No employee contributions
(iv) No employee contributions. The plan must not be a contributory DB plan. (v) Period of accrual. Each employee's benefit must be accrued over the same years of service that are taken into account in applying the benefit formula under the plan to that employee. For this purpose, any year in which the employee benefits under the plan (within the meaning of 1.410(b)-3(a)) is included as a year of service in which a benefit accrues. Thus, for example, a plan does not satisfy the safe harbor in paragraph (b)(4) of this section unless the plan uses the same years of service to determine both the normal retirement benefit under the plan's benefit formula and the fraction by which an employee's fractional rule benefit is multiplied to derive the employee's accrued benefit as of any plan year. (vi) Examples. The following examples illustrate the rules in this paragraph (b)(2): (3) Safe harbor for unit credit plans(i) General rule. A plan satisfies the safe harbor in this paragraph (b)(3) for a plan year if it satisfies both of the following requirements: (A) The plan must satisfy the 133 1/3 percent accrual rule of section 411(b)(1)(B). (B) Each employee's accrued benefit under the plan as of any plan year must be determined by applying the plan's benefit formula to the employee's years of service and (if applicable) average annual compensation, both determined as of that plan year. (ii) Example. The following example illustrates the rules in this paragraph (b)(3): (4) Safe harbor for plans using fractional accrual rule(i) General rule. A plan satisfies the safe harbor in this paragraph (b)(4) for a plan year if it satisfies each of the following requirements: (A) The plan must satisfy the fractional accrual rule of section 411(b)(1)(C). (B) Each employee's accrued benefit under the plan as of any plan year before the employee reaches normal retirement age must be determined by multiplying the employee's fractional rule benefit (within the meaning of 1.411(b)-1(b)(3)(ii)(A)) by a fraction, the numerator of which is the employee's years of service determined as of the plan year, and the denominator of which is the employee's projected years of service as of normal retirement age. (C) The plan must satisfy one of the following requirements: