Consider Freezing your Cash Balance Plan or Defined Benefit Plan for 2020

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.

 

How Do You Freeze Your Cash Balance Plan? – Click Here for a Short Video

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.

 

For More Information

Please contact Wendy Frame or Jeremy Palm to explore your options or if you have any questions. We look forward to hearing from you.

 

Disclaimer:

This article is for your general education, and does not create a client relationship or any service engagement between you and Lurie LLP. The content of this article is based on the best information available, but official guidance, rules, laws and/or updates may change and become out of date. Please contact your Lurie advisor before acting on any of the information contained in this article.

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