If a contributory DB plan is frozen providing for no future accruals can the plan continue to require that contributions be made by employees? In this situation the plan would, however, provide for an accrual to the extent that the accrued benefit derived by employee contributions, as determined according to IRC 411©, exceeded the plan’s formula benefit.

to what end would you consider this?
It simply means all the headaches of continued accrual. Why not put the employee money into their deductible salary deferral accounts?

If the corporate finance people hope to get some arbitrage off the use of employee money, is it worth it?

The reason for the continued employee contributions (and the freeze) is because the poor funding status of the plan. There would be very limited situations in which the benefit associated with accumulated employee contributions exceeded the plan's formula benefit. The most sensible solution from my point of view is to "convert" employee contributions to employer contributions.

Considering that the mandatory contributions MUST be credited with 120% of the Federal Mid-Term rate each year, which tends to be higher than the asset earnings (your experience may vary), the accrued benefits will accumulate rapidly. I would not view this as a good thing.

Also, if the plan is currently underfunded, you may already be in the situation where the accumulated mandatory contributions exceeds the asset value, and this is worse!

Be very very careful here.

How do you suppose this will go over with the employees? ...