[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: 26CFR1.411(a)-9]

[Page 605]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.411(a)-9  Amendment of break in service rules; transitional period.

    (a) In general. Under section 1017(f)(2) of the Employee Retirement 
Income Security Act of 1974, a plan is not a qualified plan (and a trust 
forming a part of such plan is not a qualified trust) if the rules of 
the plan relating to breaks in service are amended, and--
    (1) Such amendment is effective after January 1, 1974, and before 
the effective date of section 411, and
    (2) Under such amendment, the nonforfeitable percentage of any 
employee's right to his employer-derived accrued benefit is less than 
the lesser of the nonforfeitable percentage of such employee's right to 
such benefit--
    (i) Under the break in service rules provided by section 411(a)(6) 
and Sec. 1.411(a)-6(c), or
    (ii) The greatest such percentage under the plan as in effect on or 
after January 1, 1974 (provided the break in service rules of the plan 
were not in violation of any law or rule of law on January 1, 1974).
    (b) Break in service rules. For purposes of paragraph (a), the term 
``break in service rules'' means the rules provided by a plan relating 
to circumstances under which a period of an employee's service or plan 
participation is disregarded, for purposes of determining the extent to 
which his rights to his accrued benefit under the plan are 
unconditional, if under such rules such service is disregarded by reason 
of the employee's failure to complete a required period of service 
within a specified period of time. For this purpose, plan rules which 
result in the loss of prior vesting or benefit accruals of an employee, 
or which deny an employee eligibility to participate, by reason of 
separation or failure to complete a required period of service within a 
specified period of time (e.g., 300 hours in one year) will be 
considered break in service rules. For purposes of section 411(b)(3), 
service described under the plan's break in service rules, as in effect 
before the effective date of section 411, need not be counted.

(Sec. 411 (88 Stat. 901; 26 U.S.C. 411))

[T.D. 7501, 42 FR 42333, Aug. 23, 1977]