Amendment language to freeze

[Trekker]

We are freezing benefit accruals in several cash balance plans. Notices and amendments will be timely, but the question regards the language for the amendment. We have used the following:

"Notwithstanding anything herein to the contrary and unless further amended, no benefits shall accrue under the Plan after _________."

Should we elaborate and provide that for purposes of benefit accrual, the counting of Hours of Service shall cease? What has been your experience with the wording of the amendment?

Thanks.

[David MacLennan]

The intent of freeze amendments can be unclear. Some things to consider for your amendment:

1) What is your benefit formula based upon? Is it your intent that, after the freeze, accruals still occur for the year based on hypothetical account balance increases using YTD compensation in the formula as of the freeze date?

2) Is any participant's benefit limited by the IRC 415 limits? Will their benefit increase when the 415 limits increase?

3) Freeze of plan entry/participation.

4) Fresh start provisions.

You can't stop the counting of Hours of Service. I suspect you may be in over your head here. I respectfully recommend you get some professional help with this - if not an attorney then a very experienced actuary.

[Trekker]

All points well taken.

Thanks!