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Pension Resource

Treas. Reg. § 1.401(a)(26)-3

Rules applicable to a defined benefit plan's prior benefit structure.
CFR 2005 annual edition (revised as of 2005-04-01) · superseded Apr 1, 2006 · last amended by T.D. 8375, 56 FR 63415, Dec. 4, 1991
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(a) General rule. A defined benefit plan that does not meet one of the exceptions in § 1.401(a)(26)-1(b) must satisfy paragraph (c) of this section with respect to its prior benefit structure. Defined contribution plans are not subject to this section.
(b) Prior benefit structure. Each defined benefit plan has only one prior benefit structure, and all accrued benefits under the plan as of the beginning of a plan year (including benefits rolled over or transferred to the plan) are included in the prior benefit structure for the year.
(c) Testing a prior benefit structure—(1) General rule. A plan's prior benefit structure satisfies this paragraph if the plan provides meaningful benefits to a group of employees that includes the lesser of 50 employees or 40 percent of the employer's employees. Thus, a plan satisfies the requirements of this paragraph (c) if at least 50 employees or 40 percent of the employer's employees currently accrue meaningful benefits under the plan. Alternatively, a plan satisfies this paragraph if at least 50 employees and former employees or 40 percent of the employer's employees and former employees have meaningful accrued benefits under the plan.
(2) Meaningful benefits. Whether a plan is providing meaningful benefits, or whether individuals have meaningful accrued benefits under a plan, is determined on the basis of all the facts and circumstances. The relevant factors in making this determination include, but are not limited to, the following: the level of current benefit accruals; the comparative rate of accruals under the current benefit formula compared to prior rates of accrual under the plan; the projected accrued benefits under the current benefit formula compared to accrued benefits as of the close of the immediately preceding plan year; the length of time the current benefit formula has been in effect; the number of employees with accrued benefits under the plan; and the length of time the plan has been in effect. A rule for determining whether an offset plan provides meaningful benefits is provided in § 1.401(a)(26)-5(a)(2). A plan does not satisfy this paragraph (c) if it exists primarily to preserve accrued benefits for a small group of employees and thereby functions more as an individual plan for the small group of employees or for the employer.
(d) Multiemployer plan rule. A multiemployer plan is deemed to satisfy the prior benefit structure rule in paragraph (c)(1) of this section for a plan year if the multiemployer plan provides meaningful benefits to at least 50 employees for a plan year, or 50 employees have meaningful accrued benefits under the plan. For purposes of this paragraph, all employees benefiting under the multiemployer plan may be considered, whether or not these employees are included in a unit of employees covered pursuant to any collective bargaining agreement.
Source credit, amendments & notes

[T.D. 8375, 56 FR 63415, Dec. 4, 1991]

Treas. Reg. § 1.401(a)(26)-3 — Rules applicable to a defined benefit plan's prior benefit structure. · CFR 2005 annual edition (revised as of 2005-04-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr26-1.401%28a%29%2826%29-3&asof=1989-12-19 · printed Oct 16, 2026
On this page
  • (a) General rule.
  • (b) Prior benefit structure.
  • (c) (c) Testing a prior benefit structure—(1) General rule. A p…
  • (d) Multiemployer plan rule.
Implements
I.R.C. § 401 Qualified pension, profit-sharing, and stock bonus plans
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Revenue Procedures
  • Rev. Proc. 2023-37 Dec 18, 2023 — This revenue procedure sets forth the rules regarding qualified pre-approved plans and section 403(b) pre-approved plans, and combines, conforms, clarifies, an…

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Apr 1, 1997Mar 31, 2006CFR 2005 annual edition (revised as of 2005-04-01) run 127T.D. 8375, 56 FR 63415, Dec. 4, 1991View
Apr 1, 2006currenteCFR editorial change effective 2016-05-18 run 2T.D. 8375, 56 FR 63415, Dec. 4, 1991View · Redline (sign in)
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