Coping with Benefit Cutbacks: 204(h) Notice Requirements from Regulatory and Litigation Perspectives

ERISA and the Internal Revenue Code require that employers amending defined benefit and money purchase pension plans to significantly reduce the rate of future benefit accruals or early retirement benefits must notify affected employees of the change. The notice requirement constrains communications by employers seeking to freeze benefits, convert to cash balance plans, or change benefit formulas, and can be a powerful tool in the hands of employees seeking to challenge benefit reductions. The panel will discuss the statutory requirements and recent court interpretations, including cases holding plan amendments void.

Topics that will be addressed include the following:

• Recent IRS proposed regulations on the interaction of Section 204(h) with Pension Protection Act requirements for retroactive plan amendments.
• What events require a 204(h) notice and what is a "significant reduction" in the rate of future benefit accrual or in early retirement benefits?
• What information must a Section 204(h) notice contain?
• What is the role of other disclosures, such as summary plan descriptions and summaries of material modification, in communicating benefits changes?
• What are the consequences of failure to give a proper notice?
• Who is a proper defendant on a claim for failure to provide a proper notice?
• What remedies are potentially available to participants in court?

Panelists:
Alan Tawshunsky, Deputy Division Counsel/Deputy Associate Chief Counsel (Employee Benefits), Internal Revenue Service, Washington, DC
Susan Katz Hoffman, Littler Mendelson, Philadelphia, PA
Thomas Moukawsher, Moukawsher & Walsh LLC, Hartford, CT

Moderator: Teresa Renaker, Lewis, Feinberg, Lee, Renaker & Jackson, PC, Oakland, CA

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