29 U.S.C. § 1405 — Limitation on withdrawal liability

**(a) Unfunded vested benefits allocable to employer in bona fide sale of assets of employer in arms-length transaction to unrelated party; maximum amount; determinative factors** (1) In the case of bona fide sale of all or substantially all of the employer’s assets in an arm’s-length transaction to an unrelated party (within the meaning of [section 1384(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1384/d&num=0&edition=prelim)), the unfunded vested benefits allocable to an employer (after the application of all sections of this part having a lower number designation than this section), other than an employer undergoing reorganization under title 11 or similar provisions of State law, shall not exceed the greater of— (A) a portion (determined under paragraph (2)) of the liquidation or dissolution value of the employer (determined after the sale or exchange of such assets), or (B) in the case of a plan using the attributable method of allocating withdrawal liability, the unfunded vested benefits attributable to employees of the employer. (2) For purposes of paragraph (1), the portion shall be determined in accordance with the following table: If the liquidation or distribution value of the employer after the sale or exchange is—The portion is— Not more than $5,000,00030 percent of the amount. More than $5,000,000, but not more than $10,000,000$1,500,000, plus 35 percent of the amount in excess of $5,000,000. More than $10,000,000, but not more than $15,000,000$3,250,000, plus 40 percent of the amount in excess of $10,000,000. More than $15,000,000, but not more than $17,500,000$5,250,000, plus 45 percent of the amount in excess of $15,000,000. More than $17,500,000, but not more than $20,000,000$6,375,000, plus 50 percent of the amount in excess of $17,500,000. More than $20,000,000, but not more than $22,500,000$7,625,000, plus 60 percent of the amount in excess of $20,000,000. More than $22,500,000, but not more than $25,000,000$9,125,000, plus 70 percent of the amount in excess of $22,500,000. More than $25,000,000$10,875,000, plus 80 percent of the amount in excess of $25,000,000. **(b) Unfunded vested benefits allocable to insolvent employer undergoing liquidation or dissolution; maximum amount; determinative factors** In the case of an insolvent employer undergoing liquidation or dissolution, the unfunded vested benefits allocable to that employer shall not exceed an amount equal to the sum of— (1) 50 percent of the unfunded vested benefits allocable to the employer (determined without regard to this section), and (2) that portion of 50 percent of the unfunded vested benefits allocable to the employer (as determined under paragraph (1)) which does not exceed the liquidation or dissolution value of the employer determined— (A) as of the commencement of liquidation or dissolution, and (B) after reducing the liquidation or dissolution value of the employer by the amount determined under paragraph (1). **(c) Property not subject to enforcement of liability; precondition** To the extent that the withdrawal liability of an employer is attributable to his obligation to contribute to or under a plan as an individual (whether as a sole proprietor or as a member of a partnership), property which may be exempt from the estate under [section 522 of title 11](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section522&num=0&edition=prelim) or under similar provisions of law, shall not be subject to enforcement of such liability. **(d) Insolvency of employer; liquidation or dissolution value of employer** For purposes of this section— (1) an employer is insolvent if the liabilities of the employer, including withdrawal liability under the plan (determined without regard to subsection (b)), exceed the assets of the employer (determined as of the commencement of the liquidation or dissolution), and (2) the liquidation or dissolution value of the employer shall be determined without regard to such withdrawal liability. **(e) One or more withdrawals of employer attributable to same sale, liquidation, or dissolution** In the case of one or more withdrawals of an employer attributable to the same sale, liquidation, or dissolution, under regulations prescribed by the corporation— (1) all such withdrawals shall be treated as a single withdrawal for the purpose of applying this section, and (2) the withdrawal liability of the employer to each plan shall be an amount which bears the same ratio to the present value of the withdrawal liability payments to all plans (after the application of the preceding provisions of this section) as the withdrawal liability of the employer to such plan (determined without regard to this section) bears to the withdrawal liability of the employer to all such plans (determined without regard to this section).