Opinion ID: 507220
Heading Depth: 4
Heading Rank: 2

Heading: pbgc

Text: 45 The PBGC consistently has construed Category 6 to include only benefits actually accrued as of the termination date according to the terms of the plan. 19 Blessitt's assertion that Category 6 includes unaccrued benefits based on future years of service not actually worked is inconsistent with the PBGC's longstanding position. 46 Numerous PBGC Opinion Letters reiterate the PBGC's longstanding position that accrual of benefits for purposes of ERISA ceases when a plan terminates. For example, in PBGC Opinion Letter 86-5 (March 6, 1986), the PBGC advised a plan sponsor that ERISA does not apply to assets remaining after the satisfaction ... of all accrued benefits under a pension plan that has not provided for employee contributions. Hence a transfer of such assets to a separate trust to await further disposition would not violate the provisions of Title IV [of ERISA]. Similarly, in PBGC Opinion Letter 86-1 (January 15, 1986), the PBGC gave the following advice: 47 As a participant accrues more years of service, he or she generally accrues higher benefits which will be payable upon retirement. On the date of plan termination, however, all accruals will cease. Benefit entitlements under the terminated plan are calculated with reference only to each participant's service accrued up to the date of termination. For example, a participant with 15 years of service and 45 years of age on the date of plan termination will generally be entitled to a benefit calculated with reference to 15 years of service and payable at normal retirement age. 48 This interpretation directly contradicts Blessitt's position. See also PBGC Opinion Letters 85-28 (December 2, 1985) and 85-9 (April 5, 1985) (when a defined benefit plan terminates, residual assets in excess of the accrued benefits under the plan as of the termination date can revert to the employer).