Restricted Distributions under PPA

[Rob P]

I have a client with a frozen DB plan that is concerned about making lump sum distributions next year. They're an underfunded calendar year plan with approximately 120 participants.

Can someone please confirm that since the plan was frozen before 09/01/2005, they can continue to pay lump sums as long as the funding percentage doesn't drop below 60%? It's my understanding that they're exempt from the 60%/80% rule because of their frozen status.

Also, when is the funding status for 2008 actually determined? Assuming we're doing a 01/01/2008 valuation, which probably won't be done until late winter or early spring 2008, is there any guidance on how we should be administering the plan for the first several months of 2008?

Lastly, if the plan were less than the 60% threshold as of 01/01/2008, could a contribution be made in the 2008 calendar year to boost the funding percentage for 2008?

Any thoughts are appreciated.

[Effen]

This may help

http://benefitslink.com/boards/index.php?showtopic=36253

Be careful not to pay out any top 25 HCEs

[Rob P]

Thanks. I did see that link and it was helpful.

Any thoughts on when contributions would count as an asset?