[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR547.1]

[Page 202-203]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 547_REQUIREMENTS OF A ``BONA FIDE THRIFT OR SAVINGS PLAN''--Table 
of Contents
 
Sec. 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 Sec. 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

[[Page 203]]

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 Sec. 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 
1215-0019)

[19 FR 4864, Aug. 3, 1954, as amended at 47 FR 145, Jan. 5, 1982]