DB plan not subject to ERISA Title IV PBGC

[John Feldt ERPA CPC QPA]

We are making sure all of our SPDs are updated (the 5-year SPD update rule). Down to the last few, and just want to make sure it is possible for a DB plan to be subject to Title I but not Title IV solely due to the different definitions used within ERISA regarding ownership.

In the PBGC regulations (4022) it defines the term "substantial owner'' means an individual who--

(i) owns the entire interest in an unincorporated trade or business,

(ii) in the case of a partnership, is a partner who owns, directly or indirectly, more than 10 percent of either the capital interest or the profits interest in such partnership, or

(iii) in the case of a corporation, owns, directly or indirectly, more than 10 percent in value of either the voting stock of that corporation or all the stock of that corporation.

We have some plans like this, where the owner and his brother-in-law each own 50% of a corporation. No other employees.

I was thinking the Title I exemption applies to 100% owners and their spouses. So it looks to me that they are covered by ERISA Title I, but not subject to the PBGC. Thus we need to update their SPD due to ERISA 104(b)(1).

Any thoughts?

[Blinky the 3-eyed Fish]

There are many examples of DB plans covered by Title I but not covered by the PBGC.

[John Feldt ERPA CPC QPA]

That's what I thought - thanks!