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TITLE 26-INTERNAL REVENUE CODE (ii) In the case of any plan maintained exclusively for employees of an education- al institution (as defined in section 170(b)(1)(A)(ii) by an employer which is exempt from tax under section 501(a) which provides that each participant having at least 1 year of service 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 (1) of subparagraph (A) shall be applied by sub- stituting "30" for "25". This clause shall not apply to any plan to which clause (i) applies. (2) Maximum age conditions A trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part excludes from participation (on the basis of age) employees who have attained a specified age, unless- (A) the plan is a- (i) defined benefit plan, or (ii) target benefit plan (as defined under regulations prescribed by the Secretary), and (B) such employees begin employment with the employer after they have attained a specified age which is not more than 5 years before the normal retirement age under the plan. (3) Definition of year of service (A) General rule For purposes of this subsection, the term "year of service" means a 12-month period during which the employee has not less than 1,000 hours of service. For purposes of this paragraph, computation of any 12- month period shall be made with reference to the date on which the employee's em- ployment commenced, except that, under regulations prescribed by the Secretary of Labor, such computation may be made by reference to the first day of a plan year in the case of an employee who does not com- plete 1,000 hours of service during the 12- month period beginning on the date his em- ployment commenced. (B) Seasonal industries In the case of any seasonal Industry where the customary period of employment is less than 1,000 hours during a calendar year, the term "year of service" shall be such period as may be determined under regulations prescribed by the Secretary of Labor. (C) Hours of service For purposes of this subsection, the term "hour of service" means a time of service determined under regulations prescribed by the Secretary of Labor. (D) Maritime industries For purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as 1,000 hours of service. The Secretary of Labor may pre- scribe regulations to carry out this subpara- graph. (4) Time of participation A plan shall be treated as not meeting the requirements of paragraph (1) unless it pro- vides that any employee who has satisfied the minimum age and service requirements speci- fied in such paragraph, and who is otherwise entitled to participate in the plan, commences participation in the plan no later than the earlier of-- (A) the first day of the first plan year be- ginning after the date on which such em- ployee satisfied such requirements, or (B) the date 6 months after the date on which he satisfied such requirements, unless such employee was separated from the service before the date referred to in subpara- graph (A) or (B), whichever is applicable. (5) Breaks in service (A) General rule Except as otherwise provided in subpara- graphs (B), (C), and (D), all years of service with the employer or employers maintain- ing the plan shall be taken into account in computing the period of service for pur- poses of paragraph (1). (B) Employees under 3-year 100 percent %esting In the case of any employee who has any 1-year break in service (as defined in section 411(a)(6)(A)) under a plan to which the ser- vice requirements of clause (i) of paragraph (1)(B) apply, if such employee has not satis- fied such requirements, service before such break shall not be required to be taken into account. (C) 1-year break in service In computing an employee's period of ser- vice for purposes of paragraph (1) in the case of any participant who has any 1-year break in service (as defined in section 411(a)(6)(A)), service before such break shall not be required to be taken into ac- count under the plan until he has complet- ed a year of service (as defined in paragraph (3)) after his return. (D) Nonvested participants In the case of a participant who does not have any nonforfeitable right to an accrued benefit derived from employer contribu- tions, years of service with the employer or employers maintaining the plan before a break in service shall not be required to be taken into account in computing the period of service for purposes of paragraph (1) if the number of consecutive 1-year breaks in service equals or exceeds the aggregate number of such years of service before such break. Such aggregate number of years of service before such break shall be deemed not to include any years of service not re- quired to be taken into account under this subparagraph by reason of any prior break In serice. (b) Eligibility (1) In general A trust shall not constitute a qualified trust under section 401(a) unless the trust, or two or more trusts, or the trust or trusts and an- nuity plan or plans are designated by the em- ployer as constituting parts of a plan intend- Page 322 §410