PUBLIC LAW 97-248—SEPT. 3, 1982
96 STAT. 515
derived from employer contributions of each participant who is a non-key employee, when expressed as a n annual retirement benefit, is not less than the applicable percentage of the participant's average compensation for years in the testing period. "(B) APPLICABLE PERCENTAGE.—For purposes of s u b p a r a -
g r a p h (A), the term 'applicable percentage' means the lesser of— "(i) 2 percent multiplied by the n u m b e r of years of service with the employer, or "(ii) 20 percent. "(C) YEARS OF SERVICE.—For purposes of t h i s paragraph —
"(i) IN GENERAL.—Except a s provided in clause (ii), years of service shall be determined under the rules of paragraph s (4), (5), and (6) of section 411(a). "(ii) EXCEPTION FOR YEARS DURING W H I C H PLAN W A S
NOT TOP-HEAVY.—A year of service with the employer shall not be t a k e n into account under this paragraph if— "(I) the plan was not a top-heavy plan for any plan year ending during such year of service, or "(II) such year of service was completed in a plan year beginning before January 1, 1984. "(D) A V E R A G E COMPENSATION FOR HIGH 5 YEARS.—For
purposes of this paragraph — "(i) IN GENERAL.—A participant's testing period shall be the period of consecutive years (not exceeding 5) during which the participant h a d the greatest aggregate compensation from the employer. "(ii) Y E A R MUST BE INCLUDED IN YEAR OF SERVICE.—
The years t a k e n into account under clause (i) shall be properly adjusted for year s not included in a year of service. "(iii) CERTAIN YEARS NOT TAKEN INTO ACCOUNT.—
Except to the e x t e n t provided in the plan, a year shall not be t a k e n into account under clause (i) if— "(I) such year ends in a plan year beginning before January 1, 1984, or "(II) such year begins after the close of the last year in which the plan was a top-heavy plan. "(E) A N N U A L RETIREMENT B E N E F I T. — For purposes of t h i s
paragraph, the term ' annual retirement benefit' means a benefit payable annual l y in the form of a single life a n n u i t y (with no ancillary benefits) beginning a t the normal retirement age under the plan. "(2) D E F I N E D CONTRIBUTION PLANS.—
"(A) IN GENERAL.—A defined contribution plan meets the requirements of the subsection if the employer contribution for the year for each participant who is a non-key employee is not less than 3 percent of such participant's compensation (within the m e a n i n g of section 415). "(B) SPECIAL RULE WHERE MAXIMUM CONTRIBUTION LESS THAN 3 PERCENT.—
"(i) IN GENERAL.—The percentage referred to in subparagraph (A) for any year shall not exceed the percentage at which contributions a r e made (or required to be made) under the plan for the year for the key
26 USC 411.
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