Opinion ID: 507220
Heading Depth: 4
Heading Rank: 1

Heading: Joint Implementation Guidelines for Termination of Defined Benefit Plans.

Text: 43 In May 1984, the Treasury, the PBGC, and the Department of Labor issued joint administrative guidelines applicable to the termination of defined benefit plans involving reversions of excess assets to the plan sponsor. PBGC News Release 84-23 (May 23, 1984), reprinted at 11 Pens.Rep. (BNA) 724 (May 28, 1984). Paragraph one of the guidelines provides that when an employer terminates a defined benefit pension plan, it may not recover any surplus assets until it has fully vested all participants' benefits and has purchased and distributed annuity contracts to protect participants against the risk that their accrued benefits may be jeopardized by future market fluctuations or other factors. (emphasis supplied). It is clear from this portion of the guidelines that an employer must satisfy only the employees' accrued benefits under the plan--not benefits that would accrue in the future if the employees continued to work for the employer after the plan terminates--before a reversion of the residual assets is permitted. 44