11(g) amendment to fix 401(a)(26) failure

[JJRetirement]

X, owner of company A (with no employees) has maintained a defined benefit plan P for 4 years. Exempt from PBGC coverage as plan that exclusively benefits substantial owners. Plan P is substantially overfunded.

X also owns (enough of) Company B so that A and B are under common control. Company B was established 7 years ago, but first had employees in 2013. in 2014, total of 6 employees with at least one year of service.

After looking at controlled group, X is informed by his actuary that Plan P fails 401(a)(26) for 2014 and 2015. Surprise!

I am expecting that an 11(g) amendment to extend eligibility to three employees of company B will be the correction for 2014 failure. Coverage and nondiscrimination will be tested based on controlled group assuming retro amendment was effective 1/1/14. Required contribution and max deduction will not be changed to reflect amendment.

Along with the thousand other questions running through my head on how to best help X with this issue, What happens with regard to PBGC coverage for 2014? Plan P will no longer be exempt. Do they need to pay premium for 2014 based on retro amendment?

Other facts: Plan P frozen effective mid year 2014. X would like to terminate Plan P and possibly establish a qualified replacement plan (DC) to which it would transfer excess assets and avoid reversion. So bringing more people into the DB will likely result in accrual of small benefits that would end up being fully vested.