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Early retirement supplements exceeding Social Security benefits
Summary DOL was asked about supplemental payments to early retirees under a defined benefit plan. It said the then section 204 rule allowed certain temporary amounts to be disregarded only up to Social Security benefit levels and ending when those benefits began. To the extent the described supplement exceeded Social Security benefits, the plan failed section 204; DOL concluded the resulting reduction in accrued benefits violated that section.
Document
Federal opinion letter
Agency
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Document number
P/OPINION 75-66
Date issued
November 12, 1975
Status
Unknown
EBSA's index does not mark withdrawn or superseded opinions; still posted on dol.gov as of 2026-10-26.
Status last verified October 26, 2026
Topics
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About this page: The full text below is the official document from U.S. Department of Labor, Employee Benefits Security Administration (EBSA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
P/OPINION 75-66
204
November 12, 1975
Dear :
This is in response to your letter of July 7, 1975,
inquiring whether a defined benefit pension plan
containing supplemental early retirement benefits
satisfied the requirements of section 204(b)(1)(G) of the
Employee Retirement Income Security Act of 1974 (ERISA).
The defined benefit pension plan may not satisfy those
requirements.
The general rule of section 204(b)(1)(G) is that a defined
benefit plan does not satisfy the requirements of section 204
of the Act if a participant's accrued benefit is reduced on
account of age or service. However, in determining whether
there has been such a reduction, certain amounts may be
disregarded if (1) they do not exceed Social Security
benefits and (2) terminate when Social Security benefits
commence. The purpose of section 204(B)(1)(G)(i) and (ii)
is to allow an early retiree to maintain a retirement income
equivalent to the retirement income of a person retiring
when social security benefits commence.
In your letter you describe a supplemental early retirement
benefit that may be as high as $300 per month. To the extent
that this benefit exceeds social security benefits, the plan
does not satisfy the requirements of section 204 of the Act.
"[A]n accrued benefit may not be reduced on account of increasing
age or service (except to the extent of social security supplements
or their equivalents)." (emphasis added) Conference Report,
H.R.Rep. No. 1280,93d Cong., 2d Sess. 273 (1974), 8A U.S. Cong.
& Admin. News 672 (September 20, 1974). The benefits described
in your letter appear to be social security supplements or
their equivalent that exceed the allowable amount. As a result
a participant's accrued benefit will be reduced on account
of an increase in age. This reduction violates the requirements
of section 204 of the Act.
Sincerely,
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