Corporate Frozen Plans

Most plan sponsors choose to freeze their plans in order to save money by introducing a profit sharing plan to replace it. The original strategy was to terminate the plan ultimately.

But how long has your plan been frozen? Is the objective to terminate the plan even close to being met? If the plan seems to have been frozen far too long with no advancement toward its termination, then the planning has not been adequate. Blaming a decline in the stock market or a decline in interest rates does not excuse poor consulting. If a plan sponsor is led to believe that contributing the Minimum Required Contribution every year will bring enough assets into the Plan to terminate it, then the consultant has not been properly doing his job.

We first address these issues by establishing a firm timetable, not a “glide path” which is far too passive. Next, we review the assets being invested and assess the risk tolerance of the plan sponsor. We steer away from wishful thinking that the market or interest rates will “turn around.” We actively seek a mechanism to enable the plan sponsor to rid itself of the plan once and for all.

Contact us.  We’ll give you our “thawts.”