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TITLE 26-INTERNAL REVENUE CODE (F) years of service before the first plan year to which this section applies, if such service would have been disregarded under the rules of the plan with regard to breaks in service as in effect on the applicable date. (5) Year of service (A) General rule For purposes of this subsection, except as provided in subparagraph (C), the term "year of service" means a calendar year, plan year, or other 12-consecutive month period designated by the plan (and not pro- hibited under regulations prescribed by the Secretary of Labor) during which the par- ticipant has completed 1,000 hours of ser- vice. (B) Hours of service For purposes of this subsection, the term "hours of service" has the meaning pro- vided by section 410(a)(3,(C). (C) Seasonal induotries 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. (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 the purposes of this subparagraph. (6) Breaks in service (A) Definition of 1-year break in service For purposes of this paragraph, the term "1-year break in service" means a calendar year, plan year, or other 12-consecutive- month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has not completed more than 500 hours of service. (B) 1 year of service after 1-year break in service For purposes of paragraph (4), in the case of any employee who has any 1-year break in s ervice, years of service before such break shall not be required to be taken into ac- count until he has completed a year of ser- vice after his return. (C) 1-year break in service under defined contri- bution plan For purposes of paragraph (4), in the case of any participant in a defined contribution plan, or an insured defined benefit plan which satisfies the requirements of subsec- tion (b)(1)(F), who has any 1-year break in service, years of service after such break shall not be required to be taken into ac- count for purposes of determining the non- forfeitable percentage of his accrued bene- fit derived from employer contributions which accrued before such break. (D) Nonvested participants For purposes of paragraph (4), in the case of a participant who, under the plan, does not have any nonforfeitable right to an ac- crued benefit derived from employer contri- butions, years of service before any 1-year break in service shall not be required to be taken into account if the number of con- secutive 1-year breaks in service equals or exceeds the aggregate number of such years of service prior to such break. Such aggre- gate number of years of service before such break shall be deemed not to include any years of service not required to be taken into account under this subparagraph by reason of any prior break in service. (7) Accrued benefit (A) In general For purposes of this section, the term "ac- crued benefit" means- (i) in the case of a defined benefit plan. the employee's accrued benefit deter- mined under the plan and, except as pro- vided in subsection (c)(3), expressed in the form of an annual benefit commencing at normal retirement age, or (ii) in the case of a plan which is not a defined benefit plan, the balance of the employee's account. (B) Effect of certain ditributions Notwithstanding paragraph (4), for pur- poses of determining the employee's ac- crued benefit under the plan, the plan may disregard service performed by the employ- ee with respect to which he has received- (I) a distribution of the present value of his entire nonforfeitable benefit if such distribution was in an amount (not more than $1,750) permitted under regulations prescribed by the Secretary, or (ii) a distribution of the present value of his nonforfeitable benefit attributable to such service which he elected to receive. Clause (I) of this subparagraph shall apply only if such distribution was made on termi- nation of the employee's participation in the plan. Clause (i) of this subparagraph shall apply only if such distribution was made on termination of the employee's par- ticipation in the plan or under such other circumstances as may be provided under regulations prescribed by the Secretary. (C) Repayment of subparagraph (B) distributions For purposes of determining the employ- ee's accrued benefit under a plan, the plan may not disregard service as provided in subparagraph (B) unless the plan provides an opportunity for the participant to repay the full amount of the distribution de- scribed in such subparagraph (B) with, in the case of a defined benefit plan, interest at the rate determined for purposes of sub- section (c)(2)(C) and provides that upon such repayment the employee's accrued benefit shall be recomputed by taking into account service so disregarded. This subpar- agraph shall apply only in the case of a par- ticipant who- (i) received such a distribution in any plan year to which this section applies, which distribution was less than the pre- sent value of his accrued benefit, Page 327