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TITLE 26-INTERNAL REVENUE CODE (C) Rollover into an individual retirement ac- count or annuity or a qualified plan If a retirement bond is redeemed at any time before the close of the taxable year in which the registered owner attains age 701/2, and the registered owner transfers the entire amount of the proceeds from the re- demption of the bond to an individual re- tirement account described in section 408(a) or to an individual retirement annuity de- scribed in section 408(b) (other than an en- dowment contract) which is maintained for the benefit of the registered owner of the bond, or to an employees' trust described in section 401(a) which is exempt from tax under section 501(a), or an annuity plan de- scribed in section 403(a) for the benefit of the registered owner, on or before the 60th day after the day on which he received the proceeds of such redemption, then the pro- ceeds shall be excluded from gross income and the transfer shall be treated as a rol- lover contribution described in section 408(d)(3). This subparagraph does not apply in the case of a transfer to such an employ- ees' trust or such an annuity plan unless no part of the value of such proceeds is attrib- utable to any source other than a rollover contribution from such an employees' trust or annuity plan (other than an annuity plan or a trust forming part of a plan under which the individual was an employee within the meaning of section 401(c)(1) at the time contributions were made on his behalf under the plan). (c) Additional tax on certain redemptions before age 59V (1) Early redemption of bond If a retirement bond is redeemed by the registered owner before he attains age 591/2, his tax under this chapter for the taxable year in which the bond is redeemed shall be increased by an amount equal to 10 percent of the amount of the amount of the proceeds of the redemption includible in his gross income for the taxable year. (2) Disability cases Paragraph (1) does not apply for any tax- able year during which the retirement bond is redeemed if, for that taxable year, the regis- tered owner is disabled within the meaning of section 72(m)(7). (3) Redemption within one year Paragraph (1) does not apply if the regis- tered owner tenders the bond for redemption within 12 months after the date of its issu- ance. (Added Pub. L. 93-406, title II, § 2002(c), Sept. 2, 1974, 88 Stat. 964, and amended Pub. L. 94-455, title XV, § 1501(b)(6), title XIX, §§ 1901(a)(60), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1736, 1774, 1834.) REFERENCES IN TEXT The Second Liberty Bond Act, as amended, referred to in subsec. (a), is act Sept. 24, 1917, ch. 56, 40 Stat. 288, as amended. For classification of this Act to the Code, see References in Text note set out under sec- tion 774 of Title 31, Money and Finance, and Tables volume. AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, §§ 1501(b)(6), 1906(b)(13)(A), struck out "or his delegate" following "Secretary" in the provisions preceding par. (1) and substituted "for any taxable year" for "in any taxable year" in par. (4), respectively. Subsec. (b)(3)(C). Pub. L. 94-455, § 1901(a)(60), sub. stituted "section 408(d)(3)" for "section 403(d)(3)". EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (a) by section 1501(b)(6) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1501(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 220 of this title. Amendment of subsec. (b) by section 1901(a)(60) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFFECTIVE DATE Section applicable to taxable years beginning after Dec. 31, 1974, see section 2002()(1) of Pub. L. 93-406, set out as an Effective Date note under section 219 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 37, 219, 220, 402, 403, 408, 415, 2039. 2517, 4973. 4975 of this title; title 29 sections 1051, 1081. 1108. SUBPART B--SPECIAL RULES Sec. 410. Minimum participation standards. 411. Minimum vesting standards. 412. Minimum funding standards. 413. Collectively bargained plans. I 414. Definitions and special rules. 415. Limitations on benefits and contribution under qualified plans. AMENDMENTS 1974-Pub. L. 93-406, title II, § 1011, Sept. 2, 1974, 88 Stat. 898, added subpart heading and analysis of sec- tions. § 410. Minimum participation standards (a) Participation (1) Minimum age and service conditions (A) General rule A trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part requires, as a condition of participation in the plan, that an employee complete a period of service with the em- ployer or employers maintaining the plan extending beyond the later of the following dates- (I) the date on which the employee at- tains the age of 25; or (ii) the date on which he completes 1 year of service. (B) Special rules for certain plans (I) In the case of any plan which pro- vides that after not more than 3 years of service each participant has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable (within the meaning of section 411) at the time such benefit accrues, clause (ii) of subpara- graph (A) shall be applied by substituting "3 years of service" for "1 year of service". ISo in original. Does not conform to section catch- line. Page 321 § 410