Minimum vesting standards

Each pension plan shall provide that an employee’s right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age and in addition shall satisfy the requirements of paragraphs (1) and (2) of this subsection. Years of service: The nonforfeitable percentage is: 3 20 4 40 5 60 6 80 7 or more 100. Years of service: The nonforfeitable percentage is: 2 20 3 40 4 60 5 80 6 or more 100. A right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that the payment of benefits is suspended for such period as the employee is employed, subsequent to the commencement of payment of such benefits— For nonforfeitability where the employee has a nonforfeitable right to at least 50 percent of his accrued benefit, see section 1056(c) of this title. A participant’s right to an accrued benefit derived from employer contributions under a multiemployer plan shall not be treated as forfeitable solely because— In computing the period of service under the plan for purposes of determining the nonforfeitable percentage under subsection (a)(2), all of an employee’s years of service with the employer or employers maintaining the plan shall be taken into account, except that the following may be disregarded: in the case of a multiemployer plan, years of service— with an employer after— For purposes of paragraph (1), in the case of a nonvested participant, years of service with the employer or employers maintaining the plan before any period of consecutive 1-year breaks in service shall not be required to be taken into account if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of— In the case of each individual who is absent from work for any period— The hours described in this clause are— The hours described in clause (ii) shall be treated as hours of service as provided in this subparagraph— A plan may provide that no credit will be given pursuant to this subparagraph unless the individual furnishes to the plan administrator such timely information as the plan may reasonably require to establish— For purposes of determining whether an employee who became eligible to participate in a qualified cash or deferred arrangement or a salary reduction agreement under a plan solely by reason of section 1052(c)(1)(B) of this title has a nonforfeitable right to employer contributions— Cross references A pension plan may allow for nonforfeitable benefits after a lesser period and in greater amounts than are required by this part. An applicable defined benefit plan shall not be treated as failing to meet— In the case of an applicable defined benefit plan, such plan shall be treated as meeting the requirements of subsection (a)(2) only if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions. For purposes of this subsection— The term “applicable defined benefit plan” means a defined benefit plan under which the accrued benefit (or any portion thereof) is calculated as the balance of a hypothetical account maintained for the participant or as an accumulated percentage of the participant’s final average compensation. The Secretary of the Treasury shall issue regulations which include in the definition of an applicable defined benefit plan any defined benefit plan (or any portion of such a plan) which has an effect similar to an applicable defined benefit plan.