§1415 Transfers Pursuant to Change in Bargaining Representative

Summary

When an employer’s workers move from one multiemployer pension plan to another because their bargaining representative changed and that change was certified after September 25, 1980, the old plan must transfer certain assets and debts to the new plan. The employer must tell the old plan within 30 days after it knows the change will happen. The old plan must tell the employer how much withdrawal liability the employer owes, that it plans to move the workers’ nonforfeitable benefits, and how much in assets and liabilities will move. The old plan must also tell the new plan what will be transferred. The new plan has 60 days after that notice to ask the corporation to stop the transfer. The transfer is blocked only if the corporation finds the new plan would suffer substantial financial harm. If the employer does not object within 60 days, or the new plan does not appeal, or the appeal does not show harm within 180 days, the old plan must make the transfer. If the new plan appeals and the employer must start paying withdrawal amounts before the appeal is resolved, the employer must put those payments into an escrow account; the funds go back to the employer if the transfer happens, or to the old plan and count toward liability if it does not. The old plan must not transfer assets if it is in reorganization or if the transfer would cause reorganization; in that case the old plan must move nonforfeitable benefits up to or equal to the employer’s withdrawal liability. If the old plan makes the transfer, the employer’s withdrawal liability to the old plan is reduced by the amount that the value of the unfunded vested benefits moved for the employer exceeds the value of assets moved. The old and new plan sponsors can agree to use other statutory transfer rules instead, but the employer’s reduction still applies. If the employer leaves the new plan within 240 months after the transfer, its liability to the new plan is the larger of the normal new-plan liability or the amount by which its old-plan liability was reduced, lowered by 5 percent for each full year after the transfer. Definitions: “appropriate amount of assets” = the excess of the value of the nonforfeitable benefits to be moved over the employer’s withdrawal liability; “certified change of collective bargaining representative” = a change certified under the Labor‑Management Relations Act or the Railway Labor Act.