§1389 De minimis rule

Summary

When an employer leaves a multiemployer pension plan, the money they owe for the plan’s unpaid promised benefits is cut by the smaller of two amounts: ¾ of 1 percent of the plan’s unfunded vested obligations (measured at the end of the plan year before they left) or $50,000. A plan can be changed so that the cut allowed is larger. The bigger allowed cut will be either that $50,000 rule or, if larger, the smaller of ¾ of 1 percent of unfunded obligations or $100,000. The cut rule does not apply if almost all employers leave in the same plan year, or if almost all leave over one or more plan years under an agreed plan of withdrawal. If almost all employers leave within 3 plan years, any employer who left in that time is assumed to have left under such an agreement unless they show it is more likely than not that they did not.