High 25 Lump Sum Restriction for Terminating Plan?

[hollywood]

I have a (small) client with a couple of retirees that are interested in the new lump sum window that the IRS has recently started allowing for participants who are already in receipt.  One of these retirees was a High 25 and was not allowed to select a lump sum when he retired originally.

The client is also making steps towards terminating the plan.  

If they were not terminating, the plan would need to fund up so that they were 110% funded for this High 25 retiree to receive his lump sum.  Since they are terminating, does that 110% still apply or does it go away?  Logically it doesn't seem to make sense and it seems like they should only fund to pay out the benefits for the plan termination, but logic and the regs don't always agree.  

Does timing matter?  We can't terminate the plan and then create a  window to pay out the lump sums.  If we create a window for the lump sums, then does the 110% apply since we haven't yet terminated.  If we can't do it before or after, how can we do it "at the same time" - feels slightly impossible?

thank you for any insight!

[Effen]

You can pay the "High 25" a lump sum in connection with the plan termination, but not before. 

Also, logically, if you have enough to pay them a lump sum, then the plan will be more than 110% funded since the lump sum will likely be more than 110% of the funding target. 

If they are going to terminate the plan, do everything in connection with termination.  No need to do any "windows" if the plan is being terminated.    

[CuseFan]

Effen right you are!