Rev. Rul. 79-215

This Revenue Ruling provides guidelines for interpreting section 412(c)(8) of the Internal Revenue Code of 1954 and section 302(c)(8) of the Employee Retirement Income Security Act of 1974 (ERISA) [Pub. L. 93-406, 1974-3 C.B. 1].

Under section 412(c)(8) of the Code and section 302(c)(8) of ERISA, a plan amendment shall, at the election of the plan administrator, be deemed to have been made on the first day of a plan year if (1) it is adopted no later than 21/2 months after the close of such plan year (or in the case of a multiemployer plan within the meaning of section 414(f) of the Code, no later than 2 years after the close of such plan year), (2) it does not reduce the accrued benefit of any participant determined as of the beginning of the first plan year to which the amendment applies, and (3) except as provided in the next paragraph, it does not reduce the accrued benefit of any participant determined as of the time of adoption.

No amendment may reduce the accrued benefit of any participant as of the date of adoption unless the requirements of Rev. Proc. 79-18, 1979-1 C.B. 525, are satisfied. The procedural rules, previously prescribed for plans other than collectively bargained plans by Rev. Proc. 79-18, will now apply to collectively bargained plans as well. No amendment described in this paragraph will be approved unless it is determined that such amendment is necessary because of substantial business hardship within the meaning of section 412(d)(2) of the Code and that a waiver under section 412(d)(1) of the Code or section 303(a) of ERISA is unavailable or inadequate.