PBGC VRP and Active non-vested participant

[AdKu]

As of 12/31/2009:

Active vested participants 11

Active non-vested participants 13

Terminated vested participants 3

Retired participants 5

On 1/1/2010, the only employees of the company are the active vested and active non-vested participants in the plan.

Given the above data, when calculating the VRP as well as FRP do I have use 'Active non-Vested Participants' count in my calculation and how does that translate to UVB?

[david rigby]

Participant count is important, not employee count.
Once you've identified participants, then the VRP is based on the vested portion of the total liability. The Base premium is based on total participants.
Instructions here: http://www.pbgc.gov/prac/prem/premium-payment-instructions-and-addresses.html

[My 2 cents]

Based on my understanding:

Basic premium - count each plan participant, without regard to vesting. Participants whose benefits are fully guaranteed by an insurance company (who are being paid directly from plan assets, no actual annuity purchase having occurred) and participants with no chance of earning plan benefits (i.e., became participants immediately before a permanent plan freeze so accrued nothing before the freeze) need not be included.

Variable-rate premium - add up the premium liabilities (excludes any non-vested accrued benefits) and compare to assets. If an insurance company had issued guarantees but no annuity purchase had taken place, count both the assets that the insurance company would never let go (to back the guarantees issued) and the liability (on a statue-mandated basis, not on what it would cost to buy the relevant annuities). Only ignore assets and liabilities to the extent that annuities have actually been purchased (disregarding any possibility of future dividends).