United States Code
USC most recently checked for updates: Mar 22, 2023
For the purposes of this part, an employer shall be treated as maintaining a plan if any employee of such employer accrues benefits under such plan by reason of service with such employer.
An applicable individual account plan shall meet the diversification requirements of paragraphs (2), (3), and (4).
In the case of the portion of an applicable individual’s account attributable to employee contributions and elective deferrals which is invested in employer securities, a plan meets the requirements of this paragraph if the applicable individual may elect to direct the plan to divest any such securities and to reinvest an equivalent amount in other investment options meeting the requirements of paragraph (4).
The requirements of this paragraph are met if the plan offers not less than 3 investment options, other than employer securities, to which an applicable individual may direct the proceeds from the divestment of employer securities pursuant to this subsection, each of which is diversified and has materially different risk and return characteristics.
A plan shall not be treated as failing to meet the requirements of this paragraph merely because the plan limits the time for divestment and reinvestment to periodic, reasonable opportunities occurring no less frequently than quarterly.
Except as provided in regulations, a plan shall not meet the requirements of this paragraph if the plan imposes restrictions or conditions with respect to the investment of employer securities which are not imposed on the investment of other assets of the plan. This subparagraph shall not apply to any restrictions or conditions imposed by reason of the application of securities laws.
The term “applicable individual account plan” means any individual account plan (as defined in section 1002(34) of this title) which holds any publicly traded employer securities.
Such term shall not include a one-participant retirement plan (as defined in section 1021(i)(8)(B) of this title).
Except as provided in regulations or in clause (ii), a plan holding employer securities which are not publicly traded employer securities shall be treated as holding publicly traded employer securities if any employer corporation, or any member of a controlled group of corporations which includes such employer corporation, has issued a class of stock which is a publicly traded employer security.
The term “elective deferral” means an employer contribution described in section 402(g)(3)(A) of title 26.
The term “employer security” has the meaning given such term by section 1107(d)(1) of this title.
The term “employee stock ownership plan” has the meaning given such term by section 4975(e)(7) of title 26.
The term “publicly traded employer securities” means employer securities which are readily tradable on an established securities market.
The term “year of service” has the meaning given such term by section 1053(b)(2) of this title.
In the case of the portion of an account to which paragraph (3) applies and which consists of employer securities acquired in a plan year beginning before
Clause (i) shall not apply to an applicable individual who is a participant who has attained age 55 and completed at least 3 years of service before the first plan year beginning after
For purposes of subparagraph (A), the applicable percentage shall be determined as follows:
Plan year to which paragraph (3)
The applicable percentage is:
Notwithstanding section 1002(24) of this title, an applicable plan shall not be treated as failing to meet any requirement of this subchapter, or as failing to have a uniform normal retirement age for purposes of this subchapter, solely because the plan provides for a normal retirement age described in paragraph (2).
Subject to subparagraph (C), if, after
For special rules relating to plan provisions adopted to preclude discrimination, see section 1053(c)(2) of this title.