k man Posted July 25, 2001 Posted July 25, 2001 is it a cutback or reduction in benefits to amend a plan so that the break in service rule is applicable? how does this effect the 5 year break in service rule?
david rigby Posted July 25, 2001 Posted July 25, 2001 Usually the application of a plan change is prospective only to avoid problems with IRC 411(d)(6). Probably B-I-S would be the same. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest Harry O Posted July 26, 2001 Posted July 26, 2001 I would think this is considered a change to the vesting schedule (which the IRS regulations say includes any change to the method of crediting service for vesting purposes). This means you need to let employees with 3 or more years of service elect to stay under the old service crediting rules. I'm not sure this is a section 411(d)(6) issue since there is no reduction in accrued benefits (i.e., the account balance).
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