A client has made a contribution in excess of the deductible limit in order to make the plan sufficient for plan termination. The plan is covered by the PBGC and has less than 100 participants. I understand that the excess is deductible over 10 years. My question is whether or not the excess is subject to the 10% penalty?

Check out IRC 404(g) and section 1.3.4.2of Announcement 98-1 (EP Examination Guidelines on Section 404 and 412).GATT sec 755 will exempt you from the excise tax on the remainder,if any.