One good thing PPA funding has brought us is the ability to fund a large maximum contribution (when appropriate) to most plans that have existed for a while.

Speaking of appropriate, could an employer purposely fund far more than accrued benefits just before terminating a plan, knowing that excess assets will be allocated?

For example, suppose you have a 1 participant plan and the 2008 PVAB and assets were $700,000. Suppose the participant has many years of service and participation and is nowhere near his 415 limit. Also, the participant will not work the required 1,000 hours to accrue a benefit in 2009. There would be no TNC in 2009 but the maximum contribution could be $300,000. Could such a contribution be made? I would think so.

Thanks.

I don't see why not. Just be careful that the benefit he actually receives doesn't exceed the 415 limit. Also, make sure the language in the plan allows for the reallocation of the excess assets and not an employer reversion.

Oh, and if there were other participants at one time, you might want to consider if this could be considered discriminatory in practice, or if you are amending the plan to allow for the reallocation, if that amendment could be considered discriminatory due to the timing.

Agreed. As an example of "discriminatory in practice", you will have to check overall integration level if 401(l) is part of the plan design.

Good points.

If the plan already had excess allocation language and you had former participants who terminated employment long before the current year, I cant see how that would be discrimination in practice.