Early Retirement Feature and anti-cut back

[cpc0506]

Client has ERA of 50 at which you become 100% vested. Why I do not know. Now the client wants to remove the Early Retirement Provision. Can this be done or is it a cutback?

[Lou S.]

I believe the last time I researched this you could do it with a big caveat. The Big Caveat being that you had to preserve the ERA for any benefits accrued in the plan at the time of the amendment and allow participants already in the plan to age into ERA with respect to those benefits already accrued.

But it's been at least 5 years since I last looked at the issue.

[cpc0506]

Just an FYI, this is a defined contribution plan.

[Lou S.]

In that case I think you need to preserve the ERA for account balances (plus/minus G/L to ERA) as of the amendment date.