I'm looking for problems that would arise from amending a defined benefit plan to suspend benefit accruals for 2 or 3 years.

Assume the plan provides a monthly benefit at normal retirement age of $30 per year of service and is amended to provide that the benefit will be $0 for service during 2004-2005 and $30 per year of service after 2005.

The plan now satisfies the 133 1/3 percent rule. As so amended the plan would satisfy the 133 1/3 percent rule, according to 1.411(b)-1(b)(2)(ii)(B), the conference committee report on ERISA, and IRS Document 6390.

Is there something else I'm missing that would cause a problem?

401(a)(26) failure is a possibility.

Blinky: Thank you. After reading your post I looked at the 401(a)(26) regs and found 1.401(a)(26)-1(b)(3), which gives underfunded db plans a pass on 401(a)(26). The plan is well underfunded. I also previously looked at the vesting-on-partial-termination rules in 1.411(d)-2(b)(2). There is a good possibility that the underfunding will prevent full vesting on benefit suspension.

Top heavy?

The EGTRRA "good faith" amendment would be adopted in time, and unless it's butchered, top heavy shouldn't be an issue.

Nothing else jumps out at me, except for the following:

1) Your formula sounds like it might be a negotiated plan. This is probably something obvious, but changes to such a plan would require approval within the negotiation process.

2) Probably equally unenlightening is the fact that if this plan is aggregated with any other plans so that the other plans satisfy coverage or nondiscrimination you might find the change unwelcome.

3) Employee relations issues.

Pretty much grasping at straws for additional problems, though.