Top-heavy benefits for hard-frozen DB plans

[My 2 cents]

Suppose a defined benefit plan was hard-frozen several years ago. As no key employees are currently benefitting under the plan, it should be clear that no new service accrues for the top-heavy minimum benefit.

1. If the top-heavy percentage was below 60% when the plan was frozen, is there any reason to be concerned as to what it would be as of any subsequent date?

2. If the top-heavy percentage was above 60% when the plan was frozen, is there any reason to be concerned as to what it would be as of any subsequent date?

3. If the top-heavy percentage was above 60% when the plan was frozen and, if remeasured, would remain above 60%, would it be necessary to adjust the top-heavy minimum benefit (with respect to top-heavy years of service prior to the freeze) on account of compensation increases after the year of the accrual freeze?

[Andy the Actuary]

Your magic date is PY beginning after 12/31/2001. Prior to that date, frozen plans were subject to the requirement to provide minimum top-heavy accruals. At least this is what my tired brain remembers. So even if TH ratio = 80%, so long as no key employee accrued a benefit for plan years after 12/31/2001, no TH benefits accrued (beyond what already applied) beyond this date.

[AndyH]

Agree. Current ratio is a non-issue except for vesting, and also the impact of the DB on the top heavy status of any DC plans.

[My 2 cents]

Any views to the contrary?