Rev. Rul. 81-211

Advice has been requested whether the pension plan described below satisfies the requirement of section 411(a) of the Internal Revenue Code, that an employee's right to the normal retirement benefit is nonforfeitable upon attainment of normal retirement age.

A pension plan provides that an employee's right to the normal retirement benefit under the plan is nonforfeitable at the normal retirement date. The normal retirement date is the first day of the calendar month following the date on which the employee attains age 65.

Section 401(a)(7) of the Code provides that a plan shall not be a qualified plan under section 401(a) unless it satisfies the requirements of section 411.

Section 411(a) of the Code requires that an employee's right to the normal retirement benefit under the plan must be nonforfeitable upon the attainment of normal retirement age as defined in section 411(a)(8). Section 411(a)(8) provides that normal retirement age means the earlier of: (a) the normal retirement age under the plan, or (b) the later of age 65 or the tenth anniversary of the time participation commenced.

In this case, an employee's right to the normal retirement benefit becomes nonforfeitable on the employee's normal retirement date, which will occur from one day to one month after the date the employee attains age 65. However, the normal retirement date may not occur until after the employee's normal retirement age as defined in section 411(a)(8) of the Code.

Accordingly, the pension plan does not satisfy the requirement of section 411(a) of the Code, that the employee's normal retirement benefit be nonforfeitable at normal retirement age. Therefore, the plan is not qualified under section 401(a).

Pursuant to the authority contained in section 7805(b) of the Code, this revenue ruling will not be applied to deny qualified status to any plan that is the subject of a favorable determination letter or opinion letter on September 8, 1981, provided (1) the plan is amended to reflect the position in this revenue ruling for plan years beginning after December 31, 1983, and (2) such amendment retroactively reinstates benefits if any participant has been denied treatment at least as favorable as he or she would have received if the plan had been consistent with this ruling since September 8, 1981.

This revenue ruling will be immediately effective for any plan that is not the subject of a favorable determination or opinion letter on September 8, 1981.