411 (b) (1) (G), a defined-benefit plan is not qualified if it reduces a participant's accrued benefit
on account of any increase in his or her age or service.
Details accompanying the Cox deal also show Mr Hook has agreed to swap his pounds 874,000 accrued benefit
- which he can get at next year - for an equivalent value of AS shares to "avoid significant cash outflows from the business".
The actuarial determination of the accrued benefit
obligations for pensions and other retirement benefits uses the projected benefit method prorated on service (which incorporates management's best estimate of future salary levels, other cost escalation, retirement ages of employees and other actuarial factors).
411(a)11)(D), in determining whether an employee's accrued benefit
exceeds $5,000 (and, thus, may not be immediately distributed without the employee's consent), a plan may provide that rollover contributions (and attributable earnings) are disregarded.
5, 1997, increased a plan participant's involuntary cash-out from $3,500 to $5,000, as long as the present value of the participant's nonforfeitable accrued benefit
is not above the limit.
In addition to the adverse trends in asset returns and interest rates, the funded status of many big-carrier plans has been further undermined by lucrative labor contracts (signed before the industry downturn) that drove accrued benefit
The term "balance to the credit of an employee" means either the vested (nonforfeitable) account balance that will be distributed from a defined contribution plan or the vested (nonforfeitable) accrued benefit
that will be distributed from a defined benefit plan.
if he terminates employment immediately, he will receive his accrued benefit
nevertheless, commencing at age 65).
However, the law does not stipulate that the opening account balance must equal the present accrued benefit
under the old plan.
For defined benefit plans, this specified minimum benefit results from calculating the accrued benefit
of a single life annuity at an accrual rate of .
This constant change makes the concept of an accrued benefit
difficult to apply to health plans.
50) For purposes of determining whether a participant's accrued benefit
is less than $1,000, plans must count amounts attributable to rollover contributions.