Reallocating Excess Assets upon plan term

[Guest DCquestioner]

A one man plan is overfunded (plan assets > PVAB of accrued benefit by formula), and the client intends to terminate the plan. The plan documents talks about allocating excess assets up to the 415 limit, but it has a line that I haven't seen before:

"...Such additional benefit will be subject to the limitations of Article 6 [referring to the 415 limitation] of the Basic Plan but without regard to the 10 year participation requirement in Code 415(b)(5)(l)..."

Let's say that the client only has 5 years of participation in the plan, but has 10 years of service and average compensation in excess of the 415 $$ limit. I can really pay him out the PVAB of the full $$ limit without pro-rating it?

Something just seems weird about that to me, but then again, what do I know (that phrase is not trademarked on this board, is it?).

By the way, I'm looking at an Accudraft Prototype DB Standardized Non-Integrated plan for those of you that are familiar with this type of document.

Thanks!

[JAY21]

Interesting. I don't think this can be done (ignore YOP phase-in over 10 years) to my knowledge.

[D Syrett]

Agreed.