Multiple Employer Plan - Defined Benefit

[Rolf Trautmann]

If assets are invested/tracked separately for each Adopting Employer (AE) in the Plan and benefits can't be paid from the assets of one AE to participants of another AE, can this still be considered a Multiple Employer Plan or is this really an aggregate of Single Employer Plans?

Ideally, the Multiple Employer Plan would have one Plan document, one Form 5500 filing but separate Schedule SBs for each AE, and a PBGC Premium Filing for each AE. Under this setup, would the Substantial Employer rules (annual notification, withdrawal liability issues, etc.) apply?

The information in the Multiple Employer area is somewhat limited and sometimes conflicting, so am wondering what the pension industry is doing for these types of plans.

Also, how do you file separate PBGC Premiums in the MYPAA web site? It won't allow multiple plans to be created using the same EIN/Plan Number combination. Is a unique Plan Number required for each AE?

Thanks in advance for any help you may be able to provide!

[Rolf Trautmann]

Well, from what I have gathered we cannot have the best of all worlds - Single Form 5500 filing but separate assets available to only participants of that AE.

A Multiple Employer Plan is considered a Single Employer Plan for items such as the Plan Document, Form 5500 filing, and PBGC Premium filing. However, the tradeoff for that is that you must live with the Substantial Employer and Withdrawal Liability issues that occur as AE leave the Plan.

The good news is that you have one PBGC Premium filing for a Multiple Employer Plan, which simplifies the filing process significantly. In addition, there is a chance for savings on the Variable Premium since overfunding of some AE helps offset underfunding of other AE, leading to the lowest Ununded Vested Benefit amount possible.