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TITLE 26-INTERNAL REVENUE CODE tion 411 of this title] applies, if any plan amendment with respect to breaks in service (which amendment is made or becomes effective after January 1, 1974, and before the date on which such section 411 [sec- tion 411 of this title] first becomes effective with re- spect to such plan) provides that the nonforfeitable benefit derived from employer contributions to which any employee would be entitled is less than the lesser of the nonforfeitable benefit derived from employer contributions to which he would be enti- tled under- "(A) the break in service rules of section 411(a)(6) of such Code (section 411(a)(6) of this title], or "(B) the plan as in effect on January 1, 1974, such plan shall not constitute a plan described in section 403(a) or 405(a) of such Code [section 403(a) or 405(a) of this title] ,a.d a trust forming a part of such plan shall not constitute a qualified trust under section 401(a) of such Code (section 401(a) of this title]. Subparagraph (B) shall not apply if the break in service rules under the plan would have been in violation of any law or rule of law in effect on Janu- ary 1, 1974. "(g) 3-year delay for certain provisions.-Subpara- graphs (B) and (C) of section 404(a)(1) [section 404(a)(1) of this title] shall apply only in the case of plan years beginning on or after 3 years after the date of the enactment of this Act [Sept. 2, 1974]. "(h)(1) Except as provided in paragraph (2), section 413 of the Internal Revenue Code of 1954 [section 413 of this title] shall apply to plan years beginning after December 31, 1953. "(2)(A) For plan years beginning before the applica- ble effective date of section 410 of such Code [this sec- tion], the provisions of paragraphs (1) and (8) of sub- section (b) of such section 413 [section 413 of this title] shall be applied by substituting '401(a)(3)' for '410'. "(B) For plan years beginning before the applicable effective date of section 411 of such Code (section 411 of this title], the provisions of subsection (b)(2) of such section 413 [section 413 of this title] shall be ap- plied by substituting '401(a)(7)' for '411(dl(3)'. "(C)(i) The provisions of subsection (b)(4) of such section 413 shall not apply to plan years beginning before the applicable effective date of section 411 of such Code [section 411 of this title]. "(ii) The provisions of subsection (b)(5) (other than the second sentence thereof) of such section 413 [sec- tion 413 of this title] shall not apply to plan years be- ginning before the applicable effective date of section 412 of such Code [section 412 of this title]. "(i) Contributions to H.R. 10 plans.-Notwithstand- ing subsections (b) and (c)(2), in the case of a plan in existence on January 1, 1974, the amendment made by section 1013(c)(2) of this Act [amending section 404(a)(6) of this title] shall apply, with respect to a plan which provides contributions or benefits for em- ployees some or all of whom are employees within the meaning of section 401(c)(1) of the Internal Revenue Code of 1954 (section 401(c)(1) of this title], for plan years beginning after December 31, 1974, but only if the employer (within the meaning of section 401(c)(4) of such Code) [section 401(c)(4) of this title] elects in such manner and at such time as the Secretary of the Treasury or his delegate shall by regulations pre- scribe, to have such amendment so apply. Any election made under this subsection, once made, shall be irrev- ocable," SECTION REFERRM TO IN OTHER SECTIONS This section is referred to in sections 401, 406, 407, 411, 412, 413, 414, 4975 of this title; title 29 sections 1003, 1201, 1202, 1321. § 411. Minimum vesting standards (a) General rule A trust shall not constitute a qualified trust under section 401(a) unless the plan of which such trust is a part provides that an employee's right to his normal retirement benefit is non- forfeitable upon the attainment of normal re- tirement age (as defined in paragraph (8)) and in addition satisfies the requirements of para- graphs (1) and (2) of this subsection and the re- quirements of paragraph (2) of subsection (b), and in the case of a defined benefit plan, also satisfies the requirements of paragraph (1) of subsection (b). (1) Employee contributions A plan satisfies the requirements of this paragraph if an employee's rights in his ac- crued benefit derived from his own contribu- tions are nonforfeitable. (2) Employer contributions A plan satisfies the requirements of this paragraph if it satisfies the requirements of subparagraph (A), (B), or (C). (A) 10-year vesting A plan satisfies the requirements of this subparagraph if an employee who has at least 10 years of service has a nonforfeita- ble right to 100 percent of his accrued bene- fit derived from employer contributions. (B) 5- to 15-year vesting A plan satisfies the requirements of this subparagraph if an employee who has com- pleted at least 5 years of service has a non- forfeitable right to a percentage of his ac- crued benefit derived from employer contri- butions which percentage is not less than the percentage determined under the fol- lowing table: Nonforfeltable Years of service: percentage 5 ------------------.--.--.----.----.- ,-,......-...........,..,.. 25 6 ...------------------..-...-. ,.--.------......... 30 7 .-...--------------... ------.-.-. ,... . . . .,. 35 8 ...--------------------.. ............................-. °-.--- - .- 40 9 ........................................... 4 5 10 .......................................... 50 11 .......................................... 6 0 12 ......................................................................... 70 13 .......................................... 80 14 .......................................... 90 15 or m ore .......................................................... 100. (C) Rule of 45 (i) A plan satisfies the requirements of this subparagraph if an employee who is not separated from the service, who has completed at least 5 years of service, and with respect to whom the sum of his age and years of service equals or exceeds 45, has a nonforfeitable right to a percentage of his accrued benefit derived from employ- er contributions determined under the fol- lowing table: If years of service and sum of age and then the non- equal service equals or forfeitable or exceed- exceeds- percentage is- 5 ............................... 45 ........................ 50 6 ............................... 47 ........................ 60 7 ............................... 49 ........................ 70 8 ............................... 51 ....... ..................... 80 9 ............................... 53 ........................ 90 10 ............................. 55 ........................ 100. 71-999 0 - 78 - 23 (Vol. 7) Page 325