PBGC Coverage

[Gary]

A plan is sponsored by a company that is 100% owned by a husband and wife. The plan covers three of the owners parents.

If a plan covers only substantial owners then it is exempt from PBGC coverage.

It seems that the attribution rules of IRC section 1563(e) apply in this case. And those rules seem to indicate that if the adult couple directly owns 100% of the stock then the parents would not be considered to own any of the stock in the plan and thus would not be considered substantial owners for purposes of the PBGC requirements.

Thus this plan would not contain only substantial owners and would not be eligible for that particular exemption.

Any comments on the use of section 1563(e) and my interpretation of such section?

Thanks.

[WDIK]

http://benefitslink.com/boards/index.php?showtopic=32697

[Gary]

thanks