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.
PBGC Insurance Coverage »