Jump to content

PBGC premium when one alternate payee is the only head left to count

Recommended Posts

The instructions for the PBGC premium payments say that alternate payees are not included in the participant count.

From what I read in the code and ERISA, an alternate payee is defined as someone subject to a domestic relations order.  Not specifically a QDRO.

Therefore, I suspect that for my 2021 filing, where the only benefit left to go as of 12/31/20 was for an alternate payee whose QDRO was signed by the judge in January, there's no participant count at all.  (Actual participant took his 50% earlier in 2020.)  I wasn't sure if the January date "qualifying" the order might mean the sponsor has to pay 1/12 of a head-count charge. 

But since the domestic relations order really came about first in 2006 (it was signed by a judge then but incorrectly designed/worded - not sure who reviewed it - and never corrected until the past year with the payment pending upon plan termination), I think the sponsor has no premium due at all.  (Obviously no VRP since all benefits have been completely paid now.)

Sound correct?  I'm also thinking my participant count was 0 at year end 2020 and then as the BOY count on what will be their final 2021 Form 5500-SF filing as soon as the residual $40 in trust assets is liquidated and applied to administrative fees.



Link to comment
Share on other sites

My take on this that for the PBGC purposes, you have 1 person with benefits as of 12/31/2020. Instruction says that "Beneficiaries and alternate payees are not counted as Participants.  However, a deceased Participant will continue to be counted as a Participant if there are one or more beneficiaries or alternate payees who are receiving or have a right to receive benefits earned by the Participant."

I would apply the same logic. The cashed out participant is not in the plan, but as of 12/31/2020 there is one alternate payee who has a right to receive benefits earned by the participant.

I will not count this alternate payee for the 5500 purposes.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...