Originally Posted by
pinseeker
FastBurner, I don't think that our current plan is in any danger of being taken over by the PBGC. I also don't think that just because a plan is frozen, that it gets taken over either.
One of my concerns with the PSPP is that the PBGC only covers qualified plans. As far as my research has shown, an employee can only have one qualified plan. The document that I linked mentioned that most frozen plans are rolled into another qualified plan. The MEC/NC has stated that the PSPP would be a separate plan from the current FAE plan. Our current plan would not be rolled into the new plan. They would be two separate plans.
You seem to be very knowledgeable about this, so maybe you can answer the question that the NC and R&I guys won't/can't answer. If, as the NC and R&I say, our current DB plan would be a separate plan from the PSPP plan, which plan would be covered by the PBGC? Both the NC and R&I agree that the PBGC will only cover one qualified plan for an employee group and if this gets railroaded through as our openers, which plan would be covered? Or, is it incorrect that the PBGC will only cover one qualified plan? If so, then why hasn't FedEx created different plans for the other employee groups when they froze the benefits of the DB plan for them. If they have different plans, shouldn't there be a different EIN for each qualified plan?
Straight from PBGC this morning, took a couple weeks.
- Employer can “roll” all the assets together in one large fund (what we have), but if one defined benefit is terminated and a new one begins (even in same “plan” or EIN), then
—- employer pays an employee premium flat rate for all employees for both plans (so $86 X 5300 = 455,800 X 2 (PSPP and A plan) = 911,600 for 2021).
—- employer pays a variable premium based on amount of unfunded vested benefits for both plans (finding out this number variable plan may be less, but as in the wise words of the Senior Rep I spoke with “variable benefits of any type May pay less than promised benefit.” These variable plans may have less funding requirements resulting in less premium.
—- the company can have all sorts of “plans” with different payouts for different personnel groups.
So, both are qualified plans, both require premiums.