Title 29 — LaborRelease 119-73
§1060 Multiple employer plans and other special rules
Title 29 › Chapter CHAPTER 18— - EMPLOYEE RETIREMENT INCOME SECURITY PROGRAM › Subchapter SUBCHAPTER I— - PROTECTION OF EMPLOYEE BENEFIT RIGHTS › Subtitle Subtitle B— - Regulatory Provisions › Part part 2— - participation and vesting › § 1060
Summary
Plans run by more than one employer must often be treated as if all the workers and employers were one company for key pension rules. That means rules about vesting, benefit limits, and minimum funding are applied as if everyone worked for a single employer, with special rules for breaks in service set by the Secretary. Service with a predecessor employer can count as service for the current employer. Employers that are part of a controlled group or are under common control are also treated as one employer for these rules, and minimum funding is figured for the whole group and then divided among employers under Treasury rules. A small employer can run an "eligible combined plan" that has both a defined benefit plan and a 401(a) individual account plan in one trust. To qualify, the plan must meet rules about benefits, contributions, vesting, and fairness. Key numbers: the defined benefit must give an accrued employer-funded retirement at least 1% per year of service up to 20% of final average pay (final pay is the best up to 5 consecutive years). If it meets certain interest-credit rules, pay credits by age must be at least: age 30 or less = 2%; over 30 but under 40 = 4%; 40–49 = 6%; 50 or over = 8%. The account plan must be an automatic contribution plan that treats each eligible worker as having elected 4% deferrals unless they opt out, and the employer must match 50% of employee deferrals up to 4% of pay. Vesting rules: employer-funded benefits become 100% nonforfeitable after 3 years of service; matching contributions are immediately nonforfeitable and certain nonelective contributions become 100% after 3 years. Auto-enroll plans must give a notice and a reasonable time to opt out before the first contribution and yearly notices. An eligible combined plan must be treated as a single plan for some rules, and if the combined plan is terminated the defined benefit and defined contribution parts must be ended separately. Definitions (one line each): eligible combined plan = a small-employer plan with a defined benefit and a 401(a) account plan held in one trust; applicable individual account plan = an account plan that includes a qualified cash-or-deferred (401(k)) arrangement; qualified cash or deferred arrangement = the 401(k) type of plan; CSEC plan = certain multi-employer defined benefit plans that meet the listed employer and date criteria. Plans that meet the CSEC definition are treated as CSEC unless the sponsor opts out by the end of the first plan year beginning after December 31, 2013; if treated as CSEC, certain Pension Protection Act rules stop applying from the date the plan becomes a CSEC plan.
Full Legal Text
Title 29, §1060
Labor — Source: USLM XML via OLRC
(a)Notwithstanding any other provision of this part or part 3, the following provisions of this subsection shall apply to a plan maintained by more than one employer:
(1)section 1052 of this title shall be applied as if all employees of each of the employers were employed by a single employer.
(2)section 1053 and 1054 of this title shall be applied as if all such employers constituted a single employer, except that the application of any rules with respect to breaks in service shall be made under regulations prescribed by the Secretary.
(3)The minimum funding standard provided by section 1082 of this title shall be determined as if all participants in the plan were employed by a single employer.
(b)For purposes of this part and part 3—
(1)in any case in which the employer maintains a plan of a predecessor employer, service for such predecessor shall be treated as service for the employer, and
(2)in any case in which the employer maintains a plan which is not the plan maintained by a predecessor employer, service for such predecessor shall, to the extent provided in regulations prescribed by the Secretary of the Treasury, be treated as service for the employer.
(c)For purposes of section 1052, 1053, and 1054 of this title, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a) of title 26, determined without regard to section 1563(a)(4) and (e)(3)(C) of title 26) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the minimum funding standard of section 1082 of this title shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary of the Treasury.
(d)For purposes of section 1052, 1053, and 1054 of this title, under regulations prescribed by the Secretary of the Treasury, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (c).
(e)(1)Except as provided in this subsection, this chapter shall be applied to any defined benefit plan or applicable individual account plan which are 11 So in original. Probably should be “is”. part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.
(2)For purposes of this subsection—
(A)The term “eligible combined plan” means a plan—
(i)which is maintained by an employer which, at the time the plan is established, is a small employer,
(ii)which consists of a defined benefit plan and an applicable individual account plan each of which qualifies under section 401(a) of title 26,
(iii)the assets of which are held in a single trust forming part of the plan and are clearly identified and allocated to the defined benefit plan and the applicable individual account plan to the extent necessary for the separate application of this chapter under paragraph (1), and
(iv)with respect to which the benefit, contribution, vesting, and nondiscrimination requirements of subparagraphs (B), (C), (D), (E), and (F) are met.
(B)(i)The benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant’s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.
(ii)For purposes of clause (i), the applicable percentage is the lesser of—
(I)1 percent multiplied by the number of years of service with the employer, or
(II)20 percent.
(iii)If the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 1053(f)(3)(B) of this title which meets the interest credit requirements of section 1054(b)(5)(B)(i) of this title, the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each participant receives pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table: If the participant’s age as of the beginning of the year is—The percentage is— 30 or less2 Over 30 but less than 404 40 or over but less than 506 50 or over8
(iv)For purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (1), (2), and (3) of section 1053(b) of this title, except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies.
(C)(i)The contribution requirements of this subparagraph with respect to any applicable individual account plan forming part of an eligible combined plan are met if—
(I)the qualified cash or deferred arrangement included in such plan constitutes an automatic contribution arrangement, and
(II)the employer is required to make matching contributions on behalf of each employee eligible to participate in the arrangement in an amount equal to 50 percent of the elective contributions of the employee to the extent such elective contributions do not exceed 4 percent of compensation.
(ii)An applicable individual account plan shall not be treated as failing to meet the requirements of clause (i) because the employer makes nonelective contributions under the plan but such contributions shall not be taken into account in determining whether the requirements of clause (i)(II) are met.
(D)The vesting requirements of this subparagraph are met if—
(i)in the case of a defined benefit plan forming part of an eligible combined plan an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit under the plan derived from employer contributions, and
(ii)in the case of an applicable individual account plan forming part of eligible combined plan—
(I)an employee has a nonforfeitable right to any matching contribution made under the qualified cash or deferred arrangement included in such plan by an employer with respect to any elective contribution, including matching contributions in excess of the contributions required under subparagraph (C)(i)(II), and
(II)an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived under the arrangement from nonelective contributions of the employer.
(E)In the case of a defined benefit plan or applicable individual account plan forming part of an eligible combined plan, the requirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants.
(F)(i)The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.
(ii)The requirements of this clause are met if—
(I)the requirements of subparagraphs (B) and (C) are met without regard to section 401(l) of title 26, and
(II)the requirements of section 401(a)(4) and 410(b) of title 26 are met with respect to both the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan without regard to section 401(l) of title 26.
(iii)The requirements of this clause are met if the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan meet the requirements of section 401(a)(4) and 410(b) of title 26 without being combined with any other plan.
(3)For purposes of this subsection—
(A)A qualified cash or deferred arrangement shall be treated as an automatic contribution arrangement if the arrangement—
(i)provides that each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to 4 percent of the employee’s compensation unless the employee specifically elects not to have such contributions made or to have such contributions made at a different rate, and
(ii)meets the notice requirements under subparagraph (B).
(B)(i)The requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.
(ii)The requirements of this clause are met if each employee to whom subparagraph (A)(i) applies—
(I)receives a notice explaining the employee’s right under the arrangement to elect not to have elective contributions made on the employee’s behalf or to have the contributions made at a different rate, and
(II)has a reasonable period of time after receipt of such notice and before the first elective contribution is made to make such election.
(iii)The requirements of this clause are met if each employee eligible to participate in the arrangement is, within a reasonable period before any year, given notice of the employee’s rights and obligations under the arrangement.
(4)(A)The except clause in section 1002(35) of this title shall not apply to an eligible combined plan.
(B)An eligible combined plan shall be treated as a single plan for purposes of section 1023 of this title.
(5)For purposes of this subsection—
(A)The term “applicable individual account plan” means an individual account plan which includes a qualified cash or deferred arrangement.
(B)The term “qualified cash or deferred arrangement” has the meaning given such term by section 401(k)(2) of title 26.
(f)(1)For purposes of this subchapter, except as provided in this subsection, a CSEC plan is an employee pension benefit plan (other than a multiemployer plan) that is a defined benefit plan—
(A)to which section 104 of the Pension Protection Act of 2006 applies, without regard to—
(i)section 104(a)(2) of such Act;
(ii)the amendments to such section 104 by section 202(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010; and
(iii)paragraph (3)(B);
(B)that, as of June 25, 2010, was maintained by more than one employer and all of the employers were organizations described in section 501(c)(3) of title 26;
(C)that, as of June 25, 2010, was maintained by an employer—
(i)described in section 501(c)(3) of such title,
(ii)chartered under part B of subtitle II of title 36,
(iii)with employees in at least 40 States, and
(iv)whose primary exempt purpose is to provide services with respect to children; or
(D)that, as of January 1, 2000, was maintained by an employer—
(i)described in section 501(c)(3) of title 26,
(ii)who has been in existence since at least 1938,
(iii)who conducts medical research directly or indirectly through grant making, and
(iv)whose primary exempt purpose is to provide services with respect to mothers and children.
(2)All employers that are treated as a single employer under subsection (b) or (c) of section 414 of title 26 shall be treated as a single employer for purposes of determining if a plan was maintained by more than one employer under subparagraph 22 So in original. Probably should be “subparagraphs”. (B) and (C) of paragraph (1).
(3)(A)If a plan falls within the definition of a CSEC plan under this subsection (without regard to this paragraph), such plan shall be a CSEC plan unless the plan sponsor elects not later than the close of the first plan year of the plan beginning after December 31, 2013, not to be treated as a CSEC plan. An election under the preceding sentence shall take effect for such plan year and, once made, may be revoked only with the consent of the Secretary of the Treasury.
(B)If a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the Pension Protection Act of 2006, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, shall cease to apply to such plan as of the first date as of which such plan is treated as a CSEC plan.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
This chapter, referred to in subsec. (e)(1), (2)(A)(iii), was in the original “this Act”, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see
Short Title
note set out under section 1001 of this title and Tables. section 104 of the Pension Protection Act of 2006, referred to in subsec. (f)(1)(A), (3)(B), is section 104 of Pub. L. 109–280, which is set out as a note under section 401 of Title 26, Internal Revenue Code. The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, referred to in subsec. (f)(3)(B), is Pub. L. 111–192, June 25, 2010, 124 Stat. 1280. For complete classification of this Act to the Code, see
Short Title
of 2010 Amendment note set out under section 1001 of this title and Tables.
Amendments
2020—Subsec. (f)(1)(D). Pub. L. 116–136 added subpar. (D). 2014—Subsec. (f). Pub. L. 113–97, § 101, added subsec. (f). Subsec. (f)(1)(C). Pub. L. 113–235, § 3(a)(1), added subpar. (C). Subsec. (f)(2). Pub. L. 113–235, § 3(a)(2), substituted “subparagraph (B) and (C) of paragraph (1)” for “paragraph (1)(B)”. Subsec. (f)(3). Pub. L. 113–97, § 103(a), added par. (3). 2008—Subsec. (e)(1). Pub. L. 110–458, § 109(c)(2)(A), inserted at end “In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.” Subsec. (e)(3) to (6). Pub. L. 110–458, § 109(c)(2)(B), struck out par. (3) and redesignated pars. (4) to (6) as (3) to (5), respectively. Former par. (3) related to nondiscrimination requirements for qualified cash or deferred arrangement. 2006—Pub. L. 109–280, § 903(b)(2)(A), inserted “and other special rules” after “plans” in section catchline. Subsec. (e). Pub. L. 109–280, § 903(b)(1), added subsec. (e). 1989—Subsec. (c). Pub. L. 101–239, § 7894(c)(10), substituted “and (e)(3)(C) of such Code” for “and (e)(3)(C) of such code”, which for purposes of codification was translated as “and (e)(3)(C) of title 26” thus requiring no change in text. Pub. L. 101–239, § 7891(a)(1), substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text.
Statutory Notes and Related Subsidiaries
Effective Date
of 2020 AmendmentAmendment by Pub. L. 116–136 applicable to plan years beginning after Dec. 31, 2018, see section 3609(c) of Pub. L. 116–136, set out as a note under section 414 of Title 26, Internal Revenue Code.
Effective Date
of 2014 Amendment
Amendments
by Pub. L. 113–235 effective as if included in the
Amendments
made by the Cooperative and Small Employer Charity Pension Flexibility Act, Pub. L. 113–97, see section 3(c) of Pub. L. 113–235, set out as a note under section 414 of Title 26, Internal Revenue Code. Amendment by section 101 of Pub. L. 113–97 applicable to years beginning after Dec. 31, 2013, see section 3 of Pub. L. 113–97, set out as a note under section 401 of Title 26, Internal Revenue Code. Pub. L. 113–97, title I, § 103(d), Apr. 7, 2014, 128 Stat. 1120, provided that: “The
Amendments
made by this section [amending this section and provisions set out as a note under section 401 of Title 26, Internal Revenue Code] shall apply as of the date of enactment of this Act [Apr. 7, 2014].”
Effective Date
of 2008 AmendmentAmendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.
Effective Date
of 2006 AmendmentAmendment by Pub. L. 109–280 applicable to plan years beginning after Dec. 31, 2009, see section 903(c) of Pub. L. 109–280, set out as a note under section 414 of Title 26, Internal Revenue Code.
Effective Date
of 1989 AmendmentAmendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title. Amendment by section 7894(c)(10) of Pub. L. 101–239 effective, except as otherwise provided, as if originally included in the provision of the Employee Retirement Income Security Act of 1974, Pub. L. 93–406, to which such amendment relates, see section 7894(i) of Pub. L. 101–239, set out as a note under section 1002 of this title.
Regulations
Secretary authorized, effective Sept. 2, 1974, to promulgate
Regulations
wherever provisions of this subchapter call for the promulgation of
Regulations
, see section 1031 of this title.
Reference
Citations & Metadata
Citation
29 U.S.C. § 1060
Title 29 — Labor
Last Updated
Apr 6, 2026
Release point: 119-73