During this time of uncertainty, you are facing the demands of running your business and taking care of your employees. Your cash balance or defined benefit plan may be the last thing on your mind.
You may want to freeze your cash balance plan or defined benefit plan for the 2020 plan year.
Freezing the plan now should reduce your 2020 minimum required contribution. We cannot guarantee there will be no 2020 minimum required contribution, but freezing the plan should lower the required contribution amount.
It is important to freeze the plan before an employee earns a benefit this year. In many cases, this occurs once an employee works 1,000 hours.
Once things settle down and the world returns to business as usual, you can amend the plan to unfreeze it. Note that you can still contribute to your cash balance or defined benefit plan when it is frozen.
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