Rev. Rul. 72-5

A corporation's pension plan provides that prior service credit will be granted for service as an employee with the "immediate prior employer" of each participant. The plan does not list by name the immediate prior employer of each participant.

Revenue Ruling 62-139, C.B. 1962-2, 123, states that the primary test for inclusion of credits based on the employee's services with any former employer, whether for eligibility or benefit purposes, is whether the application of such past service credits results in discrimination in favor of employees in whose favor discrimination is prohibited. That Revenue Ruling also states that the period of service with a former employer may be used for purposes of determining eligibility and benefits under a qualified plan provided (1) such former employer, if not a participant in a group plan with the present employer, is specified in the plan or trust; (2) all employees of such former employer are treated uniformly; and (3) the use of the past service factor does not produce discrimination in favor of those employees in whose favor discrimination is prohibited.

Held, this pension plan will not fail to qualify under section 401 of the Internal Revenue Code of 1954 merely because it grants past service credit for service as an employee with the "immediate prior employer" of each participant. However, whether a provision for granting credit for service with a prior employer results in prohibited discrimination in operation will be determined on the basis of all the facts in a specific case.