Cloudy Posted March 13 Report Share Posted March 13 CB plan covers only husband, wife, 22 year old daughter. Is this plan covered by the PBGC? Link to comment Share on other sites More sharing options...
truphao Posted March 13 Report Share Posted March 13 nope, this is owners-only plan and those are not PBGC covered. Link to comment Share on other sites More sharing options...
C. B. Zeller Posted March 13 Report Share Posted March 13 Who are the owners and in what amounts? What type of entity is the sponsor (corporation, partnership, sole proprietorship)? Is the sponsor a professional service employer? Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
truphao Posted March 13 Report Share Posted March 13 CB Zeller, would it matter? This is husband, wife and daughter only? Link to comment Share on other sites More sharing options...
C. B. Zeller Posted March 13 Report Share Posted March 13 Attribution of ownership for purposes of the substantial owners exemption applies only in the case of a corporation. Hojo, Lou S., John Feldt ERPA CPC QPA and 1 other 4 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
Cloudy Posted March 13 Author Report Share Posted March 13 It’s an S-Corp, I know that’s relevant. Husband and wife 50/50 owners. I think that the child is considered a substantial owner until age 26. Therefore not currently PBGC covered because it is an owner-only plan. Agree? Link to comment Share on other sites More sharing options...
John Feldt ERPA CPC QPA Posted March 13 Report Share Posted March 13 Yes, agree. Link to comment Share on other sites More sharing options...
Cloudy Posted March 13 Author Report Share Posted March 13 Thanks. Link to comment Share on other sites More sharing options...
fmsinc Posted March 14 Report Share Posted March 14 Forgive my ignorance, but I thought a Solo CB plan was designed for an unincorporated business that employs only the owner or the owner and spouse, or a corporation or LLC taxed as a corporation that employs the owner or the owner and spouse. Doesn't adding a third participant, a non-owner, the daughter, take it out of the realm of a Solo CB? David Link to comment Share on other sites More sharing options...
Bri Posted March 14 Report Share Posted March 14 I suppose "Solo CB" is no more a marketing term than a "Solo 401(k)". If their document explicitly excludes anyone else but the owner/spouse, they could have a problem, but their plan might be using a "full-blown" document so it wouldn't matter for any practical purpose. Link to comment Share on other sites More sharing options...
C. B. Zeller Posted March 14 Report Share Posted March 14 If you mean "solo CB" as a plan which is exempt from Title I of ERISA, then I agree. However, a plan can be subject to Title I and exempt from Title IV. ERISA 4021 defines several categories of plans which are exempt from PBGC coverage, including a plan "which is established and maintained exclusively for substantial owners." It then goes on to define substantial owner, and says that in the case of a corporation, constructive ownership rules apply. Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
Dougsbpc Posted March 20 Report Share Posted March 20 I know this is not completely relevant to the case at hand as it has been explained that the plan sponsor is an S-corporation. We had a sole proprietor client covering only husband and wife and made the mistake of not considering the plan a covered plan. It turned out that if the plan sponsor was a sole proprietor, it was a covered plan. Not so if the plan sponsor was a corporation. The plan was only in existence about 5 years but the PBGC came after them with all guns blazing. We had to create and file all past premiums. Since it was our mistake, we paid for all the penalties and interest on the late premiums. Link to comment Share on other sites More sharing options...
Hojo Posted March 20 Report Share Posted March 20 10 hours ago, Dougsbpc said: I know this is not completely relevant to the case at hand as it has been explained that the plan sponsor is an S-corporation. We had a sole proprietor client covering only husband and wife and made the mistake of not considering the plan a covered plan. It turned out that if the plan sponsor was a sole proprietor, it was a covered plan. Not so if the plan sponsor was a corporation. The plan was only in existence about 5 years but the PBGC came after them with all guns blazing. We had to create and file all past premiums. Since it was our mistake, we paid for all the penalties and interest on the late premiums. I would like to hear more about this. 1) How did the PBGC determine the existence of the plan? 2) How did the PBGC determine coverage?] I'm sure I have other questions, but it is fascinating to me that they would even bother. Lou S. and Effen 2 Link to comment Share on other sites More sharing options...
Recommended Posts
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 accountSign in
Already have an account? Sign in here.
Sign In Now