4000 - Advisory Opinions
Insurance Coverage for Defined Benefit Pension Plan Deposits
February 24, 1988
Walter P. Doyle, Counsel
Thank you for your February 8 letter inquiring whether the determinable interest of each employee participant in deposits in an insured bank made by trustees of a "defined benefit" pension plan is insured to $100,000, separately from other trust interests in such deposits. You note that (unlike a "defined contribution" plan) no separate account is maintained for each employee participant in a defined benefit plan, but that reference to the actuarial basis would permit calculation of the amount attributable to each participant's inclusion in the plan.
We confirm that such actuarial determinability of each employee's allocable interest in the plan's deposits at an insured bank is sufficient basis for separate insurance coverage for each such interest up to $100,000. If any such plan is overfunded and the employer has an interest in the plan deposits at any insured bank, coverage for that interest would, of course, be limited to $100,000.