September 14, the First Circuit heard oral arguments in the case of Jeffrey R.
Tasker v. DHL Retirement Savings Plan, et. al. (Docket Number 09-2661). Click here
to listen to the oral arguments.
had a defined benefit plan and a defined contribution plan through his
employer, for which he worked for over thirty-two years. The company was
acquired by a competitor in 2004, and the plans were merged into the
competitor's defined benefit and defined contribution plans. All relevant
features of Plaintiff's original plans were preserved, with one exception
-- Tasker's ability to transfer funds from one plan to the other. Plaintiff claimed that the elimination of
that right to transfer funds violated ERISA's anti-cutback rule, 29
USCS § 1054(g). Specifically,
Plaintiff claimed that in eliminating his right to transfer his balance and
thereby take advantage of more favorable actuarial assumptions, DHL had violated
the anti-cutback rule by "eliminating an optional form of benefit."
to dismiss, arguing that a Treasury Department regulation specifically
permitted the elimination of such a right, even when it resulted in a reduction
of accrued benefits. 26
C.F.R. § 1.411(d)-4, Q&A-2(b)(2)(viii) states that:
Provisions for transfer of benefits between and
among defined contribution plans and defined benefit plans. A plan may be
amended to eliminate provisions permitting the transfer of benefits between and
among defined contribution plans and defined benefit plans.
Defendants claimed that the regulation meant exactly what it said: elimination
of the right to transfer funds between plan accounts does not violate the anti-cutback
rule. Plaintiff responded that the regulation allowed the elimination of the right
to transfer funds only so long as such an amendment did not reduce the monthly
annuity benefit to which he was entitled.
In Tasker v. DHL Ret. Sav. Plan, 2009 U.S.
Dist. LEXIS 120937 (D. Mass. Nov. 20, 2009) [enhanced version available to lexis.com subscribers],
the district court held that the regulation, by allowing the elimination of the
ability to transfer funds, contemplated that such transfer could reduce or
eliminate protected benefits. For this reason, even if the transfer right
constituted an optional form of benefit, it could be eliminated without running
afoul of the anti-cutback rule.
can view defendant's motion
to dismiss, plaintiff's opposition, and defendant's reply filed in Tasker v. DHL Ret. Sav. Plan, 2009
U.S. Dist. LEXIS 120937 (D. Mass. Nov. 20, 2009)