Anti-cutback rule for union employees in a plan covering both union and non-union employees

[Belgarath]

Say you have a DC plan (ERISA 403(b)) covering both non-union and union employees, with a good faith CBA negotiated, etc., etc.

Plan, by its terms, requires a fixed employer contribution, NO allocation requirements for a plan year.

Employer is in financial difficulties, and union may be willing to renegotiate the CBA to remove or reduce the required employer contribution for 2026. But under the terms of the plan, benefit is already accrued.

I think even if union is willing to open up the CBA and renegotiate, they still can't overcome the ERISA anti-cutback requirements - is there any way around that? I'm not aware of one, but don't really deal with ERISA plans with union involvement. 

Thanks.

[ConnieStorer]

Hi Belgarath,

I worked on a defined benefit plan many many years ago that was covered by a Union.  The Union agreed to the retroactive freezing of accruals.  I brought up the anti-cutback rules to the attorneys involved in the negotiations and was told that the CBA took precedence over ERISA regulations.  They did not give me a reference site but they were the attorneys in charge so I did not argue the point.

[Effen]

I agree with Connie in that some attorney's feel the CBA can override 411(d)(6).  I personally do not agree, but like Connie, they are the attorney so let them defend it if necessary.  

I have also worked with attorney's who disagree and would implement that change as soon as administratively feasible, after required 15/90 day notice requirement.  This is obviously the advise I would give, but not my monkey if the attorney feels otherwise.  

I have a little concern over your words, "remove or reduce the required employer contribution".  I assume this is a single employer plan and not a multiemployer plan?  If so, you cannot remove or reduce the required MRC that is determined under Section 430 (i.e. Schedule SB requirements).  You may be able to reduce the negotiated contribution, but that doesn't eliminate the employers obligation to satisfy the requirements of Section 430.