The Pension Benefit Guaranty Corporation recently ruled that a defined benefit pension plan is not covered under the pension insurance program if the plan's trust is located in Puerto Rico, according to Stephen Douglas and Russ Hall of Towers Watson.
That's so even if the plan meets all of the U.S. tax qualification requirements for coverage by PBGC insurance.
In January, there was talk of allowing Puerto Rican plans to qualify for PBGC coverage if they met all of the U.S. tax requirements. Other U.S. territories, such as Guam, were not going to be treated the same way.
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