Opinion letters database

Each participant is entitled to a share of the excess plan assets where the plan does not provide for return of excess assets to employer upon plan termination.

The only participant entitled to be credited with service or receive any benefit under the plan has continuously fallen within the definition of a "substantial owner.”

No predecessor employer liability upon ultimate termination under § 4062 when there is a financially sound company maintaining the plan on its date of termination.

Plan is a governmental plan maintained pursuant to a contract with a federal agency and is excluded from Title IV coverage. Premium payments will be refunded.

Where an employer liable to PBGC and a third party make an indemnity agreement covering employer liability under Title IV, PBGC would not view it as binding on the PBGC and would seek satisfaction of the statutory liability from the employer that maintained the plan at the time it was terminated, or that employer's successor.

PBGC disputes the circumstances of the plan’s purported termination as not in compliance with the terms of the plan document and did not issue requested refund for premiums.

Notification to PBGC pursuant to § 4062(e) is required because the cessation of operations resulted in the separation from employment of more than 20% of the participants and the letter constituted notice.

Any distribution of a benefit pursuant to a plan's termination procedure is prohibited until the PBGC has issued a Notice of Sufficiency.

This letter reviewed a company's proposal on payment of employer liability, which PBGC found unacceptable, and demanded payment to PBGC for company's liability.

Upon plan termination, residual assets must be distributed to plan participants unless the plan document provides otherwise.

Once a plan is determined to be qualified by IRS, it is qualified for purposes of Title IV until qualification is revoked.

No plan termination occurred when subsidiaries ended plan participation.

This letter addresses whether a plan, as of its termination date, will have insufficient assets to pay all guaranteed benefits by discussing the following: the interest rate used to value plan benefits (plan regulation will give guidance); the circumstances PBGC will permit withdrawal of a termination notice; the appointment of trustee; that conversion to profit-sharing plan will result in termination under Title IV; and liability is determined as of the adoption or effective date of a plan.

This letter addresses a request to PBGC that a purchaser of assets from an employer liable to PBGC under section 4062 of ERISA does not succeed to the liability to the PBGC.

PBGC will issue a notice of insufficiency for the plan. Upon issuance, a plan administrator can commence distribution of assets and this must be completed within 90 days of notice issuance. There are judicial remedies available to plan administrator if needed.

A participant who has completed the requisite years of service and has attained retirement age has a nonforfeitable benefit under the described plan, even if he or she has not terminated employment prior to plan termination.

An entity that purchases the assets of a plan sponsor and does not assume its pension plan does not become a successor corporation for purposes of Title IV.

The former plan trustees resigned, and the Board of Directors did not exercise power to appoint new ones, so the plan sponsor is considered the administrator. The plan is now in bankruptcy. PBGC is considering whether statutory grounds exist to institute proceedings under § 4042.

A plan whose trust is maintained in Guam is not covered. But if a Guamanian employer maintains a trust in the United States, the plan would be covered.

The letter addresses employer liability might be imposed if PBGC exercises discretion under section 4082(c) of ERISA to insure benefits.

Plan assets must be allocated pursuant to Section 4044. However, a substantial owner may waive part of his or her accrued benefits.

A physician is, and an insurance agent is not, within the definition of professional individual for purposes of the professional service employer exemption from coverage.

The requester inquired about a possible claim by PBGC against the assets of a plan arising out of the termination of company's pension plan. Under section 4062 of ERISA, PBGC may recover from employer the amount by which plan's assets insufficient to satisfy guaranteed benefits on the date of Plan termination.

Addresses the guarantee of death benefits.

PBGC does not have jurisdiction over this plan because it terminated well before September 3, 1974. The only plan activity after the effective date of ERISA was the adjudication of a bankruptcy, and PBGC determined that it did not have any interest in the proceedings.