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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.
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