Coverage determination or assessment frequently asked questions

Who can request a coverage determination or assessment?  

Requests are typically submitted by plan sponsors or their representatives, including actuaries, accountants, attorneys, and third-party administrators.

Can a coverage determination be requested at any time?

Yes.

What kinds of information will PBGC need?

1. Whether PBGC has issued a prior coverage determination for the plan.
2. Whether the plan is already established or proposed but not yet established.
3. The plan document.
4. Correspondence with the Internal Revenue Service that is relevant to the plan’s status as a qualified plan under Internal Revenue Code (“Code”) section 401(a).
5. Whether the plan has any eligible participants with no accrued benefit, and if so, the number and reason (e.g. short time with the employer, the plan’s offset formula, or accruals that were frozen).

For asserted substantial owner plans

1. Whether the plan covers an individual who is not a substantial owner.
2. The organizational structure of the plan sponsor: corporation; limited liability company; partnership; sole proprietorship; or other entity.
3. If the plan sponsor is a limited liability company, how it is treated for federal tax purposes: corporation; partnership; disregarded entity (part of its owner’s tax return).
4. List of the names of all the participants (active, retired, and terminated vested) in the plan.
5. Documents showing the percentage of ownership interest that each participant currently holds or has held in the plan sponsor during the 60 months before a coverage determination request.
6. Documents reflecting any stock options for the plan sponsor (if the plan sponsor is a corporation).
7. If the plan sponsor is a partnership, the partnership agreement or other document naming the partners (e.g. partnership meeting minutes, state government filing). 
8. Documents indicating whether the owner’s spouse is an employee, director, or manager but only if (1) the plan sponsor is a corporation or is taxed as a corporation and (2) the plan covers only the owner and the owner’s spouse.
9. A description of any family relationships between the owner(s) of the plan sponsor and other participants of the plan and the names and the dates of birth of the owners’ children (if such family relationships exist).
10. Documents (e.g. a spreadsheet) showing dates and amounts paid to participants (providing their names and the dates they separated from service) within the past six years.
11. Date of termination or planned date of termination (if the plan has or will be terminated).   

For asserted small professional service employer plans

1. Whether the plan has at any time since September 2, 1974, had more than 25 active participants (if yes, the plan is not eligible for this exemption).
2. The website of the plan sponsor (if any). 
3. Name, principal business, services performed, and organizational structure of every employer involved in establishing and maintaining the plan.
4. A percentage breakdown of the services performed, including the percentage of revenue generated from each service (if the plan sponsor provides multiple services).
5. Names, occupations, levels of education, and percentages and periods of ownership of all current owners of the plan sponsor.
6. Names, occupations, levels of education, and titles of all individuals who control, manage, or direct the plan sponsor.
7. Educational requirements for the plan sponsor’s profession and qualifications such as course work, graduate school, specific state licenses, or similar requirements.

For asserted church plans

1. Whether the plan has made an election under Code section 410(d).
2. Whether the plan wishes to have title IV of ERISA apply to it.
3. Proof, if any, of a determination from the Internal Revenue Service that the plan is a church plan under Code section 414(e).
4. Proof, if any, an election was made under Code section 410(d).

For asserted Puerto Rico based plans

1. Whether each participant in the plan either resides or works primarily in Puerto Rico.
2. Whether the plan has made an election under section 1022(i)(2) of ERISA and 26 CFR 1.401(a)-50. 
3. Documentation, if any, of the election made under 26 CFR 1.401(a)-50.
4. All trust documents or agreements, group annuity contracts, or other financial document(s) funding the plan.
5. The name and location of the trust and trustee (if the plan is funded by a trust).
6. The name of the contract holder (if the plan is funded by a group annuity contract).
7. The master trust agreement (if the plan is part of a master trust/ agreement).
8. Documentation appointing the plan administrator.
9. Whether the administrator is an individual or entity (e.g., committee).
10. Any qualification letter(s) from the Puerto Rico Department of Treasury.
11. Documentation, if any, transferring the plan trust to Puerto Rico from elsewhere in the United States and the date when this transfer occurred.

How can I minimize delays (or contribute to streamlining) my coverage request?  

Provide all information listed on the request form and respond promptly to any follow-up inquiries from agency staff.

What are some issues that contribute to delays in coverage determinations?  

Incomplete information from plans or slow responses to follow-up requests from agency staff are the most common causes for delay. However, for more complex requests, there can be a lag while the agency conducts additional research (e.g., legal or financial) and, sometimes, when it is necessary to coordinate with other agencies.

What if I disagree with PBGC’s decision?  

A coverage determination can be appealed to PBGC’s Appeals Board as detailed in PBGC’s appeal regulation.