In this article, Tim O'Toole and Mike Khalil* discuss why some plans sponsors and pensioners are choosing an independent trustee after a pension plan's termination. Since its creation in 1975, the Pension Benefit Guaranty Corporation (PBGC) has sought and secured the role of trustee in connection with the terminated plans it insures under the framework of the Employee Retirement Income Security Act (ERISA). By serving as the trustee for every terminated plan, however, the PBGC has created administrative burdens beyond their ability to handle, among other pressing issues. These concerns have made some plan sponsors rethink whether the routine appointment of the PBGC as trustee is the right choice for their terminated plan.

*Former Miller & Chevalier attorney