Subtitle E—Special Provisions for Multiemployer Plans
Editorial Notes
Codification
part 1—employer withdrawals
§1381. Withdrawal liability established; criteria and definitions
(a) If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability.
(b) For purposes of subsection (a)—
(1) The withdrawal liability of an employer to a plan is the amount determined under
(A) first, by any de minimis reduction applicable under
(B) next, in the case of a partial withdrawal, in accordance with
(C) then, to the extent necessary to reflect the limitation on annual payments under
(D) finally, in accordance with
(2) The term "complete withdrawal" means a complete withdrawal described in
(3) The term "partial withdrawal" means a partial withdrawal described in
(
Editorial Notes
Prior Provisions
A prior section 1381,
Statutory Notes and Related Subsidiaries
Effective Date
Part effective Sept. 26, 1980, see
Elimination of Retroactive Application of Amendments Made by Multiemployer Pension Plan Amendments Act of 1980, Pub. L. 96–364
"(a)
"(1)
"(2)
"(c)
"(d)
Applicability to Certain Employers Withdrawn Before Sept. 26, 1980, From Multiemployer Plan Covering Employees in Seagoing Industry; Effective Date, Coverage, Etc.
§1382. Determination and collection of liability; notification of employer
When an employer withdraws from a multiemployer plan, the plan sponsor, in accordance with this part, shall—
(1) determine the amount of the employer's withdrawal liability,
(2) notify the employer of the amount of the withdrawal liability, and
(3) collect the amount of the withdrawal liability from the employer.
(
§1383. Complete withdrawal
(a) Determinative factors
For purposes of this part, a complete withdrawal from a multiemployer plan occurs when an employer—
(1) permanently ceases to have an obligation to contribute under the plan, or
(2) permanently ceases all covered operations under the plan.
(b) Building and construction industry
(1) Notwithstanding subsection (a), in the case of an employer that has an obligation to contribute under a plan for work performed in the building and construction industry, a complete withdrawal occurs only as described in paragraph (2), if—
(A) substantially all the employees with respect to whom the employer has an obligation to contribute under the plan perform work in the building and construction industry, and
(B) the plan—
(i) primarily covers employees in the building and construction industry, or
(ii) is amended to provide that this subsection applies to employers described in this paragraph.
(2) A withdrawal occurs under this paragraph if—
(A) an employer ceases to have an obligation to contribute under the plan, and
(B) the employer—
(i) continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required, or
(ii) resumes such work within 5 years after the date on which the obligation to contribute under the plan ceases, and does not renew the obligation at the time of the resumption.
(3) In the case of a plan terminated by mass withdrawal (within the meaning of
(c) Entertainment industry
(1) Notwithstanding subsection (a), in the case of an employer that has an obligation to contribute under a plan for work performed in the entertainment industry, primarily on a temporary or project-by-project basis, if the plan primarily covers employees in the entertainment industry, a complete withdrawal occurs only as described in subsection (b)(2) applied by substituting "plan" for "collective bargaining agreement" in subparagraph (B)(i) thereof.
(2) For purposes of this subsection, the term "entertainment industry" means—
(A) theater, motion picture (except to the extent provided in regulations prescribed by the corporation), radio, television, sound or visual recording, music, and dance, and
(B) such other entertainment activities as the corporation may determine to be appropriate.
(3) The corporation may by regulation exclude a group or class of employers described in the preceding sentence from the application of this subsection if the corporation determines that such exclusion is necessary—
(A) to protect the interest of the plan's participants and beneficiaries, or
(B) to prevent a significant risk of loss to the corporation with respect to the plan.
(4) A plan may be amended to provide that this subsection shall not apply to a group or class of employers under the plan.
(d) Other determinative factors
(1) Notwithstanding subsection (a), in the case of an employer who—
(A) has an obligation to contribute under a plan described in paragraph (2) primarily for work described in such paragraph, and
(B) does not continue to perform work within the jurisdiction of the plan,
a complete withdrawal occurs only as described in paragraph (3).
(2) A plan is described in this paragraph if substantially all of the contributions required under the plan are made by employers primarily engaged in the long and short haul trucking industry, the household goods moving industry, or the public warehousing industry.
(3) A withdrawal occurs under this paragraph if—
(A) an employer permanently ceases to have an obligation to contribute under the plan or permanently ceases all covered operations under the plan, and
(B) either—
(i) the corporation determines that the plan has suffered substantial damage to its contribution base as a result of such cessation, or
(ii) the employer fails to furnish a bond issued by a corporate surety company that is an acceptable surety for purposes of
(4) If, after an employer furnishes a bond or escrow to a plan under paragraph (3)(B)(ii), the corporation determines that the cessation of the employer's obligation to contribute under the plan (considered together with any cessations by other employers), or cessation of covered operations under the plan, has resulted in substantial damage to the contribution base of the plan, the employer shall be treated as having withdrawn from the plan on the date on which the obligation to contribute or covered operations ceased, and such bond or escrow shall be paid to the plan. The corporation shall not make a determination under this paragraph more than 60 months after the date on which such obligation to contribute or covered operations ceased.
(5) If the corporation determines that the employer has no further liability under the plan either—
(A) because it determines that the contribution base of the plan has not suffered substantial damage as a result of the cessation of the employer's obligation to contribute or cessation of covered operations (considered together with any cessation of contribution obligation, or of covered operations, with respect to other employers), or
(B) because it may not make a determination under paragraph (4) because of the last sentence thereof,
then the bond shall be cancelled or the escrow refunded.
(6) Nothing in this subsection shall be construed as a limitation on the amount of the withdrawal liability of any employer.
(e) Date of complete withdrawal
For purposes of this part, the date of a complete withdrawal is the date of the cessation of the obligation to contribute or the cessation of covered operations.
(f) Special liability withdrawal rules for industries other than construction and entertainment industries; procedures applicable to amend plans
(1) The corporation may prescribe regulations under which plans in industries other than the construction or entertainment industries may be amended to provide for special withdrawal liability rules similar to the rules described in subsections (b) and (c).
(2) Regulations under paragraph (1) shall permit use of special withdrawal liability rules—
(A) only in industries (or portions thereof) in which, as determined by the corporation, the characteristics that would make use of such rules appropriate are clearly shown, and
(B) only if the corporation determines, in each instance in which special withdrawal liability rules are permitted, that use of such rules will not pose a significant risk to the corporation under this subchapter.
(
§1384. Sale of assets
(a) Complete or partial withdrawal not occurring as a result of sale and subsequent cessation of covered operations or cessation of obligation to contribute to covered operations; continuation of liability of seller
(1) A complete or partial withdrawal of an employer (hereinafter in this section referred to as the "seller") under this section does not occur solely because, as a result of a bona fide, arm's-length sale of assets to an unrelated party (hereinafter in this section referred to as the "purchaser"), the seller ceases covered operations or ceases to have an obligation to contribute for such operations, if—
(A) the purchaser has an obligation to contribute to the plan with respect to the operations for substantially the same number of contribution base units for which the seller had an obligation to contribute to the plan;
(B) the purchaser provides to the plan for a period of 5 plan years commencing with the first plan year beginning after the sale of assets, a bond issued by a corporate surety company that is an acceptable surety for purposes of
(i) the average annual contribution required to be made by the seller with respect to the operations under the plan for the 3 plan years preceding the plan year in which the sale of the employer's assets occurs, or
(ii) the annual contribution that the seller was required to make with respect to the operations under the plan for the last plan year before the plan year in which the sale of the assets occurs,
which bond or escrow shall be paid to the plan if the purchaser withdraws from the plan, or fails to make a contribution to the plan when due, at any time during the first 5 plan years beginning after the sale; and
(C) the contract for sale provides that, if the purchaser withdraws in a complete withdrawal, or a partial withdrawal with respect to operations, during such first 5 plan years, the seller is secondarily liable for any withdrawal liability it would have had to the plan with respect to the operations (but for this section) if the liability of the purchaser with respect to the plan is not paid.
(2) If the purchaser—
(A) withdraws before the last day of the fifth plan year beginning after the sale, and
(B) fails to make any withdrawal liability payment when due,
then the seller shall pay to the plan an amount equal to the payment that would have been due from the seller but for this section.
(3)(A) If all, or substantially all, of the seller's assets are distributed, or if the seller is liquidated before the end of the 5 plan year period described in paragraph (1)(C), then the seller shall provide a bond or amount in escrow equal to the present value of the withdrawal liability the seller would have had but for this subsection.
(B) If only a portion of the seller's assets are distributed during such period, then a bond or escrow shall be required, in accordance with regulations prescribed by the corporation, in a manner consistent with subparagraph (A).
(4) The liability of the party furnishing a bond or escrow under this subsection shall be reduced, upon payment of the bond or escrow to the plan, by the amount thereof.
(b) Liability of purchaser
(1) For the purposes of this part, the liability of the purchaser shall be determined as if the purchaser had been required to contribute to the plan in the year of the sale and the 4 plan years preceding the sale the amount the seller was required to contribute for such operations for such 5 plan years.
(2) If the plan is in reorganization in the plan year in which the sale of assets occurs, the purchaser shall furnish a bond or escrow in an amount equal to 200 percent of the amount described in subsection (a)(1)(B).
(c) Variances or exemptions from continuation of liability of seller; procedures applicable
The corporation may by regulation vary the standards in subparagraphs (B) and (C) of subsection (a)(1) if the variance would more effectively or equitably carry out the purposes of this subchapter. Before it promulgates such regulations, the corporation may grant individual or class variances or exemptions from the requirements of such subparagraphs if the particular case warrants it. Before granting such an individual or class variance or exemption, the corporation—
(1) shall publish notice in the Federal Register of the pendency of the variance or exemption,
(2) shall require that adequate notice be given to interested persons, and
(3) shall afford interested persons an opportunity to present their views.
(d) "Unrelated party" defined
For purposes of this section, the term "unrelated party" means a purchaser or seller who does not bear a relationship to the seller or purchaser, as the case may be, that is described in
(
Editorial Notes
Amendments
1989—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
§1385. Partial withdrawals
(a) Determinative factors
Except as otherwise provided in this section, there is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year—
(1) there is a 70-percent contribution decline, or
(2) there is a partial cessation of the employer's contribution obligation.
(b) Criteria applicable
For purposes of subsection (a)—
(1)(A) There is a 70-percent contribution decline for any plan year if during each plan year in the 3-year testing period the employer's contribution base units do not exceed 30 percent of the employer's contribution base units for the high base year.
(B) For purposes of subparagraph (A)—
(i) The term "3-year testing period" means the period consisting of the plan year and the immediately preceding 2 plan years.
(ii) The number of contribution base units for the high base year is the average number of such units for the 2 plan years for which the employer's contribution base units were the highest within the 5 plan years immediately preceding the beginning of the 3-year testing period.
(2)(A) There is a partial cessation of the employer's contribution obligation for the plan year if, during such year—
(i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer, or
(ii) an employer permanently ceases to have an obligation to contribute under the plan with respect to work performed at one or more but fewer than all of its facilities, but continues to perform work at the facility of the type for which the obligation to contribute ceased.
(B) For purposes of subparagraph (A), a cessation of obligations under a collective bargaining agreement shall not be considered to have occurred solely because, with respect to the same plan, one agreement that requires contributions to the plan has been substituted for another agreement.
(c) Retail food industry
(1) In the case of a plan in which a majority of the covered employees are employed in the retail food industry, the plan may be amended to provide that this section shall be applied with respect to such plan—
(A) by substituting "35 percent" for "70 percent" in subsections (a) and (b), and
(B) by substituting "65 percent" for "30 percent" in subsection (b).
(2) Any amendment adopted under paragraph (1) shall provide rules for the equitable reduction of withdrawal liability in any case in which the number of the plan's contribution base units, in the 2 plan years following the plan year of withdrawal of the employer, is higher than such number immediately after the withdrawal.
(3)
(d) Continuation of liability of employer for partial withdrawal under amended plan
In the case of a plan described in
(
Editorial Notes
References in Text
This chapter, referred to in subsec. (d), was in the original "this Act", meaning
Amendments
2006—Subsec. (b)(2)(A)(i).
1989—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1989 Amendment
Amendment by
Applicability to Certain Employers Engaged in Trade or Business of Shipping Bulk Cargoes in Great Lakes Maritime Industry
"(A) For the purpose of applying section 4205 of the Employee Retirement Income Security Act of 1974 [this section] in the case of an employer described in subparagraph (B)—
"(i) 'more than 75 percent' shall be substituted for '70 percent' in subsections (a) and (b) of such section.
"(ii) '25 percent or less' shall be substituted for '30 percent' in subsection (b) of such section, and
"(iii) the number of contribution units for the high base year shall be the average annual number of such units for calendar years 1970 and 1971.
"(B) An employer is described in this subparagraph if—
"(i) the employer is engaged in the trade or business of shipping bulk cargoes in the Great Lakes Maritime Industry, and whose fleet consists of vessels the gross registered tonnage of which was at least 7,800, as stated in the American Bureau of Shipping Record, and
"(ii) whose fleet during any 5 years from the period 1970 through and including 1979 has experienced a 33 percent or more increase in the contribution units as measured from the average annual contribution units for the calendar years 1970 and 1971."
Applicability to Specified Plan Year, Cessation of Contribution Obligations, and Contribution Base Units of Employer
"(1) subsection (a)(1) of such section shall not apply to any plan year beginning before September 26, 1982,
"(2) subsection (a)(2) of such section shall not apply with respect to any cessation of contribution obligations occurring before September 26, 1980, and
"(3) in applying subsection (b) of such section, the employer's contribution base units for any plan year ending before September 26, 1980, shall be deemed to be equal to the employer's contribution base units for the last plan year ending before such date."
Liability of Certain Employers Announcing Publicly Before December 13, 1979, Total Cessation of Covered Operations at a Facility in a State; Amount, Coverage, Determinative Factors, Etc.
"(1) In the case of a partial withdrawal under section 4205 of the Employee Retirement Income Security Act of 1974 [this section], an employer who—
"(A) before December 13, 1979, had publicly announced the total cessation of covered operations at a facility in a State (and such cessation occurred within 12 months after the announcement),
"(B) had not been obligated to make contributions to the plan on behalf of the employees at such facility for more than 8 years before the discontinuance of contributions, and
"(C) after the discontinuance of contributions does not within 1 year after the date of the partial withdrawal perform work in the same State of the type for which contributions were previously required,
shall be liable under such section with respect to such partial withdrawal in an amount not greater than the amount determined under paragraph (2).
"(2) The amount determined under this paragraph is the excess (if any) of—
"(A) the present value (on the withdrawal date) of the benefits under the plan which—
"(i) were vested on the withdrawal date (or, if earlier, at the time of separation from service with the employer at the facility),
"(ii) were accrued by employees who on December 13, 1979 (or, if earlier, at the time of separation from service with the employer at the facility), were employed at the facility, and
"(iii) are attributable to service with the withdrawing employer, over
"(B)(i) the sum of—
"(I) all employer contributions to the plan on behalf of employees at the facility before the withdrawal date,
"(II) interest (to the withdrawal date) on amounts described in subclause (I), and
"(III) $100,000, reduced by
"(ii) the sum of—
"(I) the benefits paid under the plan on or before the withdrawal date with respect to former employees who separated from employment at the facility, and
"(II) interest (to the withdrawal date) on amounts described in subclause (I).
"(3) For purposes of paragraph (2)—
"(A) actuarial assumptions shall be those used in the last actuarial report completed before December 13, 1979,
"(B) the term 'withdrawal date' means the date on which the employer ceased work at the facility of the type for which contributions were previously required, and
"(C) the term 'facility' means the facility referred to in paragraph (1)."
§1386. Adjustment for partial withdrawal; determination of amount; reduction for partial withdrawal liability; procedures applicable
(a) The amount of an employer's liability for a partial withdrawal, before the application of
(1) the amount determined under
(A) on the date of the partial withdrawal, or
(B) in the case of a partial withdrawal described in
multiplied by
(2) a fraction which is 1 minus a fraction—
(A) the numerator of which is the employer's contribution base units for the plan year following the plan year in which the partial withdrawal occurs, and
(B) the denominator of which is the average of the employer's contribution base units for—
(i) except as provided in clause (ii), the 5 plan years immediately preceding the plan year in which the partial withdrawal occurs, or
(ii) in the case of a partial withdrawal described in
(b)(1) In the case of an employer that has withdrawal liability for a partial withdrawal from a plan, any withdrawal liability of that employer for a partial or complete withdrawal from that plan in a subsequent plan year shall be reduced by the amount of any partial withdrawal liability (reduced by any abatement or reduction of such liability) of the employer with respect to the plan for a previous plan year.
(2) The corporation shall prescribe such regulations as may be necessary to provide for proper adjustments in the reduction provided by paragraph (1) for—
(A) changes in unfunded vested benefits arising after the close of the prior year for which partial withdrawal liability was determined,
(B) changes in contribution base units occurring after the close of the prior year for which partial withdrawal liability was determined, and
(C) any other factors for which it determines adjustment to be appropriate,
so that the liability for any complete or partial withdrawal in any subsequent year (after the application of the reduction) properly reflects the employer's share of liability with respect to the plan.
(
§1387. Reduction or waiver of complete withdrawal liability; procedures and standards applicable
(a) The corporation shall provide by regulation for the reduction or waiver of liability for a complete withdrawal in the event that an employer who has withdrawn from a plan subsequently resumes covered operations under the plan or renews an obligation to contribute under the plan, to the extent that the corporation determines that reduction or waiver of withdrawal liability is consistent with the purposes of this chapter.
(b) The corporation shall prescribe by regulation a procedure and standards for the amendment of plans to provide alternative rules for the reduction or waiver of liability for a complete withdrawal in the event that an employer who has withdrawn from the plan subsequently resumes covered operations or renews an obligation to contribute under the plan. The rules may apply only to the extent that the rules are consistent with the purposes of this chapter.
(
Editorial Notes
References in Text
This chapter, referred to in text, was in the original "this Act", meaning
§1388. Reduction of partial withdrawal liability
(a) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year following the partial withdrawal year; criteria applicable; furnishing of bond in lieu of payment of partial withdrawal liability
(1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under
(2)(A) For any plan year for which the number of contribution base units with respect to which an employer who has partially withdrawn under
(B) If the plan sponsor determines under paragraph (1) that the employer has no further liability to the plan for the partial withdrawal, then the bond shall be cancelled.
(C) If the plan sponsor determines under paragraph (1) that the employer continues to have liability to the plan for the partial withdrawal, then—
(i) the bond shall be paid to the plan,
(ii) the employer shall immediately be liable for the outstanding amount of liability due with respect to the plan year for which the bond was posted, and
(iii) the employer shall continue to make the partial withdrawal liability payments as they are due.
(b) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year; other criteria applicable
If—
(1) for any 2 consecutive plan years following a partial withdrawal under
(2) the total number of contribution base units with respect to which all employers under the plan have obligations to contribute in each of such 2 consecutive years is not less than 90 percent of the total number of contribution base units for which all employers had obligations to contribute in the partial withdrawal plan year;
then, the employer shall have no obligation to make payments with respect to such partial withdrawal (other than delinquent payments) for plan years beginning after the second such consecutive plan year.
(c) Pro rata reduction of amount of partial withdrawal liability payment of employer for plan year following partial withdrawal year
In any case in which, in any plan year following a partial withdrawal under
(d) Building and construction industry; entertainment industry
(1) An employer to whom section 1383(b) 2 of this title (relating to the building and construction industry) applies is liable for a partial withdrawal only if the employer's obligation to contribute under the plan is continued for no more than an insubstantial portion of its work in the craft and area jurisdiction of the collective bargaining agreement of the type for which contributions are required.
(2) An employer to whom section 1383(c) 2 of this title (relating to the entertainment industry) applies shall have no liability for a partial withdrawal except under the conditions and to the extent prescribed by the corporation by regulation.
(e) Reduction or elimination of partial withdrawal liability under any conditions; criteria; procedures applicable
(1) The corporation may prescribe regulations providing for the reduction or elimination of partial withdrawal liability under any conditions with respect to which the corporation determines that reduction or elimination of partial withdrawal liability is consistent with the purposes of this chapter.
(2) Under such regulations, reduction of withdrawal liability shall be provided only with respect to subsequent changes in the employer's contributions for the same operations, or under the same collective bargaining agreement, that gave rise to the partial withdrawal, and changes in the employer's contribution base units with respect to other facilities or other collective bargaining agreements shall not be taken into account.
(3) The corporation shall prescribe by regulation a procedure by which a plan may by amendment adopt rules for the reduction or elimination of partial withdrawal liability under any other conditions, subject to the approval of the corporation based on its determination that adoption of such rules by the plan is consistent with the purposes of this chapter.
(
Editorial Notes
References in Text
"
This chapter, referred to in subsec. (e)(1), (3), was in the original "this Act", meaning
1 So in original. Probably should be "title),".
2 See References in Text note below.
§1389. De minimis rule
(a) Reduction of unfunded vested benefits allocable to employer withdrawn from plan
Except in the case of a plan amended under subsection (b), the amount of the unfunded vested benefits allocable under
(1) ¾ of 1 percent of the plan's unfunded vested obligations (determined as of the end of the plan year ending before the date of withdrawal), or
(2) $50,000,
reduced by the amount, if any, by which the unfunded vested benefits allowable to the employer, determined without regard to this subsection, exceeds $100,000.
(b) Amendment of plan for reduction of amount of unfunded vested benefits allocable to employer withdrawn from plan
A plan may be amended to provide for the reduction of the amount determined under
(1) the amount determined under subsection (a), or
(2) the lesser of—
(A) the amount determined under subsection (a)(1), or
(B) $100,000,
reduced by the amount, if any, by which the amount determined under
(c) Nonapplicability
This section does not apply—
(1) to an employer who withdraws in a plan year in which substantially all employers withdraw from the plan, or
(2) in any case in which substantially all employers withdraw from the plan during a period of one or more plan years pursuant to an agreement or arrangement to withdraw, to an employer who withdraws pursuant to such agreement or arrangement.
(d) Presumption of employer withdrawal from plan pursuant to agreement or arrangement applicable in action or proceeding to determine or collect withdrawal liability
In any action or proceeding to determine or collect withdrawal liability, if substantially all employers have withdrawn from a plan within a period of 3 plan years, an employer who has withdrawn from such plan during such period shall be presumed to have withdrawn from the plan pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence.
(
§1390. Nonapplicability of withdrawal liability for certain temporary contribution obligation periods; exception
(a) An employer who withdraws from a plan in complete or partial withdrawal is not liable to the plan if the employer—
(1) first had an obligation to contribute to the plan after September 26, 1980,
(2) had an obligation to contribute to the plan for no more than the lesser of—
(A) 6 consecutive plan years preceding the date on which the employer withdraws, or
(B) the number of years required for vesting under the plan,
(3) was required to make contributions to the plan for each such plan year in an amount equal to less than 2 percent of the sum of all employer contributions made to the plan for each such year, and
(4) has never avoided withdrawal liability because of the application of this section with respect to the plan.
(b) Subsection (a) shall apply to an employer with respect to a plan only if—
(1) the plan is amended to provide that subsection (a) applies;
(2) the plan provides, or is amended to provide, that the reduction under
(3) the ratio of the assets of the plan for the plan year preceding the first plan year for which the employer was required to contribute to the plan to the benefit payments made during that plan year was at least 8 to 1.
(
Editorial Notes
Amendments
2006—Subsec. (b)(1) to (4).
1989—Subsec. (b)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1989 Amendment
Amendment by
§1391. Methods for computing withdrawal liability
(a) Determination of amount of unfunded vested benefits allocable to employer withdrawn from plan
The amount of the unfunded vested benefits allocable to an employer that withdraws from a plan shall be determined in accordance with subsection (b), (c), or (d) of this section.
(b) Factors determining computation of amount of unfunded vested benefits allocable to employer withdrawn from plan
(1) Except as provided in subsections (c) and (d), the amount of unfunded vested benefits allocable to an employer that withdraws is the sum of—
(A) the employer's proportional share of the unamortized amount of the change in the plan's unfunded vested benefits for plan years ending after September 25, 1980, as determined under paragraph (2),
(B) the employer's proportional share, if any, of the unamortized amount of the plan's unfunded vested benefits at the end of the plan year ending before September 26, 1980, as determined under paragraph (3); and
(C) the employer's proportional share of the unamortized amounts of the reallocated unfunded vested benefits (if any) as determined under paragraph (4).
If the sum of the amounts determined with respect to an employer under paragraphs (2), (3), and (4) is negative, the unfunded vested benefits allocable to the employer shall be zero.
(2)(A) An employer's proportional share of the unamortized amount of the change in the plan's unfunded vested benefits for plan years ending after September 25, 1980, is the sum of the employer's proportional shares of the unamortized amount of the change in unfunded vested benefits for each plan year in which the employer has an obligation to contribute under the plan ending—
(i) after such date, and
(ii) before the plan year in which the withdrawal of the employer occurs.
(B) The change in a plan's unfunded vested benefits for a plan year is the amount by which—
(i) the unfunded vested benefits at the end of the plan year; exceeds
(ii) the sum of—
(I) the unamortized amount of the unfunded vested benefits for the last plan year ending before September 26, 1980, and
(II) the sum of the unamortized amounts of the change in unfunded vested benefits for each plan year ending after September 25, 1980, and preceding the plan year for which the change is determined.
(C) The unamortized amount of the change in a plan's unfunded vested benefits with respect to a plan year is the change in unfunded vested benefits for the plan year, reduced by 5 percent of such change for each succeeding plan year.
(D) The unamortized amount of the unfunded vested benefits for the last plan year ending before September 26, 1980, is the amount of the unfunded vested benefits as of the end of that plan year reduced by 5 percent of such amount for each succeeding plan year.
(E) An employer's proportional share of the unamortized amount of a change in unfunded vested benefits is the product of—
(i) the unamortized amount of such change (as of the end of the plan year preceding the plan year in which the employer withdraws); multiplied by
(ii) a fraction—
(I) the numerator of which is the sum of the contributions required to be made under the plan by the employer for the year in which such change arose and for the 4 preceding plan years, and
(II) the denominator of which is the sum for the plan year in which such change arose and the 4 preceding plan years of all contributions made by employers who had an obligation to contribute under the plan for the plan year in which such change arose reduced by the contributions made in such years by employers who had withdrawn from the plan in the year in which the change arose.
(3) An employer's proportional share of the unamortized amount of the plan's unfunded vested benefits for the last plan year ending before September 26, 1980, is the product of—
(A) such unamortized amount; multiplied by—
(B) a fraction—
(i) the numerator of which is the sum of all contributions required to be made by the employer under the plan for the most recent 5 plan years ending before September 26, 1980, and
(ii) the denominator of which is the sum of all contributions made for the most recent 5 plan years ending before September 26, 1980, by all employers—
(I) who had an obligation to contribute under the plan for the first plan year ending on or after such date, and
(II) who had not withdrawn from the plan before such date.
(4)(A) An employer's proportional share of the unamortized amount of the reallocated unfunded vested benefits is the sum of the employer's proportional share of the unamortized amount of the reallocated unfunded vested benefits for each plan year ending before the plan year in which the employer withdrew from the plan.
(B) Except as otherwise provided in regulations prescribed by the corporation, the reallocated unfunded vested benefits for a plan year is the sum of—
(i) any amount which the plan sponsor determines in that plan year to be uncollectible for reasons arising out of cases or proceedings under title 11, or similar proceedings.1
(ii) any amount which the plan sponsor determines in that plan year will not be assessed as a result of the operation of
(iii) any amount which the plan sponsor determines to be uncollectible or unassessable in that plan year for other reasons under standards not inconsistent with regulations prescribed by the corporation.
(C) The unamortized amount of the reallocated unfunded vested benefits with respect to a plan year is the reallocated unfunded vested benefits for the plan year, reduced by 5 percent of such reallocated unfunded vested benefits for each succeeding plan year.
(D) An employer's proportional share of the unamortized amount of the reallocated unfunded vested benefits with respect to a plan year is the product of—
(i) the unamortized amount of the reallocated unfunded vested benefits (as of the end of the plan year preceding the plan year in which the employer withdraws); multiplied by
(ii) the fraction defined in paragraph (2)(E)(ii).
(c) Amendment of multiemployer plan for determination respecting amount of unfunded vested benefits allocable to employer withdrawn from plan; factors determining computation of amount
(1) A multiemployer plan, other than a plan which primarily covers employees in the building and construction industry, may be amended to provide that the amount of unfunded vested benefits allocable to an employer that withdraws from the plan is an amount determined under paragraph (2), (3), (4), or (5) of this subsection, rather than under subsection (b) or (d). A plan described in
(2)(A) The amount of the unfunded vested benefits allocable to any employer under this paragraph is the sum of the amounts determined under subparagraphs (B) and (C).
(B) The amount determined under this subparagraph is the product of—
(i) the plan's unfunded vested benefits as of the end of the last plan year ending before September 26, 1980, reduced as if those obligations were being fully amortized in level annual installments over 15 years beginning with the first plan year ending on or after such date; multiplied by
(ii) a fraction—
(I) the numerator of which is the sum of all contributions required to be made by the employer under the plan for the last 5 plan years ending before September 26, 1980, and
(II) the denominator of which is the sum of all contributions made for the last 5 plan years ending before September 26, 1980, by all employers who had an obligation to contribute under the plan for the first plan year ending after September 25, 1980, and who had not withdrawn from the plan before such date.
(C) The amount determined under this subparagraph is the product of—
(i) an amount equal to—
(I) the plan's unfunded vested benefits as of the end of the plan year preceding the plan year in which the employer withdraws, less
(II) the sum of the value as of such date of all outstanding claims for withdrawal liability which can reasonably be expected to be collected, with respect to employers withdrawing before such plan year, and that portion of the amount determined under subparagraph (B)(i) which is allocable to employers who have an obligation to contribute under the plan in the plan year preceding the plan year in which the employer withdraws and who also had an obligation to contribute under the plan for the first plan year ending after September 25, 1980; multiplied by
(ii) a fraction—
(I) the numerator of which is the total amount required to be contributed under the plan by the employer for the last 5 plan years ending before the date on which the employer withdraws, and
(II) the denominator of which is the total amount contributed under the plan by all employers for the last 5 plan years ending before the date on which the employer withdraws, increased by the amount of any employer contributions owed with respect to earlier periods which were collected in those plan years, and decreased by any amount contributed by an employer who withdrew from the plan under this part during those plan years.
(D) The corporation may by regulation permit adjustments in any denominator under this section, consistent with the purposes of this subchapter, where such adjustment would be appropriate to ease administrative burdens of plan sponsors in calculating such denominators.
(3) The amount of the unfunded vested benefits allocable to an employer under this paragraph is the product of—
(A) the plan's unfunded vested benefits as of the end of the plan year preceding the plan year in which the employer withdraws, less the value as of the end of such year of all outstanding claims for withdrawal liability which can reasonably be expected to be collected from employers withdrawing before such year; multiplied by
(B) a fraction—
(i) the numerator of which is the total amount required to be contributed by the employer under the plan for the last 5 plan years ending before the withdrawal, and
(ii) the denominator of which is the total amount contributed under the plan by all employers for the last 5 plan years ending before the withdrawal, increased by any employer contributions owed with respect to earlier periods which were collected in those plan years, and decreased by any amount contributed to the plan during those plan years by employers who withdrew from the plan under this section during those plan years.
(4)(A) The amount of the unfunded vested benefits allocable to an employer under this paragraph is equal to the sum of—
(i) the plan's unfunded vested benefits which are attributable to participants' service with the employer (determined as of the end of the plan year preceding the plan year in which the employer withdraws), and
(ii) the employer's proportional share of any unfunded vested benefits which are not attributable to service with the employer or other employers who are obligated to contribute under the plan in the plan year preceding the plan year in which the employer withdraws (determined as of the end of the plan year preceding the plan year in which the employer withdraws).
(B) The plan's unfunded vested benefits which are attributable to participants' service with the employer is the amount equal to the value of nonforfeitable benefits under the plan which are attributable to participants' service with such employer (determined under plan rules not inconsistent with regulations of the corporation) decreased by the share of plan assets determined under subparagraph (C) which is allocated to the employer as provided under subparagraph (D).
(C) The value of plan assets determined under this subparagraph is the value of plan assets allocated to nonforfeitable benefits which are attributable to service with the employers who have an obligation to contribute under the plan in the plan year preceding the plan year in which the employer withdraws, which is determined by multiplying—
(i) the value of the plan assets as of the end of the plan year preceding the plan year in which the employer withdraws, by
(ii) a fraction—
(I) the numerator of which is the value of nonforfeitable benefits which are attributable to service with such employers, and
(II) the denominator of which is the value of all nonforfeitable benefits under the plan
as of the end of the plan year.
(D) The share of plan assets, determined under subparagraph (C), which is allocated to the employer shall be determined in accordance with one of the following methods which shall be adopted by the plan by amendment:
(i) by multiplying the value of plan assets determined under subparagraph (C) by a fraction—
(I) the numerator of which is the value of the nonforfeitable benefits which are attributable to service with the employer, and
(II) the denominator of which is the value of the nonforfeitable benefits which are attributable to service with all employers who have an obligation to contribute under the plan in the plan year preceding the plan year in which the employer withdraws;
(ii) by multiplying the value of plan assets determined under subparagraph (C) by a fraction—
(I) the numerator of which is the sum of all contributions (accumulated with interest) which have been made to the plan by the employer for the plan year preceding the plan year in which the employer withdraws and all preceding plan years; and
(II) the denominator of which is the sum of all contributions (accumulated with interest) which have been made to the plan (for the plan year preceding the plan year in which the employer withdraws and all preceding plan years) by all employers who have an obligation to contribute to the plan for the plan year preceding the plan year in which the employer withdraws; or
(iii) by multiplying the value of plan assets under subparagraph (C) by a fraction—
(I) the numerator of which is the amount determined under clause (ii)(I) of this subparagraph, less the sum of benefit payments (accumulated with interest) made to participants (and their beneficiaries) for the plan years described in such clause (ii)(I) which are attributable to service with the employer; and
(II) the denominator of which is the amount determined under clause (ii)(II) of this subparagraph, reduced by the sum of benefit payments (accumulated with interest) made to participants (and their beneficiaries) for the plan years described in such clause (ii)(II) which are attributable to service with respect to the employers described in such clause (ii)(II).
(E) The amount of the plan's unfunded vested benefits for a plan year preceding the plan year in which an employer withdraws, which is not attributable to service with employers who have an obligation to contribute under the plan in the plan year preceding the plan year in which such employer withdraws, is equal to—
(i) an amount equal to—
(I) the value of all nonforfeitable benefits under the plan at the end of such plan year, reduced by
(II) the value of nonforfeitable benefits under the plan at the end of such plan year which are attributable to participants' service with employers who have an obligation to contribute under the plan for such plan year; reduced by
(ii) an amount equal to—
(I) the value of the plan assets as of the end of such plan year, reduced by
(II) the value of plan assets as of the end of such plan year as determined under subparagraph (C); reduced by
(iii) the value of all outstanding claims for withdrawal liability which can reasonably be expected to be collected with respect to employers withdrawing before the year preceding the plan year in which the employer withdraws.
(F) The employer's proportional share described in subparagraph (A)(ii) for a plan year is the amount determined under subparagraph (E) for the employer, but not in excess of an amount which bears the same ratio to the sum of the amounts determined under subparagraph (E) for all employers under the plan as the amount determined under subparagraph (C) for the employer bears to the sum of the amounts determined under subparagraph (C) for all employers under the plan.
(G) The corporation may prescribe by regulation other methods which a plan may adopt for allocating assets to determine the amount of the unfunded vested benefits attributable to service with the employer and to determine the employer's share of unfunded vested benefits not attributable to service with employers who have an obligation to contribute under the plan in the plan year in which the employer withdraws.
(5)(A) The corporation shall prescribe by regulation a procedure by which a plan may, by amendment, adopt any other alternative method for determining an employer's allocable share of unfunded vested benefits under this section, subject to the approval of the corporation based on its determination that adoption of the method by the plan would not significantly increase the risk of loss to plan participants and beneficiaries or to the corporation.
(B) The corporation may prescribe by regulation standard approaches for alternative methods, other than those set forth in the preceding paragraphs of this subsection, which a plan may adopt under subparagraph (A), for which the corporation may waive or modify the approval requirements of subparagraph (A). Any alternative method shall provide for the allocation of substantially all of a plan's unfunded vested benefits among employers who have an obligation to contribute under the plan.
(C) Unless the corporation by regulation provides otherwise, a plan may be amended to provide that a period of more than 5 but not more than 10 plan years may be used for determining the numerator and denominator of any fraction which is used under any method authorized under this section for determining an employer's allocable share of unfunded vested benefits under this section.
(D) The corporation may by regulation permit adjustments in any denominator under this section, consistent with the purposes of this subchapter, where such adjustment would be appropriate to ease administrative burdens of plan sponsors in calculating such denominators.
(E)
(d) Method of calculating allocable share of employer of unfunded vested benefits set forth in subsection (c)(3); applicability of certain statutory provisions
(1) The method of calculating an employer's allocable share of unfunded vested benefits set forth in subsection (c)(3) shall be the method for calculating an employer's allocable share of unfunded vested benefits under a plan to which
(2)
(e) Reduction of liability of withdrawn employer in case of transfer of liabilities to another plan incident to withdrawal or partial withdrawal of employer
In the case of a transfer of liabilities to another plan incident to an employer's withdrawal or partial withdrawal, the withdrawn employer's liability under this part shall be reduced in an amount equal to the value, as of the end of the last plan year ending on or before the date of the withdrawal, of the transferred unfunded vested benefits.
(f) Computations applicable in case of withdrawal following merger of multiemployer plans
In the case of a withdrawal following a merger of multiemployer plans, subsection (b), (c), or (d) shall be applied in accordance with regulations prescribed by the corporation; except that, if a withdrawal occurs in the first plan year beginning after a merger of multiemployer plans, the determination under this section shall be made as if each of the multiemployer plans had remained separate plans.
(
Editorial Notes
Amendments
2006—Subsec. (c)(5)(E).
1989—Subsec. (d)(1).
1984—Subsec. (b).
Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
1 So in original. The period probably should be a comma.
§1392. Obligation to contribute
(a) "Obligation to contribute" defined
For purposes of this part, the term "obligation to contribute" means an obligation to contribute arising—
(1) under one or more collective bargaining (or related) agreements, or
(2) as a result of a duty under applicable labor-management relations law, but
does not include an obligation to pay withdrawal liability under this section or to pay delinquent contributions.
(b) Payments of withdrawal liability not considered contributions
Payments of withdrawal liability under this part shall not be considered contributions for purposes of this part.
(c) Transactions to evade or avoid liability
If a principal purpose of any transaction is to evade or avoid liability under this part, this part shall be applied (and liability shall be determined and collected) without regard to such transaction.
(
§1393. Actuarial assumptions
(a) Use by plan actuary in determining unfunded vested benefits of a plan for computing withdrawal liability of employer
The corporation may prescribe by regulation actuarial assumptions which may be used by a plan actuary in determining the unfunded vested benefits of a plan for purposes of determining an employer's withdrawal liability under this part. Withdrawal liability under this part shall be determined by each plan on the basis of—
(1) actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary's best estimate of anticipated experience under the plan, or
(2) actuarial assumptions and methods set forth in the corporation's regulations for purposes of determining an employer's withdrawal liability.
(b) Factors determinative of unfunded vested benefits of plan for computing withdrawal liability of employer
In determining the unfunded vested benefits of a plan for purposes of determining an employer's withdrawal liability under this part, the plan actuary may—
(1) rely on the most recent complete actuarial valuation used for purposes of
(2) in the absence of complete data, rely on the data available or on data secured by a sampling which can reasonably be expected to be representative of the status of the entire plan.
(c) Determination of amount of unfunded vested benefits
For purposes of this part, the term "unfunded vested benefits" means with respect to a plan, an amount equal to—
(A) the value of nonforfeitable benefits under the plan, less
(B) the value of the assets of the plan.
(
Editorial Notes
Amendments
1989—Subsec. (b)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
§1394. Application of plan amendments; exception
(a) No plan rule or amendment adopted after January 31, 1981, under
(b) All plan rules and amendments authorized under this part shall operate and be applied uniformly with respect to each employer, except that special provisions may be made to take into account the creditworthiness of an employer. The plan sponsor shall give notice to all employers who have an obligation to contribute under the plan and to all employee organizations representing employees covered under the plan of any plan rules or amendments adopted pursuant to this section.
(
§1395. Plan notification to corporation of potentially significant withdrawals
The corporation may, by regulation, require the plan sponsor of a multiemployer plan to provide notice to the corporation when the withdrawal from the plan by any employer has resulted, or will result, in a significant reduction in the amount of aggregate contributions under the plan made by employers.
(
§1396. Special rules for plans under section 404(c) of title 26
(a) Amount of withdrawal liability; determinative factors
In the case of a plan described in subsection (b)—
(1) if an employer withdraws prior to a termination described in
(A) the amount determined under
(B) the product of—
(i) the number of contribution base units for which the employer would have been required to make contributions for the prior plan year if the employer had not withdrawn, multiplied by
(ii) the contribution rate for the plan year which would be required to meet the amortization schedules contained in section 1423(d)(3)(B)(ii) 1 of this title (determined without regard to any limitation on such rate otherwise provided by this subchapter)
except that an employer shall not be required to pay an amount in excess of the withdrawal liability computed with interest; and
(2) the withdrawal liability of an employer who withdraws after December 31, 1983, as a result of a termination described in
(A) as a result of prior employer withdrawals in any plan year commencing after January 1, 1980, the number of contribution base units is reduced to less than 67 percent of the average number of such units for the calendar years 1974 through 1979; and
(B) at least 50 percent of the withdrawal liability attributable to the first 33 percent decline described in subparagraph (A) has been determined by the plan sponsor to be uncollectible within the meaning of regulations of the corporation of general applicability; and
(C) the rate of employer contributions under the plan for each plan year following the first plan year beginning after September 26, 1980 and preceding the termination date equals or exceeds the rate described in section 1423(d)(3) 1 of this title.
(b) Covered plans
A plan is described in this subsection if—
(1) it is a plan described in
(2) participation in the plan is substantially limited to individuals who retired prior to January 1, 1976.
(c) Amount of liability of employer; "a year of signatory service" defined
(1) The amount of an employer's liability under this paragraph is the product of—
(A) the amount of the employer's withdrawal liability determined without regard to this section, and
(B) the greater of 90 percent, or a fraction—
(i) the numerator of which is an amount equal to the portion of the plan's unfunded vested benefits that is attributable to plan participants who have a total of 10 or more years of signatory service, and
(ii) the denominator of which is an amount equal to the total unfunded vested benefits of the plan.
(2) For purposes of paragraph (1), the term "a year of signatory service" means a year during any portion of which a participant was employed for an employer who was obligated to contribute in that year, or who was subsequently obligated to contribute.
(
Editorial Notes
References in Text
1 See References in Text note below.
§1397. Application of part in case of certain pre-1980 withdrawals; adjustment of covered plan
(a) For the purpose of determining the amount of unfunded vested benefits allocable to an employer for a partial or complete withdrawal from a plan which occurs after September 25, 1980, and for the purpose of determining whether there has been a partial withdrawal after such date, the amount of contributions, and the number of contribution base units, of such employer properly allocable—
(1) to work performed under a collective bargaining agreement for which there was a permanent cessation of the obligation to contribute before September 26, 1980, or
(2) to work performed at a facility at which all covered operations permanently ceased before September 26, 1980, or for which there was a permanent cessation of the obligation to contribute before that date,
shall not be taken into account.
(b) A plan may, in a manner not inconsistent with regulations, which shall be prescribed by the corporation, adjust the amount of unfunded vested benefits allocable to other employers under a plan maintained by an employer described in subsection (a).
(
Editorial Notes
Amendments
1984—Subsec. (a).
§1398. Withdrawal not to occur because of change in business form or suspension of contributions during labor dispute
Notwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan solely because—
(1) an employer ceases to exist by reason of—
(A) a change in corporate structure described in
(B) a change to an unincorporated form of business enterprise,
if the change causes no interruption in employer contributions or obligations to contribute under the plan, or
(2) an employer suspends contributions under the plan during a labor dispute involving its employees.
For purposes of this part, a successor or parent corporation or other entity resulting from any such change shall be considered the original employer.
(
Editorial Notes
Amendments
1989—Par. (1)(A).
1986—Par. (1)(A).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by section 7862(b)(1)(C) of
Amendment by section 7893(f) of
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
§1399. Notice, collection, etc., of withdrawal liability
(a) Furnishing of information by employer to plan sponsor
An employer shall, within 30 days after a written request from the plan sponsor, furnish such information as the plan sponsor reasonably determines to be necessary to enable the plan sponsor to comply with the requirements of this part.
(b) Notification, demand for payment, and review upon complete or partial withdrawal by employer
(1) As soon as practicable after an employer's complete or partial withdrawal, the plan sponsor shall—
(A) notify the employer of—
(i) the amount of the liability, and
(ii) the schedule for liability payments, and
(B) demand payment in accordance with the schedule.
(2)(A) No later than 90 days after the employer receives the notice described in paragraph (1), the employer—
(i) may ask the plan sponsor to review any specific matter relating to the determination of the employer's liability and the schedule of payments,
(ii) may identify any inaccuracy in the determination of the amount of the unfunded vested benefits allocable to the employer, and
(iii) may furnish any additional relevant information to the plan sponsor.
(B) After a reasonable review of any matter raised, the plan sponsor shall notify the employer of—
(i) the plan sponsor's decision,
(ii) the basis for the decision, and
(iii) the reason for any change in the determination of the employer's liability or schedule of liability payments.
(c) Payment requirements; amount, etc.
(1)(A)(i) Except as provided in subparagraphs (B) and (D) of this paragraph and in paragraphs (4) and (5), an employer shall pay the amount determined under
(ii) The determination of the amortization period described in clause (i) shall be based on the assumptions used for the most recent actuarial valuation for the plan.
(B) In any case in which the amortization period described in subparagraph (A) exceeds 20 years, the employer's liability shall be limited to the first 20 annual payments determined under subparagraph (C).
(C)(i) Except as provided in subparagraph (E), the amount of each annual payment shall be the product of—
(I) the average annual number of contribution base units for the period of 3 consecutive plan years, during the period of 10 consecutive plan years ending before the plan year in which the withdrawal occurs, in which the number of contribution base units for which the employer had an obligation to contribute under the plan is the highest, and
(II) the highest contribution rate at which the employer had an obligation to contribute under the plan during the 10 plan years ending with the plan year in which the withdrawal occurs.
For purposes of the preceding sentence, a partial withdrawal described in
(ii)(I) A plan may be amended to provide that for any plan year ending before 1986 the amount of each annual payment shall be (in lieu of the amount determined under clause (i)) the average of the required employer contributions under the plan for the period of 3 consecutive plan years (during the period of 10 consecutive plan years ending with the plan year preceding the plan year in which the withdrawal occurs) for which such required contributions were the highest.
(II) Subparagraph (B) shall not apply to any plan year to which this clause applies.
(III) This clause shall not apply in the case of any withdrawal described in subparagraph (D).
(IV) If under a plan this clause applies to any plan year but does not apply to the next plan year, this clause shall not apply to any plan year after such next plan year.
(V) For purposes of this clause, the term "required contributions" means, for any period, the amounts which the employer was obligated to contribute for such period (not taking into account any delinquent contribution for any other period).
(iii) A plan may be amended to provide that for the first plan year ending on or after September 26, 1980, the number "5" shall be substituted for the number "10" each place it appears in clause (i) or clause (ii) (whichever is appropriate). If the plan is so amended, the number "5" shall be increased by one for each succeeding plan year until the number "10" is reached.
(D) In any case in which a multiemployer plan terminates by the withdrawal of every employer from the plan, or in which substantially all the employers withdraw from a plan pursuant to an agreement or arrangement to withdraw from the plan—
(i) the liability of each such employer who has withdrawn shall be determined (or redetermined) under this paragraph without regard to subparagraph (B), and
(ii) notwithstanding any other provision of this part, the total unfunded vested benefits of the plan shall be fully allocated among all such employers in a manner not inconsistent with regulations which shall be prescribed by the corporation.
Withdrawal by an employer from a plan, during a period of 3 consecutive plan years within which substantially all the employers who have an obligation to contribute under the plan withdraw, shall be presumed to be a withdrawal pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence.
(E) In the case of a partial withdrawal described in
(i) the amount determined under subparagraph (C) (determined without regard to this subparagraph), multiplied by
(ii) the fraction determined under
(2) Withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor under subsection (b)(1) beginning no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability or of the schedule.
(3) Each annual payment determined under paragraph (1)(C) shall be payable in 4 equal installments due quarterly, or at other intervals specified by plan rules. If a payment is not made when due, interest on the payment shall accrue from the due date until the date on which the payment is made.
(4) The employer shall be entitled to prepay the outstanding amount of the unpaid annual withdrawal liability payments determined under paragraph (1)(C), plus accrued interest, if any, in whole or in part, without penalty. If the prepayment is made pursuant to a withdrawal which is later determined to be part of a withdrawal described in paragraph (1)(D), the withdrawal liability of the employer shall not be limited to the amount of the prepayment.
(5) In the event of a default, a plan sponsor may require immediate payment of the outstanding amount of an employer's withdrawal liability, plus accrued interest on the total outstanding liability from the due date of the first payment which was not timely made. For purposes of this section, the term "default" means—
(A) the failure of an employer to make, when due, any payment under this section, if the failure is not cured within 60 days after the employer receives written notification from the plan sponsor of such failure, and
(B) any other event defined in rules adopted by the plan which indicates a substantial likelihood that an employer will be unable to pay its withdrawal liability.
(6) Except as provided in paragraph (1)(A)(ii), interest under this subsection shall be charged at rates based on prevailing market rates for comparable obligations, in accordance with regulations prescribed by the corporation.
(7) A multiemployer plan may adopt rules for other terms and conditions for the satisfaction of an employer's withdrawal liability if such rules—
(A) are consistent with this chapter, and
(B) are not inconsistent with regulations of the corporation.
(8) In the case of a terminated multiemployer plan, an employer's obligation to make payments under this section ceases at the end of the plan year in which the assets of the plan (exclusive of withdrawal liability claims) are sufficient to meet all obligations of the plan, as determined by the corporation.
(d) Applicability of statutory prohibitions
The prohibitions provided in
(
Editorial Notes
References in Text
This chapter, referred to in subsec. (c)(7)(A), was in the original "this Act", meaning
Amendments
2014—Subsec. (d).
1984—Subsec. (c)(1)(C)(iii).
§1400. Approval of amendments
(a) Amendment of covered multiemployer plan; procedures applicable
Except as provided in subsection (b), if an amendment to a multiemployer plan authorized by any preceding section of this part is adopted more than 36 months after the effective date of this section, the amendment shall be effective only if the corporation approves the amendment, or, within 90 days after the corporation receives notice and a copy of the amendment from the plan sponsor, fails to disapprove the amendment.
(b) Amendment respecting methods for computing withdrawal liability
An amendment permitted by
(c) Criteria for disapproval by corporation
The corporation shall disapprove an amendment referred to in subsection (a) or (b) only if the corporation determines that the amendment creates an unreasonable risk of loss to plan participants and beneficiaries or to the corporation.
(
Editorial Notes
References in Text
For the effective date of this section, referred to in subsec. (a), see 1461(e)(2) of this title.
§1401. Resolution of disputes
(a) Arbitration proceedings; matters subject to arbitration, procedures applicable, etc.
(1) Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under
(A) the date of notification to the employer under
(B) 120 days after the date of the employer's request under
The parties may jointly initiate arbitration within the 180-day period after the date of the plan sponsor's demand under
(2) An arbitration proceeding under this section shall be conducted in accordance with fair and equitable procedures to be promulgated by the corporation. The plan sponsor may purchase insurance to cover potential liability of the arbitrator. If the parties have not provided for the costs of the arbitration, including arbitrator's fees, by agreement, the arbitrator shall assess such fees. The arbitrator may also award reasonable attorney's fees.
(3)(A) For purposes of any proceeding under this section, any determination made by a plan sponsor under
(B) In the case of the determination of a plan's unfunded vested benefits for a plan year, the determination is presumed correct unless a party contesting the determination shows by a preponderance of evidence that—
(i) the actuarial assumptions and methods used in the determination were, in the aggregate, unreasonable (taking into account the experience of the plan and reasonable expectations), or
(ii) the plan's actuary made a significant error in applying the actuarial assumptions or methods.
(b) Alternative collection proceedings; civil action subsequent to arbitration award; conduct of arbitration proceedings
(1) If no arbitration proceeding has been initiated pursuant to subsection (a), the amounts demanded by the plan sponsor under
(2) Upon completion of the arbitration proceedings in favor of one of the parties, any party thereto may bring an action, no later than 30 days after the issuance of an arbitrator's award, in an appropriate United States district court in accordance with
(3) Any arbitration proceedings under this section shall, to the extent consistent with this subchapter, be conducted in the same manner, subject to the same limitations, carried out with the same powers (including subpena power), and enforced in United States courts as an arbitration proceeding carried out under title 9.
(c) Presumption respecting finding of fact by arbitrator
In any proceeding under subsection (b), there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were correct.
(d) Payments by employer prior and subsequent to determination by arbitrator; adjustments; failure of employer to make payments
Payments shall be made by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision with respect to the determination submitted for arbitration, with any necessary adjustments in subsequent payments for overpayments or underpayments arising out of the decision of the arbitrator with respect to the determination. If the employer fails to make timely payment in accordance with such final decision, the employer shall be treated as being delinquent in the making of a contribution required under the plan (within the meaning of
(e) Procedures applicable to certain disputes
(1) In general
If—
(A) a plan sponsor of a plan determines that—
(i) a complete or partial withdrawal of an employer has occurred, or
(ii) an employer is liable for withdrawal liability payments with respect to the complete or partial withdrawal of an employer from the plan,
(B) such determination is based in whole or in part on a finding by the plan sponsor under
(C) such transaction occurred at least 5 years before the date of the complete or partial withdrawal,
then the special rules under paragraph (2) shall be used in applying subsections (a) and (d) of this section and
(2) Special rules
(A) Determination
Notwithstanding subsection (a)(3)—
(i) a determination by the plan sponsor under paragraph (1)(B) shall not be presumed to be correct, and
(ii) the plan sponsor shall have the burden to establish, by a preponderance of the evidence, the elements of the claim under
Nothing in this subparagraph shall affect the burden of establishing any other element of a claim for withdrawal liability under this subtitle.
(B) Procedure
Notwithstanding subsection (d) and
(f) Procedures applicable to certain disputes
(1)
(A) a plan sponsor of a plan determines that—
(i) a complete or partial withdrawal of an employer has occurred, or
(ii) an employer is liable for withdrawal liability payments with respect to such complete or partial withdrawal, and
(B) such determination is based in whole or in part on a finding by the plan sponsor under
then the person against which the withdrawal liability is assessed based solely on the application of
(2)
(A) provides notice to the plan sponsor of its election to apply the special rule in this paragraph within 90 days after the plan sponsor notifies the electing person of its liability by reason of the application of
(B) if a final decision in the arbitration proceeding, or in court, of the withdrawal liability dispute has not been rendered within 12 months from the date of such notice, the electing person provides to the plan, effective as of the first day following the 12-month period, a bond issued by a corporate surety company that is an acceptable surety for purposes of
(3)
(A)
(i) employs not more than 500 employees, and
(ii) is required to make contributions to the plan for not more than 250 employees.
(B)
(4)
(5) The liability of the party furnishing a bond or escrow under this subsection shall be reduced, upon the payment of the bond or escrow to the plan, by the amount thereof.
(
Editorial Notes
Amendments
2008—Subsecs. (e) to (g).
2006—Subsec. (g).
2004—Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2006 Amendment
Effective Date of 2004 Amendment
§1402. Reimbursements for uncollectible withdrawal liability
(a) Required supplemental program to reimburse for payments due from employers uncollectible as a result of employer involvement in bankruptcy case or proceedings; program participation, premiums, etc.
By May 1, 1982, the corporation shall establish by regulation a supplemental program to reimburse multiemployer plans for withdrawal liability payments which are due from employers and which are determined to be uncollectible for reasons arising out of cases or proceedings involving the employers under title 11, or similar cases or proceedings. Participation in the supplemental program shall be on a voluntary basis, and a plan which elects coverage under the program shall pay premiums to the corporation in accordance with a premium schedule which shall be prescribed from time to time by the corporation. The premium schedule shall contain such rates and bases for the application of such rates as the corporation considers to be appropriate.
(b) Discretionary supplemental program to reimburse for payments due from employers uncollectible for other appropriate reasons
The corporation may provide under the program for reimbursement of amounts of withdrawal liability determined to be uncollectible for any other reasons the corporation considers appropriate.
(c) Payment of cost of program
The cost of the program (including such administrative and legal costs as the corporation considers appropriate) may be paid only out of premiums collected under such program.
(d) Terms and conditions, limitations, etc., of supplemental program
The supplemental program may be offered to eligible plans on such terms and conditions, and with such limitations with respect to the payment of reimbursements (including the exclusion of de minimis amounts of uncollectible employer liability, and the reduction or elimination of reimbursements which cannot be paid from collected premiums) and such restrictions on withdrawal from the program, as the corporation considers necessary and appropriate.
(e) Arrangements by corporation with private insurers for implementation of program; election of coverage by participating plans with private insurers
The corporation may enter into arrangements with private insurers to carry out in whole or in part the program authorized by this section and may require plans which elect coverage under the program to elect coverage by those private insurers.
(
§1403. Withdrawal liability payment fund
(a) Establishment of or participation in fund by plan sponsors
The plan sponsors of multiemployer plans may establish or participate in a withdrawal liability payment fund.
(b) Definitions
For purposes of this section, the term "withdrawal liability payment fund", and the term "fund", mean a trust which—
(1) is established and maintained under
(2) maintains agreements which cover a substantial portion of the participants who are in multiemployer plans which (under the rules of the trust instrument) are eligible to participate in the fund,
(3) is funded by amounts paid by the plans which participate in the fund, and
(4) is administered by a Board of Trustees, and in the administration of the fund there is equal representation of—
(A) trustees representing employers who are obligated to contribute to the plans participating in the fund, and
(B) trustees representing employees who are participants in plans which participate in the fund.
(c) Payments to plan; amount, criteria, etc.
(1) If an employer withdraws from a plan which participates in a withdrawal liability payment fund, then, to the extent provided in the trust, the fund shall pay to that plan—
(A) the employer's unattributable liability,
(B) the employer's withdrawal liability payments which would have been due but for
(C) the employer's withdrawal liability payments to the extent they are uncollectible.
(2) The fund may provide for the payment of the employer's attributable liability if the fund—
(A) provides for the payment of both the attributable and the unattributable liability of the employer in a single payment, and
(B) is subrogated to all rights of the plan against the employer.
(3) For purposes of this section, the term—
(A) "attributable liability" means the excess, if any, determined under the provisions of a plan not inconsistent with regulations of the corporation, of—
(i) the value of vested benefits accrued as a result of service with the employer, over
(ii) the value of plan assets attributed to the employer, and
(B) "unattributable liability" means the excess of withdrawal liability over attributable liability.
Such terms may be further defined, and the manner in which they shall be applied may be prescribed, by the corporation by regulation.
(4)(A) The trust of a fund shall be maintained for the exclusive purpose of paying—
(i) any amount described in paragraph (1) and paragraph (2), and
(ii) reasonable and necessary administrative expenses in connection with the establishment and operation of the trust and the processing of claims against the fund.
(B) The amounts paid by a plan to a fund shall be deemed a reasonable expense of administering the plan under
(d) Application of payments by plan
(1) For purposes of this part—
(A) only amounts paid by the fund to a plan under subsection (c)(1)(A) shall be credited to withdrawal liability otherwise payable by the employer, unless the plan otherwise provides, and
(B) any amounts paid by the fund under subsection (c) to a plan shall be treated by the plan as a payment of withdrawal liability to such plan.
(2) For purposes of applying provisions relating to the funding standard accounts (and minimum contribution requirements), amounts paid from the plan to the fund shall be applied to reduce the amount treated as contributed to the plan.
(e) Subrogation of fund to rights of plan
The fund shall be subrogated to the rights of the plan against the employer that has withdrawn from the plan for amounts paid by a fund to a plan under—
(1) subsection (c)(1)(A), to the extent not credited under subsection (d)(1)(A), and
(2) subsection (c)(1)(C).
(f) Discharge of rights of fiduciary of fund; standards applicable, etc.
Notwithstanding any other provision of this chapter, a fiduciary of the fund shall discharge the fiduciary's duties with respect to the fund in accordance with the standards for fiduciaries prescribed by this chapter (to the extent not inconsistent with the purposes of this section), and in accordance with the documents and instruments governing the fund insofar as such documents and instruments are consistent with the provisions of this chapter (to the extent not inconsistent with the purposes of this section). The provisions of the preceding sentence shall supersede any and all State laws relating to fiduciaries insofar as they may now or hereafter relate to a fund to which this section applies.
(g) Prohibition on payments from fund to plan where certain labor negotiations involve employer withdrawn or partially withdrawn from plan and continuity of labor organization representing employees continues
No payments shall be made from a fund to a plan on the occasion of a withdrawal or partial withdrawal of an employer from such plan if the employees representing the withdrawn contribution base units continue, after such withdrawal, to be represented under
(h) Purchase of insurance by employer
Nothing in this section shall be construed to prohibit the purchase of insurance by an employer from any other person, to limit the circumstances under which such insurance would be payable, or to limit in any way the terms and conditions of such insurance.
(i) Promulgation of regulations for establishment and maintenance of fund
The corporation may provide by regulation rules not inconsistent with this section governing the establishment and maintenance of funds, but only to the extent necessary to carry out the purposes of this part (other than
(
Editorial Notes
References in Text
This chapter, referred to in subsec. (f), was in the original "this Act", meaning
Amendments
1989—Subsecs. (b)(1), (c)(4)(B).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
1 So in original. Probably should be followed by "and".
§1404. Alternative method of withdrawal liability payments
A multiemployer plan may adopt rules providing for other terms and conditions for the satisfaction of an employer's withdrawal liability if such rules are consistent with this chapter and with such regulations as may be prescribed by the corporation.
(
Editorial Notes
References in Text
This chapter, referred to in text, was in the original "this Act", meaning
§1405. Limitation on withdrawal liability
(a) Unfunded vested benefits allocable to employer in bona fide sale of assets of employer in arms-length transaction to unrelated party; maximum amount; determinative factors
(1) In the case of bona fide sale of all or substantially all of the employer's assets in an arm's-length transaction to an unrelated party (within the meaning of
(A) a portion (determined under paragraph (2)) of the liquidation or dissolution value of the employer (determined after the sale or exchange of such assets), or
(B) in the case of a plan using the attributable method of allocating withdrawal liability, the unfunded vested benefits attributable to employees of the employer.
(2) For purposes of paragraph (1), the portion shall be determined in accordance with the following table:
| If the liquidation or distribution value of the employer after the sale or exchange is— | The portion is— |
|---|---|
| Not more than $5,000,000 | 30 percent of the amount. |
| More than $5,000,000, but not more than $10,000,000 | $1,500,000, plus 35 percent of the amount in excess of $5,000,000. |
| More than $10,000,000, but not more than $15,000,000 | $3,250,000, plus 40 percent of the amount in excess of $10,000,000. |
| More than $15,000,000, but not more than $17,500,000 | $5,250,000, plus 45 percent of the amount in excess of $15,000,000. |
| More than $17,500,000, but not more than $20,000,000 | $6,375,000, plus 50 percent of the amount in excess of $17,500,000. |
| More than $20,000,000, but not more than $22,500,000 | $7,625,000, plus 60 percent of the amount in excess of $20,000,000. |
| More than $22,500,000, but not more than $25,000,000 | $9,125,000, plus 70 percent of the amount in excess of $22,500,000. |
| More than $25,000,000 | $10,875,000, plus 80 percent of the amount in excess of $25,000,000. |
(b) Unfunded vested benefits allocable to insolvent employer undergoing liquidation or dissolution; maximum amount; determinative factors
In the case of an insolvent employer undergoing liquidation or dissolution, the unfunded vested benefits allocable to that employer shall not exceed an amount equal to the sum of—
(1) 50 percent of the unfunded vested benefits allocable to the employer (determined without regard to this section), and
(2) that portion of 50 percent of the unfunded vested benefits allocable to the employer (as determined under paragraph (1)) which does not exceed the liquidation or dissolution value of the employer determined—
(A) as of the commencement of liquidation or dissolution, and
(B) after reducing the liquidation or dissolution value of the employer by the amount determined under paragraph (1).
(c) Property not subject to enforcement of liability; precondition
To the extent that the withdrawal liability of an employer is attributable to his obligation to contribute to or under a plan as an individual (whether as a sole proprietor or as a member of a partnership), property which may be exempt from the estate under
(d) Insolvency of employer; liquidation or dissolution value of employer
For purposes of this section—
(1) an employer is insolvent if the liabilities of the employer, including withdrawal liability under the plan (determined without regard to subsection (b)), exceed the assets of the employer (determined as of the commencement of the liquidation or dissolution), and
(2) the liquidation or dissolution value of the employer shall be determined without regard to such withdrawal liability.
(e) One or more withdrawals of employer attributable to same sale, liquidation, or dissolution
In the case of one or more withdrawals of an employer attributable to the same sale, liquidation, or dissolution, under regulations prescribed by the corporation—
(1) all such withdrawals shall be treated as a single withdrawal for the purpose of applying this section, and
(2) the withdrawal liability of the employer to each plan shall be an amount which bears the same ratio to the present value of the withdrawal liability payments to all plans (after the application of the preceding provisions of this section) as the withdrawal liability of the employer to such plan (determined without regard to this section) bears to the withdrawal liability of the employer to all such plans (determined without regard to this section).
(
Editorial Notes
Amendments
2006—Subsec. (a)(1)(B).
Subsec. (a)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
part 2—merger or transfer of plan assets or liabilities
§1411. Mergers and transfers between multiemployer plans
(a) Authority of plan sponsor
Unless otherwise provided in regulations prescribed by the corporation, a plan sponsor may not cause a multiemployer plan to merge with one or more multiemployer plans, or engage in a transfer of assets and liabilities to or from another multiemployer plan, unless such merger or transfer satisfies the requirements of subsection (b).
(b) Criteria
A merger or transfer satisfies the requirements of this section if—
(1) in accordance with regulations of the corporation, the plan sponsor of a multiemployer plan notifies the corporation of a merger with or transfer of plan assets or liabilities to another multiemployer plan at least 120 days before the effective date of the merger or transfer;
(2) no participant's or beneficiary's accrued benefit will be lower immediately after the effective date of the merger or transfer than the benefit immediately before that date;
(3) the benefits of participants and beneficiaries are not reasonably expected to be subject to suspension under
(4) an actuarial valuation of the assets and liabilities of each of the affected plans has been performed during the plan year preceding the effective date of the merger or transfer, based upon the most recent data available as of the day before the start of that plan year, or other valuation of such assets and liabilities performed under such standards and procedures as the corporation may prescribe by regulation.
(c) Actions not deemed violation of section 1106(a) or (b)(2) of this title
The merger of multiemployer plans or the transfer of assets or liabilities between multiemployer plans, shall be deemed not to constitute a violation of the provisions of
(d) Nature of plan to which liabilities are transferred
A plan to which liabilities are transferred under this section is a successor plan for purposes of
(e) Facilitated mergers
(1) In general
When requested to do so by the plan sponsors, the corporation may take such actions as it deems appropriate to promote and facilitate the merger of two or more multiemployer plans if it determines, after consultation with the Participant and Plan Sponsor Advocate selected under
(2) Financial assistance
In order to facilitate a merger which it determines is necessary to enable one or more of the plans involved to avoid or postpone insolvency, the corporation may provide financial assistance (within the meaning of
(A) one or more of the multiemployer plans participating in the merger is in critical and declining status (as defined in
(B) the corporation reasonably expects that—
(i) such financial assistance will reduce the corporation's expected long-term loss with respect to the plans involved; and
(ii) such financial assistance is necessary for the merged plan to become or remain solvent;
(C) the corporation certifies that its ability to meet existing financial assistance obligations to other plans will not be impaired by such financial assistance; and
(D) such financial assistance is paid exclusively from the fund for basic benefits guaranteed for multiemployer plans.
Not later than 14 days after the provision of such financial assistance, the corporation shall provide notice of such financial assistance to the Committee on Education and the Workforce of the House of Representatives, the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the Committee on Health, Education, Labor, and Pensions of the Senate.
(
Editorial Notes
Amendments
2014—Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Effective Date
Part effective Sept. 26, 1980, except as specifically provided, see
§1412. Transfers between a multiemployer plan and a single-employer plan
(a) General authority
A transfer of assets or liabilities between, or a merger of, a multiemployer plan and a single-employer plan shall satisfy the requirements of this section.
(b) Accrued benefit of participant or beneficiary not lower immediately after effective date of transfer or merger
No accrued benefit of a participant or beneficiary may be lower immediately after the effective date of a transfer or merger described in subsection (a) than the benefit immediately before that date.
(c) Liability of multiemployer plan to corporation where single-employer plan terminates within 60 months after effective date of transfer; amount of liability, exemption, etc.
(1) Except as provided in paragraphs (2) and (3), a multiemployer plan which transfers liabilities to a single-employer plan shall be liable to the corporation if the single-employer plan terminates within 60 months after the effective date of the transfer. The amount of liability shall be the lesser of—
(A) the amount of the plan asset insufficiency of the terminated single-employer plan, less 30 percent of the net worth of the employer who maintained the single-employer plan, determined in accordance with
(B) the value, on the effective date of the transfer, of the unfunded benefits transferred to the single-employer plan which are guaranteed under
(2) A multiemployer plan shall be liable to the corporation as provided in paragraph (1) unless, within 180 days after the corporation receives an application (together with such information as the corporation may reasonably require for purposes of such application) from the multiemployer plan sponsor for a determination under this paragraph—
(A) the corporation determines that the interests of the plan participants and beneficiaries and of the corporation are adequately protected, or
(B) fails to make any determination regarding the adequacy with which such interests are protected with respect to such transfer of liabilities.
If, after the receipt of such application, the corporation requests from the plan sponsor additional information necessary for the determination, the running of the 180-day period shall be suspended from the date of such request until the receipt by the corporation of the additional information requested. The corporation may by regulation prescribe procedures and standards for the issuance of determinations under this paragraph. This paragraph shall not apply to any application submitted less than 180 days after September 26, 1980.
(3) A multiemployer plan shall not be liable to the corporation as provided in paragraph (1) in the case of a transfer from the multiemployer plan to a single-employer plan of liabilities which accrued under a single-employer plan which merged with the multiemployer plan, if, the value of liabilities transferred to the single-employer plan does not exceed the value of the liabilities for benefits which accrued before the merger, and the value of the assets transferred to the single-employer plan is substantially equal to the value of the assets which would have been in the single-employer plan if the employer had maintained and funded it as a separate plan under which no benefits accrued after the date of the merger.
(4) The corporation may make equitable arrangements with multiemployer plans which are liable under this subsection for satisfaction of their liability.
(d) Guarantee of benefits under single-employer plan
Benefits under a single-employer plan to which liabilities are transferred in accordance with this section are guaranteed under
(e) Transfer of liabilities by multiemployer plan to single-employer plan
(1) Except as provided in paragraph (2), a multiemployer plan may not transfer liabilities to a single-employer plan unless the plan sponsor of the plan to which the liabilities would be transferred agrees to the transfer.
(2) In the case of a transfer described in subsection (c)(3), paragraph (1) of this subsection is satisfied by the advance agreement to the transfer by the employer who will be obligated to contribute to the single-employer plan.
(f) Additional requirements by corporation for protection of interests of plan participants, beneficiaries and corporation; approval by corporation of transfer of assets or liabilities to single-employer plan from plan in reorganization; covered transfers in connection with termination
(1) The corporation may prescribe by regulation such additional requirements with respect to the transfer of assets or liabilities as may be necessary to protect the interests of plan participants and beneficiaries and the corporation.
(2) Except as otherwise determined by the corporation, a transfer of assets or liabilities to a single-employer plan from a plan in reorganization under section 1421 1 of this title is not effective unless the corporation approves such transfer.
(3) No transfer to which this section applies, in connection with a termination described in
(
Editorial Notes
References in Text
1 See References in Text note below.
§1413. Partitions of eligible multiemployer plans
(a) Authority of corporation
(1) Upon the application by the plan sponsor of an eligible multiemployer plan for a partition of the plan, the corporation may order a partition of the plan in accordance with this section. The corporation shall make a determination regarding the application not later than 270 days after the date such application was filed (or, if later, the date such application was completed) in accordance with regulations promulgated by the corporation.
(2) Not later than 30 days after submitting an application for partition of a plan under paragraph (1), the plan sponsor of the plan shall notify the participants and beneficiaries of such application, in the form and manner prescribed by regulations issued by the corporation.
(b) Eligible multiemployer plans
For purposes of this section, a multiemployer plan is an eligible multiemployer plan if—
(1) the plan is in critical and declining status (as defined in
(2) the corporation determines, after consultation with the Participant and Plan Sponsor Advocate selected under
(3) the corporation reasonably expects that—
(A) a partition of the plan will reduce the corporation's expected long-term loss with respect to the plan; and
(B) a partition of the plan is necessary for the plan to remain solvent;
(4) the corporation certifies to Congress that its ability to meet existing financial assistance obligations to other plans (including any liabilities associated with multiemployer plans that are insolvent or that are projected to become insolvent within 10 years) will not be impaired by such partition; and
(5) the cost to the corporation arising from such partition is paid exclusively from the fund for basic benefits guaranteed for multiemployer plans.
(c) Transfer of liabilities
The corporation's partition order shall provide for a transfer to the plan referenced in subsection (d)(1) of the minimum amount of the plan's liabilities necessary for the plan to remain solvent.
(d) Plans created by partition orders
(1) The plan created by the partition order is a successor plan to which
(2) The plan sponsor of an eligible multiemployer plan prior to the partition and the administrator of such plan shall be the plan sponsor and the administrator, respectively, of the plan created by the partition order.
(3) In the event an employer withdraws from the plan that was partitioned within ten years following the date of the partition order, withdrawal liability shall be computed under
(e) Payment of benefits and premiums for beneficiaries of partitioned plans
(1) For each participant or beneficiary of the plan whose benefit was transferred to the plan created by the partition order pursuant to a partition, the plan that was partitioned shall pay a monthly benefit to such participant or beneficiary for each month in which such benefit is in pay status following the effective date of such partition in an amount equal to the excess of—
(A) the monthly benefit that would be paid to such participant or beneficiary for such month under the terms of the plan (taking into account benefit suspensions under
(B) the monthly benefit for such participant or beneficiary which is guaranteed under
(2) In any case in which a plan provides a benefit improvement (as defined in
(A) the total value of the increase in benefit payments for such year that is attributable to the benefit improvement, or
(B) the total benefit payments from the plan created by the partition for such year.
Such payment shall be made at the time of, and in addition to, any other premium imposed by the corporation under this subchapter.
(3) The plan that was partitioned shall pay the premiums imposed by the corporation under this subchapter with respect to participants whose benefits were transferred to the plan created by the partition order for each year during the 10-year period following the partition effective date.
(f) Notice of partition orders to Congress
Not later than 14 days after the partition order, the corporation shall provide notice of such order to the Committee on Education and the Workforce of the House of Representatives, the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, and any affected participants or beneficiaries.
(
Editorial Notes
Amendments
2014—
Statutory Notes and Related Subsidiaries
Effective Date 2014 Amendment
§1414. Asset transfer rules
(a) Applicability and scope
A transfer of assets from a multiemployer plan to another plan shall comply with asset-transfer rules which shall be adopted by the multiemployer plan and which—
(1) do not unreasonably restrict the transfer of plan assets in connection with the transfer of plan liabilities, and
(2) operate and are applied uniformly with respect to each proposed transfer, except that the rules may provide for reasonable variations taking into account the potential financial impact of a proposed transfer on the multiemployer plan.
Plan rules authorizing asset transfers consistent with the requirements of
(b) Exemption of de minimis transfers
The corporation shall prescribe regulations which exempt de minimis transfers of assets from the requirements of this part.
(c) Written reciprocity agreements
This part shall not apply to transfers of assets pursuant to written reciprocity agreements, except to the extent provided in regulations prescribed by the corporation.
(
§1415. Transfers pursuant to change in bargaining representative
(a) Authority to transfer from old plan to new plan pursuant to employee participation in another multiemployer plan after certified change of representative
In any case in which an employer has completely or partially withdrawn from a multiemployer plan (hereafter in this section referred to as the "old plan") as a result of a certified change of collective bargaining representative occurring after September 25, 1980, if participants of the old plan who are employed by the employer will, as a result of that change, participate in another multiemployer plan (hereafter in this section referred to as the "new plan"), the old plan shall transfer assets and liabilities to the new plan in accordance with this section.
(b) Notification by employer of plan sponsor of old plan; notification by plan sponsor of old plan of employer and plan sponsor of new plan; appeal by new plan to prevent transfer; further proceedings
(1) The employer shall notify the plan sponsor of the old plan of a change in multiemployer plan participation described in subsection (a) no later than 30 days after the employer determines that the change will occur.
(2) The plan sponsor of the old plan shall—
(A) notify the employer of—
(i) the amount of the employer's withdrawal liability determined under part 1 of this subtitle with respect to the withdrawal,
(ii) the old plan's intent to transfer to the new plan the nonforfeitable benefits of the employees who are no longer working in covered service under the old plan as a result of the change of bargaining representative, and
(iii) the amount of assets and liabilities which are to be transferred to the new plan, and
(B) notify the plan sponsor of the new plan of the benefits, assets, and liabilities which will be transferred to the new plan.
(3) Within 60 days after receipt of the notice described in paragraph (2)(B), the new plan may file an appeal with the corporation to prevent the transfer. The transfer shall not be made if the corporation determines that the new plan would suffer substantial financial harm as a result of the transfer. Upon notification described in paragraph (2), if—
(A) the employer fails to object to the transfer within 60 days after receipt of the notice described in paragraph (2)(A), or
(B) the new plan either—
(i) fails to file such an appeal, or
(ii) the corporation, pursuant to such an appeal, fails to find that the new plan would suffer substantial financial harm as a result of the transfer described in the notice under paragraph (2)(B) within 180 days after the date on which the appeal is filed,
then the plan sponsor of the old plan shall transfer the appropriate amount of assets and liabilities to the new plan.
(c) Reduction of amount of withdrawal liability of employer upon transfer of appropriate amount of assets and liabilities by plan sponsor of old plan to new plan
If the plan sponsor of the old plan transfers the appropriate amount of assets and liabilities under this section to the new plan, then the amount of the employer's withdrawal liability (as determined under
(1) the value of the unfunded vested benefits allocable to the employer which were transferred by the plan sponsor of the old plan to the new plan, exceeds
(2) the value of the assets transferred.
(d) Escrow payments by employer upon complete or partial withdrawal and prior to transfer
In any case in which there is a complete or partial withdrawal described in subsection (a), if—
(1) the new plan files an appeal with the corporation under subsection (b)(3), and
(2) the employer is required by
(A) the date on which the corporation finds that the new plan would not suffer substantial financial harm as a result of the transfer, or
(B) the last day of the 180-day period beginning on the date on which the new plan files its appeal,
then the employer shall make such payments into an escrow held by a bank or similar financial institution satisfactory to the old plan. If the transfer is made, the amounts paid into the escrow shall be returned to the employer. If the transfer is not made, the amounts paid into the escrow shall be paid to the old plan and credited against the employer's withdrawal liability.
(e) Prohibition on transfer of assets to new plan by plan sponsor of old plan; exemptions
(1) Notwithstanding subsection (b), the plan sponsor shall not transfer any assets to the new plan if—
(A) the old plan is in reorganization (within the meaning of section 1421(a) 1 of this title), or
(B) the transfer of assets would cause the old plan to go into reorganization (within the meaning of section 1421(a) 1 of this title).
(2) In any case in which a transfer of assets from the old plan to the new plan is prohibited by paragraph (1), the plan sponsor of the old plan shall transfer—
(A) all nonforfeitable benefits described in subsection (b)(2), if the value of such benefits does not exceed the withdrawal liability of the employer with respect to such withdrawal, or
(B) such nonforfeitable benefits having a value equal to the withdrawal liability of the employer, if the value of such benefits exceeds the withdrawal liability of the employer.
(f) Agreement between plan sponsors of old plan and new plan to transfer in compliance with other statutory provisions; reduction of withdrawal liability of employer from old plan; amount of withdrawal liability of employer to new plan
(1) Notwithstanding subsections (b) and (e), the plan sponsors of the old plan and the new plan may agree to a transfer of assets and liabilities that complies with
(2) If the employer withdraws from the new plan within 240 months after the effective date of a transfer of assets and liabilities described in this section, the amount of the employer's withdrawal liability to the new plan shall be the greater of—
(A) the employer's withdrawal liability determined under part 1 of this subtitle with respect to the new plan, or
(B) the amount by which the employer's withdrawal liability to the old plan was reduced under subsection (c), reduced by 5 percent for each 12-month period following the effective date of the transfer and ending before the date of the withdrawal from the new plan.
(g) Definitions
For purposes of this section—
(1) "appropriate amount of assets" means the amount by which the value of the nonforfeitable benefits to be transferred exceeds the amount of the employer's withdrawal liability to the old plan (determined under part 1 of this subtitle without regard to
(2) "certified change of collective bargaining representative" means a change of collective bargaining representative certified under the Labor-Management Relations Act, 1947 [
(
Editorial Notes
References in Text
The Labor-Management Relations Act, 1947, referred to in subsec. (g)(2), is act June 23, 1947, ch. 120,
The Railway Labor Act, referred to in subsec. (g)(2), is act May 20, 1926, ch. 347,
Amendments
1984—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Sept. 26, 1980, see
1 See References in Text note below.
part 3—insolvent plans
Editorial Notes
Codification
§§1421 to 1425. Repealed. Pub. L. 113–235, div. O, title I, §108(a)(1), Dec. 16, 2014, 128 Stat. 2786
Section 1421,
Section 1422,
Section 1423,
Section 1424,
Section 1425,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal applicable with respect to plan years beginning after Dec. 31, 2014, see section 108(c) of div. O of
§1426. Insolvent plans
(a) Suspension of payments of benefits; conditions, amount, etc.
Notwithstanding
(b) Determination of insolvency status for plan year; definitions
For purposes of this section, for a plan year—
(1) a multiemployer plan is insolvent if the plan's available resources are not sufficient to pay benefits under the plan when due for the plan year, or if the plan is determined to be insolvent under subsection (d);
(2) "resource benefit level" means the level of monthly benefits determined under subsections (c)(1) and (3) and (d)(3) to be the highest level which can be paid out of the plan's available resources;
(3) "available resources" means the plan's cash, marketable assets, contributions, withdrawal liability payments, and earnings, less reasonable administrative expenses and amounts owed for such plan year to the corporation under
(4) "insolvency year" means a plan year in which a plan is insolvent.
(c) Determination by plan sponsor of plan in critical status of resource benefit level of plan for each insolvency year; uniform application of suspension of benefits; adjustments of benefit payments
(1) The plan sponsor of a plan in critical status, as described in subsection 1 1085(b)(2) of this title, shall determine in writing the plan's resource benefit level for each insolvency year, based on the plan sponsor's reasonable projection of the plan's available resources and the benefits payable under the plan.
(2)(A) The suspension of benefit payments under this section shall, in accordance with regulations prescribed by the Secretary of the Treasury, apply in substantially uniform proportions to the benefits of all persons in pay status under the plan, except that the Secretary of the Treasury may prescribe rules under which benefit suspensions for different participant groups may be varied equitably to reflect variations in contribution rates and other relevant factors including differences in negotiated levels of financial support for plan benefit obligations.
(B) For purposes of this paragraph—
(i) the term "person in pay status" means—
(I) a participant or beneficiary on the last day of the base plan year who, at any time during such year, was paid an early, late, normal, or disability retirement benefit (or a death benefit related to a retirement benefit), and
(II) to the extent provided in regulations prescribed by the Secretary of the Treasury, any other person who is entitled to such a benefit under the plan.
(ii) the base plan year for any plan year is—
(I) if there is a relevant collective bargaining agreement, the last plan year ending at least 6 months before the relevant effective date, or
(II) if there is no relevant collective bargaining agreement, the last plan year ending at least 12 months before the beginning of the plan year.
(iii) a relevant collective bargaining agreement is a collective bargaining agreement—
(I) which is in effect for at least 6 months during the plan year, and
(II) which has not been in effect for more than 36 months as of the end of the plan year.
(iv) the relevant effective date is the earliest of the effective dates for the relevant collective bargaining agreements.
(3) Notwithstanding paragraph (2), if a plan sponsor determines in writing a resource benefit level for a plan year which is below the level of basic benefits, the payment of all benefits other than basic benefits must be suspended for that plan year.
(4)(A) If, by the end of an insolvency year, the plan sponsor determines in writing that the plan's available resources in that insolvency year could have supported benefit payments above the resource benefit level for that insolvency year, the plan sponsor shall distribute the excess resources to the participants and beneficiaries who received benefit payments from the plan in that insolvency year, in accordance with regulations prescribed by the Secretary of the Treasury.
(B) For purposes of this paragraph, the term "excess resources" means available resources above the amount necessary to support the resource benefit level, but no greater than the amount necessary to pay benefits for the plan year at the benefit levels under the plan.
(5) If, by the end of an insolvency year, any benefit has not been paid at the resource benefit level, amounts up to the resource benefit level which were unpaid shall be distributed to the participants and beneficiaries, in accordance with regulations prescribed by the Secretary of the Treasury, to the extent possible taking into account the plan's total available resources in that insolvency year.
(6) Except as provided in paragraph (4) or (5), a plan is not required to make retroactive benefit payments with respect to that portion of a benefit which was suspended under this section.
(d) Applicability and determinations respecting plan assets; time for determinations of resource benefit level and level of basic benefits
(1) As of the end of the first plan year in which a plan is in critical status, as described in subsection 1 1085(b)(2) of this title,,2 and at least every 3 plan years thereafter (unless the plan is no longer in critical status, as described in subsection 1 1085(b)(2) of this title,),2 the plan sponsor shall compare the value of plan assets for that plan year with the total amount of benefit payments made under the plan for that plan year. Unless the plan sponsor determines that the value of plan assets exceeds 3 times the total amount of benefit payments, the plan sponsor shall determine whether the plan will be insolvent in any of the next 5 plan years. If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years.
(2) If, at any time, the plan sponsor of a plan in critical status, as described in subsection 1 1085(b)(2) of this title, reasonably determines, taking into account the plan's recent and anticipated financial experience, that the plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year, the plan sponsor shall make such determination available to interested parties.
(3) The plan sponsor of a plan in critical status, as described in subsection 1 1085(b)(2) of this title, shall determine in writing for each insolvency year the resource benefit level and the level of basic benefits no later than 3 months before the insolvency year.
(4) For purposes of this subsection, the value of plan assets shall be the value of the available plan assets determined under regulations prescribed by the Secretary of the Treasury.
(e) Notice, etc., requirements of plan sponsor of plan in critical status regarding insolvency and resource benefit levels
(1) If the plan sponsor of a plan in critical status, as described in subsection 1 1085(b)(2) of this title, determines under subsection (d)(1) or (2) that the plan may become insolvent (within the meaning of subsection (b)(1)), the plan sponsor shall—
(A) notify the Secretary of the Treasury,3 the parties described in
(B) inform the parties described in
(2) No later than 2 months before the first day of each insolvency year, the plan sponsor of a plan in critical status, as described in subsection 1 1085(b)(2) of this title, shall notify the Secretary of the Treasury, the corporation, and the parties described in paragraph (1)(B) of the resource benefit level determined in writing for that insolvency year.
(3) In any case in which the plan sponsor anticipates that the resource benefit level for an insolvency year may not exceed the level of basic benefits, the plan sponsor shall notify the corporation.
(4) Notice required by this subsection shall be given in accordance with regulations prescribed by the corporation, except that notice to the Secretary of the Treasury shall be given in accordance with regulations prescribed by the Secretary of the Treasury.
(5) The corporation may prescribe a time other than the time prescribed by this section for the making of a determination or the filing of a notice under this section.
(f) Financial assistance from corporation; conditions and criteria applicable
(1) If the plan sponsor of an insolvent plan, for which the resource benefit level is above the level of basic benefits, anticipates that, for any month in an insolvency year, the plan will not have funds sufficient to pay basic benefits, the plan sponsor may apply for financial assistance from the corporation under
(2) A plan sponsor who has determined a resource benefit level for an insolvency year which is below the level of basic benefits shall apply for financial assistance from the corporation under
(g) Application of subsections (a) and (c)
Subsections (a) and (c) shall not apply to a plan that, for the plan year, is operating under
(
Editorial Notes
Amendments
2014—Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (d).
Subsec. (d)(1).
Subsec. (d)(4).
Subsec. (e).
Subsec. (e)(1)(A).
Subsec. (e)(1)(B).
Subsec. (g).
2006—Subsec. (d)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2006 Amendment
Withdrawal Liability of Employer From Plan Terminating While Plan Insolvent Within This Section: Determinations, Factors, Etc.
"(A) For the purpose of determining the withdrawal liability of an employer under title IV of the Employee Retirement Income Security Act of 1974 [this subchapter] from a plan that terminates while the plan is insolvent (within the meaning of section 4245 of such Act [this section]), the plan's unfunded vested benefits shall be reduced by an amount equal to the sum of all overburden credits that were applied in determining the plan's accumulated funding deficiency for all plan years preceding the first plan year in which the plan is insolvent, plus interest thereon.
"(B) The provisions of subparagraph (A) apply only if—
"(i) the plan would have been eligible for the overburden credit in the last plan year beginning before the date of the enactment of this Act [Sept. 26, 1980], if section 4243 of the Employee Retirement Income Security Act of 1974 [former
"(ii) the Pension Benefit Guaranty Corporation determines that the reduction of unfunded vested benefits under subparagraph (A) would not significantly increase the risk of loss to the corporation."
1 So in original. Probably should be "section".
3 So in original. The comma probably should be "and".
part 4—financial assistance
§1431. Assistance by corporation
(a) Authority; procedure applicable; amount
If, upon receipt of an application for financial assistance under
(b) Conditions; repayment terms
(1) Financial assistance shall be provided under such conditions as the corporation determines are equitable and are appropriate to prevent unreasonable loss to the corporation with respect to the plan.
(2) A plan which has received financial assistance shall repay the amount of such assistance to the corporation on reasonable terms consistent with regulations prescribed by the corporation.
(c) Assistance pending final determination of application
Pending determination of the amount described in subsection (a), the corporation may provide financial assistance in such amounts as it considers appropriate in order to avoid undue hardship to plan participants and beneficiaries.
(
Editorial Notes
Effective Date
Part effective Sept. 26, 1980, except as specifically provided, see
§1432. Special financial assistance by the corporation
(a) Special financial assistance
(1) In general
The corporation shall provide special financial assistance to an eligible multiemployer plan under this section, upon the application of a plan sponsor of such a plan for such assistance.
(2) Inapplicability of certain repayment obligation
A plan receiving special financial assistance pursuant to this section shall not be subject to repayment obligations with respect to such special financial assistance.
(b) Eligible multiemployer plans
(1) In general
For purposes of this section, a multiemployer plan is an eligible multiemployer plan if—
(A) the plan is in critical and declining status (within the meaning of
(B) a suspension of benefits has been approved with respect to the plan under
(C) in any plan year beginning in 2020 through 2022, the plan is certified by the plan actuary to be in critical status (within the meaning of
(D) the plan became insolvent for purposes of
(2) Modified funded percentage
For purposes of paragraph (1)(C), the term "modified funded percentage" means the percentage equal to a fraction the numerator of which is current value of plan assets (as defined in
(c) Applications for special financial assistance
Within 120 days of March 11, 2021, the corporation shall issue regulations or guidance setting forth requirements for special financial assistance applications under this section. In such regulations or guidance, the corporation shall—
(1) limit the materials required for a special financial assistance application to the minimum necessary to make a determination on the application;
(2) specify effective dates for transfers of special financial assistance following approval of an application, based on the effective date of the supporting actuarial analysis and the date on which the application is submitted; and
(3) provide for an alternate application for special financial assistance under this section, which may be used by a plan that has been approved for a partition under
(d) Temporary priority consideration of applications
(1) In general
The corporation may specify in regulations or guidance under subsection (c) that, during a period no longer than the first 2 years following March 11, 2021, applications may not be filed by an eligible multiemployer plan unless—
(A) the eligible multiemployer plan is insolvent or is likely to become insolvent within 5 years of March 11, 2021;
(B) the corporation projects the eligible multiemployer plan to have a present value of financial assistance payments under
(C) the eligible multiemployer plan has implemented benefit suspensions under
(D) the corporation determines it appropriate based on other similar circumstances.
(e) Actuarial assumptions
(1) Eligibility
For purposes of determining eligibility for special financial assistance, the corporation shall accept assumptions incorporated in a multiemployer plan's determination that it is in critical status or critical and declining status (within the meaning of
(2) Amount of financial assistance
In determining the amount of special financial assistance in its application, an eligible multiemployer plan shall—
(A) use the interest rate used by the plan in its most recently completed certification of plan status before January 1, 2021, provided that such interest rate may not exceed the interest rate limit; and
(B) for other assumptions, use the assumptions that the plan used in its most recently completed certification of plan status before January 1, 2021, unless such assumptions are unreasonable.
(3) Interest rate limit
The interest rate limit for purposes of this subsection is the rate specified in
(4) Changes in assumptions
If a plan determines that use of one or more prior assumptions is unreasonable, the plan may propose in its application to change such assumptions, provided that the plan discloses such changes in its application and describes why such assumptions are no longer reasonable. The corporation shall accept such changed assumptions unless it determines the changes are unreasonable, individually or in the aggregate. The plan may not propose a change to the interest rate otherwise required under this subsection for eligibility or financial assistance amount.
(f) Application deadline
Any application by a plan for special financial assistance under this section shall be submitted to the corporation (and, in the case of a plan to which
(g) Determinations on applications
A plan's application for special financial assistance under this section that is timely filed in accordance with the regulations or guidance issued under subsection (c) shall be deemed approved unless the corporation notifies the plan within 120 days of the filing of the application that the application is incomplete, any proposed change or assumption is unreasonable, or the plan is not eligible under this section. Such notice shall specify the reasons the plan is ineligible for special financial assistance, any proposed change or assumption is unreasonable, or information is needed to complete the application. If a plan is denied assistance under this subsection, the plan may submit a revised application under this section. Any revised application for special financial assistance submitted by a plan shall be deemed approved unless the corporation notifies the plan within 120 days of the filing of the revised application that the application is incomplete, any proposed change or assumption is unreasonable, or the plan is not eligible under this section. Special financial assistance issued by the corporation shall be effective on a date determined by the corporation, but no later than 1 year after a plan's special financial assistance application is approved by the corporation or deemed approved. The corporation shall not pay any special financial assistance after September 30, 2030.
(h) Manner of payment
The payment made by the corporation to an eligible multiemployer plan under this section shall be made as a single, lump sum payment.
(i) Amount and manner of special financial assistance
(1) In general
Special financial assistance under this section shall be a transfer of funds in the amount necessary as demonstrated by the plan sponsor on the application for such special financial assistance, in accordance with the requirements described in subsection (j). Special financial assistance shall be paid to such plan as soon as practicable upon approval of the application by the corporation.
(2) No cap
Special financial assistance granted by the corporation under this section shall not be capped by the guarantee under 1322a of this title.
(j) Determination of amount of special financial assistance
(1) In general
The amount of financial assistance provided to a multiemployer plan eligible for financial assistance under this section shall be such amount required for the plan to pay all benefits due during the period beginning on the date of payment of the special financial assistance payment under this section and ending on the last day of the plan year ending in 2051, with no reduction in a participant's or beneficiary's accrued benefit as of March 11, 2021, except to the extent of a reduction in accordance with
(2) Projections
The funding projections for purposes of this section shall be performed on a deterministic basis.
(k) Reinstatement of suspended benefits
The Secretary, in coordination with the Secretary of the Treasury, shall ensure that an eligible multiemployer plan that receives special financial assistance under this section—
(1) reinstates any benefits that were suspended under
(2) provides payments equal to the amount of benefits previously suspended under
(A) as a lump sum within 3 months of such effective date; or
(B) in equal monthly installments over a period of 5 years, commencing within 3 months of such effective date, with no adjustment for interest.
(l) Restrictions on the use of special financial assistance
Special financial assistance received under this section and any earnings thereon may be used by an eligible multiemployer plan to make benefit payments and pay plan expenses. Special financial assistance and any earnings on such assistance shall be segregated from other plan assets. Special financial assistance shall be invested by plans in investment-grade bonds or other investments as permitted by the corporation.
(m) Conditions on plans receiving special financial assistance
(1) In general
The corporation, in consultation with the Secretary of the Treasury, may impose, by regulation or other guidance, reasonable conditions on an eligible multiemployer plan that receives special financial assistance relating to increases in future accrual rates and any retroactive benefit improvements, allocation of plan assets, reductions in employer contribution rates, diversion of contributions to, and allocation of expenses to, other benefit plans, and withdrawal liability.
(2) Limitation
The corporation shall not impose conditions on an eligible multiemployer plan as a condition of, or following receipt of, special financial assistance under this section relating to—
(A) any prospective reduction in plan benefits (including benefits that may be adjusted pursuant to
(B) plan governance, including selection of, removal of, and terms of contracts with, trustees, actuaries, investment managers, and other service providers; or
(C) any funding rules relating to the plan receiving special financial assistance under this section.
(3) Payment of premiums
An eligible multiemployer plan receiving special financial assistance under this section shall continue to pay all premiums due under
(4) Assistance not considered for certain purposes
An eligible multiemployer plan that receives special financial assistance shall be deemed to be in critical status within the meaning of
(5) Insolvent plans
An eligible multiemployer plan receiving special financial assistance under this section that subsequently becomes insolvent will be subject to the current rules and guarantee for insolvent plans.
(6) Ineligibility for other assistance
An eligible multiemployer plan that receives special financial assistance under this section is not eligible to apply for a new suspension of benefits under
(n) Coordination with Secretary of the Treasury
In prescribing the application process for eligible multiemployer plans to receive special financial assistance under this section and reviewing applications of such plans, the corporation shall coordinate with the Secretary of the Treasury in the following manner:
(1) In the case of a plan which has suspended benefits under
(A) in determining whether to approve the application, the corporation shall consult with the Secretary of the Treasury regarding the plan's proposed method of reinstating benefits, as described in the plan's application and in accordance with guidance issued by the Secretary of the Treasury, and
(B) the corporation shall consult with the Secretary of the Treasury regarding the amount of special financial assistance needed based on the projected funded status of the plan as of the last day of the plan year ending in 2051, whether the plan proposes to repay benefits over 5 years or as a lump sum, as required by subsection (k)(2), and any other relevant factors, as determined by the corporation in consultation with the Secretary of the Treasury, to ensure the amount of assistance is sufficient to meet such requirement and is sufficient to pay benefits as required in subsection (j)(1).
(2) In the case of any plan which proposes in its application to change the assumptions used, as provided in subsection (e)(4), the corporation shall consult with the Secretary of the Treasury regarding such proposed change in assumptions.
(3) If the corporation specifies in regulations or guidance that temporary priority consideration is available for plans which are insolvent within the meaning of
(
part 5—benefits after termination
§1441. Benefits under certain terminated plans
(a) Amendment of plan by plan sponsor to reduce benefits, and suspension of benefit payments
Notwithstanding
(b) Determinations respecting value of nonforfeitable benefits under terminated plan and value of assets of plan
(1) The value of nonforfeitable benefits under a terminated plan referred to in subsection (a), and the value of the plan's assets, shall be determined in writing, in accordance with regulations prescribed by the corporation, as of the end of the plan year during which
(2) For purposes of this section, plan assets include outstanding claims for withdrawal liability (within the meaning of
(c) Amendment of plan by plan sponsor to reduce benefits for conservation of assets; factors applicable
(1) If, according to the determination made under subsection (b), the value of nonforfeitable benefits exceeds the value of the plan's assets, the plan sponsor shall amend the plan to reduce benefits under the plan to the extent necessary to ensure that the plan's assets are sufficient, as determined and certified in accordance with regulations prescribed by the corporation, to discharge when due all of the plan's obligations with respect to nonforfeitable benefits.
(2) Any plan amendment required by this subsection shall, in accordance with regulations prescribed by the Secretary of the Treasury—
(A) reduce benefits only to the extent necessary to comply with paragraph (1);
(B) reduce accrued benefits only to the extent that those benefits are not eligible for the corporation's guarantee under
(C) comply with the rules for and limitations on benefit reductions under a plan in reorganization, as prescribed in section 1425 1 of this title, except to the extent that the corporation prescribes other rules and limitations in regulations under this section; and
(D) take effect no later than 6 months after the end of the plan year for which it is determined that the value of nonforfeitable benefits exceeds the value of the plan's assets.
(d) Suspension of benefit payments; determinative factors; powers and duties of plan sponsor; retroactive benefit payments
(1) In any case in which benefit payments under a plan which is insolvent under paragraph (2)(A) exceed the resource benefit level, any such payments which are not basic benefits shall be suspended, in accordance with this subsection, to the extent necessary to reduce the sum of such payments and such basic benefits to the greater of the resource benefit level or the level of basic benefits, unless an alternative procedure is prescribed by the corporation in connection with a supplemental guarantee program established under
(2) For purposes of this subsection, for a plan year—
(A) a plan is insolvent if—
(i) the plan has been amended to reduce benefits to the extent permitted by subsection (c), and
(ii) the plan's available resources are not sufficient to pay benefits under the plan when due for the plan year; and
(B) "resource benefit level" and "available resources" have the meanings set forth in paragraphs (2) and (3), respectively, of
(3) The plan sponsor of a plan which is insolvent (within the meaning of paragraph (2)(A)) shall have the powers and duties of the plan sponsor of a plan in reorganization which is insolvent (within the meaning of
(4) A plan is not required to make retroactive benefit payments with respect to that portion of a benefit which was suspended under this subsection, except that the provisions of section 1426(c)(4) and (5) of this title shall apply in the case of plans which are insolvent under paragraph (2)(A), in connection with the plan year during which such
(
Editorial Notes
References in Text
Statutory Notes and Related Subsidiaries
Effective Date
Part effective Sept. 26, 1980, except as specifically provided, see
1 See References in Text note below.
part 6—enforcement
§1451. Civil actions
(a) Persons entitled to maintain actions
(1) A plan fiduciary, employer, plan participant, or beneficiary, who is adversely affected by the act or omission of any party under this subtitle with respect to a multiemployer plan, or an employee organization which represents such a plan participant or beneficiary for purposes of collective bargaining, may bring an action for appropriate legal or equitable relief, or both.
(2) Notwithstanding paragraph (1), this section does not authorize an action against the Secretary of the Treasury, the Secretary of Labor, or the corporation.
(b) Failure of employer to make withdrawal liability payment within prescribed time
In any action under this section to compel an employer to pay withdrawal liability, any failure of the employer to make any withdrawal liability payment within the time prescribed shall be treated in the same manner as a delinquent contribution (within the meaning of
(c) Jurisdiction of Federal and State courts
The district courts of the United States shall have exclusive jurisdiction of an action under this section without regard to the amount in controversy, except that State courts of competent jurisdiction shall have concurrent jurisdiction over an action brought by a plan fiduciary to collect withdrawal liability.
(d) Venue and service of process
An action under this section may be brought in the district where the plan is administered or where a defendant resides or does business, and process may be served in any district where a defendant resides, does business, or may be found.
(e) Costs and expenses
In any action under this section, the court may award all or a portion of the costs and expenses incurred in connection with such action, including reasonable attorney's fees, to the prevailing party.
(f) Time limitations
An action under this section may not be brought after the later of—
(1) 6 years after the date on which the cause of action arose, or
(2) 3 years after the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action; except that in the case of fraud or concealment, such action may be brought not later than 6 years after the date of discovery of the existence of such cause of action.
(g) Service of complaint on corporation; intervention by corporation
A copy of the complaint in any action under this section or
(
Editorial Notes
Effective Date
Part effective Sept. 26, 1980, except as specifically provided, see
§1452. Penalty for failure to provide notice
Any person who fails, without reasonable cause, to provide a notice required under this subtitle or any implementing regulations shall be liable to the corporation in an amount up to $100 for each day for which such failure continues. The corporation may bring a civil action against any such person in the United States District Court for the District of Columbia or in any district court of the United States within the jurisdiction of which the plan assets are located, the plan is administered, or a defendant resides or does business, and process may be served in any district where a defendant resides, does business, or may be found.
(
§1453. Election of plan status
(a) Authority, time, and criteria
Within one year after September 26, 1980, a multiemployer plan may irrevocably elect, pursuant to procedures established by the corporation, that the plan shall not be treated as a multiemployer plan for any purpose under this chapter or the Internal Revenue Code of 1954, if for each of the last 3 plan years ending prior to the effective date of the Multiemployer Pension Plan Amendments Act of 1980—
(1) the plan was not a multiemployer plan because the plan was not a plan described in
(2) the plan had been identified as a plan that was not a multiemployer plan in substantially all its filings with the corporation, the Secretary of Labor and the Secretary of the Treasury.
(b) Requirements
An election described in subsection (a) shall be effective only if—
(1) the plan is amended to provide that it shall not be treated as a multiemployer plan for all purposes under this chapter and the Internal Revenue Code of 1954, and
(2) written notice of the amendment is provided to the corporation within 60 days after the amendment is adopted.
(c) Effective date
An election described in subsection (a) shall be treated as being effective as of September 26, 1980.
(
Editorial Notes
References in Text
This chapter, referred to in subsecs. (a) and (b)(1), was in the original "this Act", meaning
The Internal Revenue Code of 1954, referred to in subsecs. (a) and (b)(1), was redesignated the Internal Revenue Code of 1986 by
For the effective date of the Multiemployer Pension Plan Amendments Act of 1980, referred to in subsec. (a), see