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We have a new client for 2022 that has a profit sharing plan. There have been no contributions to the plan since 2017 (there will be no future contributions) and in the adoption agreement we prepared for them effective 1/1/2022 we indicated that the plan was frozen on 1/1/2022. Their previous TPA never amended their adoption agreement to show it as frozen. We aren't terminating the plan because there are several investments (real estate, private equity) that are not liquid and for some reason the owner doesn't want to find an IRA custodian to deal with it. When the plan was established in 2013 there were two 50/50 partners and no employees. They filed Form 5500-EZ's from 2013 through 2017. They hired an employee mid-2017 who became eligible for the plan on 7/1/2018 but has never received a contribution so has no account balance. They have filed Form 5500 (Schedule I) from 2018 - 2021. Partner A bought-out Partner B mid-2021 and Partner B's profit sharing plan account balance was rolled-over to an IRA on 12/31/2021. Now we have a single-member LLC as a plan sponsor for 2022 with one account balance and one employee who does not have an account balance and never will. Can we file Form 5500-EZ for 2022 forward or are we stuck with Form 5500? I am questioning whether or not the employee needs to be considered a participant because while the plan was not amended to be frozen, it has been frozen for all intents and purposes since 12/31/2017 which was before she became eligible.

I think this is correct, but as a sanity check since it seems harder than expect to find authority on this - if a 401(k) plan is frozen, it's still permissible for participants to take out new loans and hardship withdrawals, correct?

New spin on the old question. NRA is 62. Small plan was frozen when participant was 52 years old in 2003 with 10+ years of service and participation. Given the IRS position that 415 applies to the accrued benefit and there was no special language in the freeze amendment, the final annual accrued benefits are $160,000 (2003 $415 limit). Plan is terminating now in 2013, and participant is 62 years old. What is his allowable lumpsum? Step 1: Calculate lump sum under the plan's assumtions (417 October rates for prior year) 160,000 x 14.7734 = 2,363,744 Step 2: Under 1.415(b)-1©(3) the actuarially equivalent straight life annuity benefit is the greatest of: a) 2,363,444/14.7734 = 160,000 (plan's rate) b) 2,363,444/12.4228 = 190,251 (5.5% rate) a) > b) = 190,251 Step 3: Verify whether 190,251 is above or below $415 limit to confirm if I can pay 2,363,744 lump sum. Question is if I am still stuck with 160,000 limit, and therefore lump sum is limited. Or I can use $205,000 for this purposes since it has nothing to do with the accrued benefit, and therefore lump sum is NOT limited.