[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: 26CFR1.401-0] [Page 5-10] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) PART 1_INCOME TAXES--Table of Contents Sec. 1.401-0 Scope and definitions. Normal Taxes and Surtaxes (Continued) DEFERRED COMPENSATION, ETC. Pension, Profit-Sharing, Stock Bonus Plans, etc. Sec. 1.401-0 Scope and definitions. 1.401-1 Qualified pension, profit-sharing, and stock bonus plans. 1.401-2 Impossibility of diversion under the trust instrument. 1.401-3 Requirements as to coverage. 1.401-4 Discrimination as to contributions or benefits (before 1994). 1.401-5 Period for which requirements of section 401(a) (3), (4), (5), and (6) are applicable with respect to plans put into effect before September 2, 1974. 1.401-6 Termination of a qualified plan. 1.401-7 Forfeitures under a qualified pension plan. 1.401-8 Custodial accounts prior to January 1, 1974. 1.401-9 Face-amount certificates--nontransferable annuity contracts. 1.401-10 Definitions relating to plans covering self-employed individuals. 1.401-11 General rules relating to plans covering self-employed individuals. 1.401-12 Requirements for qualification of trusts and plans benefiting owner-employees. 1.401-13 Excess contributions on behalf of owner-employees. 1.401-14 Inclusion of medical benefits for retired employees in qualified pension or annuity plans. 1.401(a)-1 Post-ERISA qualified plans and qualified trusts; in general. 1.401(a)-2 Impossibility of diversion under qualified plan or trust. 1.401(a)-4 Optional forms of benefit (before 1994). 1.401(a)-11 Qualified joint and survivor annuities. 1.401(a)-12 Mergers and consolidations of plans and transfers of plan assets. 1.401(a)-13 Assignment or alienation of benefits. 1.401(a)-14 Commencement of benefits under qualified trusts. 1.401(a)-15 Requirement that plan benefits are not decreased on account of certain Social Security increases. 1.401(a)-16 Limitations on benefits and contributions under qualified plans. 1.401(a)-19 Nonforfeitability in case of certain withdrawals. 1.401(a)-20 Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity. 1.401(a)-30 Limit on elective deferrals. 1.401(a)-50 Puerto Rican trusts; election to be treated as a domestic trust. 1.401(a)(2)-1 Refund of mistaken employer contributions and withdrawal liability payments to multiemployer plans. 1.401(a)(4)-0 Table of contents. 1.401(a)(4)-1 Nondiscrimination requirements of section 401(a)(4). 1.401(a)(4)-2 Nondiscrimination in amount of employer contributions under a defined contribution plan. 1.401(a)(4)-3 Nondiscrimination in amount of employer-provided benefits under a defined benefit plan. 1.401(a)(4)-4 Nondiscriminatory availability of benefits, rights, and features. 1.401(a)(4)-5 Plan amendments and plan terminations. 1.401(a)(4)-6 Contributory defined benefit plans. 1.401(a)(4)-7 Imputation of permitted disparity. 1.401(a)(4)-8 Cross-testing. 1.401(a)(4)-9 Plan aggregation and restructuring. 1.401(a)(4)-10 Testing of former employees. 1.401(a)(4)-11 Additional rules. 1.401(a)(4)-12 Definitions. 1.401(a)(4)-13 Effective dates and fresh-start rules. 1.401(a)(5)-1 Special rules relating to nondiscrimination requirements. 1.401(a)(9)-0 Required minimum distributions; table of contents. 1.401(a)(9)-1 Minimum distribution requirement in general. 1.401(a)(9)-2 Distributions commencing during an employee's lifetime. 1.401(a)(9)-3 Death before required beginning date. 1.401(a)(9)-4 Determination of the designated beneficiary. 1.401(a)(9)-5 Required minimum distributions from defined contribution plans. 1.401(a)(9)-6T Required minimum distributions for defined benefit plans and annuity contracts (temporary). 1.401(a)(9)-7 Rollovers and transfers. 1.401(a)(9)-8 Special rules. 1.401(a)(9)-9 Life expectancy and distribution period tables. 1.401(a)(17)-1 Limitation on annual compensation. 1.401(a)(26)-0 Table of contents. 1.401(a)(26)-1 Minimum participation requirements. 1.401(a)(26)-2 Minimum participation rule. 1.401(a)(26)-3 Rules applicable to a defined benefit plan's prior benefit structure. [[Page 6]] 1.401(a)(26)-4 Testing former employees. 1.401(a)(26)-5 Employees who benefit under a plan. 1.401(a)(26)-6 Excludable employees. 1.401(a)(26)-7 Testing methods. 1.401(a)(26)-8 Definitions. 1.401(a)(26)-9 Effective dates and transition rules. 1.401(a)(31)-1 Requirement to offer direct rollover of eligible rollover distributions; questions and answers. 1.401(b)-1 Certain retroactive changes in plan. 1.401(e)-1 Definitions relating to plans covering self-employed individuals. 1.401(e)-2 General rules relating to plans covering self-employed individuals. 1.401(e)-3 Requirements for qualification of trusts and plans benefiting owner-employees. 1.401(e)-4 Contributions for premiums on annuity, etc., contracts and transitional rule for certain excess contributions. 1.401(e)-5 Limitation of contribution and benefit bases to first $100,000 of annual compensation in case of plans covering self-employed individuals. 1.401(e)-6 Special rules for shareholder-employers. 1.401(f)-1 Certain custodial accounts and annuity contracts. 1.401(k)-0 Certain cash or deferred arrangements, table of contents. 1.401(k)-1 Certain cash or deferred arrangements. 1.401(l)-0 Table of contents. 1.401(l)-1 Permitted disparity in employer-provided contributions or benefits. 1.401(l)-2 Permitted disparity for defined contribution plans. 1.401(l)-3 Permitted disparity for defined benefit plans. 1.401(l)-4 Special rules for railroad plans. 1.401(l)-5 Overall permitted disparity limits. 1.401(l)-6 Effective dates and transition rules. 1.401(m)-0 Employee and matching contributions, table of contents. 1.401(m)-1 Employee and matching contributions. 1.401(m)-2 Multiple use of alternative limitation. 1.402(a)-1 Taxability of beneficiary under a trust which meets the requirements of section 401(a). 1.402(a)(5)-1T Rollovers of partial distributions from qualified trusts and annuities. (Temporary) 1.402(b)-1 Treatment of beneficiary of a trust not exempt under section 501(a). 1.402(c)-1 Taxability of beneficiary of certain foreign situs trusts. 1.402(c)-2 Eligible rollover distributions; questions and answers. 1.402(d)-1 Effect of section 402(d). 1.402(e)-1 Certain plan terminations. 1.402(f)-1 Required explanation of eligible rollover distributions; questions and answers. 1.402(g)-0 Limitation on exclusion for elective deferrals, table of contents. 1.402(g)-1 Limitation on exclusion for elective deferrals. 1.402(g)-2 Increased limit for catch-up contributions. 1.403(a)-1 Taxability of beneficiary under a qualified annuity plan. 1.403(a)-2 Capital gains treatment for certain distributions. 1.403(b)-1 Taxability of beneficiary under annuity purchased by a section 501(c)(3) organization or public school. 1.403(b)-2 Eligible rollover distributions; questions and answers. 1.403(b)-3 Required minimum distributions from annuity contracts purchased, or custodial accounts or retirement income accounts established, by a section 501(c)(3) organization or a public school. 1.403(c)-1 Taxability of beneficiary under a nonqualified annuity. 1.403(d)-1 Taxability of employee when rights under contracts purchased by exempt organizations change from forfeitable to nonforfeitable. 1.404(a)-1 Contributions of an employer to an employees' trust or annuity plan and compensation under a deferred payment plan; general rule. 1.404(a)-1T Questions and answers relating to deductibility of deferred compensation and deferred benefits for employees. (Temporary) 1.404(a)-2 Information to be furnished by employer claiming deductions; taxable years ending before December 31, 1971. 1.404(a)-2A Information to be furnished by employer; taxable years ending on or after December 31, 1971, and before December 31, 1975. 1.404(a)-3 Contributions of an employer to or under an employees' pension trust or annuity plan that meets the requirements of section 401(a); application of section 404(a)(1). 1.404(a)-4 Pension and annuity plans; limitations under section 404(a)(1)(A). 1.404(a)-5 Pension and annuity plans; limitations under section 404(a)(1)(B). 1.404(a)-6 Pension and annuity plans; limitations under section 404(a)(1)(C). 1.404(a)-7 Pension and annuity plans; contributions in excess of limitations under section 404(a)(1); application of section 404(a)(1)(D). 1.404(a)-8 Contributions of an employer under an employees' annuity plan which meets the requirements of section 401(a); application of section 404(a)(2). 1.404(a)(8)-1T Deductions for plan contributions on behalf of self- employed individuals. (Temporary) [[Page 7]] 1.404(a)-9 Contributions of an employer to an employees' profit-sharing or stock bonus trust that meets the requirements of section 401(a); application of section 404(a)(3)(A). 1.404(a)-10 Profit-sharing plan of an affiliated group; application of section 404(a)(3)(B). 1.404(a)-11 Trusts created or organized outside the United States; application of section 404(a)(4). 1.404(a)-12 Contributions of an employer under a plan that does not meet the requirements of section 401(a); application of section 404(a)(5). 1.404(a)-13 Contributions of an employer where deductions are allowable under section 404(a) (1) or (2) and also under section 404(a)(3); application of section 404(a)(7). 1.404(a)-14 Special rules in connection with the Employee Retirement Income Security Act of 1974. 1.404(b)-1 Method of contribution, etc., having the effect of a plan; effect of section 404(b). 1.404(b)-1T Method or arrangement of contributions, etc., deferring the receipt of compensation or providing for deferred benefits. (Temporary) 1.404(c)-1 Certain negotiated plans; effect of section 404(c). 1.404(d)-1T Questions and answers relating to deductibility of deferred compensation and deferred benefits for independent contractors. (Temporary) 1.404(e)-1 Contributions on behalf of a self-employed individual to or under a pension, annuity, or profit-sharing plan meeting the requirements of section 401; application of section 404(a) (8), (9), and (10) and section 404 (e) and (f). 1.404(e)-1A Contributions on behalf of a self-employed individual to or under a qualified pension, annuity, or profit-sharing plan. 1.404(g)-1 Deduction of employer liability payments. 1.404(k)-1T Questions and answers relating to the deductibility of certain dividend distributions. (Temporary) 1.405-1 Qualified bond purchase plans. 1.405-2 Deduction of contributions to qualified bond purchase plans. 1.405-3 Taxation of retirement bonds. 1.406-1 Treatment of certain employees of foreign subsidiaries as employees of the domestic corporation. 1.407-1 Treatment of certain employees of domestic subsidiaries engaged in business outside the United States as employees of the domestic parent corporation. 1.408-1 General rules. 1.408-2 Individual retirement accounts. 1.408-3 Individual retirement annuities. 1.408-4 Treatment of distributions from individual retirement arrangements. 1.408-5 Annual reports by trustees or issuers. 1.408-6 Disclosure statements for individual retirement arrangements. 1.408-7 Reports on distributions from individual retirement plans. 1.408-8 Distribution requirements for individual retirement plans. 1.408-11 Net income calculation for returned or recharacterized IRA. 1.408A-0 Roth IRAs; table of contents. 1.408A-1 Roth IRAs in general. 1.408A-2 Establishing Roth IRAs. 1.408A-3 Contributions to Roth IRAs. 1.408A-4 Converting amounts to Roth IRAs. 1.408A-5 Recharacterized contributions. 1.408A-6 Distributions. 1.408A-7 Reporting. 1.408A-8 Definitions. 1.408A-9 Effective date. 1.409-1 Retirement bonds. 1.409(p)-1T Prohibited allocation of securities in an S corporation (temporary). 1.410(a)-1 Minimum participation standards; general rules. 1.410(a)-2 Effective dates. 1.410(a)-3 Minimum age and service conditions. 1.410(a)-3T Minimum age and service conditions (temporary). 1.410(a)-4 Maximum age conditions and time of participation. 1.410(a)-5 Year of service; break in service. 1.410(a)-6 Amendment of break in service rules; transition period. 1.410(a)-7 Elapsed time. 1.410(a)-8 Five consecutive 1-year breaks in service, transitional rules under the Retirement Equity Act of 1984. 1.410(a)-8T Year of service; break in service (temporary). 1.410(a)-9 Maternity and paternity absence. 1.410(a)-9T Elapsed time (temporary). 1.410(b)-0 Table of contents. 1.410(b)-1 Minimum coverage requirements (before 1994). 1.410(b)-2 Minimum coverage requirements (after 1993). 1.410(b)-3 Employees and former employees who benefit under a plan. 1.410(b)-4 Nondiscriminatory classification test. 1.410(b)-5 Average benefit percentage test. 1.410(b)-6 Excludable employees. 1.410(b)-7 Definition of plan and rules governing plan disaggregation and aggregation. 1.410(b)-8 Additional rules. 1.410(b)-9 Definitions. 1.410(b)-10 Effective dates and transition rules. 1.410(d)-1 Election by church to have participation, vesting, funding, etc. provisions apply. [[Page 8]] 1.411(a)-1 Minimum vesting standards; general rules. 1.411(a)-2 Effective dates. 1.411(a)-3 Vesting in employer-derived benefits. 1.411(a)-3T Vesting in employer-derived benefits (temporary). 1.411(a)-4 Forfeitures, suspensions, etc. 1.411(a)-4T Forfeitures, suspensions, etc. (temporary). 1.411(a)-5 Service included in determination of nonforfeitable percentage. 1.411(a)-6 Year of service; hours of service; breaks in service. 1.411(a)-7 Definitions and special rules. 1.411(a)-8 Changes in vesting schedule. 1.411(a)-8T Changes in vesting schedule (temporary). 1.411(a)-9 Amendment of break in service rules; transitional period. 1.411(a)-11 Restriction and valuation of distributions. 1.411(b)-1 Accrued benefit requirements. 1.411(c)-1 Allocation of accrued benefits between employer and employee contributions. 1.411(d)-1 Coordination of vesting and discrimination requirements. [Reserved] 1.411(d)-2 Termination or partial termination; discontinuance of contributions. 1.411(d)-3 Other special rules. 1.411(d)-4 Section 411(d)(6) protected benefits. 1.411(d)-5 Class year plans; plan years beginning after October 22, 1986. 1.412(b)-2 Amortization of experience gains in connection with certain group deferred annuity contracts. 1.412(b)-5 Election of the alternative amortization method of funding. 1.412(c)(1)-1 Determinations to be made under funding method--terms defined. 1.412(c)(1)-2 Shortfall method. 1.412(c)(1)-3 Applying the minimum funding requirements to restored plans. 1.412(c)(1)-3T Applying the minimum funding requirements to restored plans (temporary). 1.412(c)(2)-1 Valuation of plan assets; reasonable actuarial valuation methods. 1.412(c)(3)-1 Reasonable funding methods. 1.412(c)(3)-2 Effective dates and transitional rules relating to reasonable funding methods. 1.412(i)-1 Certain insurance contract plans. 1.413-1 Special rules for collectively bargained plans. 1.413-2 Special rules for plans maintained by more than one employer. 1.414(b)-1 Controlled group of corporations. 1.414(c)-1 Commonly controlled trades or businesses. 1.414(c)-2 Two or more trades or businesses under common control. 1.414(c)-3 Exclusion of certain interests or stock in determining control. 1.414(c)-4 Rules for determining ownership. 1.414(c)-5 Effective date. 1.414(e)-1 Definition of church plan. 1.414(f)-1 Definition of multiemployer plan. 1.414(g)-1 Definition of plan administrator. 1.414(l)-1 Mergers and consolidations of plans or transfers of plan assets. 1.414(q)-1 Highly compensated employee. 1.414(q)-1T Highly compensated employee (temporary). 1.414(r)-0 Table of contents. 1.414(r)-1 Requirements applicable to qualified separate lines of business. 1.414(r)-2 Line of business. 1.414(r)-3 Separate line of business. 1.414(r)-4 Qualified separate line of business--fifty-employee and notice requirements. 1.414(r)-5 Qualified separate line of business--administrative scrutiny requirement--safe harbors. 1.414(r)-6 Qualified separate line of business--administrative scrutiny requirement--individual determinations. 1.414(r)-7 Determination of the employees of an employer's qualified separate lines of business. 1.414(r)-8 Separate application of section 410(b). 1.414(r)-9 Separate application of section 401(a)(26). 1.414(r)-10 Separate application of section 129(d)(8). [Reserved] 1.414(r)-11 Definitions and special rules. 1.414(s)-1 Definition of compensation. 1.414(v)-1 Catch-up contributions. 1.415-1 General rules with respect to limitations on benefits and contributions under qualified plans. 1.415-2 Definitions and special rules. 1.415-3 Limitations for defined benefit plans. 1.415-4 Transitional rule for defined benefit plans. 1.415-5 Cost of living adjustments for defined benefit plans. 1.415-6 Limitation for defined contribution plans. 1.415-7 Limitation in case of defined benefit and defined contribution plan for same employee. 1.415-8 Combining and aggregating plans. 1.415-9 Disqualification of plans and trusts. 1.415-10 Special aggregation rules. 1.416-1 Questions and answers on top-heavy plans. 1.417(a)(3)-1 Required explanation of qualified joint and survivor annuity and qualified preretirement survivor annuity. 1.417(e)-1 Restrictions and valuations of distributions from plans subject to sections 401(a)(11) and 417. 1.417(e)-1T Restrictions and valuations of distributions from plans subject to sections 401(a)(11) and 417. (Temporary) 1.419-1T Treatment of welfare benefit funds. (Temporary) [[Page 9]] 1.419A-1T Qualified asset account limitation of additions to account. (Temporary) 1.419A-2T Qualified asset account limitation for collectively bargained funds. (Temporary) 1.419A(f)(6)-1 Exception for 10 or more employer plan. 1.420-1 Significant reduction in retiree health coverage during the cost maintenance period. Certain Stock Options 1.421-1 Effective dates and meaning and use of certain terms. 1.421-2 Restricted stock option. 1.421-3 Exercise of restricted stock option. 1.421-4 Modification, extension, or renewal. 1.421-5 Operation of section 421. 1.421-6 Options to which section 421 does not apply. 1.421-7 Meaning and use of certain terms. 1.421-8 General rules. 1.422-4 Qualified stock options (prior law). 1.422-5 Stockholder approval of incentive stock option plans. 1.423-1 Applicability of section 421(a). 1.423-2 Employee stock purchase plan defined. 1.425-1 Definitions and special rules applicable to statutory options. Authority: 26 U.S.C. 7805. Sec. 1.401-12 also issued under 26 U.S.C. 401(d)(1). Sec. 1.401(a)(2)-1 also issued under Multiemployer Pension Plan Amendments Act, Public Law 96-364, 410, (94 Stat. 1208, 1308)(1980). Sec. 1.401(a)(5)-1 also issued under 26 U.S.C. 401(a)(5). Sec. 1.401(a)(9)-1 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-2 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-3 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-4 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-5 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-6T is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-7 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-8 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(9)-9 is also issued under 26 U.S.C. 401(a)(9). Sec. 1.401(a)(17)-1 also issued under 26 U.S.C. 401(a)(17). Sec. Sec. 1.401(a)(26)-1 through (a)(26)-9 also issued under 26 U.S.C. 401(a)(26). Sec. 1.401(b)-1 also issued under 26 U.S.C. 401(b). Sec. 1.401(l)-0 through 1.401(l)-6 also issued under 26 U.S.C. 401(l). Sec. 1.403(b)-3 is also issued under 26 U.S.C. 403(b)(10). Sec. 1.408-4 also issued under 26 U.S.C. 408. Sec. 1.408-8 is also issued under 26 U.S.C. 408(a)(6) and (b)(3). Sec. 1.408-11 also issued under 26 U.S.C. 408. Sec. 1.408A-1 also issued under 26 U.S.C. 408A. Sec. 1.408A-2 also issued under 26 U.S.C. 408A. Sec. 1.408A-3 also issued under 26 U.S.C. 408A. Sec. 1.408A-4 also issued under 26 U.S.C. 408A. Sec. 1.408A-5 also issued under 26 U.S.C. 408A. Sec. 1.408A-6 also issued under 26 U.S.C. 408A. Sec. 1.408A-7 also issued under 26 U.S.C. 408A. Sec. 1.408A-8 also issued under 26 U.S.C. 408A. Sec. 1.408A-9 also issued under 26 U.S.C. 408A. Sec. Sec. 1.410(b)-2 through 1.410(b)-10 also issued under 26 U.S.C. 410(b)(6). Sec. 1.411(a)-7 also issued under 26 U.S.C. 411(a)(7)(B)(i). Sec. 1.411(d)-4 also issued under 26 U.S.C. 411(d)(6). Sec. 1.411(d)-6 is issued under Reorganization Plan No. 4 of 1978, 29 U.S.C. 1001nt. Sec. Sec. 1.414(c)-1 through 1.414(c)-5 also issued under 26 U.S.C. 414(c). Sec. 1.414(q)-1T is also issued under 26 U.S.C. 414(q). Sec. Sec. 1.414(r)-0 through 1.414(r)-7 also issued under 26 U.S.C. 414(r). Sec. 1.414(r)-8 also issued under 26 U.S.C. 410(b) and 414(r). Sec. 1.414(r)-9 also issued under 26 U.S.C. 401(a)(26) and 414(r). Sec. 1.414(r)-10 also issued under 26 U.S.C. 129 and 414(r). Sec. 1.414(r)-1 also issued under 26 U.S.C. 414(r). Sec. 1.414(s)-1 also issued under 26 U.S.C. 414(s). Sec. 1.417(e)-1 also issued under 26 U.S.C. 417(e)(3)(A)(ii)(II). Sec. 1.417(e)-1T also issued under 26 U.S.C. 417(e)(3)(A)(ii)(II). Section 1.419A(f)(6)-1 is also issued under 26 U.S.C. 419A(i). Sec. 1.420-1 also issued under 26 U.S.C. 420(c)(3)(E). DEFERRED COMPENSATION, ETC. Pension, Profit-Sharing, Stock Bonus Plans, etc. (a) In general. Sections 1.401 through 1.401-14 (inclusive) reflect the provisions of section 401 prior to amendment by the Employee Retirement Income Security Act of 1974. The sections following Sec. 1.401-14 and preceding Sec. 1.402(a)-1 (hereafter referred to in this section as the ``Post-ERISA Regulations'') reflect the provisions of section 401 after amendment by such Act. (b) Definitions. For purposes of the Post-ERISA regulations-- [[Page 10]] (1) Qualified plan. The term ``qualified plan'' means a plan which satisfies the requirements of section 401(a). (2) Qualified trust. The term ``qualified trust'' means a trust which satisfies the requirements of section 401(a). (Sec. 411 Internal Revenue Code of 1954 (88 Stat. 901; 26 U.S.C. 411)) [T.D. 7501, 42 FR 42320, Aug. 23, 1977]