90. Coverage

Statement of Requirement: Code §I RC 410(b); Rev. Proc. 2017-41, sec. 5.162 023-37, 9.03(1)

Document Provision: _____

Sample Adoption Agreement Language:

Each employee will be eligible to participate in this plan in accordance with section _____,

340 | Defined Benefit Plan LRM Package 08/2020 06/2026

except the following (check and fill blanks for all that apply):

( ) Employees who have not attained the age of _____ (cannot exceed 21).

( ) Employees who have not completed _____ year(s) of service (cannot exceed 1 year

unless the plan provides a nonforfeitable right to 100% of the participant’s account balance derived from employer contributions after not more than 2 years of service in which case up to 2 years is permissible. If the year(s) of service selected is or includes a fractional year, an employee will not be required to complete any specified number of hours of service to receive credit for such fractional year.)

( ) Employees included in a unit of employees covered by a collective bargaining

agreement between the employer and employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the employees of the employer who are covered pursuant to that agreement are professionals as defined in Treas. Reg. § 1.410(b)-9. For this purpose, the term “employee representatives” does not include any organization more than half of whose members are employees who are owners, officers, or executives of the employer.

( ) Employees who are nonresident aliens (within the meaning of Internal Revenue

Code §I RC 7701(b)(1)(B)) and who receive no earned income (within the meaning of Code §I RC 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of Code § IRC 861(a)(3)).

( ) Employees who became employees as the result of a “§ an “IRC 410(b)(6)(C)

transaction”. These employees will be excluded during the period beginning on the date of the transaction and ending on the last day of the first plan year beginning after the date of the transaction. A “§ An “IRC 410(b)(6)(C)” transaction” is an asset or stock acquisition, merger, or similar transaction involving a change in the employer of the employees of a trade or business.

(Note to reviewer: The first blank should be filled in with the section number that corresponds to LRM #17. If the plan provides for a single annual entry date reduce each of the limits contained in the sample provision above by ½ year (i.e. change age 21 to 20½, 1 year to ½ year and 2 years to 1½ years). This reduction can be avoided if the employee enters the plan on the entry date nearest the date the employee completes the eligibility requirement and the entry date is the first day of the plan year.)