547.1 Essential requirements for qualifications.§ 547.1 Essential requirements for qualifications.
(a) A “bona fide thrift or savings plan” for the purpose of section 7(e)(3)(b) of the Act is required to meet all the standards set forth in paragraphs (b) through (f) of this section and must not contain the disqualifying provisions set forth in § 547.2.
(b) The thrift or savings plan constitutes a definite program or arrangement in writing, adopted by the employer or by contract as a result of collective bargaining and communicated or made available to the employees, which is established and maintained, in good faith, for the purpose of encouraging voluntary thrift or savings by employees by providing an incentive to employees to accumulate regularly and retain cash savings for a reasonable period of time or to save through the regular purchase of public or private securities.
(c) The plan specifically shall set forth the category or categories of employees participating and the basis of their eligibility. Eligibility may not be based on such factors as hours of work, production, or efficiency of the employees' Provided, however, That hours of work may be used to determine eligibility of part-time or casual employees.
(d) The amount any employee may save under the plan shall be specified in the plan or determined in accordance with a definite formula specified in the plan, which formula may be based on one or more factors such as the straight-time earnings or total earnings, base rate of pay, or length of service of the employee.
(e) The employer's total contribution in any year may not exceed 15 percent of the participating employees' total earnings during that year. In addition, the employer's total contribution in any year may not exceed the total amount saved or invested by the participating employees during that year: Provided, however, That a plan permitting a greater contribution may be submitted to the Administrator and approved by him as a “bona fide thrift or savings plan” within the meaning of section 7(e)(3)(b) of the Act if:
(1) The plan meets all the other standards of this section;
(2) The plan contains none of the disqualifying factors enumerated in § 547.2;
(3) The employer's contribution is based to a substantial degree upon retention of savings; and
(4) The amount of the employer's contribution bears a reasonable relationship to the amount of savings retained and the period of retention.
(f) The employer's contributions shall be apportioned among the individual employees in accordance with a definite formula or method of calculation specified in the plan, which formula or method of calculation is based on the amount saved or the length of time the individual employee retains his savings or investment in the plan: Provided, That no employee's share determined in accordance with the plan may be diminished because of any other remuneration received by him.(Approved by the Office of Management and Budget under control number 1235-0013) [19 FR 4864, Aug. 3, 1954, as amended at 47 FR 145, Jan. 5, 1982; 71 FR 16666, Apr. 3, 2006; 82 FR 2228, Jan. 9, 2017]