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Showing results for tags 'Closing the plan for new entr'.
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Plan sponsor wants to close the plans to new participants while continuing to accrue benefits for existing participants. A couple of questions: Must the 40% participation test, the 410(b) and and the plan's average benefit tests include the employees that - in the absence of this freezing- would qualify to participate? I vaguely remember that it may be an exception for frozen plans, but I am not sure. Any citations? Usually when freezing a plan, the amendment simply replace the plan accrual formula with 0.0%. Any special language for an amendment that continue accruals for existing participants but close the plan to new participants? Any potential pitfalls - excepting the employees happiness- I should be aware of? Thanks for your help
