Accrual Years after unfreezing of benefits

[Guest DavidB]

If a defined benefit plan had froze accruals for 2 years and now is unfreezing benefits, do the frozen years count toward a participant's accrual fraction??? How does this affect a particpant who terminated service prior to the unfreezing of benefits??

[david rigby]

Depends on how you want to define it. The unfreeze is an opportunity to redefine the benefit, especially prospectively, if so desired. Whatever format is chosen, highly recommend that the amendment which unfreezes the plan specifies the answer to your questions. Just be careful of discriminatory issues.

W/R/T terminated EEs, same issue, but it seems likely that the plan sponsor would not want to grant a retroactive benefit to such individuals. Could unfreeze by affecting only prospective service.