Overfunded Defined Benefit Plan Termination

[Doghouse]

A small DB plan (PBGC covered) terminated 6/30/11. There were assets in excess of the PVABS. We want to amend to increase the 2011 benefit accrual to absorb the excess assets.

Is there any problem with this from a timing standpoint (i.e. the amendment increasing benefits will be adopted post termination, but effective retroactive to first day of plan year)? The plan termination will be submitted for a favorable determination letter, and I don't want any surprises on this issue.

Thanks!

Dog

[david rigby]

I have seen plan amendments enacted after plan termination date. IMHO, your proposed amendment should be valid, but you may wish to get opinion from your ERISA attorney.

[JAY21]

This should not be a problem and the IRS will accept this type of amendment upon their review.