Opinion letters database

Plan administrator's failure to distribute plan assets upon termination violates ERISA provisions.

Employer's liability to PBGC for value of benefits under terminated plan.

A successor plan’s tax-qualified status cannot be attributed to another, non-qualified plan, and the phase-in of PBGC’s guarantee begins only when the plan is covered.

Based on its structure and how it operates, a fund consisting of contributing employers is a single plan and if one employer withdraws, it is not considered a separate plan termination.

A plan maintained by a clinical psychologist whose company provides marital and family counseling is a professional service employer plan and therefore excluded from PBGC coverage.

A plan maintained by a state licensed planner whose company of licensed planners provides consulting services to assist municipal planning boards with development plans, land use studies, and housing surveys is a professional service employer plan and therefore excluded from PBGC coverage.

Claim of the trust filed in bankruptcy reorganization for unpaid employer contributions will not be impaired by an assignment to PBGC because the corporation has the same rights and remedies when serving as an ERISA trustee.

This letter explains how PBGC determines eligibility for a “Category 3 Benefit,” which is a benefit of a participant who retired, or could have retired, 3 years or more before the plan terminated.

The $20 minimum phase-in in PBGC's regulation is not subject to actuarial adjustment for the participant’s age at the time the benefit started.

Section 4021(b)(2) of ERISA excludes from coverage any government plan. PBGC determined that this plan is not a governmental plan because the plan is typically treated as a private employer, and there is no evidence that Congress intended to deprive these employees of Title IV protection.

Whether plan must pay premiums for certain retirees whose benefits are to be paid by an insurance annuity contract. Participants were not notified and plan must pay premiums for covered annuitants.

The offer of a severance benefit election to participants eligible for normal or early retirement is contrary to the Plan’s terms and violates the method under ERISA for the allocation of assets.

Request to reconsider that plan isn't subject to PBGC's guarantee of basic benefits. Plan terminated before ERISA enactment and is not subject to PBGC's guarantee.

Whether a Puerto Rico plan without an IRS determination letter meets the tax qualification requirement in practice to be a covered plan. PBGC requested additional information but also indicated it would not pay interest on any potential premium refunds.

Employer's potential liability when employer's sale of substantially all assets, and concurrent transfer of its DB pension plan to a successor employer. Employer would not be liable if plan has sufficient assets to pay all PBGC guaranteed benefits.

Discusses whether the plan is a single plan or an aggregate of single-employer plans. PBGC concluded that the plan is an aggregate because of restrictions on availability of assets to pay certain benefits.

A plan maintained by a council created as a political subdivision under state statute is a governmental plan and is thus excluded from coverage under 4021(b)(2).

A plan maintained by a municipal water authority created under state law is a governmental plan and is thus excluded from coverage under 4021(b)(2).

A pre-termination death benefit is not a guaranteed pension benefit and is treated as a liability arising before plan termination, and therefore must be deducted from the plan’s available assets before the 4044 allocation.

PBGC declined to restore a terminated plan under section 4047 where the employer sought restoration solely to spin off and terminate a portion of the plan, thereby substantially reducing participants and limiting the guarantee phase-in.

Embalmers and funeral directors are not professional individuals under 4021(c), thus a plan they maintain is not excluded from coverage as a professional service employer plan.

Section 4022(c) authorizes PBGC to establish a generally applicable non-basic benefit guarantee program, not case-by-case coverage. Because PBGC has not instituted such a program, it cannot guarantee the plan’s non-basic benefits.

Termination of the plan must be in accordance with the notice requirements in the plan documents. Plan sponsor would be unable to retroactively terminate the plan at an earlier date.

An employer's temporary funding deficiencies or request for a minimum funding waiver do not impair participant's PBGC-guaranteed benefits. Upon termination, the employer is liable to PBGC for any shortfall between guaranteed benefits and plan assets.

Although the plan’s profit-sharing (individual account) portion is excluded from Title IV, the defined benefit portion did not terminate before September 2, 1974, and therefore is subject to coverage under Title IV.