Rev. Rul. 79-325

Advice has been requested as to whether a plan amendment made during a plan year that reduces the accrued benefit of a participant to the accrued benefit at the beginning of such year and that does not satisfy the requirements of section 412(c)(8) of the Internal Revenue Code and section 302(c)(8) of the Employee Retirement Income Security Act of 1974 [Pub. L. 93-406, 1974-3 C.B. 1] (ERISA), violates section 411(d)(6) of the Code and section 204(g) of ERISA.

A plan is amended during a plan year to reduce the accrued benefits of some or all participants to the accrued benefit that existed on the first day of such plan year. This amendment does not satisfy the requirements of section 412(c)(8) of the Code and tion 302(c)(8) of ERISA.

Section 411(d)(6) of the Code and section 204(g) of ERISA provide that an accrued benefit may not be reduced by a plan amendment other than an amendment described in section 412(c)(8) of the Code and section 302(c)(8) of ERISA.

In this case, section 411(d)(6) of the Code and section 204(g) of ERISA apply even though the accrued benefit during a plan year is reduced to the accrued benefit as of some earlier date in such plan year. Also, the sole allowable exception from the requirements of section 411(d)(6), relating to sections 412(c)(8) of the Code and 302(c)(8) of ERISA, does not apply.

Accordingly, such plan amendment violates section 411(d)(6) of the Code and section 204(g) of ERISA.