Before I get into trouble for mis- advising the client, I thought I will check my opinion.

I am looking at a DB plan sponsored by a pet hospital (a corp. by Veterinarians) - I think they are a "Professional Service Employer"?

Veterinarians are not listed in ERISA 4021©(2)(B) - hence the question. Do they qualify as licensed practitioners of the healing arts?

Assuming they are a "Professional Service Employer".

The # of participants in the DB plan just went above 25. Now the plan is definitely a PBGC covered plan?

The reason for the caution: Once the plan is PBGC covered it will remain covered even if the # of participants is 25 or less and will have to go through the PBGC termination process when the time comes (unless the only reamining participants are "substantial owners).

TIA.

You can ask the PBGC for guidance on coverage issues. See number 5 under Contacts on page v. of this:
http://www.pbgc.gov/plan_admin/2003ppp.pdf
My personal opinion (which is worth the paper it is printed on) is that veterinarians should be eligible for “professional service employer”, but not for the “healing arts” reason you cite. Notice in section 4021©(2)(B) “… includes but is not limited to…” Thus, the language is open to include a profession that may have been inadvertently omitted in the original.
Now over 25 participants? Definitely covered.
If they drop below 25 at a later date? The language of 4021(b)(13) indicates that the plan would remain covered.

PBGC Op Ltr 75-104:

LETTER:
This is in response to your letter of June 12, 1975 asking confirmation of your understanding that incorporated animal hospitals, being professional corporations, need not file form PBGC-1.




A professional service employer is any entity (it need not be a corporation) owned or controlled by professional individuals, as defined in Section 4021© (2) (B), where both the entity and the professional individuals are engaged in the performance of the same professional service. Licensed veterinarians are "licensed practitioners of the healing acts" under Section 4021© (2) (B). Accordingly, a plan maintained by an employer entity engaged in providing veterinary services that is owned or controlled by a licensed veterinary or veterinaries is a plan maintained by a professional service employer. Pursuant to Section 4021(b)(13), such a plan is excluded from Title IV coverage if it does not at any time subsequent to the enactment of the Employee Retirement Income Security Act of 1974 have more than 25 active participants.




Plans which are excluded from coverage under Title IV do not need to file form PBGC-1.




I hope this information will prove useful to you.




Henry Rose
General Counsel

A couple of years ago I appplied to the PBGC for a coverage determination on a veterinary hospital that never had more than 25 employees and the PBGC ruled it was not covered, but I would think, as pax mentioned, the greater than 25 count in your case makes it covered.

Thanks all - your responses reinforced my opnion.