The sponsor of a DB plan wants to freeze benefits for current participants and close the plan to future new entrants. The plan is underfunded on an accrued benefit basis, so the there is no potential for reversion, which means that the special rule of 1.411(d)-2(b)(2) is satisfied. Does the freeze of future entrants create a PPT under the general rule of 1.411(d)-2(b)(1)? If so, who has to be brought up to 100% vesting? The people who are the cause of the PPT are not participants, and the actual particiapnts are not affected by the PPT.

Assuming PPT means partial plan termination, I would say generally no. However there are instances where it could. Do a search of this board, I seem to remember a tread discussing this a few months ago.

Standard wisdom is that you ask for a ruling if you are uncertain.

Your facts probably do not result in a PPT, but the IRS has the authority to second-guess you.

At the very least, you will be dealing with PBGC notification.

Effen, was this the thread of which you were thinking?

http://benefitslink.com/boards/index.php?showtopic=33896

I say definitely no.

If I am wrong then I would like to be educated but I see no partial termination and no PBGC reportable event.

I'd be interested in contrary arguments.

Zillions of plans are being frozen. How many are fully vesting people? If there is enough money, they would normally be frozen and terminated, not just frozen. If not enough money, how can there be a reversion?