The Pension Benefit Guaranty Corp. (PBGC) has extended its coverage-determination pilot program for another year — until Sept. 30, 2022. First launched in July 2019, the program was set to expire on Sept. 30, 2021. Most private-sector defined benefit plans are covered by PBGC termination insurance, unless they meet one of a few exemptions. Determining whether an exemption applies is not always straightforward, yet PBGC generally issues coverage determinations only for plans that already exist.
The pilot program lets employers creating new plans request opinion letters on the likelihood of coverage or noncoverage due to either of the following exemptions:
- The plan sponsor is a professional service employer.
- All plan participants are substantial owners.
Other exemptions exist but fall outside the scope of the pilot program.
- PBGC insurance coverage webpage (PBGC, Oct. 13, 2021)