For a variety of economic reasons, plan sponsors amend their plans to reduce the going-forward rate of benefit accrual by participants or reduce or eliminate early retirement benefits.
Prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), plan sponsors of defined benefit pension plans and money purchase pension plans were required to comply with the notice requirements of �204(h) of ERISA with respect to significant reductions in the rate of future benefit accrual by participants. EGTRRA amended ERISA �204(h) to, among other things, extend that section’s reach to early retirement benefits and added �4980F of the Internal Revenue Code (code), which imposes an excise tax for failures in this regard.
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