Amending a church plan to reduce an accrued benefit

[Guest jvanheyde]

Assume a church plan is not subject to ERISA and the church amends the plan to increase the normal retirement age and decrease the accrued benefit. On what basis could a participant who has reached normal retirement age argue that his/her benefit could not be reduced. I've read that the anti-cutback rules of Code Section 411(d)(6) do not apply to Church Plans per 411(e)(1).

It appears that any cause of action would have to be found in (i) the Plan document, (ii) state law or (iii) church law.

If the Plan document reserves the right to amend the plan unilaterly and without regard to whether it reduces a participant's accrued benefit, then item (i) is out.

Item (ii) seems like it would have to be like a promissory estoppel basis, that the participant did everything he was asked to do and was promised a certain benefit in return.

Any thoughts on how to argue this amendment would not apply to a participant who reached normal retirement?

[david rigby]

... the anti-cutback rules of Code Section 411(d)(6) do not apply to Church Plans per 411(e)(1).

Don't forget to read 411(e)(2).