The Pension Benefit Guaranty Corporation (PBGC) serves as insurance for some qualified retirement plans. Covered plans pay annual premiums to the PBGC and in return, the PBGC steps in to guarantee benefits (up to a limit) if the plan becomes unable to pay.
In general, the PBGC covers qualified, private-sector single or multiemployer defined benefit plans unless they are exempt. So who is excluded from coverage?
- Some professional service employer plans (doctors, lawyers, accountants, architects) which have never had more than 25 active participants
- Substantial owner plans (established and maintained exclusively for benefit of owners)
- Defined contribution plans (401(k) profit sharing, money purchase, etc.)
- Governmental plans
- Church plans
Your IAI consultant can help you determine whether your plan is covered by the PBGC. If you have any questions or concerns, reach out to your IAI consultant!
