Amendment to increase benefit after plan terminated

[Jakyasar]

One lifer DB plan.

Plan frozen/terminated 12/31/2025 with perfect funding with excess, if any, going to qualified replacement plan (QRP).

Client did not tell me about additional contributions made during 2025, simply forgot. Big amount too.

Now have quite an excess but lumpsum still under 415 limit.

Solutions for retroactive amendments?

• Amend to have a retroactive benefit increase
• Amend from QRP allocation to participant allocation

Any thoughts?

Thanks

[Bri]

Either of those sound pretty good.

[Calavera]

2nd is much easier to implement

[david rigby]

On 2/12/2026 at 1:19 PM, Calavera said:

2nd is much easier to implement

I'm not so sure about that.  For a one-participant plan, it should be very easy to increase the benefit (it's not already in pay-status, is it?).  The increase does not have to absorb the entire amount of the excess funding; just do an amendment that increases the benefit by 5%, or 8% or whatever percent gets about 90% (for example) of the excess.  Since 415 limit appears to be irrelevant, choose whatever increase you want.  Assuming a lump sum payment that is rolled into participant's IRA, that "protects" more of the total dollars. 

Alternatively, if you put all the excess in QRP, the same protection does not apply, because it's not yet allocated, and might not be fully allocated for a few years.  What happens if the participant dies six months after the transfer to QRP?

Have I overlooked something?

[David D]

I have only set up a QRP when the owner is limited by 415 on plan termination and cannot be allocated the excess.  Most plan documents allow for the allocation of assets in a non discriminatory manner on plan termination.  Whether you need an amendment to allow for the maximum deductible contribution made prior to December 31, 2025 depends on whether the amount contributed during the year is less than the allowable maximum or not.

[Jakyasar]

Another potential client who screwed up, must be me.

This one has employees. CB cover owner/non-HCE where all others are excluded and DC plan. All others are HCEs. Non PBGC covered.

As I just found out, client made a deposit during the final plan year without checking with me and also had 20% return. So now have roughly 200k excess over the account balances.

Same situation as before, terminated 12/31/2025, excess to be reverted to corporation with administrative procedure stating excess goes to QRP.

Simply amending the formula will eat up almost all of the excess as the owner is far away from 415 limits. The problem here is I may have discrimination issues.

Let's say I amend the formula just to increase the owner under the new law and test the plans and I pass (it does), is this a BRF/discrimination issue?

How about I increase the owner and also provide a small increase to the non-HCE and re-test all plans again, would that be ok and better?

Any other solutions that I am not seeing?

Never had this issue before.

[Calavera]

21 hours ago, david rigby said:

Have I overlooked something?

Under 2nd, I meant to remove procedural QRP setup and just give this back to participant upon plan termination. For one person plan you just need to be sure that the total payout is under the 415 limit. 

[David D]

I would test the plans together again, but now rather than using the credits in your val you use the credits plus the excess you are allocating to see that it passes.  It seems to me that you would need to give something to the other in the CB plan as you will be amending after the plan term date and the amended credit would not pass on it's own as only the owner would get anything.