How does PBGC decide which standard terminations to audit?
Plans are selected from all standard terminations completed during the target period, to meet our statutory requirement of a statistically significant sample. Currently, PBGC selects all plans with a participant count of more than 300 for audit. For plans with a participant count of 300 or less, PBGC randomly selects plans to audit. PBGC also may audit a plan when we have reason to believe there may be a problem (for example, when we receive a complaint by plan participants or a plan practitioner). In addition, PBGC audits all plans that distribute plan assets in satisfaction of plan liabilities before or without filing a standard termination notice (Form 500) in accordance with the standard termination regulations. (PBGC reserves the right to take any other appropriate action in such circumstances.) Q: Does PBGC nullify the termination if it finds a distribution error during the standard termination audit? A: PBGC requires that participants and beneficiaries be made whole. For example
