Frozen profit sharing plan - vesting

[taxllm]

Do you need to vest everybody if you freeze a profit sharing plan?

Thanks

[ESOP Guy]

You need to define freeze better. What do you mean by freeze?

[taxllm]

No new participants allowed and no contributions made after December 31.

[My 2 cents]

No ifs, ands or buts, service for vesting purposes cannot be frozen.

It is not required that vesting be granted when a defined benefit plan adopts a hard freeze, but adopting a hard freeze could result in the occurrence of a partial termination. Granting full vesting at the same time as the freeze would render that issue more or less moot. Not sure what the rules are for a defined contribution plan.

[taxllm]

Participants will continue to accrue service for vesting purposes. Under 411(d)(3) a complete discontinuance of contributions results in 100% vesting.

[ESOP Guy]

I would agree a complete ending of contributions will resulting in vesting for people.

[david rigby]

Is the PS contribution discretionary? If the ER, in its discretion, decides to make a zero PS contribution, is that a freeze?

Put another way, what is the intent of the original question?

[jpod]

Is it an "overt" discontinuance, meaning is the plan being amended so that by its written terms there will be no more contributions? If so, full vesting is required. If, on the other hand, it is a 100% discretionary profit sharing plan and the employer merely has it in its head that it won't be contributing any more - which naturally means there won't be anyone new who could share in contributions - when full vesting is required is a little more twisty.

[taxllm]

Thank you for the input. The plan by its terms was "frozen," so even if the employer contribution was discretionary, participants should have been vested when the plan was amended.