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February 23, 2009

Frozen Plan

Your Guide



A qualified plan which has been amended to discontinue contributions and benefit accruals, but assets have not been distributed to participants or their beneficiaries. Frozen plans typically exclude new participants from entering the plan.

Referring Cite

Revenue Ruling 89-87, Temp. Treas. Reg. §1.416-1T,,

Additional Helpful Information

  • For purposes of the top heavy rules, a frozen plan is one in which benefit accruals have ceased but all assets have not been distributed to participants or their beneficiaries. Such plans are treated, for purposes of the top-heavy rules, as any non-frozen plan. That is, such plans must provide minimum contributions or benefit accruals, limit the amount of compensation which can be taken into account in providing benefits, and provide top-heavy vesting. A frozen defined contribution plan may not be required to provide additional contributions because of the top heavy rules
  • Frozen plan; additional accruals; vesting service. Revenue Ruling 2003–65 states that the freezing of accruals under a plan is not a plan termination for purposes of determining whether vesting service may be disregarded if accruals resume under the plan. Accordingly, all years of service for the plan sponsor since the plan was established must be counted toward vesting. The result is the same if, instead, the frozen plan is merged into a new plan of the employer with accruals resuming under the merged plan.

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