In order to freeze your cash balance plan there are three things to take into consideration. The first is that participants will not earn benefits in 2020 if they freeze their cash balance plan. Next, the freeze reduces the participants required contributions for 2020, and lastly the freeze must take place before participants would earn their 2020 benefits.
What Steps Do I Need to Take?
If participants want to freeze their cash balance plans they must (1) contact their Third Party Administrator (TPA)/Actuary to let them know. (2) Have the TPA/Actuary prepare a freeze amendment & employee notice, and (3) the participant must sign the amendment and notify employees of the freeze. Check out this video to learn more: