415 limit - hi 3 yr avg

[Gary]

Say a plan is frozen as of 1/1/2009.

At that time the participant has 3 yr avg comp of 100,000.

The dollar limit is 156,000 as of 1/1/2009.

NRA is 62 and employee is age 62 at 1/1/2009.

Plan provides for actuarial increase for late commenement.

Say as of 1/1/2011 employee has avg comp of 120,000 (counting comp for 2009 and 2010 after plan freeze).

Question is: Should late ret act increases be limited to 100k or 120K? that is, can hi 3 comp limit increase after plan freeze from 100k to 120k?

[SoCalActuary]

If you allow future pay to influence the benefit, then it is not a frozen benefit.

Some call this a soft freeze, where credits stop but pay changes the benefit.

If that's what you want, remember that this is still an on-going plan, not a terminating plan.

[Gary]

the plan in question is an on going hard frozen plan. so was trying to determine if the 415 comp limit should increase after the freeze date, as applicable?

the response appears all benefits, including 415 limits remain frozen, unless a cost of living increase occurs.

thanks

[david rigby]

Almost. If it's a hard freeze, any 415-related increases will not affect any accrued benefit. The freeze amendment could have been structured to include 415 increases, but it appears too late for that.