Financial planner and PBGC coverage

[Jakyasar]

Looking into setting up db plans for some financial planners for 2020.

Does anyone have any experience on if and when they would be covered by PBGC? I am aware that I can ask PBGC pilot program but may not get a response in time.

Thank you

[Peter Gulia]

For the issues one imagines are in play, engage Ilene Ferenczy to advise you.

 

https://ferenczylaw.com/article-defined-benefit-plans-determining-professional-status-of-plan-sponsors-for-pbgc-coverage/

 

[C. B. Zeller]

Good call Peter. Here is some more reading material on the topic from Ms. Ferenczy if you are so inclined:

https://ferenczylaw.com/flashpoint-surprise-you-are-or-are-not-a-professional-and-you-are-or-are-not-covered-by-the-pbgc/

[Jakyasar]

Thank you both

[Jakyasar]

I actually read these articles before (thank you for reminding me).

I will contact PBGC first and see if and when they will say anything.

To be safe, already designed the plans assuming no coverage. As they are for 2021, have time to revisit the designs in PBGC covered.

Will share with the board if and when I get any results and their demands to provide a determination.

[AndyH]

Don't hold your breath.  Submitted one January 2020.  Did not get a conclusion until October 2020 (week of 5500 and contribution due date) and only after outside pressure was applied.  Exempt.  

[Jim van Iwaarden]

If the plans cover only substantial owners, they're PBGC-exempt regardless of whether the employers are professional service firms: https://www.pbgc.gov/prac/other-guidance/insurance-coverage.

[truphao]

You can wait until September 15, 2021 to set up (and deduct) for 2020.  Not like you want to do that..:)