§1369 — Title 29 Labor | U.S. Code

Summary

If someone enters a deal mainly to avoid having to pay obligations tied to a pension plan, and that deal becomes effective within five years before the plan ends, then that person and their related companies as of the plan’s end must be treated as a sponsor of the plan when it terminates. That rule does not make anyone responsible for any benefit increases adopted after the deal became effective. When a company reorganizes, the new or surviving company is treated as the original company for these rules if the change is just a new identity, form, or location; if the company is liquidated into its parent; or if it merges, consolidates, or splits into successor company or companies.

Title 29, §1369

Labor — Source: USLM XML via OLRC

(a)If a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject under this subtitle and the transaction becomes effective within five years before the termination date of the termination on which such liability would be based, then such person and the members of such person’s controlled group (determined as of the termination date) shall be subject to liability under this subtitle in connection with such termination as if such person were a contributing sponsor of the terminated plan as of the termination date. This subsection shall not cause any person to be liable under this subtitle in connection with such plan termination for any increases or improvements in the benefits provided under the plan which are adopted after the date on which the transaction referred to in the preceding sentence becomes effective.

(b)For purposes of this subtitle, the following rules apply in the case of certain corporate reorganizations:

(1)If a person ceases to exist by reason of a reorganization which involves a mere change in identity, form, or place of organization, however effected, a successor corporation resulting from such reorganization shall be treated as the person to whom this subtitle applies.

(2)If a person ceases to exist by reason of liquidation into a parent corporation, the parent corporation shall be treated as the person to whom this subtitle applies.

(3)If a person ceases to exist by reason of a merger, consolidation, or division, the successor corporation or corporations shall be treated as the person to whom this subtitle applies.

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 99–272, title XI, § 11013(b), Apr. 7, 1986, 100 Stat. 261, provided that: “section 4069(a) of the Employee Retirement Income Security Act of 1974 (as added by subsection (a)) [subsec. (a) of this section] shall apply with respect to transactions becoming effective on or after January 1, 1986.” Section effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99–272, set out as an

Effective Date

of 1986 Amendment note under section 1341 of this title.

§1369 Treatment of transactions to evade liability; effect of corporate reorganization

Summary

Title 29, §1369

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

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