§1411 Mergers and Transfers Between Multiemployer Plans

Summary

Plan sponsors may not merge a multiemployer pension plan with other plans, or move assets or liabilities between them, unless the merger or transfer meets four rules. The sponsor must tell the corporation at least 120 days before the change. No participant’s or beneficiary’s earned benefit can be smaller right after the change than it was before. The benefits must not be reasonably expected to be suspended under section 1426. An actuarial valuation of each affected plan must have been done in the plan year before the change using the most recent data as of the day before that plan year began, or another valuation done under rules the corporation sets. If the corporation finds the merger or transfer meets these rules, it will not treat the action as a forbidden transaction. The plan that takes on liabilities is treated as a successor plan under the related rules. The corporation may help plans merge by offering training, technical help, mediation, and other support after consulting the Participant and Plan Sponsor Advocate. It can also give financial help to a merged plan to avoid or delay insolvency if one plan is in critical and declining status, the help is expected to reduce the corporation’s long-term loss and is needed for solvency, the corporation’s other obligations won’t be harmed, and the money comes only from the fund for basic benefits. The corporation must notify certain congressional committees within 14 days after giving such financial help.