§1369 Treatment of Transactions to Evade Liability; Effect of Corporate Reorganization

Summary

If someone enters into a deal mainly to avoid responsibility for a pension plan and that deal takes effect within five years before the plan ends, that person and the companies in that person’s controlled group (measured at the plan’s end) must be treated as if they were a contributing sponsor when the plan terminates. That rule does not make them pay for any benefit increases or improvements that were adopted after the deal took effect. When a company is reorganized, the law treats the new or surviving company as the same person for these rules: a mere change of identity, form, or place makes the successor the same person; liquidation into a parent makes the parent the same person; and merger, consolidation, or division makes the successor company or companies the same person.