§ 1060. Multiple employer plans and other special rules
(a)
Plan maintained by more than one employer
Notwithstanding any other provision of this part or part 3, the following provisions of this subsection shall apply to a plan maintained by more than one employer:
(1)
Section
1052 of this title shall be applied as if all employees of each of the employers were employed by a single employer.
(2)
Sections
1053 and
1054 of this title shall be applied as if all such employers constituted a single employer, except that the application of any rules with respect to breaks in service shall be made under regulations prescribed by the Secretary.
(3)
The minimum funding standard provided by section
1082 of this title shall be determined as if all participants in the plan were employed by a single employer.
(b)
Maintenance of plan of predecessor employer
For purposes of this part and part 3—
(c)
Plan maintained by controlled group of corporations
For purposes of sections
1052,
1053, and
1054 of this title, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section
1563
(a) of title
26, determined without regard to section
1563
(a)(4) and (e)(3)(C) of title
26) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the minimum funding standard of section
1082 of this title shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary of the Treasury.
(d)
Plan of trades or businesses under common control
For purposes of sections
1052,
1053, and
1054 of this title, under regulations prescribed by the Secretary of the Treasury, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (c) of this section.
(e)
Special rules for eligible combined defined benefit plans and qualified cash or deferred arrangements
(1)
General rule
Except as provided in this subsection, this chapter shall be applied to any defined benefit plan or applicable individual account plan which are [1] part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.
(2)
Eligible combined plan
For purposes of this subsection—
(A)
In general
The term “eligible combined plan” means a plan—
(i)
which is maintained by an employer which, at the time the plan is established, is a small employer,
(ii)
which consists of a defined benefit plan and an applicable individual account plan each of which qualifies under section
401
(a) of title
26,
(iii)
the assets of which are held in a single trust forming part of the plan and are clearly identified and allocated to the defined benefit plan and the applicable individual account plan to the extent necessary for the separate application of this chapter under paragraph (1), and
(B)
Benefit requirements
(i)
In general
The benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant’s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.
(iii)
Special rule for applicable defined benefit plans
If the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section
1053
(f)(3)(B) of this title which meets the interest credit requirements of section
1054
(b)(5)(B)(i) of this title, the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each participant receives pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table:
If the participant’s age
The
as of the beginning
percentage
of the year is—
is—
30 or less
2
Over 30 but less than 40
4
40 or over but less than 50
6
50 or over
8.
(iv)
Years of service
For purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (1), (2), and (3) of section
1053
(b) of this title, except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies.
(C)
Contribution requirements
(i)
In general
The contribution requirements of this subparagraph with respect to any applicable individual account plan forming part of an eligible combined plan are met if—
(I)
the qualified cash or deferred arrangement included in such plan constitutes an automatic contribution arrangement, and
(II)
the employer is required to make matching contributions on behalf of each employee eligible to participate in the arrangement in an amount equal to 50 percent of the elective contributions of the employee to the extent such elective contributions do not exceed 4 percent of compensation.
Rules similar to the rules of clauses (ii) and (iii) of section
401
(k)(12)(B) of title
26 shall apply for purposes of this clause.
(ii)
Nonelective contributions
An applicable individual account plan shall not be treated as failing to meet the requirements of clause (i) because the employer makes nonelective contributions under the plan but such contributions shall not be taken into account in determining whether the requirements of clause (i)(II) are met.
(D)
Vesting requirements
The vesting requirements of this subparagraph are met if—
(i)
in the case of a defined benefit plan forming part of an eligible combined plan an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit under the plan derived from employer contributions, and
(ii)
in the case of an applicable individual account plan forming part of eligible combined plan—
(I)
an employee has a nonforfeitable right to any matching contribution made under the qualified cash or deferred arrangement included in such plan by an employer with respect to any elective contribution, including matching contributions in excess of the contributions required under subparagraph (C)(i)(II), and
(II)
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 under the arrangement from nonelective contributions of the employer.
For purposes of this subparagraph, the rules of section
1053 of this title shall apply to the extent not inconsistent with this subparagraph.
(E)
Uniform provision of contributions and benefits
In the case of a defined benefit plan or applicable individual account plan forming part of an eligible combined plan, the requirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants.
(F)
Requirements must be met without taking into account social security and similar contributions and benefits or other plans
(i)
In general
The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.
(3)
Automatic contribution arrangement
For purposes of this subsection—
(A)
In general
A qualified cash or deferred arrangement shall be treated as an automatic contribution arrangement if the arrangement—
(i)
provides that each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to 4 percent of the employee’s compensation unless the employee specifically elects not to have such contributions made or to have such contributions made at a different rate, and
(B)
Notice requirements
(i)
In general
The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.
(ii)
Reasonable period to make election
The requirements of this clause are met if each employee to whom subparagraph (A)(i) applies—
The requirements of this subparagraph shall not be treated as met unless the requirements of clauses (i) and (ii) of section
401
(k)(12)(D) of title
26 are met with respect to the notices described in clauses (ii) and (iii) of this subparagraph.
(4)
Coordination with other requirements
(B)
Reporting
An eligible combined plan shall be treated as a single plan for purposes of section
1023 of this title.
[1] So in original. Probably should be “is”.