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A client of ours filed a Form 10 with the PBGC because of a failure to meet a MRC. Basically, the client opened 2 new locations and is having a cash flow issue, but intends to make up the minimum within the next year. The client has provided all required items on the form 10 including financial information for the company.

The PBGC representative is now asking for personal tax returns for the owners of the company. Have you ran across this? What was your response? My assumption is this may be an overzealous new employee, but any input would be appreciated.

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PBGC has lots of money and staff and it often feels like they are just looking for things to keep busy. 

That said, they are looking for proof that the company has the money to make the contributions in the future.  They may be overzealous, but they have the authority to make things very difficult for the sponsor if they don't cooperate.  They probably want to see if the company really doesn't have the cash, or did they siphon off the cash as compensation or bonuses.  In other words, they want to see where the cash is going if it isn't going into the plan.  

I would recommend that you work to appease the PBGC, if possible.  If the client doesn't want to provide tax forms, ask the PBGC what other types of documentation they would accept.  

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Interesting.  How big is the plan?   Did they have a funding deficiency or just miss a quarterly?

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The d

On 1/10/2020 at 1:04 PM, AndyH said:

Interesting.  How big is the plan?   Did they have a funding deficiency or just miss a quarterly?

Less than 50 participants.  They do have a funding deficiency, but sufficient assets to pay benefits with a majority owner waiver.

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