[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: 26CFR1.410(a)-8]

[Page 548-549]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.410(a)-8  Five consecutive 1-year breaks in service, transitional 
rules under the Retirement Equity Act of 1984.

    Sections 410(a)(5)(D) and 411(a)(6)(D), as amended by the Retirement 
Equity Act of 1984 (REA 1984), permit a plan to disregard years of 
service that were disregarded under the plan provisions satisfying those 
sections (as in effect on August 22, 1984) as of the day before

[[Page 549]]

the REA amendments apply to the plan. Under section 302(a) of REA 1984, 
the new break-in-service rules generally apply to plan years beginning 
after December 31, 1984. Thus, for example, assume a plan has a calendar 
plan year and disregarded years of service as permitted by sections 
410(a)(5)(D) and 411(a)(6)(D) as in effect on August 22, 1984. An 
employee completed two years of service in 1981 and 1982, and then 
incurred two consecutive 1-year breaks in service in 1983 and 1984. The 
plans may disregard the prior years of service even though the employee 
did not incur five consecutive 1-year breaks in service. On the other 
hand, assume the employee completed three consecutive years of service 
beginning in 1980, and incurred two 1-year breaks in service in 1983 and 
1984. Because, as of December 31, 1984, the years of service credited 
before 1983 could not be disregarded, whether the plan may subsequently 
disregard those years of service would be governed by the rules enacted 
by REA 1984.

[T.D. 8219, 53 FR 31851, Aug. 22, 1988; 53 FR 48534, Dec. 1, 1988]