PBGC coverage if non-owner terminates but is not paid out

Plan covers owner and sister. So covered by PBGC since sister does not have ownership. That's good as it allows 25% deduction for DC plan. Sister terminates. If she is not paid her benefit, remains in plan as terminated vested, I think the plan remains covered by PBGC, so we can still have a 25% DC deduction. Correct?

Correct.

Follow up to this. If the sister is cashed out and only the owner remains, is the owner under an obligation to submit for a determination request from the PBGC (and, presumably, cease coverage), or can the plan remain PBGC-covered?

You can't elect voluntary PBGC coverage if you are not a PBGC plan.

On 12/1/2017 at 12:34 PM, Paul Marszalek said:

Follow up to this. If the sister is cashed out and only the owner remains, is the owner under an obligation to submit for a determination request from the PBGC (and, presumably, cease coverage), or can the plan remain PBGC-covered?

Agree with Lou S. The plan becomes not covered. Whether or not you submit to PBGC to get a formal determination (in which case they will tell you it is not covered as of the date the sister is cashed out) is irrelevant.

Also, I agree with Mike Preston regarding the original post being correct.

Source: I have been through a case like this with PBGC.