The opinion of the court was delivered by: MCGLYNN
This is an application by the Pension Benefit Guaranty Corp. (PBGC) for the appointment of a trustee and for an order of distribution of the assets of the C.D. Moyer Pension Trust (the Plan) under §§ 4041(g) and 4042(b) of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. §§ 1341(g) and 1342(b) (1975)). Jurisdiction is predicated upon § 4003(e)(3) of ERISA (29 U.S.C. § 1303(e)(3)(1975)).
PBGC is a United States Government corporation established under § 4002 of ERISA (29 U.S.C. § 1302) to administer the mandatory pension plan termination insurance program in Title IV of ERISA. § 4002(a) (29 U.S.C. § 1302 (a)). C.D. Moyer Company Trust is a pension plan sponsored by the C.D. Moyer Co., which is the employer and plan administrator. The Plan is funded solely by employer contributions. On March 15, 1976, the employer amended the Plan to provide for payment to it of any assets which remain in the Plan because of erroneous actuarial computations after the Plan has satisfied all of its liabilities. The employer proposed termination of the Plan on April 2, 1976. On December 4, 1976, a Certification of Sufficiency was filed which stated that the Plan assets were sufficient to satisfy the benefits guaranteed by PBGC under Title IV of ERISA. On December 28, 1976, PBGC issued a notice of sufficiency, pursuant to § 4041(b) of ERISA which authorized the employer to terminate the Plan and distribute the assets. Relying upon the notice of sufficiency, the plan administrator purchased annuities for all participants which fulfilled the obligation of the Plan. The excess of the plan assets over the amount required for the purchase of annuities totaled $90,000, and by letter dated May 16, 1977, the employer so notified PBGC. On June 29, 1977, PBGC filed the application here at issue seeking the appointment of a trustee for the purpose of acquiring and distributing to the employees of C.D. Moyer Co. the $90,000 excess. For the following reasons, I hold that this application must be denied.
Although PBGC is authorized by section 4041(g) (29 U.S.C. § 1341(g)) to seek the appointment of a trustee, it may do so only under the limited circumstances prescribed by section 4042 (29 U.S.C. § 1342).
Section 4042 authorizes PBGC to apply for appointment of a trustee, "[Whenever] the corporation makes a determination"
"(1) the plan has not met the minimum funding standard required under section 412 of Title 26 (Internal Revenue Code) . . .
(2) the plan is unable to pay benefits when due,
(3) the reportable event described in section 1343(b)(7) of this title has occurred, or
(4) the possible long-run loss of the corporation with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated.
Not one of these requirements is present here.
As to the funding standard, the Plan was terminated prior to the first day of the plan year beginning in 1976 and, therefore, was never governed by § 412. See ERISA, § 1017(b).
Moreover, the existence of an actuarial over-funding demonstrates that the Plan would have satisfied the requirements of that section in any event.
The second criterion for the appointment of a trustee is not applicable since annuities have been purchased which will provide payment of the benefits required under the Plan when due.
Next, for a reportable event under § 1343(b)(7) to occur, a plan must have unfunded nonforfeitable benefits immediately after a distribution of $10,000 or more, made by reason other than death, to an individual participant. This reportable ...