Client Alert: Recent Case Has Broad Implications for Controlled Group Liability of Private Equity Funds

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February 27, 2013
Under Title IV of the Employee Retirement Income Security Act (ERISA), all members of a controlled group are jointly and severally liable for various pension-related liabilities.  Eighty percent common ownership is generally required for a controlled group to exist.  While the Pension Benefit Guaranty Corporation (PBGC) has broadly construed what is a “controlled group” for this purpose, a recent decision from the U.S. District Court for the District of Massachusetts adopts a narrower interpretation that could have implications for private equity funds.