PBGC Extends Opinion Letter Pilot Program
October 26, 2021
The Pension Benefit Guaranty Corporation (PBGC) recently announced that the agency’s opinion letter pilot program has been extended to September 30, 2022. PBGC insures most private-sector defined benefit pension plans, and this pilot program is designed to allow employers to request a determination from the agency about whether a proposed defined benefit pension plan will be covered.
PBGC will address two questions when providing an opinion letter: whether the plan’s sponsoring employer is a professional service employer, and whether all participants in the plan are substantial owners. PBGC does not cover plans that cover 25 or fewer participants and are established and maintained by a professional service employer. PBGC also does not cover plans that are established and maintained exclusively for substantial owners of the plan sponsor.
Employers who are considering establishing a defined benefit pension plan should be aware of this pilot program.
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