In 2012, plaintiffs sued under the Employee Retirement Income Security Act's "anti-cutback rule," which prohibits any amendment of a benefit plan that would reduce a participant's accrued benefit, according to court documents.

U.S. District Court Judge Marsha Pechman ruled that in eliminating the right to transfer funds, DHL did not violate ERISA's anti-cutback rule.

The 9^th circuit upheld that ruling on the grounds that eliminating the transfer right did not reduce accrued benefits in the individual DC or DB plans of participants.

The court also ruled that because the transfer option was an "optional form of benefit," then it fell under the regulatory exceptions of ERISA's anti-cutback rule.

In upholding the lower court's ruling, the 9^th Circuit has furthered legal precedent in how sponsors can amend their floor-offset retirement plans.

In floor-offset plans, benefits are calculated on the basis of an enrollee's average compensation and years of service (the floor), with an offset allowed for the assets accrued in a separate defined contribution or profit sharing plan.

With the plans, sponsors calculate an annual annuity value of the defined contribution plan.

If the annuity value of the defined contribution plan is greater than the value of the defined benefit plan, then the participant's retirement will come from the DC savings.

If the annuitized defined contribution assets are less than the value of the defined benefit plan, then the sponsor will use assets in the defined benefit plan to make up the difference.

Under a floor-offset plan, an employee will never receive less than the floor benefit promised under the DB plan, according to an IRS fact sheet.

And if the defined contribution account preforms well enough to exceed the minimum promised benefit in the DB plan, then the participant is allowed to keep all of the assets, and the sponsor is free from the liability of providing a monthly pension.

Essentially, floor-offset plans allow sponsors to hedge their pension obligations.

In the opinion issued by the 9^th Circuit in Anderson v. DHL, the court acknowledged that the elimination of the transfer right caused many participants to receive reduced benefits.

In a prior case brought against DHL in 2009, Jeffery Tasker, a retiree with more than 32 years of service with Airborne, sued DHL under ERISA's anti-cutback rule.

In 2003, Tasker was told that if he transferred the assets in his defined contribution profit sharing plan (more than $370,000) into the general defined benefit fund, he would be eligible to receive $4,163 a month in retirement.

When it came time to start collecting his pension in 2008, Tasker was informed he would only be receiving $2,200 a month. The larger figure was calculated considering Tasker's transfer. But DHL, upon taking over the plan, eliminated the right, greatly reducing Tasker's benefit.

Tasker's case was also dismissed, on the grounds of a Department of Treasury regulation that allows sponsors to eliminate transfer rights, even when "such transfer may reduce or eliminate protected benefits."