[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.401(l)-6]

[Page 353-354]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.401(l)-6  Effective dates and transition rules.

    (a) Statutory effective date--(1) In general. Except as otherwise 
provided in paragraph (a)(2) of this section, section 401(a)(5)(C) is 
effective for plan years beginning on or after January 1, 1989, and 
section 401(l) is effective with respect to plan years, and benefits 
attributable to plan years, beginning on or after January 1, 1989. The 
preceding sentence is applicable to a plan without regard to whether the 
plan was in existence as of a particular date.
    (2) Collectively bargained plans. (i) In the case of a plan 
maintained pursuant to 1 or more collective bargaining agreements 
between employee representatives and 1 or more employers ratified before 
March 1, 1986, sections 401(a)(5) and 401(l) are applicable for plan 
years beginning on or after the later of--
    (A) January 1, 1989; or
    (B) The date on which the last of such collective bargaining 
agreements terminates (determined without regard to any extension of any 
such agreement occurring on or after March 1, 1986). However, 
notwithstanding the preceding sentence, sections 401(a)(5) and 401(l) 
apply to plans described in this paragraph (a)(2) no later than the 
first plan year beginning after January 1, 1991.
    (ii) For purposes of paragraph (a)(2)(i)(B) of this section, a 
change made after October 22, 1986, in the terms or conditions of a 
collectively bargained plan, pursuant to a collective bargaining 
agreement ratified before March 1, 1986, is not treated as a change in 
the terms and conditions of the plan.
    (iii) In the case of a collectively bargained plan described in 
paragraph (a)(2)(i) of this section, if the date in paragraph 
(a)(2)(i)(B) of this section precedes November 15, 1988, then the date 
in this paragraph (a)(2) is replaced with the date on which the last of 
any collective bargaining agreements in effect on November 15, 1988, 
terminates, provided that the plan complies during this period with a 
reasonable good faith interpretation of section 401(l).
    (iv) Whether a plan is maintained pursuant to a collective 
bargaining agreement is determined under the principles applied under 
section 1017(c) of the Employee Retirement Income Security Act of 1974. 
See H.R. Rep. No. 1280, 93d Cong., 2d Sess. 266 (1974). In addition, a 
plan is not treated as maintained under a collective bargaining 
agreement unless the employee representatives satisfy section 
7701(a)(46) of the Internal Revenue Code after March 31, 1984. See Sec. 
301.7701-17T of this chapter for other requirements for a plan to be 
considered to be collectively bargained.
    (b) Regulatory effective date--(1) In general. Except as otherwise 
provided in paragraph (b)(2) of this section, Sec. Sec. 1.401(l)-1 
through 1.401(l)-6 apply to plan years beginning on or after January 1, 
1994.
    (2) Plans of tax-exempt organizations. In the case of plans 
maintained by an organization exempt from income taxation under section 
501(a), including plans subject to section 403(b)(12)(A)(i) (nonelective 
plans), Sec. Sec. 1.401(l)-1 through 1.401(l)-6 apply to plan years 
beginning on or after January 1, 1996.
    (3) Defined contribution plans. A defined contribution plan 
satisfies section 401(l) with respect to a plan year beginning on or 
after the effective date of these regulations, as set forth in 
paragraphs (b)(1) and (b)(2) of this section, if it satisfies the 
applicable requirements of Sec. Sec. 1.401(l)-1 through 1.401(l)-5 for 
the plan year.
    (4) Defined benefit plans. A defined benefit excess plan or offset 
plan satisfies section 401(l) with respect to all plan years, and 
benefits attributable to all plan years, beginning on or after the 
effective date of these regulations, as set forth in paragraphs (b)(1) 
and (b)(2) of this section, by satisfying the applicable requirements of 
Sec. Sec. 1.401(l)-1 through 1.401(l)-5 and the requirements of Sec. 
1.401(a)(4)-13(c) (and Sec. 1.401(a)(4)-13(d), if applicable), using a 
fresh-start date that is on or after December 31, 1988, and before the 
effective date of

[[Page 354]]

these regulations. A defined benefit excess plan or offset plan that 
does not satisfy section 401(l) with respect to all plan years beginning 
on or after the effective date of these regulations may, under the rules 
of Sec. 1.401(a)(4)-13(c) (and Sec. 1.401(a)(4)-13(d), if applicable), 
satisfy section 401(l) for plan years beginning after a fresh-start date 
by satisfying the applicable requirements of Sec. Sec. 1.401(l)-1 
through 1.401(l)-5 after the fresh-start date.
    (c) Compliance during transition period. For plan years beginning on 
or after January 1, 1989, and before the effective date of these 
regulations, as set forth in paragraph (b) of this section, a plan must 
be operated in accordance with a reasonable, good faith interpretation 
of section 401(l). Whether a plan is operated in accordance with a 
reasonable, good faith interpretation of section 401(l) will generally 
be determined based on all of the relevant facts and circumstances, 
including the extent to which an employer has resolved unclear issues in 
its favor. A plan will be deemed to be operated in accordance with a 
reasonable, good faith interpretation of section 401(l) if it is 
operated in accordance with the terms of Sec. Sec. 1.401(l)-1 through 
1.401(l)-5.

[T.D. 8486, 58 FR 46835, Sept. 3, 1993]