Pension Plan Restructuring (Part IV) - Plan Amendments

There are other ways to restructure your defined benefit plan to decrease future costs that are typically less drastic than the conversion to defined contribution or plan wind-up options discussed in my previous posts.

Benefit Reductions

For example, plan amendments to:

• eliminate or reduce ancillary benefits such as unreduced (or partially reduced) early retirement and bridge benefits;
• change ancillary benefit eligibility criteria (age and service requirements);
• change the future service defined benefit formula (e.g., reduce the percentage, narrow the scope of pensionable earnings or change to career average);
• reduce or eliminate indexation on future service accruals (including a change to ad hoc indexing); and