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“accrued” only by an “employee”, but, once accrued, the benefit
is protected from diminution as long as the individual who
accrued the benefit is a “participant” in the plan, whether as an
employee or as a retiree.4 It follows that, while a retiree may
enjoy COLAs added after retirement, such COLAs are not “accrued
benefits” as to that retiree, because the COLAs were not accrued
while he was an employee. Accordingly, the later-added COLAs are
not protected from being diminished by operation of section
411(d)(6).
The pertinent legislative history reinforces the
understanding that ERISA was meant to protect only retirement
benefits “stockpiled” during an employee’s tenure on the job:
Unless an employee’s rights to his accrued pension
benefits are nonforfeitable, he has no assurance that
he will ultimately receive a pension. Thus, pension
rights which have slowly been stockpiled over many
years may suddenly be lost if the employee leaves or
loses his job prior to retirement. Quite apart from
the resulting hardships * * * such losses of pension
rights are inequitable, since the pension contributions
previously made on behalf of the employee may have been
made in lieu of additional compensation or some other
4 While 29 U.S.C. sec. 1002(6) (1994) defines “employee” as
“any individual employed by an employer”, 29 U.S.C. sec. 1002(7)
(1994) defines “participant” more expansively to include “any
employee or former employee”. (Emphasis added.) The terms
“employee” and “former employee” are not interchangeable.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117-118
(1989). Additionally, while the definition of the term “accrued
benefit” under 29 U.S.C. sec. 1002 (23) is “an individual’s
accrued benefit”, we find no indication that this term has a
different meaning for purposes of sec. 411(d)(6).
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