Guest JBeck Posted July 31, 2003 Posted July 31, 2003 An employer that is not part of a controlled group has two underfunded pension plans. The employer will sell the assets of the company. The employees will either go with the buyer or be terminated. The employer still maintains the plan in this situation. If the employer finds it does not have sufficient funds to make minimum contributions to the plan, and it desires to terminate the plans in a distress termination, what assets will the PBGC look for? Specifically, can it look to the assets of the principal owners?
mbozek Posted July 31, 2003 Posted July 31, 2003 If the sponsor is incorporated the answer is no - only the assets of the entity that established the plan are at risk. But under ERISA 4069 the PBGC can see if there was a distress sale of assets and make a claim against the seller. mjb
david rigby Posted August 20, 2003 Posted August 20, 2003 I agree with mbozek. In fact, he may have stated it mildly. Expect the PBGC to challenge the sale, or go after both seller and buyer. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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