29 U.S.C. § 1383 — Complete withdrawal

Page 700 TITLE 29—LABOR § 1383 (3) collect the amount of the withdrawal li- ability from the employer. (Pub. L. 93–406, title IV, § 4202, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1218.) § 1383. Complete withdrawal (a) Determinative factors For purposes of this part, a complete with- drawal from a multiemployer plan occurs when an employer— (1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered oper- ations under the plan. (b) Building and construction industry (1) Notwithstanding subsection (a), in the case of an employer that has an obligation to con- tribute under a plan for work performed in the building and construction industry, a complete withdrawal occurs only as described in para- graph (2), if— (A) substantially all the employees with re- spect to whom the employer has an obligation to contribute under the plan perform work in the building and construction industry, and (B) the plan— (i) primarily covers employees in the building and construction industry, or (ii) is amended to provide that this sub- section applies to employers described in this paragraph. (2) A withdrawal occurs under this paragraph if— (A) an employer ceases to have an obligation to contribute under the plan, and (B) the employer— (i) continues to perform work in the juris- diction of the collective bargaining agree- ment of the type for which contributions were previously required, or (ii) resumes such work within 5 years after the date on which the obligation to con- tribute under the plan ceases, and does not renew the obligation at the time of the re- sumption. (3) In the case of a plan terminated by mass withdrawal (within the meaning of section 1341a(a)(2) of this title), paragraph (2) shall be applied by substituting ‘‘3 years’’ for ‘‘5 years’’ in subparagraph (B)(ii). (c) Entertainment industry (1) Notwithstanding subsection (a), in the case of an employer that has an obligation to con- tribute under a plan for work performed in the entertainment industry, primarily on a tem- porary or project-by-project basis, if the plan primarily covers employees in the entertain- ment industry, a complete withdrawal occurs only as described in subsection (b)(2) applied by substituting ‘‘plan’’ for ‘‘collective bargaining agreement’’ in subparagraph (B)(i) thereof. (2) For purposes of this subsection, the term ‘‘entertainment industry’’ means— (A) theater, motion picture (except to the extent provided in regulations prescribed by the corporation), radio, television, sound or visual recording, music, and dance, and (B) such other entertainment activities as the corporation may determine to be appro- priate. (3) The corporation may by regulation exclude a group or class of employers described in the preceding sentence from the application of this subsection if the corporation determines that such exclusion is necessary— (A) to protect the interest of the plan’s par- ticipants and beneficiaries, or (B) to prevent a significant risk of loss to the corporation with respect to the plan. (4) A plan may be amended to provide that this subsection shall not apply to a group or class of employers under the plan. (d) Other determinative factors (1) Notwithstanding subsection (a), in the case of an employer who— (A) has an obligation to contribute under a plan described in paragraph (2) primarily for work described in such paragraph, and (B) does not continue to perform work with- in the jurisdiction of the plan, a complete withdrawal occurs only as described in paragraph (3). (2) A plan is described in this paragraph if sub- stantially all of the contributions required under the plan are made by employers primarily engaged in the long and short haul trucking in- dustry, the household goods moving industry, or the public warehousing industry. (3) A withdrawal occurs under this paragraph if— (A) an employer permanently ceases to have an obligation to contribute under the plan or permanently ceases all covered operations under the plan, and (B) either— (i) the corporation determines that the plan has suffered substantial damage to its contribution base as a result of such ces- sation, or (ii) the employer fails to furnish a bond issued by a corporate surety company that is an acceptable surety for purposes of section 1112 of this title, or an amount held in es- crow by a bank or similar financial institu- tion satisfactory to the plan, in an amount equal to 50 percent of the withdrawal liabil- ity of the employer. (4) If, after an employer furnishes a bond or es- crow to a plan under paragraph (3)(B)(ii), the corporation determines that the cessation of the employer’s obligation to contribute under the plan (considered together with any cessations by other employers), or cessation of covered oper- ations under the plan, has resulted in substan- tial damage to the contribution base of the plan, the employer shall be treated as having with- drawn from the plan on the date on which the obligation to contribute or covered operations ceased, and such bond or escrow shall be paid to the plan. The corporation shall not make a de- termination under this paragraph more than 60 months after the date on which such obligation to contribute or covered operations ceased. (5) If the corporation determines that the em- ployer has no further liability under the plan ei- ther— Page 701 TITLE 29—LABOR § 1384 (A) because it determines that the contribu- tion base of the plan has not suffered substan- tial damage as a result of the cessation of the employer’s obligation to contribute or ces- sation of covered operations (considered to- gether with any cessation of contribution obli- gation, or of covered operations, with respect to other employers), or (B) because it may not make a determina- tion under paragraph (4) because of the last sentence thereof, then the bond shall be cancelled or the escrow refunded. (6) Nothing in this subsection shall be con- strued as a limitation on the amount of the withdrawal liability of any employer. (e) Date of complete withdrawal For purposes of this part, the date of a com- plete withdrawal is the date of the cessation of the obligation to contribute or the cessation of covered operations. (f) Special liability withdrawal rules for indus- tries other than construction and entertain- ment industries; procedures applicable to amend plans (1) The corporation may prescribe regulations under which plans in industries other than the construction or entertainment industries may be amended to provide for special withdrawal li- ability rules similar to the rules described in subsections (b) and (c). (2) Regulations under paragraph (1) shall per- mit use of special withdrawal liability rules— (A) only in industries (or portions thereof) in which, as determined by the corporation, the characteristics that would make use of such rules appropriate are clearly shown, and (B) only if the corporation determines, in each instance in which special withdrawal li- ability rules are permitted, that use of such rules will not pose a significant risk to the corporation under this subchapter. (Pub. L. 93–406, title IV, § 4203, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1218.) § 1384. Sale of assets (a) Complete or partial withdrawal not occurring as a result of sale and subsequent cessation of covered operations or cessation of obliga- tion to contribute to covered operations; con- tinuation of liability of seller (1) A complete or partial withdrawal of an em- ployer (hereinafter in this section referred to as the ‘‘seller’’) under this section does not occur solely because, as a result of a bona fide, arm’s- length sale of assets to an unrelated party (here- inafter in this section referred to as the ‘‘pur- chaser’’), the seller ceases covered operations or ceases to have an obligation to contribute for such operations, if— (A) the purchaser has an obligation to con- tribute to the plan with respect to the oper- ations for substantially the same number of contribution base units for which the seller had an obligation to contribute to the plan; (B) the purchaser provides to the plan for a period of 5 plan years commencing with the first plan year beginning after the sale of as- sets, a bond issued by a corporate surety com- pany that is an acceptable surety for purposes of section 1112 of this title, or an amount held in escrow by a bank or similar financial insti- tution satisfactory to the plan, in an amount equal to the greater of— (i) the average annual contribution re- quired to be made by the seller with respect to the operations under the plan for the 3 plan years preceding the plan year in which the sale of the employer’s assets occurs, or (ii) the annual contribution that the seller was required to make with respect to the op- erations under the plan for the last plan year before the plan year in which the sale of the assets occurs, which bond or escrow shall be paid to the plan if the purchaser withdraws from the plan, or fails to make a contribution to the plan when due, at any time during the first 5 plan years beginning after the sale; and (C) the contract for sale provides that, if the purchaser withdraws in a complete with- drawal, or a partial withdrawal with respect to operations, during such first 5 plan years, the seller is secondarily liable for any withdrawal liability it would have had to the plan with re- spect to the operations (but for this section) if the liability of the purchaser with respect to the plan is not paid. (2) If the purchaser— (A) withdraws before the last day of the fifth plan year beginning after the sale, and (B) fails to make any withdrawal liability payment when due, then the seller shall pay to the plan an amount equal to the payment that would have been due from the seller but for this section. (3)(A) If all, or substantially all, of the seller’s assets are distributed, or if the seller is liq- uidated before the end of the 5 plan year period described in paragraph (1)(C), then the seller shall provide a bond or amount in escrow equal to the present value of the withdrawal liability the seller would have had but for this sub- section. (B) If only a portion of the seller’s assets are distributed during such period, then a bond or escrow shall be required, in accordance with reg- ulations prescribed by the corporation, in a manner consistent with subparagraph (A). (4) The liability of the party furnishing a bond or escrow under this subsection shall be reduced, upon payment of the bond or escrow to the plan, by the amount thereof. (b) Liability of purchaser (1) For the purposes of this part, the liability of the purchaser shall be determined as if the purchaser had been required to contribute to the plan in the year of the sale and the 4 plan years preceding the sale the amount the seller was re- quired to contribute for such operations for such 5 plan years. (2) If the plan is in reorganization in the plan year in which the sale of assets occurs, the pur- chaser shall furnish a bond or escrow in an amount equal to 200 percent of the amount de- scribed in subsection (a)(1)(B).