Central Laborers' Pension Fund v. Heinz

[Everett Moreland]

Under this decision (issued today by the Supreme Court), would it violate 411(d)(6) to amend a db plan to suspend actuarial increases on previously accrued benefits while working for the employer and not receiving benefits after normal retirement age, as to benefits accrued before the amendment, where these actuarial increases have been provided pursuant to ERISA and not pursuant to the plan document? My first reading of the decision is this would violate 411(d)(6). I would like to get others' thoughts.

[Kirk Maldonado]

Here's the cite to the reported decision: http://a257.g.akamaitech.net/7/257/2422/07...3pdf/02-891.pdf

[david rigby]

You lawyers like long sentences.

If I understand your question, I read the regs under 411(d)(6) such that, yes it is a violation, Heinz case not needed for that conclusion. But note, in reading the summary of the Heinz case, I was shocked at what the plan tried to get away with. Perhaps I am oversimplifying.

[Everett Moreland]

Pax:

The reason the plan tried to get away with it is the IRS has allowed it. The following is from the IRS audit guidelines for multiemployer plans (the Supreme Court cited and rejected this provision as inconsistent with the 411(d)(6) regulations):

"An amendment that reduces IRC 411(d)(6) protected benefits on account of 203(a)(3)(B) service does not violate IRC 411(d)(6). In contrast, protected benefits may not be retroactively reduced on account of reemployment that is not 203(a)(3)(B) service. Because IRC 411(d)(6) only protects benefits from being reduced by amendment, receipt of protected benefits other than the normal retirement benefit may be conditioned on the participant's not performing any type of reemployment if the provision is present in the plan from its establishment. See DOL Reg. 2530.203-3(a)."