Disability early retirement

[Guest meggie]

Early retirement eligibility is currently defined as age and service, or disabled. Can the disablity portion of eligibility be removed without violating protected benefits under IRC411(d)(6)?

[Kirk Maldonado]

Meggie:

What do the regulation say?

[Guest meggie]

1.411(d)-4 Q&A2 states that "a plan may be amended to eliminate or reduce section 411(d)(6) protected benefits not yet accrued as of the later of the amendment's adoption date or effective date without violating section 411(d)(6)".

It is my understanding that a qualified disability benefit that is an incidental benefit is not a protected benefit.

On the other hand, early retirement benefits are protected benefits, so my question is-- if early retirement is allowed if disabled regardless of the age and service requirements, then is the disability early retirement benefit a protected benefit? If the answer is yes, and the plan sponsor wants to amend it out of the plan, does the plan have to protect this benefit to the extent accrued?

[Guest Brian4]

One thing to watch out for is what is the amount of the disability benefit. If it exceeds the qualified disability benefit in IRC 411(a)(9), it becomes a protected retirement benefit.