Premiums

Pension Benefit Guaranty Corporation 87-9 Augus t 24, 1987 RE FERENCE: [*1] 4006 Premium Rat es29 C FR Part 2610 Declaration and Payment of Premiums OP INION: This is in response to the issues raised in your letter of July 27 to * * * concerning PBGC premiums in SocialSecurit y integrated plans. As I understand it, your question is whether premiums are payable for participants in anintegrated excess plan where their service will not result in a unit of credit for accrued benefit purposes because theplan is a "true unit credit plan" and their compensation is below the minimum compensation level. It is the view ofthe PBGC that premiu ms are required in a plan year for employees who are participants in a plan, even though theyare n either accruing benefits nor entitled to service credits for accrual purposes because their compensation is belowthe min imum compensation level in an excess plan. Your le tter recognizes that the instructions for PBGC Form 1 provide that the participant count must includeemployees w ho may not be accruing benefits because their compensation is below the minimum compensation levelin an i ntegrated excess plan. You postulate that such employees are included in the participant count, although theyare not c urrently accruing benefits, as a [*2] protection for the PBGC from large amounts of benefit liability thatcould occur i f such employees moved above the minimum compensation level and became entitled to accruedben efits based on full service. You then ask whether or not, in an integrated unit credit plan, where accrued benefitsare not ba sed on total service but only on each year's credited service, premiums should be payable for thoseemp loyees below the covered compensation level. Implici t in your question is the assumption that the PBGC premium payment obligation reflects the traditional"risk spreading" insurance concept. The PBGC's termination insurance, however, is not comparable

Pension Benefit Guaranty Corporation 81-28 Augus t 31, 1981 RE FERENCE: [* 1] 4007 Payment of Premiums29 C FR 2602 Payment of Premiums OP INION: Th is is i n reference to your letter regarding the above-referenced plan (the "Plan") and our letter in r esponse (copyenclo sed). As we discussed over the telephone on June 9, 1981, this is to supplement our initial response. First, the Pla n is not req uired to pay premiums for those * * * Corpor ation * * * employees who are excluded frompart icipation in the Plan whil e they are represented by a union. However, * * * is required to pay premiums for non-uni on employees earning credited service under the terms of t he Plan without regard to whether their compensation fallsbelo w the integration cut-off. Second, your lett er directed our attention to Plan Sections 2.1(8)(3), 1.2(A)(1), and 1.40 which r elate to creditedservi ce and participation i n this integrated pension plan. Our conclusions si nce only employees can earn credit ed service,and as Section 1.17 limits the def inition of employee to per sons employed by directly, we conclude that premiums donot ha ve to be paid for employees of trades or businesses under common control with * * *. We hope thi s response has been helpful. Should you have any questions, please phone [*2] * * * the attorney hand ling this matter, at (202) 254-3010. Mitchell Strickl er De puty General Counsel

Pension Benefit Guaranty Corporation 85-6 Februa ry 1, 1985 RE FERENCE: [*1] 4006(a)(3)(B) P remium Rates. Rates prescribed by regulation OP INION: Th is is in response to your recent request that the Pension Benefi t Guaranty Corporation (the "PBGC") reconsi derits prev ious determination, made in a letter dated * * * by Mitchell L. Strickl er, the Deputy General Counsel of the PBGC, with respect t o the payment of pension plan termination insurance premiums within the factual co ntext of * * * unusual pens ion plan structure. Specifically, you have asked that we reconsider our position t hat a pension plan,otherwise obligated to p ay premiums to the PBGC, must pay a premium f or an individual active participant even whena pre mium has been paid for that individual by a different plan maintained by the same employer. As you described the sit uation, * * * maintains a number of pensi on plans covered under Title IV of the EmployeeRetirement Income Security Act of 1974, as amended ("E RISA"), 29 U.S.C. § § 1301-1461 (1982), in which nearly allpast and present * * * employees participate (the "Basic Plans"), as well as several other covered pension plans in whi chonly * * * s alaried employees participate (the "Salaried Plans"). As a result of this plan str ucture, each [*2] individualparticipant actively accruing benefits it one of t he Salaried Plans is also accruing benefits in one of the Basic Plans, and will eventually become eligible to receive cumulative benefits from both. Indeed, of the * * * particip ants in the BasicPlan s, * * * also participate in the Salaried Plans. As you are aware, the PBGC is empowered by Section 4006(a)(3)(B) of ER ISA, 29 U.S.C. § 1306(a)(3)(B), topresc ribe by regulati on the extent to which the Title IV insurance premium may be charged "more tha n once for any pla nyear t o an individual participating in more than one p lan maintained by the same emplo