Plan X has been exempt from PBGC premiums because the only employees of the company are husband and wife. Now they have an employee. The employee first became a participant at 1/1/2001. The participant count at 12/31/2000 is 2.

I thing the 2001 PBGC premium is $38. What am I missing?

Assuming that your plan is a calendar year plan, I don't think you are missing anything. Your premium snapshot date is 12/31/2000 and on that date you only have two participants. So your flat-rate premium is indeed $38.

RCK