Freezing A Cash Balance Plan For Only 1 Year?

Just a question, because I honestly haven't dealt with too many frozen plans.  If someone is having some cash flow issues and want to freeze their cash balance plan for only 1 year, is that an issue?  I just wanted to make sure.  It's a discussion that's being had, but not necessarily going to happen.

It would be for 2025, since no one has worked 1,000 hours for the year.

Very common strategy.  Just make sure you do it before anyone earns a benefit and make sure you get the 204(h) notices out on time.

And understand that a freeze doesn’t mean there won’t be any contribution due. It will still depend on the investments and overall funding level. 

not sure if 204(h) is applicable to an Owner-only Plan.  Although the regulations do not exempt Onwer-only situations explicitely but it is not an ERISA plan.

Once you activate the plan, make sure to exclude any increase attributable to the HCE's for the cushion calculations.

Otherwise, the statements from Effen and Bill are correct.

I would also caution against repeating this strategy any time within the next few years for the same employer, and make sure the employer is aware of that, as you do not want a pattern of amendments that creates a discretionary arrangement in practice.