plant shutdown and accrued benefits

[Guest Mr. Kite]

I have what I hoped would be a simple question: Pension plan has a plant shutdown benefit -- unreduced pension if 55 and 10 years of service. Employee has over 10 years of service at time of shutdown, but he is only 50. Is the employee allowed to "grow into" the benefit and receive the unreduced pension at 55?

The Bellas case and the 411(d)(6) regulations indicate that shutdown benefits are accrued benefits, and the Gillis case and RR 85-6 indicate that an employee may "grow into" eligibility to receive accrued benefits, but I haven't found anything directly on point.

Relevant plan language: any employee who shall have had at least 10 years of service and shall have attained the age of 55 may retire, provided that at the time of retirement the Employee has been laid off as a result of a plant shutdown.

[Guest Harry O]

No. He will not reach the age requirement while employed. He has terminated employment.

The cases in this area address situations where the plan was amended to eliminate the shutdown benefit when the employee was age 50 and had 10 years of service but the plant shutdown 5 years later when the employee was now 55 & 10. In this case, the employee is entitled to the shutdown benefit (based on his accrued benefit at the date of amendment if the plan was artfully drafted or based on his accrued benefit at 55 & 10 if not so artfuly drafted).