Opinion ID: 2732855
Heading Depth: 4
Heading Rank: 1

Heading: the accrued benefit under the defined

Text: benefit plan determined without regard to the offset derived from the profit-sharing plan satisfies the [minimum vesting] requirements . . . ; and (2) the offset to the benefit otherwise payable is equal to the amount deemed provided on the determination date by the vested portion of the account balance in the profit-sharing plan . . . . Rev. Rul. 76-259, 1976-2 C.B. 111 (1976) (emphasis added). Plaintiffs rely on the italicized language to suggest that DHL’s two plans should be treated as a “fully integrated 22 ANDERSEN V. DHL RETIREMENT PENSION PLAN arrangement,” and thus any amendment that affects the combined take-home monthly benefits under the plans, as DHL’s elimination of the transfer option did here, should be treated as reducing an “accrued benefit” in violation of the anti-cutback rule. But the Revenue Ruling does not change the definition of an “accrued benefit” established in 29 U.S.C. § 1002(23), or the general notion that an accrued benefit for a floor-offset plan is defined by reference to the terms of each of the two plans at issue. Instead, it confirms that the “accrued benefit” of a defined benefit plan is separate from the offset applied; and it adds, for minimum vesting purposes, an independent requirement regarding the offset — that it be equal to the vested portion of the defined contribution plan — that Plaintiffs do not contend has been violated here. Further, 26 U.S.C. § 414(k), which Plaintiffs also cite, states that for purposes of the provision defining “accrued benefit,”8 floor-offset plans are “treated as consisting of a defined contribution plan to the extent benefits are based on the separate account of a participant and as a defined benefit plan with respect to the remaining portion of benefits under the plan.” 26 U.S.C. § 414(k). With regard to DHL’s plans, then, § 414(k) means that the “accrued benefit” of the offset (which is “based on the separate account,” id.) is defined as “the balance of the individual’s account,” and the “accrued benefit” of the remainder is defined as “the individual’s accrued benefit determined under the plan and . . . expressed 8 Section 414(k) cites 26 U.S.C. § 411(a)(7), the Internal Revenue Code provision defining “accrued benefit.” The Internal Revenue Code definition is substantively identical to the definition contained in ERISA, 29 U.S.C. § 1002(23), which we quote throughout this opinion. ANDERSEN V. DHL RETIREMENT PENSION PLAN 23 in the form of an annual benefit commencing at normal retirement age,” 29 U.S.C. § 1002(23). Neither of the provisions Plaintiffs cite indicates that the transfer option described in section 7.11 should be considered part of the “accrued benefit” under the particular terms of DHL’s defined benefit plan. In sum, after the 2004 plan amendment, the “accrued benefits” of both the defined contribution and the defined benefit plans remained intact. We therefore conclude that the reduction of periodic benefits paid from the Retirement Income Plan that resulted from DHL’s elimination of the transfer option did not violate 29 U.S.C. § 1054(g)(1). That conclusion does not, however, entirely resolve this case.