of churches shall include\u2014"},{"t":"clause","id":"/us/usc/t26/s414/e/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, regardless of the source of his compensation;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" an employee of an organization, whether a civil law corporation or otherwise, which is exempt from tax under section 501 and which is controlled by or associated with a church or a convention or association of churches; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/3/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" an individual described in subparagraph (E).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/3/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Church treated as employer"},{"t":"content","children":[{"t":"p","text":"A church or a convention or association of churches which is exempt from tax under section 501 shall be deemed the employer of any individual included as an employee under subparagraph (B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/3/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Association with church"},{"t":"content","children":[{"t":"p","text":"An organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/3/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Special rule in case of separation from plan"},{"t":"chapeau","text":"If an employee who is included in a church plan separates from the service of a church or a convention or association of churches or an organization described in clause (ii) of paragraph (3)(B), the church plan shall not fail to meet the requirements of this subsection merely because the plan\u2014"},{"t":"clause","id":"/us/usc/t26/s414/e/3/E/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" retains the employee\u2019s accrued benefit or account for the payment of benefits to the employee or his beneficiaries pursuant to the terms of the plan; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/3/E/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" receives contributions on the employee\u2019s behalf after the employee\u2019s separation from such service, but only for a period of 5 years after such separation, unless the employee is disabled (within the meaning of the disability provisions of the church plan or, if there are no such provisions in the church plan, within the meaning of section 72(m)(7)) at the time of such separation from service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/e/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Correction of failure to meet church plan requirements"},{"t":"subpara","id":"/us/usc/t26/s414/e/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"If a plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 fails to meet one or more of the requirements of this subsection and corrects its failure to meet such requirements within the correction period, the plan shall be deemed to meet the requirements of this subsection for the year in which the correction was made and for all prior years.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Failure to correct"},{"t":"content","children":[{"t":"p","text":"If a correction is not made within the correction period, the plan shall be deemed not to meet the requirements of this subsection beginning with the date on which the earliest failure to meet one or more of such requirements occurred.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Correction period defined"},{"t":"chapeau","text":"The term \u201ccorrection period\u201d means\u2014"},{"t":"clause","id":"/us/usc/t26/s414/e/4/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the period, ending 270 days after the date of mailing by the Secretary of a notice of default with respect to the plan\u2019s failure to meet one or more of the requirements of this subsection;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/4/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any period set by a court of competent jurisdiction after a final determination that the plan fails to meet such requirements, or, if the court does not specify such period, any reasonable period determined by the Secretary on the basis of all the facts and circumstances, but in any event not less than 270 days after the determination has become final; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/4/C/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" any additional period which the Secretary determines is reasonable or necessary for the correction of the default,","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"whichever has the latest ending date.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/e/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Special rules for chaplains and self-employed ministers"},{"t":"subpara","id":"/us/usc/t26/s414/e/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Certain ministers may participate"},{"t":"chapeau","text":"For purposes of this part\u2014"},{"t":"clause","id":"/us/usc/t26/s414/e/5/A/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"A duly ordained, commissioned, or licensed minister of a church is described in paragraph (3)(B) if, in connection with the exercise of their ministry, the minister\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/e/5/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" is a self-employed individual (within the meaning of section 401(c)(1)(B), or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/e/5/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" is employed by an organization other than an organization which is described in section 501(c)(3) and with respect to which the minister shares common religious bonds.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/5/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Treatment as employer and employee"},{"t":"content","children":[{"t":"p","text":"For purposes of sections 403(b)(1)(A) and 404(a)(10), a minister described in clause (i)(I) shall be treated as employed by the minister\u2019s own employer which is an organization described in section 501(c)(3) and exempt from tax under section 501(a).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Special rules for applying section 403(b) to self-employed ministers"},{"t":"chapeau","text":"In the case of a minister described in subparagraph (A)(i)(I)\u2014"},{"t":"clause","id":"/us/usc/t26/s414/e/5/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the minister\u2019s includible compensation under section 403(b)(3) shall be determined by reference to the minister\u2019s earned income (within the meaning of section 401(c)(2)) from such ministry rather than the amount of compensation which is received from an employer, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/e/5/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the years (and portions of years) in which such minister was a self-employed individual (within the meaning of section 401(c)(1)(B)) with respect to such ministry shall be included for purposes of section 403(b)(4).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/5/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Effect on non-denominational plans"},{"t":"content","children":[{"t":"p","text":"If a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry participates in a church plan (within the meaning of this section) and in the exercise of such ministry is employed by an employer not otherwise participating in such church plan, then such employer may exclude such minister from being treated as an employee of such employer for purposes of applying sections 401(a)(3), 401(a)(4), and 401(a)(5), as in effect on ","children":[{"t":"text","text":"September 1, 1974","tail":", and sections 401(a)(4), 401(a)(5), 401(a)(26), 401(k)(3), 401(m), 403(b)(1)(D) (including section 403(b)(12)), and 410 to any stock bonus, pension, profit-sharing, or annuity plan (including an annuity described in section 403(b) or a retirement income account described in section 403(b)(9)). The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purpose of, and prevent the abuse of, this subparagraph."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/5/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Compensation taken into account only once"},{"t":"content","children":[{"t":"p","text":"If any compensation is taken into account in determining the amount of any contributions made to, or benefits to be provided under, any church plan, such compensation shall not also be taken into account in determining the amount of any contributions made to, or benefits to be provided under, any other stock bonus, pension, profit-sharing, or annuity plan which is not a church plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/e/5/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Exclusion"},{"t":"content","children":[{"t":"p","text":"In the case of a contribution to a church plan made on behalf of a minister described in subparagraph (A)(i)(II), such contribution shall not be included in the gross income of the minister to the extent that such contribution would not be so included if the minister was an employee of a church.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Multiemployer plan"},{"t":"para","id":"/us/usc/t26/s414/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Definition"},{"t":"chapeau","text":"For purposes of this part, the term \u201cmultiemployer plan\u201d means a plan\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/f/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" to which more than one employer is required to contribute,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" which satisfies such other requirements as the Secretary of Labor may prescribe by regulation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Cases of common control"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, all trades or businesses (whether or not incorporated) which are under common control within the meaning of subsection (c) are considered a single employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/f/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Continuation of status after termination"},{"t":"content","children":[{"t":"p","text":"Notwithstanding paragraph (1), a plan is a multiemployer plan on and after its termination date under title IV of the Employee Retirement Income Security Act of 1974 if the plan was a multiemployer plan under this subsection for the plan year preceding its termination date.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/f/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Transitional rule"},{"t":"content","children":[{"t":"p","text":"For any plan year which began before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, the term \u201cmultiemployer plan\u201d means a plan described in this subsection as in effect immediately before that date.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/f/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Special election"},{"t":"chapeau","text":"Within one year after the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, a multiemployer plan may irrevocably elect, pursuant to procedures established by the Pension Benefit Guaranty Corporation and subject to the provisions of section 4403(b) and (c) of the Employee Retirement Income Security Act of 1974, that the plan shall not be treated as a multiemployer plan for any purpose under such Act or this title, if for each of the last 3 plan years ending prior to the effective date of the Multiemployer Pension Plan Amendments Act of 1980\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/f/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the plan was not a multiemployer plan because the plan was not a plan described in section 3(37)(A)(iii) of the Employee Retirement Income Security Act of 1974 and section 414(f)(1)(C) (as such provisions were in effect on the day before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980); and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the plan had been identified as a plan that was not a multiemployer plan in substantially all its filings with the Pension Benefit Guaranty Corporation, the Secretary of Labor and the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/f/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Election with regard to multiemployer status"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" Within 1 year after the enactment of the Pension Protection Act of 2006\u2014"},{"t":"clause","id":"/us/usc/t26/s414/f/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" An election under paragraph (5) may be revoked, pursuant to procedures prescribed by the Pension Benefit Guaranty Corporation, if, for each of the 3 plan years prior to the date of the enactment of that Act, the plan would have been a multiemployer plan but for the election under paragraph (5), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/f/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" a plan that meets the criteria in subparagraph (A) and (B) of paragraph (1) of this subsection or that is described in subparagraph (E) may, pursuant to procedures prescribed by the Pension Benefit Guaranty Corporation, elect to be a multiemployer plan, if\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/f/6/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" for each of the 3 plan years immediately preceding the first plan year for which the election under this paragraph is effective with respect to the plan, the plan has met those criteria or is so described,","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/f/6/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" substantially all of the plan\u2019s employer contributions for each of those plan years were made or required to be made by organizations that were exempt from tax under section 501, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/f/6/A/ii/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" the plan was established prior to ","children":[{"t":"text","text":"September 2, 1974","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" An election under this paragraph shall be effective for all purposes under this Act\u202f","children":[{"t":"ref","text":"1"},{"t":"num","text":"1","tail":"\u202fSo in original. Probably should be \u201ctitle\u201d."},{"t":"text","text":"\u202fSo in original. Probably should be \u201ctitle\u201d.","tail":" and under the Employee Retirement Income Security Act of 1974, starting with any plan year beginning on or after "},{"t":"text","text":"January 1, 1999","tail":", and ending before "},{"t":"text","text":"January 1, 2008","tail":", as designated by the plan in the election made under subparagraph (A)(ii)."}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" Once made, an election under this paragraph shall be irrevocable, except that a plan described in subparagraph (A)(ii) shall cease to be a multiemployer plan as of the plan year beginning immediately after the first plan year for which the majority of its employer contributions were made or required to be made by organizations that were not exempt from tax under section 501.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" The fact that a plan makes an election under subparagraph (A)(ii) does not imply that the plan was not a multiemployer plan prior to the date of the election or would not be a multiemployer plan without regard to the election.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/E","children":[{"t":"num","text":"(E)"},{"t":"content","text":" A plan is described in this subparagraph if it is a plan sponsored by an organization which is described in section 501(c)(5) and exempt from tax under section 501(a) and which was established in Chicago, Illinois, on ","children":[{"t":"text","text":"August 12, 1881","tail":"."}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/f/6/F","children":[{"t":"num","text":"(F)"},{"t":"heading","text":"Maintenance under collective bargaining agreement.\u2014"},{"t":"content","text":"For purposes of this title and the Employee Retirement Income Security Act of 1974, a plan making an election under this paragraph shall be treated as maintained pursuant to a collective bargaining agreement if a collective bargaining agreement, expressly or otherwise, provides for or permits employer contributions to the plan by one or more employers that are signatory to such agreement, or participation in the plan by one or more employees of an employer that is signatory to such agreement, regardless of whether the plan was created, established, or maintained for such employees by virtue of another document that is not a collective bargaining agreement.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Plan administrator"},{"t":"chapeau","text":"For purposes of this part, the term \u201cplan administrator\u201d means\u2014"},{"t":"para","id":"/us/usc/t26/s414/g/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" the person specifically so designated by the terms of the instrument under which the plan is operated;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/g/2","children":[{"t":"num","text":"(2)"},{"t":"chapeau","text":" in the absence of a designation referred to in paragraph (1)\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/g/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" in the case of a plan maintained by a single employer, such employer,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/g/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" in the case of a plan maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who maintained the plan, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/g/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" in any case to which subparagraph (A) or (B) does not apply, such other person as the Secretary may by regulation, prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Tax treatment of certain contributions"},{"t":"para","id":"/us/usc/t26/s414/h/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Effective with respect to taxable years beginning after ","children":[{"t":"text","text":"December 31, 1973","tail":", for purposes of this title, any amount contributed\u2014"}]},{"t":"subpara","id":"/us/usc/t26/s414/h/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" to an employees\u2019 trust described in section 401(a), or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/h/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" under a plan described in section 403(a), shall not be treated as having been made by the employer if it is designated as an employee contribution.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/h/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Designation by units of government"},{"t":"content","children":[{"t":"p","text":"For purposes of paragraph (1), in the case of any plan established by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments), where the contributions of employing units are designated as employee contributions but where any employing unit picks up the contributions, the contributions so picked up shall be treated as employer contributions.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Defined contribution plan"},{"t":"content","children":[{"t":"p","text":"For purposes of this part, the term \u201cdefined contribution plan\u201d means a plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant\u2019s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant\u2019s account.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/j","children":[{"t":"num","text":"(j)"},{"t":"heading","text":"Defined benefit plan"},{"t":"content","children":[{"t":"p","text":"For purposes of this part, the term \u201cdefined benefit plan\u201d means any plan which is not a defined contribution plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/k","children":[{"t":"num","text":"(k)"},{"t":"heading","text":"Certain plans"},{"t":"chapeau","text":"A defined benefit plan which provides a benefit derived from employer contributions which is based partly on the balance of the separate account of a participant shall\u2014"},{"t":"para","id":"/us/usc/t26/s414/k/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" for purposes of section 410 (relating to minimum participation standards), be treated as a defined contribution plan,","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/k/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" for purposes of sections 72(d) (relating to treatment of employee contributions as separate contract), 411(a)(7)(A) (relating to minimum vesting standards), 415 (relating to limitations on benefits and contributions under qualified plans), and 401(m) (relating to nondiscrimination tests for matching requirements and employee contributions), be treated as consisting of a defined contribution plan to the extent benefits are based on the separate account of a participant and as a defined benefit plan with respect to the remaining portion of benefits under the plan, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/k/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" for purposes of section 4975 (relating to tax on prohibited transactions), be treated as a defined benefit plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/l","children":[{"t":"num","text":"(l)"},{"t":"heading","text":"Merger and consolidations of plans or transfers of plan assets"},{"t":"para","id":"/us/usc/t26/s414/l/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"A trust which forms a part of a plan shall not constitute a qualified trust under section 401 and a plan shall be treated as not described in section 403(a) unless in the case of any merger or consolidation of the plan with, or in the case of any transfer of assets or liabilities of such plan to, any other trust plan after ","children":[{"t":"text","text":"September 2, 1974","tail":", each participant in the plan would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated). The preceding sentence does not apply to any multiemployer plan with respect to any transaction to the extent that participants either before or after the transaction are covered under a multiemployer plan to which Title IV of the Employee Retirement Income Security Act of 1974 applies."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/l/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Allocation of assets in plan spin-offs, etc."},{"t":"subpara","id":"/us/usc/t26/s414/l/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In the case of a plan spin-off of a defined benefit plan, a trust which forms part of\u2014"},{"t":"clause","id":"/us/usc/t26/s414/l/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the original plan, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any plan spun off from such plan,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"shall not constitute a qualified trust under this section unless the applicable percentage of excess assets are allocated to each of such plans.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Applicable percentage"},{"t":"chapeau","text":"For purposes of subparagraph (A), the term \u201capplicable percentage\u201d means, with respect to each of the plans described in clauses (i) and (ii) of subparagraph (A), the percentage determined by dividing\u2014"},{"t":"clause","id":"/us/usc/t26/s414/l/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" the excess (if any) of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the sum of the funding target and target normal cost determined under section 430, over","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the amount of the assets required to be allocated to the plan after the spin-off (without regard to this paragraph), by","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the sum of the excess amounts determined separately under clause (i) for all such plans.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Excess assets"},{"t":"chapeau","text":"For purposes of subparagraph (A), the term \u201cexcess assets\u201d means an amount equal to the excess (if any) of\u2014"},{"t":"clause","id":"/us/usc/t26/s414/l/2/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the fair market value of the assets of the original plan immediately before the spin-off, over","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the amount of assets required to be allocated after the spin-off to all plans (determined without regard to this paragraph).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Certain spun-off plans not taken into account"},{"t":"clause","id":"/us/usc/t26/s414/l/2/D/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"A plan involved in a spin-off which is described in clause (ii), (iii), or (iv) shall not be taken into account for purposes of this paragraph, except that the amount determined under subparagraph (C)(ii) shall be increased by the amount of assets allocated to such plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Plans transferred out of controlled groups"},{"t":"content","children":[{"t":"p","text":"A plan is described in this clause if, after such spin-off, such plan is maintained by an employer who is not a member of the same controlled group as the employer maintaining the original plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/D/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Plans transferred out of multiple employer plans"},{"t":"content","children":[{"t":"p","text":"A plan as described in this clause if, after the spin-off, any employer maintaining such plan (and any member of the same controlled group as such employer) does not maintain any other plan remaining after the spin-off which is also maintained by another employer (or member of the same controlled group as such other employer) which maintained the plan in existence before the spin-off.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/D/iv","children":[{"t":"num","text":"(iv)"},{"t":"heading","text":"Terminated plans"},{"t":"content","children":[{"t":"p","text":"A plan is described in this clause if, pursuant to the transaction involving the spin-off, the plan is terminated.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/D/v","children":[{"t":"num","text":"(v)"},{"t":"heading","text":"Controlled group"},{"t":"content","children":[{"t":"p","text":"For purposes of this subparagraph, the term \u201ccontrolled group\u201d means any group treated as a single employer under subsection (b), (c), (m), or (","children":[{"t":"text","text":"o","tail":")."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Paragraph not to apply to multiemployer plans"},{"t":"content","children":[{"t":"p","text":"This paragraph does not apply to any multiemployer plan with respect to any spin-off to the extent that participants either before or after the spin-off are covered under a multiemployer plan to which title IV of the Employee Retirement Income Security Act of 1974 applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/F","children":[{"t":"num","text":"(F)"},{"t":"heading","text":"Application to similar transaction"},{"t":"content","children":[{"t":"p","text":"Except as provided by the Secretary, rules similar to the rules of this paragraph shall apply to transactions similar to spin-offs.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/l/2/G","children":[{"t":"num","text":"(G)"},{"t":"heading","text":"Special rules for bridge depository institutions"},{"t":"chapeau","text":"For purposes of this paragraph, in the case of a bridge depository institution established under section 11(i) of the Federal Deposit Insurance Act (","children":[{"t":"ref","text":"12 U.S.C. 1821(i)","href":"/us/usc/t12/s1821/i","tail":")\u2014"}]},{"t":"clause","id":"/us/usc/t26/s414/l/2/G/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" such bank shall be treated as a member of any controlled group which includes any insured bank (as defined in section 3(h) of such Act (","children":[{"t":"ref","text":"12 U.S.C. 1813(h)","href":"/us/usc/t12/s1813/h","tail":"))\u2014"}]},{"t":"subclause","id":"/us/usc/t26/s414/l/2/G/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" which maintains a defined benefit plan,","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/G/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" which is closed by the appropriate bank regulatory authorities, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/G/i/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" any asset and liabilities of which are received by the bridge depository institution, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/l/2/G/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" the requirements of this paragraph shall not be treated as met with respect to such plan unless during the 180-day period beginning on the date such insured bank is closed\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/G/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the bridge depository institution has the right to require the plan to transfer (subject to the provisions of this paragraph) not more than 50 percent of the excess assets (as defined in subparagraph (C)) to a defined benefit plan maintained by the bridge depository institution with respect to participants or former participants (including retirees and beneficiaries) in the original plan employed by the bridge depository institution or formerly employed by the closed bank, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/l/2/G/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" no other merger, spin-off, termination, or similar transaction involving the portion of the excess assets described in subclause (I) may occur without the prior written consent of the bridge depository institution.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/m","children":[{"t":"num","text":"(m)"},{"t":"heading","text":"Employees of an affiliated service group"},{"t":"para","id":"/us/usc/t26/s414/m/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/m/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Affiliated service group"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201caffiliated service group\u201d means a group consisting of a service organization (hereinafter in this paragraph referred to as the \u201cfirst organization\u201d) and one or more of the following:"},{"t":"subpara","id":"/us/usc/t26/s414/m/2/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" any service organization which\u2014"},{"t":"clause","id":"/us/usc/t26/s414/m/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" is a shareholder or partner in the first organization, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/m/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" regularly performs services for the first organization or is regularly associated with the first organization in performing services for third persons, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/m/2/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" any other organization if\u2014"},{"t":"clause","id":"/us/usc/t26/s414/m/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a significant portion of the business of such organization is the performance of services (for the first organization, for organizations described in subparagraph (A), or for both) of a type historically performed in such service field by employees, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/m/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" 10 percent or more of the interests in such organization is held by persons who are highly compensated employees (within the meaning of section 414(q)) of the first organization or an organization described in subparagraph (A).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/m/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Service organizations"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cservice organization\u201d means an organization the principal business of which is the performance of services.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/m/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Employee benefit requirements"},{"t":"chapeau","text":"For purposes of this subsection, the employee benefit requirements listed in this paragraph are\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/m/4/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/m/4/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" sections 408(k), 408(p), 410, 411, 415, and 416.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/m/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Certain organizations performing management functions"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201caffiliated service group\u201d also includes a group consisting of\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/m/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" an organization the principal business of which is performing, on a regular and continuing basis, management functions for 1 organization (or for 1 organization and other organizations related to such 1 organization), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/m/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the organization (and related organizations) for which such functions are so performed by the organization described in subparagraph (A).","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of this paragraph, the term \u201crelated organizations\u201d has the same meaning as the term \u201crelated persons\u201d when used in section 144(a)(3).","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/m/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Other definitions"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/m/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Organization defined"},{"t":"content","children":[{"t":"p","text":"The term \u201corganization\u201d means a corporation, partnership, or other organization.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/m/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Ownership"},{"t":"clause","id":"/us/usc/t26/s414/m/6/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"In determining ownership, the principles of section 318(a) shall apply, except that community property laws shall be disregarded for purposes of determining ownership.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/m/6/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Special rules for applying family attribution"},{"t":"chapeau","text":"For purposes of applying the attribution rules under section 318 with respect to clause (i), the following rules apply:"},{"t":"subclause","id":"/us/usc/t26/s414/m/6/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" Community property laws shall be disregarded for purposes of determining ownership.","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/m/6/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" Except as provided by the Secretary, stock of an individual not attributed under section 318(a)(1)(A)(i) to such individual\u2019s spouse shall not be attributed by reason of the combined application of paragraphs (1)(A)(ii) and (4) of section 318(a) to such spouse from a child who has not attained the age of 21 years.","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/m/6/B/ii/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" Except as provided by the Secretary, in the case of stock in different organizations which is attributed under section 318(a)(1)(A)(ii) from each parent to a child who has not attained the age of 21 years, and is not attributed to such parents as spouses under section 318(a)(1)(A)(i), such attribution to the child shall not by itself result in such organizations being members of the same affiliated service group.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/m/6/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Plan shall not fail to be treated as satisfying this section"},{"t":"content","children":[{"t":"p","text":"If the application of clause (ii) causes two or more entities to be an affiliated service group, or to no longer be in an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/n","children":[{"t":"num","text":"(n)"},{"t":"heading","text":"Employee leasing"},{"t":"para","id":"/us/usc/t26/s414/n/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of the requirements listed in paragraph (3), with respect to any person (hereinafter in this subsection referred to as the \u201crecipient\u201d) for whom a leased employee performs services\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/n/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the leased employee shall be treated as an employee of the recipient, but","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" contributions or benefits provided by the leasing organization which are attributable to services performed for the recipient shall be treated as provided by the recipient.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/n/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Leased employee"},{"t":"chapeau","text":"For purposes of paragraph (1), the term \u201cleased employee\u201d means any person who is not an employee of the recipient and who provides services to the recipient if\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/n/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" such services are provided pursuant to an agreement between the recipient and any other person (in this subsection referred to as the \u201cleasing organization\u201d),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" such person has performed such services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" such services are performed under primary direction or control by the recipient.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/n/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Requirements"},{"t":"chapeau","text":"For purposes of this subsection, the requirements listed in this paragraph are\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/n/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" paragraphs (3), (4), (7), (16), (17), and (26) of section 401(a),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" sections 408(k), 408(p), 410, 411, 415, and 416, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/3/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" sections 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, and 4980B.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/n/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Time when first considered as employee"},{"t":"subpara","id":"/us/usc/t26/s414/n/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"In the case of any leased employee, paragraph (1) shall apply only for purposes of determining whether the requirements listed in paragraph (3) are met for periods after the close of the period referred to in paragraph (2)(B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Years of service"},{"t":"content","children":[{"t":"p","text":"In the case of a person who is an employee of the recipient (whether by reason of this subsection or otherwise), for purposes of the requirements listed in paragraph (3), years of service for the recipient shall be determined by taking into account any period for which such employee would have been a leased employee but for the requirements of paragraph (2)(B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/n/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Safe harbor"},{"t":"subpara","id":"/us/usc/t26/s414/n/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In the case of requirements described in subparagraphs (A) and (B) of paragraph (3), this subsection shall not apply to any leased employee with respect to services performed for a recipient if\u2014"},{"t":"clause","id":"/us/usc/t26/s414/n/5/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" such employee is covered by a plan which is maintained by the leasing organization and meets the requirements of subparagraph (B), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/n/5/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" leased employees (determined without regard to this paragraph) do not constitute more than 20 percent of the recipient\u2019s nonhighly compensated work force.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Plan requirements"},{"t":"chapeau","text":"A plan meets the requirements of this subparagraph if\u2014"},{"t":"clause","id":"/us/usc/t26/s414/n/5/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" such plan is a money purchase pension plan with a nonintegrated employer contribution rate for each participant of at least 10 percent of compensation,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/n/5/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" such plan provides for full and immediate vesting, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/n/5/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" each employee of the leasing organization (other than employees who perform substantially all of their services for the leasing organization) immediately participates in such plan.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Clause (iii) shall not apply to any individual whose compensation from the leasing organization in each plan year during the 4-year period ending with the plan year is less than $1,000.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/5/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Definitions"},{"t":"chapeau","text":"For purposes of this paragraph\u2014"},{"t":"clause","id":"/us/usc/t26/s414/n/5/C/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Highly compensated employee"},{"t":"content","children":[{"t":"p","text":"The term \u201chighly compensated employee\u201d has the meaning given such term by section 414(q).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/n/5/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Nonhighly compensated work force"},{"t":"chapeau","text":"The term \u201cnonhighly compensated work force\u201d means the aggregate number of individuals (other than highly compensated employees)\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/n/5/C/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" who are employees of the recipient (without regard to this subsection) and have performed services for the recipient (or for the recipient and related persons) on a substantially full-time basis for a period of at least 1 year, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/n/5/C/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" who are leased employees with respect to the recipient (determined without regard to this paragraph).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/n/5/C/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Compensation"},{"t":"chapeau","text":"The term \u201ccompensation\u201d has the same meaning as when used in section 415; except that such term shall include\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/n/5/C/iii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" any employer contribution under a qualified cash or deferred arrangement to the extent not included in gross income under section 402(e)(3) or 402(h)(1)(B),","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/n/5/C/iii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" any amount which the employee would have received in cash but for an election under a cafeteria plan (within the meaning of section 125), and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/n/5/C/iii/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" any amount contributed to an annuity contract described in section 403(b) pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/n/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Other rules"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/n/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Related persons"},{"t":"content","children":[{"t":"p","text":"The term \u201crelated persons\u201d has the same meaning as when used in section 144(a)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/n/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Employees of entities under common control"},{"t":"content","children":[{"t":"p","text":"The rules of subsections (b), (c), (m), and (","children":[{"t":"text","text":"o","tail":") shall apply."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/o","children":[{"t":"num","text":"(o)"},{"t":"heading","text":"Regulations"},{"t":"chapeau","text":"The Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in subsection (m)(4) or (n)(3) or any requirement under section 457 through the use of\u2014"},{"t":"para","id":"/us/usc/t26/s414/o/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" separate organizations,","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/o/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" employee leasing, or","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/o/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" other arrangements.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"The regulations prescribed under subsection (n) shall include provisions to minimize the recordkeeping requirements of subsection (n) in the case of an employer which has no top-heavy plans (within the meaning of section 416(g)) and which uses the services of persons (other than employees) for an insignificant percentage of the employer\u2019s total workload.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/p","children":[{"t":"num","text":"(p)"},{"t":"heading","text":"Qualified domestic relations order defined"},{"t":"chapeau","text":"For purposes of this subsection and section 401(a)(13)\u2014"},{"t":"para","id":"/us/usc/t26/s414/p/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"subpara","id":"/us/usc/t26/s414/p/1/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Qualified domestic relations order"},{"t":"chapeau","text":"The term \u201cqualified domestic relations order\u201d means a domestic relations order\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" which creates or recognizes the existence of an alternate payee\u2019s right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" with respect to which the requirements of paragraphs (2) and (3) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/1/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Domestic relations order"},{"t":"chapeau","text":"The term \u201cdomestic relations order\u201d means any judgment, decree, or order (including approval of a property settlement agreement) which\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" is made pursuant to a State or Tribal domestic relations law (including a community property law).","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of clause (ii), the term \u201cTribal\u201d with respect to a domestic relations law means such a law which is issued by or under the laws of an Indian tribal government, a subdivision of such an Indian tribal government, or an agency or instrumentality of either.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Order must clearly specify certain facts"},{"t":"chapeau","text":"A domestic relations order meets the requirements of this paragraph only if such order clearly specifies\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/p/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount or percentage of the participant\u2019s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" the number of payments or period to which such order applies, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/2/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" each plan to which such order applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Order may not alter amount, form, etc., of benefits"},{"t":"chapeau","text":"A domestic relations order meets the requirements of this paragraph only if such order\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/p/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" does not require the plan to provide increased benefits (determined on the basis of actuarial value), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/3/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Exception for certain payments made after earliest retirement age"},{"t":"subpara","id":"/us/usc/t26/s414/p/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"A domestic relations order shall not be treated as failing to meet the requirements of subparagraph (A) of paragraph (3) solely because such order requires that payment of benefits be made to an alternate payee\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/4/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" in the case of any payment before a participant has separated from service, on or after the date on which the participant attains (or would have attained) the earliest retirement age,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/4/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" as if the participant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of the benefits actually accrued and not taking into account the present value of any employer subsidy for early retirement), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/4/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" in any form in which such benefits may be paid under the plan to the participant (other than in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse).","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of clause (ii), the interest rate assumption used in determining the present value shall be the interest rate specified in the plan or, if no rate is specified, 5 percent.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Earliest retirement age"},{"t":"chapeau","text":"For purposes of this paragraph, the term \u201cearliest retirement age\u201d means the earlier of\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/4/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the date on which the participant is entitled to a distribution under the plan, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/4/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" the later of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/p/4/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the date the participant attains age 50, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/p/4/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the earliest date on which the participant could begin receiving benefits under the plan if the participant separated from service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Treatment of former spouse as surviving spouse for purposes of determining survivor benefits"},{"t":"chapeau","text":"To the extent provided in any qualified domestic relations order\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/p/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the former spouse of a participant shall be treated as a surviving spouse of such participant for purposes of sections 401(a)(11) and 417 (and any spouse of the participant shall not be treated as a spouse of the participant for such purposes), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" if married for at least 1 year, the surviving former spouse shall be treated as meeting the requirements of section 417(d).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Plan procedures with respect to orders"},{"t":"subpara","id":"/us/usc/t26/s414/p/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Notice and determination by administrator"},{"t":"chapeau","text":"In the case of any domestic relations order received by a plan\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the plan administrator shall promptly notify the participant and each alternate payee of the receipt of such order and the plan\u2019s procedures for determining the qualified status of domestic relations orders, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" within a reasonable period after receipt of such order, the plan administrator shall determine whether such order is a qualified domestic relations order and notify the participant and each alternate payee of such determination.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Plan to establish reasonable procedures"},{"t":"content","children":[{"t":"p","text":"Each plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Procedures for period during which determination is being made"},{"t":"subpara","id":"/us/usc/t26/s414/p/7/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"During any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the plan administrator, by a court of competent jurisdiction, or otherwise), the plan administrator shall separately account for the amounts (hereinafter in this paragraph referred to as the \u201csegregated amounts\u201d) which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/7/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Payment to alternate payee if order determined to be qualified domestic relations order"},{"t":"content","children":[{"t":"p","text":"If within the 18-month period described in subparagraph (E) the order (or modification thereof) is determined to be a qualified domestic relations order, the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons entitled thereto.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/7/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Payment to plan participant in certain cases"},{"t":"chapeau","text":"If within the 18-month period described in subparagraph (E)\u2014"},{"t":"clause","id":"/us/usc/t26/s414/p/7/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" it is determined that the order is not a qualified domestic relations order, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/p/7/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the issue as to whether such order is a qualified domestic relations order is not resolved,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"then the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/7/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Subsequent determination or order to be applied prospectively only"},{"t":"content","children":[{"t":"p","text":"Any determination that an order is a qualified domestic relations order which is made after the close of the 18-month period described in subparagraph (E) shall be applied prospectively only.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/p/7/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Determination of 18-month period"},{"t":"content","children":[{"t":"p","text":"For purposes of this paragraph, the 18-month period described in this subparagraph is the 18-month period beginning with the date on which the first payment would be required to be made under the domestic relations order.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Alternate payee defined"},{"t":"content","children":[{"t":"p","text":"The term \u201calternate payee\u201d means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Subsection not to apply to plans to which section 401(a)(13) does not apply"},{"t":"content","children":[{"t":"p","text":"This subsection shall not apply to any plan to which section 401(a)(13) does not apply. For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/10","children":[{"t":"num","text":"(10)"},{"t":"heading","text":"Waiver of certain distribution requirements"},{"t":"content","children":[{"t":"p","text":"With respect to the requirements of subsections (a) and (k) of section 401, section 403(b), section 409(d), and section 457(d), a plan shall not be treated as failing to meet such requirements solely by reason of payments to an alternative payee pursuant to a qualified domestic relations order.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/11","children":[{"t":"num","text":"(11)"},{"t":"heading","text":"Application of rules to certain other plans"},{"t":"content","children":[{"t":"p","text":"For purposes of this title, a distribution or payment from a governmental plan (as defined in subsection (d)) or a church plan (as described in subsection (e)) or an eligible deferred compensation plan (within the meaning of section 457(b)) shall be treated as made pursuant to a qualified domestic relations order if it is made pursuant to a domestic relations order which meets the requirement of clause (i) of paragraph (1)(A).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/12","children":[{"t":"num","text":"(12)"},{"t":"heading","text":"Tax treatment of payments from a section 457 plan"},{"t":"content","children":[{"t":"p","text":"If a distribution or payment from an eligible deferred compensation plan described in section 457(b) is made pursuant to a qualified domestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to such distribution or payment.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/p/13","children":[{"t":"num","text":"(13)"},{"t":"heading","text":"Consultation with the Secretary"},{"t":"content","children":[{"t":"p","text":"In prescribing regulations under this subsection and section 401(a)(13), the Secretary of Labor shall consult with the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/q","children":[{"t":"num","text":"(q)"},{"t":"heading","text":"Highly compensated employee"},{"t":"para","id":"/us/usc/t26/s414/q/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201chighly compensated employee\u201d means any employee who\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/q/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" was a 5-percent owner at any time during the year or the preceding year, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/1/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" for the preceding year\u2014"},{"t":"clause","id":"/us/usc/t26/s414/q/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" had compensation from the employer in excess of $80,000, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/q/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" if the employer elects the application of this clause for such preceding year, was in the top-paid group of employees for such preceding year.","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"The Secretary shall adjust the $80,000 amount under subparagraph (B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter ending ","children":[{"t":"text","text":"September 30, 1996","tail":"."}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"5-percent owner"},{"t":"content","children":[{"t":"p","text":"An employee shall be treated as a 5-percent owner for any year if at any time during such year such employee was a 5-percent owner (as defined in section 416(i)(1)) of the employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Top-paid group"},{"t":"content","children":[{"t":"p","text":"An employee is in the top-paid group of employees for any year if such employee is in the group consisting of the top 20 percent of the employees when ranked on the basis of compensation paid during such year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Compensation"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201ccompensation\u201d has the meaning given such term by section 415(c)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Excluded employees"},{"t":"chapeau","text":"For purposes of subsection (r) and for purposes of determining the number of employees in the top-paid group, the following employees shall be excluded\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/q/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" employees who have not completed 6 months of service,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" employees who normally work less than 17\u00bd hours per week,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/5/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" employees who normally work during not more than 6 months during any year,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/5/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" employees who have not attained age 21, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/5/E","children":[{"t":"num","text":"(E)"},{"t":"content","text":" except to the extent provided in regulations, employees who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and the employer.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Except as provided by the Secretary, the employer may elect to apply subparagraph (A), (B), (C), or (D) by substituting a shorter period of service, smaller number of hours or months, or lower age for the period of service, number of hours or months, or age (as the case may be) than that specified in such subparagraph.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Former employees"},{"t":"chapeau","text":"A former employee shall be treated as a highly compensated employee if\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/q/6/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" such employee was a highly compensated employee when such employee separated from service, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/q/6/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" such employee was a highly compensated employee at any time after attaining age 55.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Coordination with other provisions"},{"t":"content","children":[{"t":"p","text":"Subsections (b), (c), (m), (n), and (","children":[{"t":"text","text":"o","tail":") shall be applied before the application of this subsection."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Special rule for nonresident aliens"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection and subsection (r), employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)) shall not be treated as employees.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/q/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Certain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans"},{"t":"content","children":[{"t":"p","text":"In the case of a church plan (as defined in subsection (e)), no employee shall be considered an officer, a person whose principal duties consist of supervising the work of other employees, or a highly compensated employee for any year unless such employee is a highly compensated employee under paragraph (1) for such year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/r","children":[{"t":"num","text":"(r)"},{"t":"heading","text":"Special rules for separate line of business"},{"t":"para","id":"/us/usc/t26/s414/r/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For purposes of sections 129(d)(8) and 410(b), an employer shall be treated as operating separate lines of business during any year if the employer for bona fide business reasons operates separate lines of business.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Line of business must have 50 employees, etc."},{"t":"chapeau","text":"A line of business shall not be treated as separate under paragraph (1) unless\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/r/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" such line of business has at least 50 employees who are not excluded under subsection (q)(5),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/r/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the employer notifies the Secretary that such line of business is being treated as separate for purposes of paragraph (1), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/r/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" such line of business meets guidelines prescribed by the Secretary or the employer receives a determination from the Secretary that such line of business may be treated as separate for purposes of paragraph (1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Safe harbor rule"},{"t":"subpara","id":"/us/usc/t26/s414/r/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is\u2014"},{"t":"clause","id":"/us/usc/t26/s414/r/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" not less than one-half, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/r/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" not more than twice,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"the percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of clause (i) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/r/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Determination may be based on preceding year"},{"t":"chapeau","text":"The requirements of subparagraph (A) shall be treated as met with respect to any line of business if such requirements were met with respect to such line of business for the preceding year and if\u2014"},{"t":"clause","id":"/us/usc/t26/s414/r/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/r/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the employees shifted to or from the line of business after the close of the preceding year contained a substantially proportional number of highly compensated employees.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Highly compensated employee percentage defined"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201chighly compensated employee percentage\u201d means the percentage which highly compensated employees performing services for the line of business are of all employees performing services for the line of business.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Allocation of benefits to line of business"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, benefits which are attributable to services provided to a line of business shall be treated as provided by such line of business.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Headquarters personnel, etc."},{"t":"chapeau","text":"The Secretary shall prescribe rules providing for\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/r/6/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the allocation of headquarters personnel among the lines of business of the employer, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/r/6/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the treatment of other employees providing services for more than 1 line of business of the employer or not in lines of business meeting the requirements of paragraph (2).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Separate operating units"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cseparate line of business\u201d includes an operating unit in a separate geographic area separately operated for a bona fide business reason.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/r/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Affiliated service groups"},{"t":"content","children":[{"t":"p","text":"This subsection shall not apply in the case of any affiliated service group (within the meaning of section 414(m)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/s","children":[{"t":"num","text":"(s)"},{"t":"heading","text":"Compensation"},{"t":"chapeau","text":"For purposes of any applicable provision\u2014"},{"t":"para","id":"/us/usc/t26/s414/s/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in this subsection, the term \u201ccompensation\u201d has the meaning given such term by section 415(c)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/s/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Employer may elect not to treat certain deferrals as compensation"},{"t":"content","children":[{"t":"p","text":"An employer may elect not to include as compensation any amount which is contributed by the employer pursuant to a salary reduction agreement and which is not includible in the gross income of an employee under section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/s/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Alternative determination of compensation"},{"t":"content","children":[{"t":"p","text":"The Secretary shall by regulation provide for alternative methods of determining compensation which may be used by an employer, except that such regulations shall provide that an employer may not use an alternative method if the use of such method discriminates in favor of highly compensated employees (within the meaning of subsection (q)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/s/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Applicable provision"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201capplicable provision\u201d means any provision which specifically refers to this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/t","children":[{"t":"num","text":"(t)"},{"t":"heading","text":"Application of controlled group rules to certain employee benefits"},{"t":"para","id":"/us/usc/t26/s414/t/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"All employees who are treated as employed by a single employer under subsection (b), (c), or (m) shall be treated as employed by a single employer for purposes of an applicable section. The provisions of subsection (","children":[{"t":"text","text":"o","tail":") shall apply with respect to the requirements of an applicable section."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/t/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Applicable section"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201capplicable section\u201d means section 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, or 4980B.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/u","children":[{"t":"num","text":"(u)"},{"t":"heading","text":"Special rules relating to veterans\u2019 reemployment rights under USERRA and to differential wage payments to members on active duty"},{"t":"para","id":"/us/usc/t26/s414/u/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Treatment of certain contributions made pursuant to veterans\u2019 reemployment rights"},{"t":"chapeau","text":"If any contribution is made by an employer or an employee under an individual account plan with respect to an employee, or by an employee to a defined benefit plan that provides for employee contributions, and such contribution is required by reason of such employee\u2019s rights under chapter 43 of title 38, United States Code, resulting from qualified military service, then\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/u/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" such contribution shall not be subject to any otherwise applicable limitation contained in section 402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, or 457, and shall not be taken into account in applying such limitations to other contributions or benefits under such plan or any other plan, with respect to the year in which the contribution is made,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" such contribution shall be subject to the limitations referred to in subparagraph (A) with respect to the year to which the contribution relates (in accordance with rules prescribed by the Secretary), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m), 403(b)(12), 408(k)(3), 408(k)(6), 408(p), 410(b), or 416 by reason of the making of (or the right to make) such contribution.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of the preceding sentence, any elective deferral or employee contribution made under paragraph (2) shall be treated as required by reason of the employee\u2019s rights under such chapter 43.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Reemployment rights under USERRA with respect to elective deferrals"},{"t":"subpara","id":"/us/usc/t26/s414/u/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of this subchapter and section 457, if an employee is entitled to the benefits of chapter 43 of title 38, United States Code, with respect to any plan which provides for elective deferrals, the employer sponsoring the plan shall be treated as meeting the requirements of such chapter 43 with respect to such elective deferrals only if such employer\u2014"},{"t":"clause","id":"/us/usc/t26/s414/u/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" permits such employee to make additional elective deferrals under such plan (in the amount determined under subparagraph (B) or such lesser amount as is elected by the employee) during the period which begins on the date of the reemployment of such employee with such employer and has the same length as the lesser of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/u/2/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the product of 3 and the period of qualified military service which resulted in such rights, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/u/2/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" 5 years, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/u/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" makes a matching contribution with respect to any additional elective deferral made pursuant to clause (i) which would have been required had such deferral actually been made during the period of such qualified military service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Amount of makeup required"},{"t":"content","children":[{"t":"p","text":"The amount determined under this subparagraph with respect to any plan is the maximum amount of the elective deferrals that the individual would have been permitted to make under the plan in accordance with the limitations referred to in paragraph (1)(A) during the period of qualified military service if the individual had continued to be employed by the employer during such period and received compensation as determined under paragraph (7). Proper adjustment shall be made to the amount determined under the preceding sentence for any elective deferrals actually made during the period of such qualified military service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Elective deferral"},{"t":"content","children":[{"t":"p","text":"For purposes of this paragraph, the term \u201celective deferral\u201d has the meaning given such term by section 402(g)(3); except that such term shall include any deferral of compensation under an eligible deferred compensation plan (as defined in section 457(b)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"After-tax employee contributions"},{"t":"content","children":[{"t":"p","text":"References in subparagraphs (A) and (B) to elective deferrals shall be treated as including references to employee contributions.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Certain retroactive adjustments not required"},{"t":"chapeau","text":"For purposes of this subchapter and subchapter E, no provision of chapter 43 of title 38, United States Code, shall be construed as requiring\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/u/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" any crediting of earnings to an employee with respect to any contribution before such contribution is actually made, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" any allocation of any forfeiture with respect to the period of qualified military service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Loan repayment suspensions permitted"},{"t":"content","children":[{"t":"p","text":"If any plan suspends the obligation to repay any loan made to an employee from such plan for any part of any period during which such employee is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p), 401(a), or 4975(d)(1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Qualified military service"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cqualified military service\u201d means any service in the uniformed services (as defined in chapter 43 of title 38, United States Code) by any individual if such individual is entitled to reemployment rights under such chapter with respect to such service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Individual account plan"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cindividual account plan\u201d means any defined contribution plan (including any tax-sheltered annuity plan under section 403(b), any simplified employee pension under section 408(k), any qualified salary reduction arrangement under section 408(p), and any eligible deferred compensation plan (as defined in section 457(b))).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Compensation"},{"t":"chapeau","text":"For purposes of sections 403(b)(3), 415(c)(3), and 457(e)(5), an employee who is in qualified military service shall be treated as receiving compensation from the employer during such period of qualified military service equal to\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/u/7/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the compensation the employee would have received during such period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for absence during the period of qualified military service, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/7/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" if the compensation the employee would have received during such period was not reasonably certain, the employee\u2019s average compensation from the employer during the 12-month period immediately preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"USERRA requirements for qualified retirement plans"},{"t":"chapeau","text":"For purposes of this subchapter and section 457, an employer sponsoring a retirement plan shall be treated as meeting the requirements of chapter 43 of title 38, United States Code, only if each of the following requirements is met:"},{"t":"subpara","id":"/us/usc/t26/s414/u/8/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" An individual reemployed under such chapter is treated with respect to such plan as not having incurred a break in service with the employer maintaining the plan by reason of such individual\u2019s period of qualified military service.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/8/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" Each period of qualified military service served by an individual is, upon reemployment under such chapter, deemed with respect to such plan to constitute service with the employer maintaining the plan for the purpose of determining the nonforfeitability of the individual\u2019s accrued benefits under such plan and for the purpose of determining the accrual of benefits under such plan.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/8/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" An individual reemployed under such chapter is entitled to accrued benefits that are contingent on the making of, or derived from, employee contributions or elective deferrals only to the extent the individual makes payment to the plan with respect to such contributions or deferrals. No such payment may exceed the amount the individual would have been permitted or required to contribute had the individual remained continuously employed by the employer throughout the period of qualified military service. Any payment to such plan shall be made during the period beginning with the date of reemployment and whose duration is 3 times the period of the qualified military service (but not greater than 5 years).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Treatment in the case of death or disability resulting from active military service"},{"t":"subpara","id":"/us/usc/t26/s414/u/9/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For benefit accrual purposes, an employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under the terms of the plan) while performing qualified military service with respect to the employer maintaining the plan as if the individual has resumed employment in accordance with the individual\u2019s reemployment rights under chapter 43 of title 38, United States Code, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability. In the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such plan with respect to the benefit accrual requirements of paragraph (8) with respect to such individual shall be treated for purposes of paragraph (1) as if such compliance were required under such chapter 43.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/9/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Nondiscrimination requirement"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall apply only if all individuals performing qualified military service with respect to the employer maintaining the plan (as determined under subsections (b), (c), (m), and (","children":[{"t":"text","text":"o","tail":")) who die or became disabled as a result of performing qualified military service prior to reemployment by the employer are credited with service and benefits on reasonably equivalent terms."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/9/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Determination of benefits"},{"t":"chapeau","text":"The amount of employee contributions and the amount of elective deferrals of an individual treated as reemployed under subparagraph (A) for purposes of applying paragraph (8)(C) shall be determined on the basis of the individual\u2019s average actual employee contributions or elective deferrals for the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s414/u/9/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the 12-month period of service with the employer immediately prior to qualified military service, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/u/9/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" if service with the employer is less than such 12-month period, the actual length of continuous service with the employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/10","children":[{"t":"num","text":"(10)"},{"t":"heading","text":"Plans not subject to title 38"},{"t":"content","children":[{"t":"p","text":"This subsection shall not apply to any retirement plan to which chapter 43 of title 38, United States Code, does not apply.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/11","children":[{"t":"num","text":"(11)"},{"t":"heading","text":"References"},{"t":"content","children":[{"t":"p","text":"For purposes of this section, any reference to chapter 43 of title 38, United States Code, shall be treated as a reference to such chapter as in effect on ","children":[{"t":"text","text":"December 12, 1994","tail":" (without regard to any subsequent amendment)."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/u/12","children":[{"t":"num","text":"(12)"},{"t":"heading","text":"Treatment of differential wage payments"},{"t":"subpara","id":"/us/usc/t26/s414/u/12/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Except as provided in this paragraph, for purposes of applying this title to a retirement plan to which this subsection applies\u2014"},{"t":"clause","id":"/us/usc/t26/s414/u/12/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" an individual receiving a differential wage payment shall be treated as an employee of the employer making the payment,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/u/12/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the differential wage payment shall be treated as compensation, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/u/12/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" the plan shall not be treated as failing to meet the requirements of any provision described in paragraph (1)(C) by reason of any contribution or benefit which is based on the differential wage payment.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/12/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Special rule for distributions"},{"t":"clause","id":"/us/usc/t26/s414/u/12/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Notwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii),","children":[{"t":"ref","text":"2"},{"t":"num","text":"2","tail":"\u202fSee References in Text note below."},{"t":"text","text":"\u202fSee References in Text note below.","tail":" an individual shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services described in section 3401(h)(2)(A)."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/u/12/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Limitation"},{"t":"content","children":[{"t":"p","text":"If an individual elects to receive a distribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/12/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Nondiscrimination requirement"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A)(iii) shall apply only if all employees of an employer (as determined under subsections (b), (c), (m), and (","children":[{"t":"text","text":"o","tail":")) performing service in the uniformed services described in section 3401(h)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the employer, to make contributions based on the payments on reasonably equivalent terms. For purposes of applying this subparagraph, the provisions of paragraphs (3), (4), and (5) of section 410(b) shall apply."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/u/12/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Differential wage payment"},{"t":"content","children":[{"t":"p","text":"For purposes of this paragraph, the term \u201cdifferential wage payment\u201d has the meaning given such term by section 3401(h)(2).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/v","children":[{"t":"num","text":"(v)"},{"t":"heading","text":"Catch-up contributions for individuals age 50 or over"},{"t":"para","id":"/us/usc/t26/s414/v/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"An applicable employer plan shall not be treated as failing to meet any requirement of this title solely because the plan permits an eligible participant to make additional elective deferrals in any plan year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Limitation on amount of additional deferrals"},{"t":"subpara","id":"/us/usc/t26/s414/v/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"A plan shall not permit additional elective deferrals under paragraph (1) for any year in an amount greater than the lesser of\u2014"},{"t":"clause","id":"/us/usc/t26/s414/v/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the applicable dollar amount, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" the excess (if any) of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the participant\u2019s compensation (as defined in section 415(c)(3)) for the year, over","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" any other elective deferrals of the participant for such year which are made without regard to this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Applicable dollar amount"},{"t":"chapeau","text":"For purposes of this paragraph\u2014"},{"t":"clause","id":"/us/usc/t26/s414/v/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" In the case of an applicable employer plan other than a plan described in section 401(k)(11) or 408(p), the applicable dollar amount is $5,000 (the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year).","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" In the case of an applicable employer plan described in section 401(k)(11) or 408(p), except as provided in clause (iii), the applicable dollar amount is $2,500 (the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year).","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/2/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"chapeau","text":" In the case of an applicable employer plan\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/B/iii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(I), or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/B/iii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" to which an election under section 408(p)(2)(E)(i)(II) applies for the year (including a plan described in section 401(k)(11) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(II) and to which such election applies by reason of subparagraphs (B)(i)(I) and (E) of section 401(k)(11)),","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"\u2001the applicable dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (ii) for calendar year 2024.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Cost-of-living adjustment"},{"t":"clause","id":"/us/usc/t26/s414/v/2/C/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Certain large employers"},{"t":"content","children":[{"t":"p","text":"In the case of a year beginning after ","children":[{"t":"text","text":"December 31, 2006","tail":", the Secretary shall adjust annually the $5,000 amount in subparagraph (B)(i) and the $2,500 amount in subparagraph (B)(ii) for increases in the cost-of-living at the same time and in the same manner as adjustments under section 415(d); except that the base period taken into account shall be the calendar quarter beginning "},{"t":"text","text":"July 1, 2005","tail":", and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500. In the case of a year beginning after "},{"t":"text","text":"December 31, 2025","tail":", the Secretary shall adjust annually the adjusted dollar amounts applicable under clauses (i) and (ii) of subparagraph (E) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning "},{"t":"text","text":"July 1, 2024","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/2/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Other employers"},{"t":"content","children":[{"t":"p","text":"In the case of a year beginning after ","children":[{"t":"text","text":"December 31, 2024","tail":", the Secretary shall adjust annually the dollar amount described in subparagraph (B)(iii) in the manner provided under clause (i) of this subparagraph, except that the base period taken into account shall be the calendar quarter beginning "},{"t":"text","text":"July 1, 2023","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Aggregation of plans"},{"t":"content","children":[{"t":"p","text":"For purposes of this paragraph, plans described in clauses (i), (ii), and (iv) of paragraph (6)(A) that are maintained by the same employer (as determined under subsection (b), (c), (m) or (","children":[{"t":"text","text":"o","tail":")) shall be treated as a single plan, and plans described in clause (iii) of paragraph (6)(A) that are maintained by the same employer shall be treated as a single plan."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/2/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Adjusted dollar amount"},{"t":"chapeau","text":"For purposes of subparagraph (B), the adjusted dollar amount is\u2014"},{"t":"clause","id":"/us/usc/t26/s414/v/2/E/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" in the case of clause (i) of subparagraph (B), the greater of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/E/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" $10,000, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/E/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause, or","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/2/E/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" in the case of clause (ii) of subparagraph (B), the greater of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/E/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" $5,000, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/v/2/E/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" an amount equal to equal to\u202f","children":[{"t":"ref","text":"3"},{"t":"num","text":"3","tail":"\u202fSo in original."},{"t":"text","text":"\u202fSo in original.","tail":" 150 percent of the dollar amount which would be in effect under such clause for 2025 for eligible participants not described in the parenthetical in such clause."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Treatment of contributions"},{"t":"chapeau","text":"In the case of any contribution to a plan under paragraph (1)\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/v/3/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" such contribution shall not, with respect to the year in which the contribution is made\u2014"},{"t":"clause","id":"/us/usc/t26/s414/v/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" be subject to any otherwise applicable limitation contained in sections 401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (determined without regard to section 457(b)(3)), or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" be taken into account in applying such limitations to other contributions or benefits under such plan or any other such plan, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" except as provided in paragraph (4), such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making of (or the right to make) such contribution.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Application of nondiscrimination rules"},{"t":"subpara","id":"/us/usc/t26/s414/v/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"An applicable employer plan shall be treated as failing to meet the nondiscrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all eligible participants to make the same election with respect to the additional elective deferrals under this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Aggregation"},{"t":"content","children":[{"t":"p","text":"For purposes of subparagraph (A), all plans maintained by employers who are treated as a single employer under subsection (b), (c), (m), or (","children":[{"t":"text","text":"o","tail":") of section 414 shall be treated as 1 plan, except that a plan described in clause (i) of section 410(b)(6)(C) shall not be treated as a plan of the employer until the expiration of the transition period with respect to such plan (as determined under clause (ii) of such section)."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Eligible participant"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201celigible participant\u201d means a participant in a plan\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/v/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" who would attain age 50 by the end of the taxable year,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" with respect to whom no other elective deferrals may (without regard to this subsection) be made to the plan for the plan (or other applicable) year by reason of the application of any limitation or other restriction described in paragraph (3) or comparable limitation or restriction contained in the terms of the plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Other definitions and rules"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/v/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Applicable employer plan"},{"t":"chapeau","text":"The term \u201capplicable employer plan\u201d means\u2014"},{"t":"clause","id":"/us/usc/t26/s414/v/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" an employees\u2019 trust described in section 401(a) which is exempt from tax under section 501(a),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" a plan under which amounts are contributed by an individual\u2019s employer for an annuity contract described in section 403(b),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/6/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" an eligible deferred compensation plan under section 457 of an eligible employer described in section 457(e)(1)(A), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/v/6/A/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" an arrangement meeting the requirements of section 408(k) or (p).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Elective deferral"},{"t":"content","children":[{"t":"p","text":"The term \u201celective deferral\u201d has the meaning given such term by subsection (u)(2)(C).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/6/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Exception for section 457 plans"},{"t":"content","children":[{"t":"p","text":"This subsection shall not apply to a participant for any year for which a higher limitation applies to the participant under section 457(b)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/v/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Certain deferrals must be Roth contributions"},{"t":"subpara","id":"/us/usc/t26/s414/v/7/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, paragraph (1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)) made pursuant to an employee election.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/7/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Roth option"},{"t":"content","children":[{"t":"p","text":"In the case of an applicable employer plan with respect to which subparagraph (A) applies to any participant for a plan year, paragraph (1) shall not apply to the plan unless the plan provides that any eligible participant may make the participant\u2019s additional elective deferrals as designated Roth contributions.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/7/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Exception"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall not apply in the case of an applicable employer plan described in paragraph (6)(A)(iv).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/7/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Election to change deferrals"},{"t":"content","children":[{"t":"p","text":"The Secretary may provide by regulations that an eligible participant may elect to change the participant\u2019s election to make additional elective deferrals if the participant\u2019s compensation is determined to exceed the limitation under subparagraph (A) after the election is made.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/v/7/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Cost of living adjustment"},{"t":"content","children":[{"t":"p","text":"In the case of a year beginning after ","children":[{"t":"text","text":"December 31, 2024","tail":", the Secretary shall adjust annually the $145,000 amount in subparagraph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under 415(d); except that the base period taken into account shall be the calendar quarter beginning "},{"t":"text","text":"July 1, 2023","tail":", and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/w","children":[{"t":"num","text":"(w)"},{"t":"heading","text":"Special rules for certain withdrawals from eligible automatic contribution arrangements"},{"t":"para","id":"/us/usc/t26/s414/w/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"If an eligible automatic contribution arrangement allows an employee to elect to make permissible withdrawals\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/w/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the amount of any such withdrawal shall be includible in the gross income of the employee for the taxable year of the employee in which the distribution is made,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" no tax shall be imposed under section 72(t) with respect to the distribution, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" the arrangement shall not be treated as violating any restriction on distributions under this title solely by reason of allowing the withdrawal.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"In the case of any distribution to an employee by reason of an election under this paragraph, employer matching contributions shall be forfeited or subject to such other treatment as the Secretary may prescribe.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/w/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Permissible withdrawal"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/w/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cpermissible withdrawal\u201d means any withdrawal from an eligible automatic contribution arrangement meeting the requirements of this paragraph which\u2014"},{"t":"clause","id":"/us/usc/t26/s414/w/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" is made pursuant to an election by an employee, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/w/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" consists of elective contributions described in paragraph (3)(B) (and earnings attributable thereto).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Time for making election"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall not apply to an election by an employee unless the election is made no later than the date which is 90 days after the date of the first elective contribution with respect to the employee under the arrangement.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Amount of distribution"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall not apply to any election by an employee unless the amount of any distribution by reason of the election is equal to the amount of elective contributions made with respect to the first payroll period to which the eligible automatic contribution arrangement applies to the employee and any succeeding payroll period beginning before the effective date of the election (and earnings attributable thereto).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/w/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Eligible automatic contribution arrangement"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201celigible automatic contribution arrangement\u201d means an arrangement under an applicable employer plan\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/w/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" under which a participant may elect to have the employer make payments as contributions under the plan on behalf of the participant, or to the participant directly in cash,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" under which the participant is treated as having elected to have the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the participant specifically elects not to have such contributions made (or specifically elects to have such contributions made at a different percentage), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/3/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" which meets the requirements of paragraph (4).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/w/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Notice requirements"},{"t":"subpara","id":"/us/usc/t26/s414/w/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The administrator of a plan containing an arrangement described in paragraph (3) shall, within a reasonable period before each plan year, give to each employee to whom an arrangement described in paragraph (3) applies for such plan year notice of the employee\u2019s rights and obligations under the arrangement which\u2014"},{"t":"clause","id":"/us/usc/t26/s414/w/4/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" is sufficiently accurate and comprehensive to apprise the employee of such rights and obligations, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/w/4/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" is written in a manner calculated to be understood by the average employee to whom the arrangement applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Time and form of notice"},{"t":"chapeau","text":"A notice shall not be treated as meeting the requirements of subparagraph (A) with respect to an employee unless\u2014"},{"t":"clause","id":"/us/usc/t26/s414/w/4/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the notice includes an explanation of the employee\u2019s right under the arrangement to elect not to have elective contributions made on the employee\u2019s behalf (or to elect to have such contributions made at a different percentage),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/w/4/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the employee has a reasonable period of time after receipt of the notice described in clause (i) and before the first elective contribution is made to make such election, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/w/4/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" the notice explains how contributions made under the arrangement will be invested in the absence of any investment election by the employee.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/w/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Applicable employer plan"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201capplicable employer plan\u201d means\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/w/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" an employees\u2019 trust described in section 401(a) which is exempt from tax under section 501(a),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" a plan under which amounts are contributed by an individual\u2019s employer for an annuity contract described in section 403(b),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/5/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" an eligible deferred compensation plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/5/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" a simplified employee pension the terms of which provide for a salary reduction arrangement described in section 408(k)(6), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/w/5/E","children":[{"t":"num","text":"(E)"},{"t":"content","text":" a simple retirement account (as defined in section 408(p)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/w/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Special rule"},{"t":"content","children":[{"t":"p","text":"A withdrawal described in paragraph (1) (subject to the limitation of paragraph (2)(C)) shall not be taken into account for purposes of section 401(k)(3) or for purposes of applying the limitation under section 402(g)(1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/x","children":[{"t":"num","text":"(x)"},{"t":"heading","text":"Special rules for eligible combined defined benefit plans and qualified cash or deferred arrangements"},{"t":"para","id":"/us/usc/t26/s414/x/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"General rule"},{"t":"content","children":[{"t":"p","text":"Except as provided in this subsection, the requirements of this title shall be applied to any defined benefit plan or applicable defined contribution plan which is part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Eligible combined plan"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201celigible combined plan\u201d means a plan\u2014"},{"t":"clause","id":"/us/usc/t26/s414/x/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" which is maintained by an employer which, at the time the plan is established, is a small employer,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" which consists of a defined benefit plan and an applicable defined contribution plan,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" the assets of which are held in a single trust forming part of the plan and are clearly identified and allocated to the defined benefit plan and the applicable defined contribution plan to the extent necessary for the separate application of this title under paragraph (1), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/A/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" with respect to which the benefit, contribution, vesting, and nondiscrimination requirements of subparagraphs (B), (C), (D), (E), and (F) are met.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of this subparagraph, the term \u201csmall employer\u201d has the meaning given such term by section 4980D(d)(2), except that such section shall be applied by substituting \u201c500\u201d for \u201c50\u201d each place it appears.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Benefit requirements"},{"t":"clause","id":"/us/usc/t26/s414/x/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant\u2019s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Applicable percentage"},{"t":"chapeau","text":"For purposes of clause (i), the applicable percentage is the lesser of\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" 1 percent multiplied by the number of years of service with the employer, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" 20 percent.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Special rule for applicable defined benefit plans"},{"t":"content","children":[{"t":"p","text":"If the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 411(a)(13)(B) which meets the interest credit requirements of section 411(b)(5)(B)(i), the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each participant receives a pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table:","children":[{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"p","children":[{"t":"text","text":"\u2001\u2001\u2001If the participant\u2019s age as of the"}]},{"t":"p","children":[{"t":"text","text":"\u2001\u2001\u2001\u2001beginning of the year is\u2014"}]},{"t":"p","children":[{"t":"text","text":"The percentage is\u2014"}]},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"},{"t":"p","children":[{"t":"text","text":"30 or less"}]},{"t":"p","text":"2\u202f\u202f"},{"t":"text","text":"\n"},{"t":"p","children":[{"t":"text","text":"Over 30 but less than 40"}]},{"t":"p","text":"4\u202f\u202f"},{"t":"text","text":"\n"},{"t":"p","children":[{"t":"text","text":"40 or over but less than 50"}]},{"t":"p","text":"6\u202f\u202f"},{"t":"text","text":"\n"},{"t":"p","children":[{"t":"text","text":"50 or over"}]},{"t":"p","text":"8."},{"t":"text","text":"\n"},{"t":"text","text":"\n","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/B/iv","children":[{"t":"num","text":"(iv)"},{"t":"heading","text":"Years of service"},{"t":"content","children":[{"t":"p","text":"For purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (4), (5), and (6) of section 411(a), except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Contribution requirements"},{"t":"clause","id":"/us/usc/t26/s414/x/2/C/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The contribution requirements of this subparagraph with respect to any applicable defined contribution plan forming part of an eligible combined plan are met if\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/C/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the qualified cash or deferred arrangement included in such plan constitutes an automatic contribution arrangement, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/C/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the employer is required to make matching contributions on behalf of each employee eligible to participate in the arrangement in an amount equal to 50 percent of the elective contributions of the employee to the extent such elective contributions do not exceed 4 percent of compensation.","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"\u2001Rules similar to the rules of clauses (ii) and (iii) of section 401(k)(12)(B) shall apply for purposes of this clause.","tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Nonelective contributions"},{"t":"content","children":[{"t":"p","text":"An applicable defined contribution plan shall not be treated as failing to meet the requirements of clause (i) because the employer makes nonelective contributions under the plan but such contributions shall not be taken into account in determining whether the requirements of clause (i)(II) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Vesting requirements"},{"t":"chapeau","text":"The vesting requirements of this subparagraph are met if\u2014"},{"t":"clause","id":"/us/usc/t26/s414/x/2/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" in the case of a defined benefit plan forming part of an eligible combined plan an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee\u2019s accrued benefit under the plan derived from employer contributions, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" in the case of an applicable defined contribution plan forming part of eligible combined plan\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/D/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" an employee has a nonforfeitable right to any matching contribution made under the qualified cash or deferred arrangement included in such plan by an employer with respect to any elective contribution, including matching contributions in excess of the contributions required under subparagraph (C)(i)(II), and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/D/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee\u2019s accrued benefit derived under the arrangement from nonelective contributions of the employer.","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"\u2001For purposes of this subparagraph, the rules of section 411 shall apply to the extent not inconsistent with this subparagraph.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Uniform provision of contributions and benefits"},{"t":"content","children":[{"t":"p","text":"In the case of a defined benefit plan or applicable defined contribution plan forming part of an eligible combined plan, the requirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/2/F","children":[{"t":"num","text":"(F)"},{"t":"heading","text":"Requirements must be met without taking into account social security and similar contributions and benefits or other plans"},{"t":"clause","id":"/us/usc/t26/s414/x/2/F/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/F/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Social security and similar contributions"},{"t":"chapeau","text":"The requirements of this clause are met if\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/F/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the requirements of subparagraphs (B) and (C) are met without regard to section 401(","children":[{"t":"text","text":"l","tail":"), and"}],"tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/x/2/F/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the requirements of sections 401(a)(4) and 410(b) are met with respect to both the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan without regard to section 401(","children":[{"t":"text","text":"l","tail":")."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/2/F/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Other plans and arrangements"},{"t":"content","children":[{"t":"p","text":"The requirements of this clause are met if the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan meet the requirements of sections 401(a)(4) and 410(b) without being combined with any other plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Nondiscrimination requirements for qualified cash or deferred arrangement"},{"t":"subpara","id":"/us/usc/t26/s414/x/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"A qualified cash or deferred arrangement which is included in an applicable defined contribution plan forming part of an eligible combined plan shall be treated as meeting the requirements of section 401(k)(3)(A)(ii) if the requirements of paragraph (2)(C) are met with respect to such arrangement.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Matching contributions"},{"t":"content","children":[{"t":"p","text":"In applying section 401(m)(11) to any matching contribution with respect to a contribution to which paragraph (2)(C) applies, the contribution requirement of paragraph (2)(C) and the notice requirements of paragraph (5)(B) shall be substituted for the requirements otherwise applicable under clauses (i) and (ii) of section 401(m)(11)(A).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Satisfaction of top-heavy rules"},{"t":"content","children":[{"t":"p","text":"A defined benefit plan and applicable defined contribution plan forming part of an eligible combined plan for any plan year shall be treated as meeting the requirements of section 416 for the plan year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Automatic contribution arrangement"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/x/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"A qualified cash or deferred arrangement shall be treated as an automatic contribution arrangement if the arrangement\u2014"},{"t":"clause","id":"/us/usc/t26/s414/x/5/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" provides that each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to 4 percent of the employee\u2019s compensation unless the employee specifically elects not to have such contributions made or to have such contributions made at a different rate, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/5/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" meets the notice requirements under subparagraph (B).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Notice requirements"},{"t":"clause","id":"/us/usc/t26/s414/x/5/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/5/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Reasonable period to make election"},{"t":"chapeau","text":"The requirements of this clause are met if each employee to whom subparagraph (A)(i) applies\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/x/5/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" receives a notice explaining the employee\u2019s right under the arrangement to elect not to have elective contributions made on the employee\u2019s behalf or to have the contributions made at a different rate, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/x/5/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" has a reasonable period of time after receipt of such notice and before the first elective contribution is made to make such election.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/x/5/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Annual notice of rights and obligations"},{"t":"content","children":[{"t":"p","text":"The requirements of this clause are met if each employee eligible to participate in the arrangement is, within a reasonable period before any year, given notice of the employee\u2019s rights and obligations under the arrangement.","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"The requirements of clauses (i) and (ii) of section 401(k)(12)(D) shall be met with respect to the notices described in clauses (ii) and (iii) of this subparagraph.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Coordination with other requirements"},{"t":"subpara","id":"/us/usc/t26/s414/x/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Treatment of separate plans"},{"t":"content","children":[{"t":"p","text":"Section 414(k) shall not apply to an eligible combined plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Reporting"},{"t":"content","children":[{"t":"p","text":"An eligible combined plan shall be treated as a single plan for purposes of sections 6058 and 6059.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/x/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Applicable defined contribution plan"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/x/7/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The term \u201capplicable defined contribution plan\u201d means a defined contribution plan which includes a qualified cash or deferred arrangement.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/x/7/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Qualified cash or deferred arrangement"},{"t":"content","children":[{"t":"p","text":"The term \u201cqualified cash or deferred arrangement\u201d has the meaning given such term by section 401(k)(2).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/y","children":[{"t":"num","text":"(y)"},{"t":"heading","text":"Cooperative and small employer charity pension plans"},{"t":"para","id":"/us/usc/t26/s414/y/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of this title, except as provided in this subsection, a CSEC plan is a defined benefit plan (other than a multiemployer plan)\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/y/1/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" to which section 104 of the Pension Protection Act of 2006 applies, without regard to\u2014"},{"t":"clause","id":"/us/usc/t26/s414/y/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" section 104(a)(2) of such Act;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the amendments to such section 104 by section 202(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" paragraph (3)(B);","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/y/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" that, as of ","children":[{"t":"text","text":"June 25, 2010","tail":", was maintained by more than one employer and all of the employers were organizations described in section 501(c)(3);"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/y/1/C","children":[{"t":"num","text":"(C)"},{"t":"chapeau","text":" that, as of ","children":[{"t":"text","text":"June 25, 2010","tail":", was maintained by an employer\u2014"}]},{"t":"clause","id":"/us/usc/t26/s414/y/1/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" described in section 501(c)(3),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" chartered under part B of subtitle II of title 36, United States Code,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/C/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" with employees in at least 40 States, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/C/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" whose primary exempt purpose is to provide services with respect to children; or","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/y/1/D","children":[{"t":"num","text":"(D)"},{"t":"chapeau","text":" that, as of ","children":[{"t":"text","text":"January 1, 2000","tail":", was maintained by an employer\u2014"}]},{"t":"clause","id":"/us/usc/t26/s414/y/1/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" described in section 501(c)(3),","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" who has been in existence since at least 1938,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/D/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" who conducts medical research directly or indirectly through grant making, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/y/1/D/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" whose primary exempt purpose is to provide services with respect to mothers and children.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/y/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Aggregation"},{"t":"content","children":[{"t":"p","text":"All employers that are treated as a single employer under subsection (b) or (c) shall be treated as a single employer for purposes of determining if a plan was maintained by more than one employer under subparagraphs (B) and (C) of paragraph (1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/y/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Election"},{"t":"subpara","id":"/us/usc/t26/s414/y/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"If a plan falls within the definition of a CSEC plan under this subsection (without regard to this paragraph), such plan shall be a CSEC plan unless the plan sponsor elects not later than the close of the first plan year of the plan beginning after ","children":[{"t":"text","text":"December 31, 2013","tail":", not to be treated as a CSEC plan. An election under the preceding sentence shall take effect for such plan year and, once made, may be revoked only with the consent of the Secretary."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/y/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Special rule"},{"t":"content","children":[{"t":"p","text":"If a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the Pension Protection Act of 2006, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, shall cease to apply to such plan as of the first date as of which such plan is treated as a CSEC plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/z","children":[{"t":"num","text":"(z)"},{"t":"heading","text":"Certain plan transfers and mergers"},{"t":"para","id":"/us/usc/t26/s414/z/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Under rules prescribed by the Secretary, except as provided in paragraph (2), no amount shall be includible in gross income by reason of\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/z/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" a transfer of all or a portion of the accrued benefit of a participant or beneficiary, whether or not vested, from a church plan that is a plan described in section 401(a) or an annuity contract described in section 403(b) to an annuity contract described in section 403(b), if such plan and annuity contract are both maintained by the same church or convention or association of churches,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/z/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" a transfer of all or a portion of the accrued benefit of a participant or beneficiary, whether or not vested, from an annuity contract described in section 403(b) to a church plan that is a plan described in section 401(a), if such plan and annuity contract are both maintained by the same church or convention or association of churches, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/z/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" a merger of a church plan that is a plan described in section 401(a), or an annuity contract described in section 403(b), with an annuity contract described in section 403(b), if such plan and annuity contract are both maintained by the same church or convention or association of churches.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/z/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Limitation"},{"t":"content","children":[{"t":"p","text":"Paragraph (1) shall not apply to a transfer or merger unless the participant\u2019s or beneficiary\u2019s total accrued benefit immediately after the transfer or merger is equal to or greater than the participant\u2019s or beneficiary\u2019s total accrued benefit immediately before the transfer or merger, and such total accrued benefit is nonforfeitable after the transfer or merger.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/z/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Qualification"},{"t":"content","children":[{"t":"p","text":"A plan or annuity contract shall not fail to be considered to be described in section 401(a) or 403(b) merely because such plan or annuity contract engages in a transfer or merger described in this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/z/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Definitions"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/z/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Church or convention or association of churches"},{"t":"content","children":[{"t":"p","text":"The term \u201cchurch or convention or association of churches\u201d includes an organization described in subparagraph (A) or (B)(ii) of subsection (e)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/z/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Annuity contract"},{"t":"content","children":[{"t":"p","text":"The term \u201cannuity contract\u201d includes a custodial account described in section 403(b)(7) and a retirement income account described in section 403(b)(9).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/z/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Accrued benefit"},{"t":"chapeau","text":"The term \u201caccrued benefit\u201d means\u2014"},{"t":"clause","id":"/us/usc/t26/s414/z/4/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" in the case of a defined benefit plan, the employee\u2019s accrued benefit determined under the plan, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/z/4/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" in the case of a plan other than a defined benefit plan, the balance of the employee\u2019s account under the plan.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/aa","children":[{"t":"num","text":"(aa)"},{"t":"heading","text":"Special rules applicable to benefit overpayments"},{"t":"para","id":"/us/usc/t26/s414/aa/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"A plan shall not fail to be treated as described in clause (i), (ii), (iii), or (iv) of section 219(g)(5)(A) (and shall not fail to be treated as satisfying the requirements of section 401(a) or 403) merely because\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/aa/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the plan fails to obtain payment from any participant, beneficiary, employer, plan sponsor, fiduciary, or other party on account of any inadvertent benefit overpayment made by the plan, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/aa/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the plan sponsor amends the plan to increase past, or decrease future, benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/aa/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Reduction in future benefit payments and recovery from responsible party"},{"t":"chapeau","text":"Paragraph (1) shall not fail to apply to a plan merely because, after discovering a benefit overpayment, such plan\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/aa/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" reduces future benefit payments to the correct amount provided for under the terms of the plan, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/aa/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" seeks recovery from the person or persons responsible for such overpayment.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/aa/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Employer funding obligations"},{"t":"content","children":[{"t":"p","text":"Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under sections 412 and 430 or to prevent or restore an impermissible forfeiture in accordance with section 411.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/aa/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Observance of benefit limitations"},{"t":"content","children":[{"t":"p","text":"Notwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/aa/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Coordination with other qualification requirements"},{"t":"content","children":[{"t":"p","text":"The Secretary may issue regulations or other guidance of general applicability specifying how benefit overpayments and their recoupment or non-recoupment from a participant or beneficiary shall be taken into account for purposes of satisfying any requirement applicable to a plan to which paragraph (1) applies.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/bb","children":[{"t":"num","text":"(bb)"},{"t":"heading","text":"Eliminating unnecessary plan requirements related to unenrolled participants"},{"t":"para","id":"/us/usc/t26/s414/bb/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Notwithstanding any other provision of this title, with respect to any defined contribution plan, no disclosure, notice, or other plan document (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant is furnished\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/bb/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" an annual reminder notice of such participant\u2019s eligibility to participate in such plan and any applicable election deadlines under the plan, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/bb/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" any document requested by such participant that the participant would be entitled to receive notwithstanding this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/bb/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Unenrolled participant"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201cunenrolled participant\u201d means an employee who\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/bb/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" is eligible to participate in a defined contribution plan,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/bb/2/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" has been furnished\u2014"},{"t":"clause","id":"/us/usc/t26/s414/bb/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the summary plan description pursuant to section 104(b) of the Employee Retirement Income Security Act of 1974, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/bb/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any other notices related to eligibility under the plan and required to be furnished under this title, or the Employee Retirement Income Security Act of 1974, in connection with such participant\u2019s initial eligibility to participate in such plan,","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/bb/2/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" is not participating in such plan, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/bb/2/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" satisfies such other criteria as the Secretary of the Treasury may determine appropriate, as prescribed in guidance issued in consultation with the Secretary of Labor.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"For purposes of this subsection, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligibility.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/bb/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Annual reminder notice"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cannual reminder notice\u201d means the notice described in section 111(c) of the Employee Retirement Income Security Act of 1974.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s414/cc","children":[{"t":"num","text":"(cc)"},{"t":"heading","text":"Correcting automatic contribution errors"},{"t":"para","id":"/us/usc/t26/s414/cc/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Any plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/cc/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Corrected error defined"},{"t":"chapeau","text":"For purposes of this subsection, the term \u201ccorrected error\u201d means a reasonable administrative error\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/cc/2/A","children":[{"t":"num","text":"(A)"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" made in implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee covered by such feature), or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" made by failing to afford an eligible employee the opportunity to make an affirmative election because such employee was improperly excluded from the plan],","children":[{"t":"text","text":"3","tail":" and"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/cc/2/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" that is corrected prospectively by implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee) determined in accordance with the terms of an eligible automatic contribution arrangement (as defined under subsection (w)(3)), provided that\u2014"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" such implementation error is corrected not later than\u2014"},{"t":"subclause","id":"/us/usc/t26/s414/cc/2/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the date of the first payment of compensation made by the employer to the employee on or after the last day of the 9\u00bd month-period after the end of the plan year during which such error with respect to the employee first occurred, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s414/cc/2/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" if earlier in the case of an employee who notifies the plan sponsor of such error, the date of the first payment of compensation made by the employer to the employee on or after the last day of the month following the month in which such notification was made,","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" in the case of an employee who would have been entitled to additional matching contributions had any missed elective deferral been made, the plan sponsor makes a corrective allocation, not later than the deadline specified by the Secretary in regulations or other guidance prescribed under paragraph (3), of matching contributions on behalf of the employee in an amount equal to the additional matching contributions to which the employee would have been so entitled (adjusted to account for earnings had the missed elective deferrals been made).","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" such implementation error is of a type which is so corrected for all similarly situated participants in a nondiscriminatory manner,","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/B/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" notice of such error is given to the employee not later than 45 days after the date on which correct deferrals begin, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s414/cc/2/B/v","children":[{"t":"num","text":"(v)"},{"t":"content","text":" the notice under clause (iv) satisfies such regulations or other guidance as the Secretary prescribes under paragraph (4).","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Such correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the Secretary.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/cc/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"No obligation for employer to restore missed elective deferrals"},{"t":"content","children":[{"t":"p","text":"If the requirements of paragraph (2)(B) are satisfied, the employer will not be required to provide eligible employees with the missed amount of elective deferrals resulting from a reasonable administrative error described in paragraph (2)(A)(i) or (ii) through a qualified nonelective contribution, or otherwise.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s414/cc/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Regulations and guidance for favorable correction methods"},{"t":"chapeau","text":"The Secretary shall by regulations or other guidance of general applicability prescribe\u2014"},{"t":"subpara","id":"/us/usc/t26/s414/cc/4/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the deadline for making a corrective allocation of matching contributions required by paragraph (2)(B)(ii),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/cc/4/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the content of the notice required by paragraph (2)(B)(iv),","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/cc/4/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" the manner in which the amount of the corrective allocation under paragraph (2)(B)(ii) is determined,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/cc/4/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" the manner of adjustment to account for earnings on matching contributions under paragraph (2)(B)(ii), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s414/cc/4/E","children":[{"t":"num","text":"(E)"},{"t":"content","text":" such other rules as are necessary to carry out the purposes of the subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}