ERISA25 Posted May 23, 2013 Posted May 23, 2013 The PBGC has indicated that a letter of credit held in escrow satisfies the bonding requirement, but it also said that it is within a fund’s discretion as to whether a given institution is an acceptable party to hold a letter of credit in escrow. See PBGC Opinion Letter 1981-32 (addressing buyer’s bond, but I believe same rationale would apply to seller’s bond). Are funds reluctant to agree to letters of credit? Is it the normal course to approach the fund for permission to use a letter of credit?
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