AFTAP certification for frozen plans

[dmb]

I understand that plans that have ceased benefit accruals prior to September 1, 2005 are not subject to 436 benefit restrictions. What i'm not sure of is if AFTAP certifications are required to be completed for those plans. Any help is appreciated. Thanks.

[Blinky the 3-eyed Fish]

An AFTAP is never required, rather you suffer the restrictions if one is not done. So ask yourself what restrictions would apply and if you care.

There is the underlying thought that you may be required by actuarial standards to certify the AFTAP if not doing so will cause harm to the plan or participants.

[Andy the Actuary]

Okay, the Brobdingnagians have usurped US political office and the stock market has bullied up. Your frozen plan is now well overfunded. The Plan provides that excess assets revert to the employer, but the employer is so thankful for the glowing economy that he chooses to amend the Plan to spread the windfall among the participants.

The frozen plan forgiveness applies to 436(d) which would otherwise restrict lump sum distributions. 436© precludes amendments to increase liabilities if a plan is underfunded -- deemed or otherwise. Consequently, if there has been no timely AFTAP certification, it doesn't appear the Plan could be so amended.