[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: 31CFR353.13]

[Page 325-326]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 353--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES EE AND HH--Table of Contents
 
               Subpart C--Limitations on Annual Purchases
 
Sec. 353.13  Employee plans--Conditions of eligibility.

    (a) Definition of plan. Employee thrift, savings, vacation and 
similar plans are contributory plans established by the employer for the 
exclusive and irrevocable benefit of its employees or their 
beneficiaries. Each plan must afford employees the means of making 
regular savings from their wages through payroll deductions and provide 
for employer contributions to be added to these savings.
    (b) Definition of terms used in this section. (1) The term assets 
means all the employees' contributions and assets purchased with them 
and the employer's contributions and assets purchased with them, as well 
as accretions, such as dividends on stock, the increment in value on 
bonds and all other income; but, notwithstanding any other provision of 
this section, the right to demand and receive all assets credited to the 
account of an employee shall not

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be construed to require the distribution of assets in kind when it would 
not be possible or practicable to make such a distribution; for example, 
Series EE bonds may not be reissued in unauthorized denominations.
    (2) The word beneficiary means: (i) The person or persons, if any, 
designated by the employee in accordance with the terms of the plan to 
receive the benefits of the plan upon the employee's death or (ii) the 
estate of the employee.
    (c) Conditions of eligibility. An employee plan must conform to the 
following rules in order to be eligible for the special limitation 
provided in Sec. 353.10.
    (1) Crediting of assets. All assets of a plan must be credited to 
the individual accounts of participating employees and may be 
distributed only to them or their beneficiaries, except as provided in 
paragraph (c)(3) of this section.
    (2) Purchase of bonds. Bonds may 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 is equal to 
the purchase price of a bond or bonds in an authorized denomination or 
denominations, and shares in the bonds are credited to the accounts of 
the individuals from which the purchase price was derived, in amounts 
corresponding with their shares. For example, if $50 credited to the 
account of John Jones is commingled with funds credited to the accounts 
of other employees to make a total of $5,000 with which a Series EE bond 
in the denomination of $10,000 (face amount) is purchased in December 
1980 and registered in the name and title of the trustee, the plan must 
provide, in effect, that John Jones' account be credited to show that he 
is the owner of a Series EE bond in the denomination of $100 (face 
amount) bearing an issue date of December 1, 1980.
    (3) Irrevocable right of withdrawal. Each participating employee has 
an irrevocable right to request and receive from the trustee all assets 
credited to the employee's account (or their value, if the employee 
prefers) without regard to any conditions other than the loss or 
suspension of the privilege of participating further in the plan. A plan 
may limit or modify such right in any manner required for qualification 
of the plan under section 401 of the Internal Revenue Code of 1954, as 
amended (26 U.S.C. section 401).
    (4) Rights of beneficiary. Upon the death of an employee, his or her 
beneficiary shall have the absolute and unconditional right to demand 
and receive from the trustee all assets credited to the account of the 
employee or their value, if he or she so prefers.
    (5) Reissue or payment upon distribution. 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 plan trustee in which the 
employee has a share, the bond must be paid or reissued to the extent of 
the share. If an employee or the 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 employee or the 
employee's beneficiary to the extent entitled, in authorized 
denominations, in any authorized form of registration, upon the request 
and certification of the trustee.
    (d) Application for special limitation. A trustee of an employee 
plan who desires to purchase bonds under the special limitation should 
submit to the designated Federal Reserve Bank or Branch a copy of:
    (1) The plan, (2) any instructions issued under the plan that 
concern Series EE bonds, and (3) the trust agreement, in order to 
establish the plan's eligibility.
    (e) Vacation plans. Savings bonds may be purchased under certain 
vacation plans. Questions concerning the eligibility of these plans to 
purchase bonds in excess of the general limitation should be addressed 
to the Bureau of the Public Debt, Parkersburg, WV 26101.

(31 U.S.C. 3105 and 3121)

[44 FR 76441, Dec. 26, 1979, as amended at 48 FR 55458, Dec. 13, 1983; 
59 FR 10541, Mar. 4, 1994; 63 FR 64551, Nov. 20, 1998]

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