Defined benefit pension plan sponsors in U.S. territories, like Puerto Rico, need to pay attention to changes to their Pension Benefit Guaranty Corporation coverage, according to Buck Consultants.

Generally, qualified defined benefit plans must be funded under a trust created or organized in the United States. This does not include U.S. territories. In the past, the PBGC took the position that the U.S. trust requirement did not apply to Puerto Rican qualified plans, even if they did make the ERISA election that would allow them to have their trust be treated as a U.S. trust.

But, for Guam, the PBGC took a completely different position, stating that a plan established in Guam with a non-U.S. trust that otherwise met the tax qualification requirements of the U.S. tax code is subject to PBGC coverage.