dmb Posted February 5, 2013 Posted February 5, 2013 Can a DB plan be amended to not provide further benefit accruals to a participants upon attainment of NRA (which is 65 in this case)? Thanks.
rcline46 Posted February 5, 2013 Posted February 5, 2013 I would think you a Suspension of Benefits notice, which would hold t he benefits plus interest, or start paying the benefits even if not retired. I do not have a cite handy, but I don't think you can stop accruals for someone who is still earning accrual credits. This does not work in a Money Purchase plan so I don't think it would work in a Defined Benefit Plan.
david rigby Posted February 5, 2013 Posted February 5, 2013 Not if it's an ERISA plan. But, it can be amended to limit the number of years of service (for example, 30) included in the benefit formula. 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.
Andy the Actuary Posted February 5, 2013 Posted February 5, 2013 It would also seem possible if there is a specific participant in mind to be able to define an employee class that the Plan would no longer cover. This would have to be nondiscriminatory and all the coverage and participation tests would need to be satisfied. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
SoCalActuary Posted February 5, 2013 Posted February 5, 2013 What is the motive? Saving money? If the participant has already earned the maximum benefit allowed under plan terms, then it occurs automatically. Otherwise, you are simply discriminating.
dmb Posted February 6, 2013 Author Posted February 6, 2013 Thanks for the responses. Yes, the motive is saving money.
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