A company sponsors a money purchase pension plan that, once eligibility has been met and a participant begins participation, requires 501 hours of service to receive an allocation of the contribution for the plan year. The company has decided, near the end of the plan year, that they don't want to make contributions to employees who terminated during the year so they amend their plan to require employement on the last day requirement as a requirement to receive a contribution allocation.

Some of the terminees worked the 501 hours and when they left were expecting a contribution. Now they won't get one. Is this a cut-back of benefits?

Based on the facts you set forth it is a cutback. You may want to look at the following

http://www.reish.com/practice_areas/Techni...lTips/tip16.cfm
[Edited by KJohnson on 07-14-2000 at 09:21 AM]

My recollection is that the Section 411(d)(6)regulations would require that persons who have already completed 501 hours get an allocation.

I agree. Those employees that worked 501 hours already did what they had to to get the contribution. This can not be taken from them once earned.

411(d)(6) would preclude amending the plan for the current year. The terminated employees had already satisfied the terms and conditions for benefit accrual and are entitled to a contribution for the current.

The plan could be amended, but would only apply to future plan years.