Accrual in Year of Termination

[Dougsbpc]

Suppose you have a 1 participant DB plan for a small profitable employer with a 6/30 plan year end and 1,000 hour requirement for benefit accrual.

The plan existed for 4 years until benefits were frozen a year ago. Upon restating his plan on April 1, 2012 we unfroze the plan per his instruction effective for the plan year 7/1/2011-6/30/12. Now apparently he lost his largest client and wants to terminate the plan.

If the plan were terminated effective 6/30/12, could he accrue a full year of participation for 415 dollar limit purposes for the year 7/1/11-6/30/12?

Thanks.

[JAY21]

I don't see why not.

[emmetttrudy]

Yes. As long as he met the accrual requirements. Did he work 1,000 hours?

[Dougsbpc]

Yes he will have worked more than 1,000 hours from 7/1/11 - 6/30/12. We propose the termination date be 6/30/12.