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29 U.S.C. § 1386 — Adjustment for partial withdrawal; determination of amount; reduction for partial withdrawal liability; procedures applicable

Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1386 — Adjustment for partial withdrawal; determination of amount; reduction for partial withdrawal liability; procedures applicable

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Stable record: federal_law:legal_authorities:record_usc_c77cbb932984c2363890868c
Source file: Laws/federal/codes/united-states-code/title-29/section-1386-adjustment-for-partial-withdrawal-determination-of-amount-reduction-for--8c6c1b2643.md
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Source location: Title 29, Chapter 18, § 1386; chapter-018-employee-retirement-income-security-program.md

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**(a)** The amount of an employer’s liability for a partial withdrawal, before the application of sections 1399(c)(1) and 1405 of this title, is equal to the product of— (1) 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), and adjusted under [section 1389 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1389&num=0&edition=prelim) if appropriate, determined as if the employer had withdrawn from the plan in a complete withdrawal— (A) on the date of the partial withdrawal, or (B) in the case of a partial withdrawal described in [section 1385(a)(1)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) (relating to 70-percent contribution decline), on the last day of the first plan year in the 3-year testing period, multiplied by (2) a fraction which is 1 minus a fraction— (A) the numerator of which is the employer’s contribution base units for the plan year following the plan year in which the partial withdrawal occurs, and (B) the denominator of which is the average of the employer’s contribution base units for— (i) except as provided in clause (ii), the 5 plan years immediately preceding the plan year in which the partial withdrawal occurs, or (ii) in the case of a partial withdrawal described in [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) (relating to 70-percent contribution decline), the 5 plan years immediately preceding the beginning of the 3-year testing period. **(b)** (1) In the case of an employer that has withdrawal liability for a partial withdrawal from a plan, any withdrawal liability of that employer for a partial or complete withdrawal from that plan in a subsequent plan year shall be reduced by the amount of any partial withdrawal liability (reduced by any abatement or reduction of such liability) of the employer with respect to the plan for a previous plan year. (2) The corporation shall prescribe such regulations as may be necessary to provide for proper adjustments in the reduction provided by paragraph (1) for— (A) changes in unfunded vested benefits arising after the close of the prior year for which partial withdrawal liability was determined, (B) changes in contribution base units occurring after the close of the prior year for which partial withdrawal liability was determined, and (C) any other factors for which it determines adjustment to be appropriate, so that the liability for any complete or partial withdrawal in any subsequent year (after the application of the reduction) properly reflects the employer’s share of liability with respect to the plan.

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1389 — De minimis rule

**(a) Reduction of unfunded vested benefits allocable to employer withdrawn from plan** Except in the case of a plan amended under subsection (b), the amount of the unfunded vested benefits allocable under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) to an employer who withdraws from a plan shall be reduced by the smaller of— (1) ¾ of 1 percent of the plan’s unfunded vested obligations (determined as of the end of the plan year ending before the date of withdrawal), or (2) $50,000, reduced by the amount, if any, by which the unfunded vested benefits allowable to the employer, determined without regard to this subsection, exceeds $100,000. **(b) Amendment of plan for reduction of amount of unfunded vested benefits allocable to employer withdrawn from plan** A plan may be amended to provide for the reduction of 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) by not more than the greater of— (1) the amount determined under subsection (a), or (2) the lesser of— (A) the amount determined under subsection (a)(1), or (B) $100,000, reduced by the amount, if any, by which 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) for the employer, determined without regard to this subsection, exceeds $150,000. **(c) Nonapplicability** This section does not apply— (1) to an employer who withdraws in a plan year in which substantially all employers withdraw from the plan, or (2) in any case in which substantially all employers withdraw from the plan during a period of one

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1389

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1391 — Methods for computing withdrawal liability

**(a) Determination of amount of unfunded vested benefits allocable to employer withdrawn from plan** The amount of the unfunded vested benefits allocable to an employer that withdraws from a plan shall be determined in accordance with subsection (b), (c), or (d) of this section. **(b) Factors determining computation of amount of unfunded vested benefits allocable to employer withdrawn from plan** (1) Except as provided in subsections (c) and (d), the amount of unfunded vested benefits allocable to an employer that withdraws is the sum of— (A) the employer’s proportional share of the unamortized amount of the change in the plan’s unfunded vested benefits for plan years ending after September 25, 1980, as determined under paragraph (2), (B) the employer’s proportional share, if any, of the unamortized amount of the plan’s unfunded vested benefits at the end of the plan year ending before September 26, 1980, as determined under paragraph (3); and (C) the employer’s proportional share of the unamortized amounts of the reallocated unfunded vested benefits (if any) as determined under paragraph (4). If the sum of the amounts determined with respect to an employer under paragraphs (2), (3), and (4) is negative, the unfunded vested benefits allocable to the employer shall be zero. (2) (A) An employer’s proportional share of the unamortized amount of the change in the plan’s unfunded vested benefits for plan years ending after September 25, 1980, is the sum of the employer’s proportional shares of the unamortized amount of the change in unfunded vested benefits for each plan year in which the employer has an obligation to contribute under the plan ending— (i) after such date, and (ii) before the plan year in which the withdrawal of the employer occurs

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1391

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1381 — Withdrawal liability established; criteria and definitions

**(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).

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1381

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1388 — Reduction of partial withdrawal liability

**(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

29 U.S.C. § 1399 — Notice, collection, etc., of withdrawal liability

**(a) Furnishing of information by employer to plan sponsor** An employer shall, within 30 days after a written request from the plan sponsor, furnish such information as the plan sponsor reasonably determines to be necessary to enable the plan sponsor to comply with the requirements of this part. **(b) Notification, demand for payment, and review upon complete or partial withdrawal by employer** (1) As soon as practicable after an employer’s complete or partial withdrawal, the plan sponsor shall— (A) notify the employer of— (i) the amount of the liability, and (ii) the schedule for liability payments, and (B) demand payment in accordance with the schedule. (2) (A) No later than 90 days after the employer receives the notice described in paragraph (1), the employer— (i) may ask the plan sponsor to review any specific matter relating to the determination of the employer’s liability and the schedule of payments, (ii) may identify any inaccuracy in the determination of the amount of the unfunded vested benefits allocable to the employer, and (iii) may furnish any additional relevant information to the plan sponsor. (B) After a reasonable review of any matter raised, the plan sponsor shall notify the employer of— (i) the plan sponsor’s decision, (ii) the basis for the decision, and (iii) the reason for any change in the determination of the employer’s liability or schedule of liability payments. **(c) Payment requirements; amount, etc.** (1) (A) (i) Except as provided in subparagraphs (B) and (D) of this paragraph and in paragraphs (4) and (5), an employer shall pay the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&ed

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1399

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1386 — Adjustment for partial withdrawal; deter-

Page 703 TITLE 29—LABOR § 1386 (Pub. L. 93–406, title IV, § 4205, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1221; amended Pub. L. 101–239, title VII, § 7891(a)(1), Dec. 19, 1989, 103 Stat. 2445; Pub. L. 109–280, title II, § 204(b)(1), Aug. 17, 2006, 120 Stat. 887.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (d), was in the original ‘‘this Act’’, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified prin- cipally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of this title and Tables. AMENDMENTS 2006—Subsec. (b)(2)(A)(i). Pub. L. 109–280 inserted ‘‘or to an entity or entities owned or controlled by the em- ployer’’ after ‘‘to another location’’. 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 2006 AMENDMENT Pub. L. 109–280, title II, § 204(b)(2), Aug. 17, 2006, 120 Stat. 887, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply with re- spect to work transferred on or after the date of the en- actment of this Act [Aug. 17, 2006].’’ EFFECTIVE DATE OF 1989 AMENDMENT Amendment 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. APPLICABILITY TO CERTAIN EMPLOYERS ENGAGED

Source: Supplied 2024 U.S. Code historical extraction · 29 U.S.C. § 1386

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