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29 U.S.C. § 1385 — Partial withdrawals
Federal law — U.S. Code and appendices · legal_authorities
**(a) Determinative factors** Except as otherwise provided in this section, there is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year—
(1) there is a 70-percent contribution decline, or
(2) there is a partial cessation of the employer’s contribution obligation.
**(b) Criteria applicable** For purposes of subsection (a)—
(1)
(A) There is a 70-percent contribution decline for any plan year if during each plan year in the 3-year testing period the employer’s contribution base units do not exceed 30 percent of the employer’s contribution base units for the high base year.
(B) For purposes of subparagraph (A)—
(i) The term “3-year testing period” means the period consisting of the plan year and the immediately preceding 2 plan years.
(ii) The number of contribution base units for the high base year is the average number of such units for the 2 plan years for which the employer’s contribution base units were the highest within the 5 plan years immediately preceding the beginning of the 3-year testing period.
(2)
(A) There is a partial cessation of the employer’s contribution obligation for the plan year if, during such year—
(i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer, or
(ii) an employer permanently ceases to have an obligation to contribute under the plan with respect t
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Source file: Laws/federal/codes/united-states-code/title-29/section-1385-partial-withdrawals--2d75af1394.md
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Source location: Title 29, Chapter 18, § 1385; chapter-018-employee-retirement-income-security-program.md
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**(a) Determinative factors** Except as otherwise provided in this section, there is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year—
(1) there is a 70-percent contribution decline, or
(2) there is a partial cessation of the employer’s contribution obligation.
**(b) Criteria applicable** For purposes of subsection (a)—
(1)
(A) There is a 70-percent contribution decline for any plan year if during each plan year in the 3-year testing period the employer’s contribution base units do not exceed 30 percent of the employer’s contribution base units for the high base year.
(B) For purposes of subparagraph (A)—
(i) The term “3-year testing period” means the period consisting of the plan year and the immediately preceding 2 plan years.
(ii) The number of contribution base units for the high base year is the average number of such units for the 2 plan years for which the employer’s contribution base units were the highest within the 5 plan years immediately preceding the beginning of the 3-year testing period.
(2)
(A) There is a partial cessation of the employer’s contribution obligation for the plan year if, during such year—
(i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer, or
(ii) an employer permanently ceases to have an obligation to contribute under the plan with respect to work performed at one or more but fewer than all of its facilities, but continues to perform work at the facility of the type for which the obligation to contribute ceased.
(B) For purposes of subparagraph (A), a cessation of obligations under a collective bargaining agreement shall not be considered to have occurred solely because, with respect to the same plan, one agreement that requires contributions to the plan has been substituted for another agreement.
**(c) Retail food industry**
(1) In the case of a plan in which a majority of the covered employees are employed in the retail food industry, the plan may be amended to provide that this section shall be applied with respect to such plan—
(A) by substituting “35 percent” for “70 percent” in subsections (a) and (b), and
(B) by substituting “65 percent” for “30 percent” in subsection (b).
(2) Any amendment adopted under paragraph (1) shall provide rules for the equitable reduction of withdrawal liability in any case in which the number of the plan’s contribution base units, in the 2 plan years following the plan year of withdrawal of the employer, is higher than such number immediately after the withdrawal.
(3) [Section 1388 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1388&num=0&edition=prelim) shall not apply to a plan which has been amended under paragraph (1).
**(d) Continuation of liability of employer for partial withdrawal under amended plan** In the case of a plan described in [section 404(c) of title 26](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section404/c&num=0&edition=prelim), or a continuation thereof, the plan may be amended to provide rules setting forth other conditions consistent with the purposes of this chapter under which an employer has liability for partial withdrawal.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Benefit plans as affecting interstate commerce and the Federal taxing power** The Congress finds that the growth in size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; that the operational scope and economic impact of such plans is increasingly interstate; that the continued well-being and security of millions of employees and their dependents are directly affected by these plans; that they are affected with a national public interest; that they have become an important factor affecting the stability of employment and the successful development of industrial relations; that they have become an important factor in commerce because of the interstate character of their activities, and of the activities of their participants, and the employers, employee organizations, and other entities by which they are established or maintained; that a large volume of the activities of such plans are carried on by means of the mails and instrumentalities of interstate commerce; that owing to the lack of employee information and adequate safeguards concerning their operation, it is desirable in the interests of employees and their beneficiaries, and to provide for the general welfare and the free flow of commerce, that disclosure be made and safeguards be provided with respect to the establishment, operation, and administration of such plans; that they substantially affect the revenues of the United States because they are afforded preferential Federal tax treatment; that despite the enormous growth in such plans many employees with long years of employment are losing anticipated retirement benefits owing to the lack of vesting provisions in such plans; that owing to the inadequacy of current minimum standards, the soundness and stabilit
Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1001
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year following the partial withdrawal year; criteria applicable; furnishing of bond in lieu of payment of partial withdrawal liability**
(1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under [section 1385(a)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385/a/1&num=0&edition=prelim) (referred to elsewhere in this section as the “partial withdrawal year”), the number of contribution base units with respect to which the employer has an obligation to contribute under the plan for each such year is not less than 90 percent of the total number of contribution base units with respect to which the employer had an obligation to contribute under the plan for the high base year (within the meaning of [section 1385(b)(1)(B)(ii) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385/b/1/B/ii&num=0&edition=prelim)), then the employer shall have no obligation to make payments with respect to such partial withdrawal (other than delinquent payments) for plan years beginning after the second consecutive plan year following the partial withdrawal year.
(2)
(A) For any plan year for which the number of contribution base units with respect to which an employer who has partially withdrawn under [section 1385(a)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385/a/1&num=0&edition=prelim) has an obligation to contribute under the plan equals or exceeds the number of units for the highest year determined under paragraph (1) without regard to “90 percent of”,
Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1388
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Federal law — U.S. Code and appendices · legal_authorities
For purposes of this subchapter:
(1) The terms “employee welfare benefit plan” and “welfare plan” mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in [section 186(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section186/c&num=0&edition=prelim) (other than pensions on retirement or death, and insurance to provide such pensions).
(2)
(A) Except as provided in subparagraph (B), the terms “employee pension benefit plan” and “pension plan” mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program—
(i) provides retirement income to employees, or
(ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond,
regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan. A distribution from a plan, fund, or program shall not be treated as made
Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1002
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability.
**(b)** For purposes of subsection (a)—
(1) The withdrawal liability of an employer to a plan is the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) to be the allocable amount of unfunded vested benefits, adjusted—
(A) first, by any de minimis reduction applicable under [section 1389 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1389&num=0&edition=prelim),
(B) next, in the case of a partial withdrawal, in accordance with [section 1386 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1386&num=0&edition=prelim),
(C) then, to the extent necessary to reflect the limitation on annual payments under [section 1399(c)(1)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1399/c/1/B&num=0&edition=prelim), and
(D) finally, in accordance with [section 1405 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1405&num=0&edition=prelim).
(2) The term “complete withdrawal” means a complete withdrawal described in [section 1383 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1383&num=0&edition=prelim).
(3) The term “partial withdrawal” means a partial withdrawal described in [section 1385 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
Page 702
TITLE 29—LABOR
§ 1385
(c) Variances or exemptions from continuation of
liability of seller; procedures applicable
The corporation may by regulation vary the
standards in subparagraphs (B) and (C) of sub-
section (a)(1) if the variance would more effec-
tively or equitably carry out the purposes of
this subchapter. Before it promulgates such reg-
ulations, the corporation may grant individual
or class variances or exemptions from the re-
quirements of such subparagraphs if the par-
ticular case warrants it. Before granting such an
individual or class variance or exemption, the
corporation—
(1) shall publish notice in the Federal Reg-
ister of the pendency of the variance or ex-
emption,
(2) shall require that adequate notice be
given to interested persons, and
(3) shall afford interested persons an oppor-
tunity to present their views.
(d) ‘‘Unrelated party’’ defined
For purposes of this section, the term ‘‘unre-
lated party’’ means a purchaser or seller who
does not bear a relationship to the seller or pur-
chaser, as the case may be, that is described in
section 267(b) of title 26, or that is described in
regulations prescribed by the corporation apply-
ing principles similar to the principles of such
section.
(Pub. L. 93–406, title IV, § 4204, as added Pub. L.
96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1220;
amended Pub. L. 101–239, title VII, § 7891(a)(1),
Dec. 19, 1989, 103 Stat. 2445.)
Editorial Notes
AMENDMENTS
1989—Subsec. (d). Pub. L. 101–239 substituted ‘‘Inter-
nal Revenue Code of 1986’’ for ‘‘Internal Revenue Code
of 1954’’, which for purposes of codification was trans-
lated as ‘‘title 26’’ thus requiring no change in text.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L
Source: Supplied 2024 U.S. Code historical extraction · 29 U.S.C. § 1385
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