Decrease in avg pay decreasing accrued benefit

[Gary]

A plan uses high 3 consecutive year avg for avg comp.

If employee earns 50,000 for 2000, 2001 and 2002 can his avg comp decrease?

i.e what plan provisions would be necessary for a decrease in avg comp to occur?

Thank you.

[mwyatt]

Not sure of your question, but it would appear if the definition of High 3 was over entire period of service that $50k would serve as a threshold per your example. However, the definition may in fact be High 3 in last 10 years (or some other permutation). Look to the document...

[WDIK]

Even if the average compensation decreased under the scenario described by mwyatt, it is my understanding that benefits already accrued cannot be reduced.

[david rigby]

Not quite. IRC 411(d)(6) protection applies to plan amendments. It is possible for a benefit to decline due to decreasing compensation, but if you have to amend the plan for that to happen, then the accrued benefit at the date of the amendment will serve as a minimum.