- 12 - Employee Benefit Rights”. Congress included in Title II of ERISA “Amendments to the Internal Revenue Code Relating to Retirement Plans.” Through ERISA, qualified pension plans and their participants are granted favorable tax treatment in that: (1) An employer may deduct its contributions to the trust which holds the pension fund in the year in which the contributions are made, (2) the earnings on the trust’s principal are not taxed, and (3) the employee is not taxed until the benefits are distributed to him or her. We concern ourselves with the anticutback rule of section 411(d)(6). That section, which parallels the requirements of 29 U.S.C. sec. 1054(g), provides in relevant part: (6) Accrued benefit not to be decreased by amendment.-- (A) In general.--A plan shall be treated as not satisfying the requirements of this section if the accrued benefit of a participant is decreased by an amendment of the plan, other than an amendment described in Section 412(c)(8), or Section 4281 of the Employee Retirement Income Security Act of 1974. (B) Treatment of certain plan amendments.--For purposes of subparagraph (A), a plan amendment which has the effect of-- (i) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in regulations)[3], or 3 There is no definition of "retirement-type subsidy" in the regulations.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011