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Section 411(d)(6)(B)(i) was added to the Code in 1984, as
part of the Retirement Equity Act (REA), Pub. L. 98-397, 98 Stat.
1426 (1984). Before the REA, the anticutback rules did not
explicitly preclude plan amendments that reduced or eliminated
early retirement benefits or retirement-type subsidies. Because
many early retirement programs provided a benefit commencing
before normal retirement age, such a benefit was found not to
fall within the definition of an “accrued benefit”. Bellas v.
CBS, Inc., supra at 523 n.2. The REA provided that an employee
would be protected from a plan amendment reducing his or her
early retirement benefit or retirement-type subsidy.9 It did
not, however, affect the type of COLAs that are at issue here.
Moreover, even if we assume for the sake of argument that
the NPF COLAs were “retirement-type subsidies”, they would not be
nonforfeitable under section 411(d)(6)(B)(i) as to those who
retired before the NPF COLA amendments became effective. By
treating retirement subsidies as if they were accrued benefits,
the REA broadens the scope of benefits protected under the
8(...continued)
retiring before normal retirement age “still have value in excess
of the amount that would be available to a retiring employee
under the comparable actuarially-reduced normal retirement
benefit provisions. We agree * * * that this excess value is a
subsidy.”).
9 Congress contemplated that the Treasury Department would
promulgate regulations defining the term “retirement-type
subsidy”. See sec. 411(d)(6)(B)(ii); see also 29 U.S.C. sec.
1054(g)(2)(A). The Treasury Department has yet to do so.
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