Updating Frozen Defined Benefit Plans for Current Law and Other Compliance Issues


During the Frozen Plan Amendments project, the Employee Plans Compliance Unit looked at whether sponsors of frozen defined benefit plans had amended their plans for the Economic Growth and Tax Relief Reconciliation Act of 2001.

Project goals

We designed the Frozen Plan Amendments project to learn:

  1. If  plan sponsors amended their frozen plans for current law by the required deadlines
  2. Whether the sampled plans were actually frozen defined benefit plans
  3. Reasons the plans were frozen
  4. The effective date of the freeze
  5. What sponsors intended to do with their frozen plans in the short term


Generally, participants in a frozen plan don’t accrue new benefits.

Just as with active plans, a frozen plan must comply with the requirements of Internal Revenue Code Section 401(a) to retain its tax-qualified status. If plan sponsors don’t amend their frozen plans for current law by the required deadlines, their plans could become disqualified. The deadline depends on whether the plan is a pre-approved plan or an individually designed plan.

  • Pre-approved plans - Plan sponsors who adopted a pre-approved plan had until April 30, 2012, to adopt their EGTRRA plan restatement.
  • Individually designed plans - Sponsors of individually designed plans should have amended for EGTRRA during their 5-year remedial amendment cycle that is generally based on the last digit of their EIN.

Additionally, special rules and annual testing requirements for the minimum coverage and participation requirements of IRC Sections 410(b) and 401(a)(26) and non-discrimination apply to frozen plans.

Project results

Overall, the project showed that sponsors of the sampled frozen defined benefit plans amended their plans for current law by the required deadlines; however we found other issues:

  • Incorrect pension feature code listed on Form 5500
    • Some sponsors selected pension feature code 1I, frozen defined benefit plan, when their plan was a defined contribution plan.
    • Some sponsors selected pension feature code 1I, frozen defined benefit plan, when their plan wasn’t frozen.
  • Form 5500 filed incorrectly - Some SEP plan sponsors filed a Form 5500 series return. SEP plans don’t have a Form 5500 filing requirement.
  • No Form 5500 filed - A few sponsors didn’t file a Form 5500. Being frozen doesn’t eliminate the Form 5500 filing requirement. A frozen plan isn’t a terminated plan. A terminated plan:
    • has been formally terminated,
    • no longer credits service for benefit accruals and vesting, and
    • has distributed or is distributing all plan assets as soon as it’s administratively feasible, generally within one year after the date of plan termination (Revenue Ruling 89–87).
  • Employer no longer in existence - In a few cases, the sponsoring corporation dissolved or self-employed owner retired or died, but the assets remained in the trust. A qualified plan needs a sponsoring employer.

If any of these situations sound familiar, talk with your benefits professional. If you are a benefits professional, make sure you talk with your clients about the differences between active, frozen and terminated plans.

Planning tips

Now may be a good time to review your frozen defined benefit plan to see if you:

  1. Still have a valid reason for keeping the plan frozen
  2. Have filed Form 5500 for your plan by the filing deadline
  3. Used the correct pension feature code on Form 5500
  4. Amended the plan for current law by the required deadline

Missed the deadline to amend your plan?

If you’ve missed the deadline to amend your plan for EGTRRA, EGTRRA good-faith amendments, interim amendments, or amendments required to implement optional tax law changes, you may be able to correct this failure through our Voluntary Correction Program.

Contact us

If you have questions about this project, email us and include “Frozen Plan Amendments” in the subject line. We regret that we cannot answer technical questions unrelated to your compliance check. If you have account-specific questions, see EP Customer Account Services.

Additional resources