Merging Plans without a controlled group

Entity B is 51% owned by Entity C and 49% by Entity A.

Entity B exists only on paper at this point. It has no business operations or employees. It sponsors an underfunded DB plan, but entity A operates the plan and employees from A serve as the plan's fiduciary. Entity A and Entity C also has their own DB plans.

Entity A and Entity C cannot/will not arrive at a deal for either of them to take 80%+ ownership of Entity B and enable them to merge the B plan into their own DB plan.

Are there any mechanisms that would allow A or C to merge the B plan into its own plan without taking 80% ownership of the B entity? Could this be negotiated between A and C?

w/o 80% control I don't see how that is possible. If B has no operations then what is it's purpose, is it solely in existence as sponsor of this underfunded DBP? Assuming B has no assets and only DB liability, A or C taking the other's share of B in exchange for a payment covering their newly assumed liability is what neither is willing to do? Or are there other issues with B such that neither A nor C would want full control and responsibility? Why would A or C even want to merge B w/o proper compensation?

Is B's plan being funded now at all and by who? Are A & C pumping cash into B solely for this? Is there a reason not to just let the plan "fail" and go to PBGC? 

1 hour ago, CuseFan said:

w/o 80% control I don't see how that is possible. If B has no operations then what is it's purpose, is it solely in existence as sponsor of this underfunded DBP? Assuming B has no assets and only DB liability, A or C taking the other's share of B in exchange for a payment covering their newly assumed liability is what neither is willing to do? Or are there other issues with B such that neither A nor C would want full control and responsibility? Why would A or C even want to merge B w/o proper compensation?

Is B's plan being funded now at all and by who? Are A & C pumping cash into B solely for this? Is there a reason not to just let the plan "fail" and go to PBGC? 

 

There are some legacy workers comp claims still being paid through B and there are potential environmental claims (it was a mining facility). 

Correct, neither is willing to to take a payment to cover the newly assumed liability, mainly because of the unknowns.

No one has ever considered letting it fail, and I don't think anyone would be comfortable with that idea.

Pension B is ~95% funded. A & C are splitting the required cash evenly. The cash flow is a very small amount for A and C, so they can both continue the funding requirements without much issue. If there were a creative strategy to merge the plan into A or C, that would be preferable, but each can live with the cash flow as it is.

Can A & C fully fund B to terminate or is that too much cash? A as the fiduciary may try contacting PBGC for consultation on what may be done.