Merging DB Plans

Hi,

Thanks as always for all the insights. 

Two PBGC DB Plans sponsored by same owner (controlled group).

One of the entities is not active anymore.

Both DB Plans are frozen.

If the non-active DB is merged with the active DB (benefits etc carried over) is this subject to the PBGC termination process with filing all the many forms or is the only form needed is a 5310-A as it is not a termination rather a merger?

Is there any downside to merging as opposed to terminating the non-active plan?

Thank you!

You stated merger, so no, it's not a termination.  The question of "downside" could be more complex, which is a question for the consulting actuary.

Point of clarification, the term "non-active" can be ambiguous.  You might mean (a) "frozen", or (b) "only in-pay status or VT participants" or (c) maybe even something else. (That clarification probably won't have any bearing on how you merge the plans.)

Thank you. The non active referred to the DB Plan sponsored by the entity that is not active anymore. 

If the funded status of that plan is sufficient, it might make sense to terminate and save the administrative costs, PBGC premiums, etc. but there may be lots of other issues to consider, like settlement accounting if subject to ASC 715. This is where a good actuary provides value, meaningful consulting versus mechanical valuations.