Problem with Defn. of Normal Ret. Age

[mal]

Approximately 5 years ago one of our DB plans created an

unreduced retirement benefit for those employees

with 30 years of service who were at least 57 years old.

Unfortunately, this was added to the definition of normal

retirement age in the plan document. In actuality, it is

an early, unreduced pension.

We would like to change the plan to correct this error. However,

there is some concern over the IRC and ERISA anti cutback

rules. If this change were made, the employees would

still have a right to the same form and amount of benefit,

it just would not be characterized as a normal retirment.

Thanks

[david rigby]

If the sponsor amended the plan definition of NRD, it is there and is not "an early unreduced pension." Certainly, the sponsor will want legal advice, but attempting to claim "scrivener's error" after 5 years seems to be more than a "stretch".

Remember that NRD is relevant for several purposes. For example, it is the date at which a top-heavy benefit is assumed to be applicable.

[MGB]

It is also the date that determines the back-loading test under 411. A person terminating one year prior to that unreduced date better have a pro-rata accrual coming to them at the same date.