Anti-cutback Rules for Qualified Retirement Plans (IRC § 411(d)(6))

Summary

This practice note describes the anti-cutback rules that generally prohibit qualified retirement plan sponsors from amending their plans in a way that decreases participants' accrued benefits, imposes new restrictions or conditions on those benefits, or otherwise eliminates or reduces certain protected benefits. These rules are found in I.R.C. § 411(d)(6), as amended by the Economic Growth and Tax Relief Reconciliation Act (Pub. L. No. 107-16) (EGTRRA) and the implementing regulations thereunder (collectively referred to here as Section 411(d)(6)) and parallel provisions of the Employee Retirement Income Security Act (ERISA) under ERISA § 204(g) (29 U.S.C. § 1054(g)). Your understanding of the anti-cutback rules is necessary for advising plan sponsors that are contemplating plan amendments, plan mergers, or transfers of plan assets, situations that could implicate these rules, to help them avoid non-compliance leading to possible ERISA claims or loss of the plan's qualified status.