Common use of Fail-Safe Allocation Clause in Contracts

Fail-Safe Allocation. With respect only to nonstandardized plans and notwithstanding any provision of the Plan or Adoption Agreement to the contrary, for Plan Years beginning after December 31, 1989, if the Plan would otherwise fail to satisfy the requirements of Section 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) of the Code and the regulations thereunder because Employer contributions have not been allocated to a sufficient number or percentage of Participants for the Plan Year, an additional contribution shall be made by the Employer and shall be allocated to the Employer Accounts of affected Participants subject to the following provisions: (a) The Participants eligible to share in the allocation of the Employer's contribution shall be expanded to include the minimum number of Participants who are not otherwise eligible to the extent necessary to satisfy the applicable test under the relevant Section of the Code. The specific Participant who shall become eligible are those Participants who are actively employed on the last day of the Plan Year who have completed the greatest number of Hours of Service during the Plan Year. (b) If the applicable test is still not satisfied, the Participants eligible to share in the allocation shall be further expanded to include the minimum number of Participants who are not employed on the last day of the Plan Year as are necessary to satisfy the applicable test. The specific Participants who shall become eligible are those Participants who have completed the greatest number of Hours of Service during the Plan Year. (c) A Participant's accrued benefit shall not be reduced by any reallocation of amounts that have previously been allocated. To the extent necessary, the Employer shall make an additional contribution equal to the amount such affected Participants would have received if they had originally shared in the allocations without regard to the deductibility of the contribution. Any adjustment to the allocations pursuant to this paragraph shall be considered a retroactive amendment adopted by the last day of the Plan Year.

Fail-Safe Allocation. With respect only to nonstandardized non-standardized plans and notwithstanding any provision of the Plan or Adoption Agreement to the contrary, for Plan Years beginning after December 31, 1989, if the Plan would otherwise fail to satisfy the requirements of Section 401(a)(26), section 410(b)(1) or 410(b)(2)(A)(i) of the Code (the ratio percentage test) and the regulations thereunder because Employer contributions have not been allocated to a sufficient number or percentage of Participants for the Plan Year, and the right to receive a contribution is conditioned upon participation on the last day of the Plan Year or the completion of more than 501 Hours of Service, or conditioned upon membership in a certain Employee classification, an additional contribution shall be made by the Employer and shall be allocated to the Employer Accounts of affected Participants Participants, considering all the applicable exclusions of sections 410(b)(3) and (4) of the Code subject to the following provisions: (a) The Participants eligible to share in the allocation of the Employer's contribution shall be expanded to include the minimum number of Participants who are not otherwise eligible to the extent necessary to satisfy the applicable test under the relevant Section ratio percentage test of section 410(b) (1) of the Code. The specific Participant Participants who shall become eligible are those Participants who are members of an eligible classification of Employees, who are actively employed on the last day of the Plan Year who Year, but have completed not met the Plan's Hours of Service requirement. These Participants shall be given an allocation one Participant at a time beginning with the Participant with the greatest number of Hours of Service during and continuing in descending order until the ratio percentage test is passed. If two or more Participants have the same number of Hours of Service then the Participant with the lowest Compensation shall receive an allocation first. Fail-safe allocations shall be given to the smallest number of Participants which allows the Plan Yearto pass the ratio percentage test. (b) If the applicable ratio percentage test is still not satisfied, the Participants eligible to share in the allocation shall be further expanded to include the minimum number of Participants who are members of an eligible classification of Employees, who are not employed on the last day of the Plan Year as is necessary to satisfy the ratio percentage test. The specific Participants who shall become eligible are those Participants who have completed the greatest number of Hours of Service (in excess of 500 hours) during the Plan Year. These Participants shall be given an allocation one Participant at a time in descending order until the ratio percentage test is passed. If two or more Participants have been credited with the same number of Hours of Service then the Participant with the lowest Compensation shall receive an allocation first. (c) If the ratio percentage test is still not satisfied, the Participants eligible to share in the allocation of the Employer's contribution shall be expanded to include the minimum number of Participants who are not otherwise eligible to the extent necessary to satisfy the applicable test under the ratio percentage test of section 410(b) (1) of the Code. The specific Participants who shall become eligible are those Participants who are members of an ineligible classification of Employees, who are actively employed on the last day of the Plan Year, and have met the Plan's Hours of Service requirement. These Participants shall be given an allocation one Participant at a time beginning with the Participant with the greatest number of Hours of Service and continuing in descending order until the ratio percentage test is passed. If two or more Participants have the same number of Hours of Service then the Participant with the lowest Compensation shall receive an allocation first. Fail-Safe allocations shall be given to the smallest number of Participants which allows the Plan to pass the ratio percentage test. (d) If the ratio percentage test is still not satisfied, the Participants eligible to share in the allocation shall be further expanded to include the minimum number of Participants who are members of an ineligible classification of Employees, who are employed on the last day of the Plan Year but have not meet the hours requirement of the Plan as is necessary to satisfy the ratio percentage test. The specific Participants who shall become eligible are those Participants who have completed the greatest number of Hours of Service during the Plan Year. These Participants shall be given an allocation one Participant at a time in descending order until the ratio percentage test is passed. If two or more Participants have been credited with the same number of Hours of Service then the Participant with the lowest Compensation shall receive an allocation first. (ce) A Participant's accrued benefit shall If the ratio percentage test is still not be reduced by any reallocation of amounts that have previously been allocated. To the extent necessarysatisfied, the Employer shall make an additional contribution equal Participants eligible to the amount such affected Participants would have received if they had originally shared share in the allocations without regard to the deductibility of the contribution. Any adjustment to the allocations pursuant to this paragraph allocation shall be considered a retroactive amendment adopted by further expanded to include the minimum number of Participants who are members of an ineligible classification of Employees, who are not employed on the last day of the Plan Year as is necessary to satisfy the ratio percentage test. The specific Participants who shall become eligible are those Participants who have completed the greatest number of Hours of Service (in excess of 500 hours) during the Plan Year. These Participants shall be given an allocation one Participant at a time in descending order until the ratio percentage test is passed. If two or more Participants have been credited with the same number of Hours of Service then the Participant with the lowest Compensation shall receive an allocation first. (f) The Employer may elect in the Adoption Agreement, whether to apply this Section 2.3.8.