[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR316.5]

[Page 190-191]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 316--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES E--Table of Contents
 
Sec. 316.5  Limitation on holdings.

    (a) General limitation. The amount of Series E bonds, originally 
issued during any one calendar year, that could be held by any one 
person, computed in accordance with the governing regulations, ranged 
from $5,000 (face amount) to $20,000 (face amount), depending upon the 
issue date.
    (b) Special limitation for employee savings plans. A special 
limitation for employee savings plans was provided, which was $2,000 
(face amount) multiplied by the highest number of participants in any 
employee savings plan, as defined in paragraph (b)(1) of this section, 
at any time during the year in which the bonds were issued. The plan had 
to be established, as set forth below.
    (1) Definition of plan and conditions of eligibility. (i) The 
employee savings plan must have been established by the employer for the 
exclusive and irrevocable benefit of employees or their beneficiaries, 
afforded employees the means of making regular savings from their wages 
through payroll deduction, and provided for employer contributions to be 
added to such savings.
    (ii) The entire assets thereof must have been credited to the 
individual accounts of participating employees and the assets so 
credited could be distributed only to the employees or their 
beneficiaries, except as otherwise provided herein.
    (iii) Series E bonds were to be purchased only with assets credited 
to the accounts of participating employees and only if the amount taken 
from any account at any time for that purpose was equal to the purchase 
price of a bond or bonds in an authorized denomination or denominations, 
and shares therein were credited to the accounts of the individuals from 
whom the purchase price thereof was derived, in amounts corresponding 
with such shares. For example, if $37.50 credited to the account of John 
Jones was commingled with funds credited to the accounts of other 
employees to make a total of $7,500, with which a Series E bond in the 
denomination of $10,000 (face amount) was purchased in December 1978 and 
registered in the name and title of the trustee, the plan must have 
provided, in effect, that John Jones'

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account would be credited to show that he was the owner of a Series E 
bond in the denomination of $50 (face amount) bearing the issue date of 
December 1, 1978.
    (iv) Each participating employee has an irrevocable right at any 
time to demand and receive from the trustee all assets credited to his 
or her account or the value thereof, if he or she so prefers, without 
regard to any condition other than the loss or suspension of the 
privilege of participating further in the plan. However, a plan was not 
deemed to be inconsistent herewith if it limited or modified the 
exercise of any such right by providing that the employer's contribution 
did not vest absolutely until the employee had made contributions under 
the plan in each of not more than 60 calendar months succeeding the 
month for which the employer's contribution was made.
    (v) Upon the death of an employee, his or her beneficiary has the 
absolute and unconditional right to demand and receive from the trustee 
all assets credited to the account of the employee, or the value 
thereof, if he or she so prefers.
    (vi) When settlement is made with an employee, or his or her 
beneficiary, with respect to any bond registered in the name and title 
of the trustee in which the employee has a share (see paragraphs (b)(1) 
(ii) and (iii) of this section), the bond must be submitted for 
redemption or reissue to the extent of such share. If an employee or his 
or her beneficiary is to receive distribution in kind, bonds bearing the 
same issue dates as those credited to the employee's account will be 
reissued in the name of the distributee to the extent to which he or she 
is entitled, in any authorized form of registration, upon the request 
and certification of the trustee, in accordance with the governing 
reguations.
    (2) Definitions of terms used in paragraph (b)--related provisions. 
(i) The term savings plan includes any regulations issued under the plan 
with regard to Series E bonds. A trustee desiring to purchase bonds in 
excess of the general limitation in any calendar year should have 
submitted to the Federal Reserve Bank of the district a copy of the 
plan, any such regulations, and the trust agreement, all certified to be 
true copies, in order to establish eligibility.
    (ii) The term assets means all funds, including the employee 
contributions and employer contributions and assets purchased therewith, 
as well as accretions thereto, such as dividends on stock, the increment 
in value on bonds and all other income; but, notwithstanding any other 
provision of this paragraph, the right to demand and receive all assets 
credited to the account of an employee shall not be construed to require 
the distribution of assets in kind when it would not be possible or 
practicable to make such distribution; for example, Series E bonds may 
not be reissued in unauthorized denominations, and fractional shares of 
stock are not readily distributable in kind.
    (iii) The term beneficiary means the person or persons, if any, 
designated by the employee in accordance with the terms of the plan to 
receive the benefits of the trust upon his or her death, or the estate 
of the employee, and the term distributee means the employee, or his or 
her beneficiary.