In simultaneous releases Aug. 12th., the Internal Revenue Service issued both final and proposed regulations affecting the so-called “anti-cutback rule” for pension plans, according to a Thompson briefing.
“The ‘anti-cutback rule’ under ERISA (and the tax code) generally forbids plan amendments that eliminate or reduce optional forms of benefits, early retirement benefits, or retirement-related subsidies that were in place before the amendment,” Thompson reported, “The new rules intending to reflect the Supreme Court’s holding in Central Laborers’ Pension Fund v. Heinz, (541 U.S. 739, June 7, 2004) that “a plan could not enforce a ‘suspension’ of benefits against retirees who had taken new jobs as supervisors in the same industry, where plan provisions purporting to deny them benefits didn’t restrict supervisory work until after the participants had accrued their benefits and had worked for two years as supervisors following their initial receipt of plan benefits.”
The final regulations became effective August 12, 2005
Comments can be made in writing or electronically on the proposed regulations until November 10, 2005, with the IRS having scheduled a public hearing on December 6th..