PRIA, Government Policy, Made Personal

Summary

An employer does not have to pay withdrawal liability to a pension plan when it stops participating if four things are all true: the employer first had to contribute after September 26, 1980; it contributed for no more than the lesser of six consecutive plan years or the plan’s required vesting years; in each of those years its contributions were less than 2% of all employer contributions to the plan that year; and it has not used this rule before for that plan. That relief only applies if the plan is amended to allow it, the reduction under section 411(a)(3)(E) of title 26 applies to the employer’s workers, and the plan’s assets in the year before the employer first contributed were at least 8 to 1 compared to that year’s benefit payments.

Title 29, §1390

Labor, Source: USLM XML via OLRC

(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 section 411(a)(3)(E) of title 26 applies with respect to the employees of the employer; and

(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.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2006—Subsec. (b)(1) to (4). Pub. L. 109–280 redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “the plan is not a plan which primarily covers employees in the building and

Construction

industry;”. 1989—Subsec. (b)(3). Pub. L. 101–239 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text.

Statutory Notes and Related Subsidiaries

Effective Date

of 2006 Amendment Pub. L. 109–280, title II, § 204(c)(3), Aug. 17, 2006, 120 Stat. 887, provided that: “The

Amendments

made by this subsection [amending this section and section 1391 of this title] shall apply with respect to plan withdrawals occurring on or after January 1, 2007.”

Effective Date

of 1989 AmendmentAmendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title.

§1390 Nonapplicability of Withdrawal Liability for Certain Temporary Contribution Obligation Periods; Exception

Summary

Title 29, §1390

Notes & Related Subsidiaries

Editorial Notes

Amendments

Construction

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Effective Date

Citations & Metadata