Coverage

Pension Benefit Guaranty Corporation 76-58 April 29, 1976 RE FERENCE: [*1] 4022(a) Benefits Guaranteed. Type of Benefits Guaranteed OP INION: This is in response to your letter of December 19, 1975, and subsequent telephone conversations with * * * of mystaff, concerning the * * * and * * * You asked this Office to determine whether the * * * Plan and the * * * Plan (coll ectively, "the Plans") are subject to the plan te rmination insurance provision of the Employee Retirement IncomeSec urity Act of 1974 (the "Act"); in your opinion, they are not. Bo th Plans provi de for voluntary employee participation with each participant el ecting to have a specified amountdeducted fr om his paycheck and credited to his account in either or both of Fund A and Fund C (differing only as toinvestment media). Income, gains and loss es of Fu nd A and Fund C are allocated to each participant's account. Uponterminati on of parti cipation for any reason, each participant receives the number of shares of McDonnell DouglasCommon stock a ttributable to him and/or the curre nt dollar balance of his account. Any benefit in the latter form, at apa rticipant's opti on, may be in the form of an annui ty purchased by his employer with the cash the participant o therwisewou ld receiv e. In my opinion, [*2] the Fund A/Fund C features of the Plans constitute indi vidual account plans asdefine d in Section 3(3 4) of the Act and, as a consequence, are not covered by the plan terminati on insurance provisionsof the A ct. Both Pla ns also provide for additional b enefits, from Fund B, to be funded solely by employer contributions. Such contributions t o Fund B are required to be made from time to time to fund all pay ments to participants (from Fund B)on an actu arially sound basis and to provide for payment of all expenses of administering the P lans. Benefits f rom FundB a re a percentage (50% upon normal, earl y or disability retirement, dea