Shultz memo minimum in the year of termination

[Bri]

Plan's been frozen so no new benefits after June 30.

Plan's staff contribution credits tend to suck so bad that they always have to do an -11g amendment to pass 401(a)(26).  (Annual $500 bucks each, allocated formally as $125 for each quarter they're active during, and then the -11g stuffs more into Q4 as necessary for folks.)

Well now they're only going to be getting $250 for the most part. 

But is there any "accepted practice" for whether it's appropriate to measure the 0.5% benefit level relative only to the compensation through the freeze date?  Otherwise everyone's going to be at HALF their typical accrual rate, if it's expected to be measured on full year's pay.

--bri

[Nate S]

The freeze amendment and 204(h) notice should indicate what is being frozen after June 30.  I would normally expect it to say that service and compensation are not considered after the freeze date.  However, since 401(a)(26) is so poorly defined it's not that big of a stretch to argue that compensation should be measured for only the period during which the benefit was actually accrued.