CHAPTER 3B ACCRUING BENEFITS - PART 2 (SPECIAL RULES; PROTECTION OF BENEFITS)

Once an employee becomes a participant in a plan, he or she can b-egin to accrue benefits. In Chapter 3A, we discussed the methods under which benefits are accrued, illustrating the differences between defined contribution plans and defined benefit plans. In this chapter we address the minimum accrual requirements for top heavy plans, as well as other special issues that affect the accrual of benefits (e.g., compensation dollar limit under IRC §401(a)(17)). We also discuss the rules designed to protect accrued benefits: anti-cutback rule, anti-assignment rule, and the exclusive benefit rule. Where appropriate, references are made to these other requireme