Retirees Hit by Restricted Benefit Rules

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Here is our basic situation:

-Calendar year plan certified as critical by the actuary in mid-February

-Notice of critical status was mailed on last day of February

-A handful of participants already had applications completed and were waiting to retire on March 1 with a Social Security Level Income form of payment. (This form of benefit does not comply with ICR 432(f)(2)(A) or ERISA 305(f)(2)(A) and is prohibited.)

-The Annuity Starting Date was March 1 for these retirees.

-The applicable statutes indicate that the restrictions on these types of benefit payments becomes effective on the date the notice of critical status is sent.

-This group of participants has fallen through the cracks and have been drawing the payments since March. The problem was recently discovered.

The Board would prefer to let these retirees continue with the level income payments since they had absolutely no notice that the changes were coming. While the fund complied with the notice rules these particular retirees likely received it a couple of days after they were retired. The November changes to the 204(h) regulations indicate that the plan is deemed to comply with the 204(h) requirements so long as they sent a proper critical status notice.

Is there any way to provide relief to these individuals or are the Trustees obligated to reduce their payments?