24. Determination of frozen accrued benefit

Statement of Requirement: Treas. Reg. 1.401(a)(4)-13(c)

Document Provision: _____

(Note to reviewer: This LRM #24 does not apply to IRC 412(e)(3) plans. See LRM #32 for the definition of frozen projected benefit.)

Sample Plan Language:

A participant's frozen accrued benefit is the amount of the participant's accrued benefit determined in accordance with the provisions of the plan applicable in the year containing the latest fresh-start date, determined as if the participant terminated employment with the employer as of the latest fresh-start date (or the date the participant actually terminated employment with the employer, if earlier) without regard to any amendment made to the plan after that date other than amendments recognized as effective as of or before the date under IRC 401(b) or Treas. Reg. 1.401(a)(4)-11(g). If the participant has not had a freshstart, the participant's frozen accrued benefit will be zero.

If, as of the participant's latest fresh-start date, the amount of a participant's frozen accrued benefit was limited by the application of IRC 415, the participant's frozen accrued benefit will be increased for years after the latest fresh-start date to the extent permitted under IRC 415(d) (1). In addition, the frozen accrued benefit of a participant whose frozen accrued benefit includes the top-heavy minimum benefits provided in section ____ of the plan, will be increased to the extent necessary to comply with the average compensation requirement of IRC 416(c)(1) (D)(i).

(Note to reviewer: The blank should be filled in with the plan section number corresponding to LRM #70.)

23 | Defined Benefit Plan LRM Package 06/2026

If: (1) the plan's normal form of benefit in effect on the participant's latest fresh-start date is not the same as the normal form under the plan after such fresh-start date and/or (2) the normal retirement age for any participant on that date was greater than the normal retirement age for that participant under the plan after such fresh-start date, the frozen accrued benefit will be expressed as an actuarial equivalent benefit in the normal form under the plan after the participant's latest fresh-start date, commencing at the participant's normal retirement age under the plan in effect after such latest fresh-start date.

If the plan provides a new optional form of benefit with respect to a participant's frozen accrued benefit, such new optional form of benefit will be provided with respect to each participant's entire accrued benefit (i.e., accrued both before and after the fresh-start date). In addition, if this plan is a unit credit plan, with respect to plan years beginning after the latest fresh-start date, the current benefit formula will provide each participant in the freshstart group a benefit of not less than 0.5% of the participant's average annual compensation times the participant's years of service after the latest fresh-start date. If this is a flat benefit plan, then, with respect to plan years beginning after the plan's latest freshstart date, the current benefit formula will provide each participant a benefit of not less than 25% of the participant's average annual compensation. If a participant will have less than 50 years of service after the latest fresh-start date through the year the participant attains normal retirement age (or current age, if later), then such minimum percentage will be reduced by multiplying it by the following ratio:

participant's years of service after the latest fresh-start date

50