SECTION 3. SCOPE

This revenue procedure applies to RICs that are consenting partners in eligible partnerships described in Rev. Proc. 2002–68, in Rev. Proc. 2003–84, or in any successor published guidance that provides substantially the same treatment for consenting partners in eligible tax-exempt-bond partnerships.

May 2, 2005 990 2005–18 I.R.B.

1996 after accruing enough pension credits to qualify for early retirement payments under a plan provision that paid them the same monthly benefit they would have received had they commenced payment at normal retirement age. The plan terms required that payments be suspended if a participant engaged in “disqualifying employment.” At the time the two participants commenced payment, the plan defined disqualifying employment to include only employment covered by the plan. At that time, employment covered by the plan (and thus, disqualifying employment) did not include work as a construction supervisor, the position in which the two participants were employed after they commenced benefits. Accordingly, the participants’ benefit payments were not suspended in 1996. However, in 1998, the plan was amended to expand its definition of disqualifying employment to include any employment in the construction industry in the geographic area covered by the plan, and the plan stopped payments to the two participants on account of their disqualifying employment as construction supervisors. The two participants sued to recover the suspended payments, claiming that the amendment expanding the plan’s suspension provisions violated section 204(g) of ERISA (the counterpart to § 411(d)(6) of the Code).

The Supreme Court, holding for the two participants, ruled that section 204(g) prohibits a plan amendment expanding the categories of post-retirement employment that results in suspension of the payment of early retirement benefits already accrued. The Court found that while ERISA permits certain conditions that are elements of the benefit itself (such as suspensions under § 411(a)(3)(B) of the Code or section 203(a)(3)(B) of ERISA), such a condition may not be imposed after a benefit has accrued and that the right to receive benefit payments on a certain date may not be limited by a new condition narrowing that right. The Court agreed with the 7 ^th Circuit that “[a] participant’s benefits cannot be understood without reference to the conditions imposed on receiving those benefits, and an amendment placing materially greater restrictions on the receipt of the benefit ‘reduces’ the benefit just as surely as a decrease in the size of the monthly benefit payment.” Central Laborers’, 124 S.Ct. at 2235–36, quoting