Under ERISA and the Internal Revenue Code, two or more entities with a certain level of common ownership or affiliation are treated as a single entity for purposes of liability to a pension plan or a union plan, among certain other rules applicable to benefit plans. These entities are called the “Controlled Group”. The PBGC backs pension plans to a certain extent, and will pursue claims against the employer and the controlled group to reimburse itself. Thus, insolvent Affiliate A could have been the employer of the current and future pensioners, but Affiliate B might also be on the hook for pension liabilities.
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