These plans can be designed to avoid much of the contribution volatility associated with traditional DB plans because accrued benefits
can be reduced if the plan's funding deteriorates.
outputs, that is, accrued benefits
defined in terms of deferred annuity
For cash balance or hybrid plans, the accrued benefit
may be expressed as an annuity payable at retirement age, the balance of a hypothetical account, or the current value of the cumulative percentage of the employee's final compensation.
The DROP-electing employee thus foregoes increases in the accrued benefit
during the DROP period in exchange for receiving benefits (via accumulation in the DROP account) during the DROP period.
One of the most controversial issues arises when the accrued benefits
of the defined-benefit plan exceed the amount determined under the cash-balance formula.
People who have no experience with benefit administration matters fail to understand that accrued benefits
are only a measure of what would be paid if the employees quit on the date of measurement.
Accordingly, the final regulations generally provide that a defined contribution plan does not violate the requirements of section 411(d)(6) merely because the plan is amended to eliminate or restrict the ability of a participant to receive payment of accrued benefits
under a particular optional form of benefit if, after the plan amendment is effective with respect to the participant, the alternative forms of payment available to the participant include payment in a single-sum distribution form that is otherwise identical to the optional form of benefit that is being eliminated or restricted.
Thus, in some cases, accrued benefits
under the cash balance formula may be lower than those under a traditional defined benefit plan.
Cicero had tried in the past to convince the CEO that these so-called "extracurricular activities" accrued benefits
to the hospital, his efforts had failed.
These provisions allow a worker to terminate service before he or she is eligible for retirement without losing accrued benefits
Of those who froze plans, 58 percent had also frozen the accrued benefits
to existing participants, while 42 percent continued to accumulate accrued benefits
for the current population.
Survivors' claims for dependency and indemnity compensation (DIC), survivors' pension and accrued benefits
must be filed on VA Form 21-534EZ, Application for DIC, Death Pension, and/or Accrued Benefits