Final 415 regulations re plan termination

[Guest saeissler]

Suppose the plan year and limitation year are 7/1/07 to 6/30/08. The plan terminates 12/31/2007. This is a one participant plan. There are excess assets in the plan, as of 7/1/2007 and at plan termination. The maximum benefit is the 415 $ limit, which is $185,000 for the current limitation year. If the distribution is made in 2008, the $ limit is $185,000 per 1.415(d)-1(a)(4)(ii).

The accrued benefit is grandfathered as of 7/1/2007 under the final 415 regs. The formula benefit gives a higher benefit than the 415 limit at 7/1/2007. If the benefits are not paid out until 2009, can the participant get additional assets because his formula benefit was limited by the previous 415 limit? Can the participant get additional assets if the plan provides for the allocation of excess assets to participants?

Announcement 95-99 audit guidelines said that the dollar limit was frozen at the date of plan termination. But perhaps the final regs overrule this? Or do the final regs just apply to periodic payments or to plans that have COLAs? 1.415(a)-1(d)(3)(v)©