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Guest Eris@rab
Posted

are COLA's allowed to be cutback?

what about if there is an unreduced pension at age 62 with 30 years of service -- can we eliminate that if we have an unreduced pension at age 55 with 10 years of service?

Posted

The IRS considers a COLA to be part of the accrued benefit. For example, see GrayBook Q&A 2006-32 and 96-39.

BTW, so does the PBGC. See BlueBook Q&A 98-2.

Also, see recent court case:

Gary Williams v. Rohm and Haas Pension Plan

Seventh Circuit, decided 8/14/2007

Case. No. 06-2555

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.

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