Accumulated Funding Deficiency Cannot Be Corrected By Terminating Plan (Posted September 22, 2004) Technical Tip 129: The following question and answer were from the IRS Q&A Session at the 2003 ASPPA Annual Conference: A defined benefit plan has an accumulated funding deficiency. Can the accumulated funding deficiency be corrected by terminating the plan? Response: No. The termination of the plan does not correct a funding deficiency or the need to pay the first tier tax. However, under certain conditions, Rev. Proc. 2000-17 provides relief from the 100% second tier tax. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.