Freezing Defined Benefit Plan Benefits

Summary

This practice note addresses issues related to defined benefit plans “freezing” or otherwise ceasing the accrual of further benefits under the plan for some or all participants. Freezing defined benefit plans has been common as plan sponsors have sought to control the costs of maintaining such plans. A plan freeze generally involves an amendment causing the plan to cease recognizing affected participants’ future credited service under the plan, at least for purposes of benefit accrual. Sometimes, plans are amended to change eligibility requirements to close participation for newly hired employees.