I've seen discussion of this here but don't recall any definitive answers. Can an active participant's accrued benefit go down legitimately? For example, if:

1. Average comp decreases (e.g. comp history is less than the averaging period and comp goes down in year 4 or 5) and an additional year of benefit service isn't credited for some reason.

2. Average comp decreases on account of a high 5 in last 10 definition where the highest years would be prior to the most recent 10 and additional service credit isn't enough to offset decrease in average comp.

3. An increase in covered compensation on account of indexing in a year of termination prior to accruing an additional year of service.

Thanks for any clarification of this.

This a recent thread that might help.

http://benefitslink.com/boards/index.php?showtopic=12679

I'm pretty sure that the regs point out that an accrued benefit cannot decrease solely as a result in the participant's SS Covered Compensation. Thus, for a CY plan, the accrued benefit as of 1/1/2001 should not decrease below the accrued benefit as of 12/31/2000 if the only difference is due to which Covered Compensation table is used.

(Sorry i'm having trouble remembering which reg this is.)