29 U.S.C. § 1401 — Resolution of disputes

Page 715 TITLE 29—LABOR § 1401 Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (c)(7)(A), 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 2014—Subsec. (d). Pub. L. 113–235 inserted ‘‘or to any arrangement relating to withdrawal liability involving the plan’’ before period at end. 1984—Subsec. (c)(1)(C)(iii). Pub. L. 98–369 substituted ‘‘September 26, 1980’’ for ‘‘April 29, 1980’’. § 1400. Approval of amendments (a) Amendment of covered multiemployer plan; procedures applicable Except as provided in subsection (b), if an amendment to a multiemployer plan authorized by any preceding section of this part is adopted more than 36 months after the effective date of this section, the amendment shall be effective only if the corporation approves the amend- ment, or, within 90 days after the corporation receives notice and a copy of the amendment from the plan sponsor, fails to disapprove the amendment. (b) Amendment respecting methods for com- puting withdrawal liability An amendment permitted by section 1391(c)(5) of this title may be adopted only in accordance with that section. (c) Criteria for disapproval by corporation The corporation shall disapprove an amend- ment referred to in subsection (a) or (b) only if the corporation determines that the amendment creates an unreasonable risk of loss to plan par- ticipants and beneficiaries or to the corporation. (Pub. L. 93–406, title IV, § 4220, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1239.) Editorial Notes REFERENCES IN TEXT For the effective date of this section, referred to in subsec. (a), see 1461(e)(2) of this title. § 1401. Resolution of disputes (a) Arbitration proceedings; matters subject to arbitration, procedures applicable, etc. (1) Any dispute between an employer and the plan sponsor of a multiemployer plan con- cerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration. Either party may initiate the arbitration proceeding within a 60-day pe- riod after the earlier of— (A) the date of notification to the employer under section 1399(b)(2)(B) of this title, or (B) 120 days after the date of the employer’s request under section 1399(b)(2)(A) of this title. The parties may jointly initiate arbitration within the 180-day period after the date of the plan sponsor’s demand under section 1399(b)(1) of this title. (2) An arbitration proceeding under this sec- tion shall be conducted in accordance with fair and equitable procedures to be promulgated by the corporation. The plan sponsor may purchase insurance to cover potential liability of the ar- bitrator. If the parties have not provided for the costs of the arbitration, including arbitrator’s fees, by agreement, the arbitrator shall assess such fees. The arbitrator may also award reason- able attorney’s fees. (3)(A) For purposes of any proceeding under this section, any determination made by a plan sponsor under sections 1381 through 1399 of this title and section 1405 of this title is presumed correct unless the party contesting the deter- mination shows by a preponderance of the evi- dence that the determination was unreasonable or clearly erroneous. (B) In the case of the determination of a plan’s unfunded vested benefits for a plan year, the de- termination is presumed correct unless a party contesting the determination shows by a pre- ponderance of evidence that— (i) the actuarial assumptions and methods used in the determination were, in the aggre- gate, unreasonable (taking into account the experience of the plan and reasonable expecta- tions), or (ii) the plan’s actuary made a significant error in applying the actuarial assumptions or methods. (b) Alternative collection proceedings; civil ac- tion subsequent to arbitration award; con- duct of arbitration proceedings (1) If no arbitration proceeding has been initi- ated pursuant to subsection (a), the amounts de- manded by the plan sponsor under section 1399(b)(1) of this title shall be due and owing on the schedule set forth by the plan sponsor. The plan sponsor may bring an action in a State or Federal court of competent jurisdiction for col- lection. (2) Upon completion of the arbitration pro- ceedings in favor of one of the parties, any party thereto may bring an action, no later than 30 days after the issuance of an arbitrator’s award, in an appropriate United States district court in accordance with section 1451 of this title to en- force, vacate, or modify the arbitrator’s award. (3) Any arbitration proceedings under this sec- tion shall, to the extent consistent with this subchapter, be conducted in the same manner, subject to the same limitations, carried out with the same powers (including subpena power), and enforced in United States courts as an arbitration proceeding carried out under title 9. (c) Presumption respecting finding of fact by ar- bitrator In any proceeding under subsection (b), there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were cor- rect. (d) Payments by employer prior and subsequent to determination by arbitrator; adjustments; failure of employer to make payments Payments shall be made by an employer in ac- cordance with the determinations made under Page 716 TITLE 29—LABOR § 1401 this part until the arbitrator issues a final deci- sion with respect to the determination sub- mitted for arbitration, with any necessary ad- justments in subsequent payments for overpay- ments or underpayments arising out of the deci- sion of the arbitrator with respect to the deter- mination. If the employer fails to make timely payment in accordance with such final decision, the employer shall be treated as being delin- quent in the making of a contribution required under the plan (within the meaning of section 1145 of this title). (e) Procedures applicable to certain disputes (1) In general If— (A) a plan sponsor of a plan determines that— (i) a complete or partial withdrawal of an employer has occurred, or (ii) an employer is liable for withdrawal liability payments with respect to the complete or partial withdrawal of an em- ployer from the plan, (B) such determination is based in whole or in part on a finding by the plan sponsor under section 1392(c) of this title that a prin- cipal purpose of a transaction that occurred before January 1, 1999, was to evade or avoid withdrawal liability under this subtitle, and (C) such transaction occurred at least 5 years before the date of the complete or par- tial withdrawal, then the special rules under paragraph (2) shall be used in applying subsections (a) and (d) of this section and section 1399(c) of this title to the employer. (2) Special rules (A) Determination Notwithstanding subsection (a)(3)— (i) a determination by the plan sponsor under paragraph (1)(B) shall not be pre- sumed to be correct, and (ii) the plan sponsor shall have the bur- den to establish, by a preponderance of the evidence, the elements of the claim under section 1392(c) of this title that a principal purpose of the transaction was to evade or avoid withdrawal liability under this sub- title. Nothing in this subparagraph shall affect the burden of establishing any other element of a claim for withdrawal liability under this subtitle. (B) Procedure Notwithstanding subsection (d) and sec- tion 1399(c) of this title, if an employer con- tests the plan sponsor’s determination under paragraph (1) through an arbitration pro- ceeding pursuant to subsection (a), or through a claim brought in a court of com- petent jurisdiction, the employer shall not be obligated to make any withdrawal liabil- ity payments until a final decision in the ar- bitration proceeding, or in court, upholds the plan sponsor’s determination. (f) Procedures applicable to certain disputes (1) IN GENERAL.—If— (A) a plan sponsor of a plan determines that— (i) a complete or partial withdrawal of an employer has occurred, or (ii) an employer is liable for withdrawal li- ability payments with respect to such com- plete or partial withdrawal, and (B) such determination is based in whole or in part on a finding by the plan sponsor under section 1392(c) of this title that a principal purpose of any transaction which occurred after December 31, 1998, and at least 5 years (2 years in the case of a small employer) before the date of the complete or partial withdrawal was to evade or avoid withdrawal liability under this subtitle, then the person against which the withdrawal li- ability is assessed based solely on the applica- tion of section 1392(c) of this title may elect to use the special rule under paragraph (2) in ap- plying subsection (d) of this section and section 1399(c) of this title to such person. (2) SPECIAL RULE.—Notwithstanding sub- section (d) and section 1399(c) of this title, if an electing person contests the plan sponsor’s de- termination with respect to withdrawal liability payments under paragraph (1) through an arbi- tration proceeding pursuant to subsection (a), through an action brought in a court of com- petent jurisdiction for review of such an arbitra- tion decision, or as otherwise permitted by law, the electing person shall not be obligated to make the withdrawal liability payments until a final decision in the arbitration proceeding, or in court, upholds the plan sponsor’s determina- tion, but only if the electing person— (A) provides notice to the plan sponsor of its election to apply the special rule in this para- graph within 90 days after the plan sponsor no- tifies the electing person of its liability by reason of the application of section 1392(c) of this title; and (B) if a final decision in the arbitration pro- ceeding, or in court, of the withdrawal liabil- ity dispute has not been rendered within 12 months from the date of such notice, the electing person provides to the plan, effective as of the first day following the 12-month pe- riod, 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 sum of the withdrawal liability payments that would otherwise be due under subsection (d) and section 1399(c) of this title for the 12-month period beginning with the first anniversary of such notice. Such bond or escrow shall remain in effect until there is a final decision in the arbitration proceeding, or in court, of the withdrawal liability dispute, at which time such bond or escrow shall be paid to the plan if such final decision upholds the plan sponsor’s determination. (3) DEFINITION OF SMALL EMPLOYER.—For pur- poses of this subsection— (A) IN GENERAL.—The term ‘‘small em- ployer’’ means any employer which, for the calendar year in which the transaction re- ferred to in paragraph (1)(B) occurred and for each of the 3 preceding years, on average— Page 717 TITLE 29—LABOR § 1402 (i) employs not more than 500 employees, and (ii) is required to make contributions to the plan for not more than 250 employees. (B) CONTROLLED GROUP.—Any group treated as a single employer under subsection (b)(1) of section 1301 of this title, without regard to any transaction that was a basis for the plan’s finding under section 1392 of this title, shall be treated as a single employer for purposes of this subparagraph. (4) ADDITIONAL SECURITY PENDING RESOLUTION OF DISPUTE.—If a withdrawal liability dispute to which this subsection applies is not concluded by 12 months after the electing person posts the bond or escrow described in paragraph (2), the electing person shall, at the start of each suc- ceeding 12-month period, provide an additional bond or amount held in escrow equal to the sum of the withdrawal liability payments that would otherwise be payable to the plan during that pe- riod. (5) The liability of the party furnishing a bond or escrow under this subsection shall be reduced, upon the payment of the bond or escrow to the plan, by the amount thereof. (Pub. L. 93–406, title IV, § 4221, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1239; amended Pub. L. 108–218, title II, § 202(a), Apr. 10, 2004, 118 Stat. 608; Pub. L. 109–280, title II, § 204(d)(1), Aug. 17, 2006, 120 Stat. 887; Pub. L. 110–458, title I, § 105(b)(2), Dec. 23, 2008, 122 Stat. 5105.) Editorial Notes AMENDMENTS 2008—Subsecs. (e) to (g). Pub. L. 110–458 redesignated subsecs. (f) and (g) as (e) and (f), respectively, and struck out former subsec. (e). Prior to amendment, text read as follows: ‘‘If any employer requests in writing that the plan sponsor make available to the employer general information necessary for the employer to compute its withdrawal liability with respect to the plan (other than information which is unique to that employer), the plan sponsor shall furnish the informa- tion to the employer without charge. If any employer requests in writing that the plan sponsor make an esti- mate of such employer’s potential withdrawal liability with respect to the plan or to provide information unique to that employer, the plan sponsor may require the employer to pay the reasonable cost of making such estimate or providing such information.’’ 2006—Subsec. (g). Pub. L. 109–280 added subsec. (g). 2004—Subsec. (f). Pub. L. 108–218 added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amend- ment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code. EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–280, title II, § 204(d)(2), Aug. 17, 2006, 120 Stat. 889, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to any person that receives a notification under section 4219(b)(1) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1399(b)(1)] on or after the date of enactment of this Act [Aug. 17, 2006] with respect to a transaction that occurred after December 31, 1998.’’ EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–218, title II, § 202(b), Apr. 10, 2004, 118 Stat. 609, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall apply to any em- ployer that receives a notification under section 4219(b)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1399(b)(1)) after October 31, 2003.’’ § 1402. Reimbursements for uncollectible with- drawal liability (a) Required supplemental program to reimburse for payments due from employers uncollectible as a result of employer involve- ment in bankruptcy case or proceedings; pro- gram participation, premiums, etc. By May 1, 1982, the corporation shall establish by regulation a supplemental program to reim- burse multiemployer plans for withdrawal liabil- ity payments which are due from employers and which are determined to be uncollectible for reasons arising out of cases or proceedings in- volving the employers under title 11, or similar cases or proceedings. Participation in the sup- plemental program shall be on a voluntary basis, and a plan which elects coverage under the program shall pay premiums to the corpora- tion in accordance with a premium schedule which shall be prescribed from time to time by the corporation. The premium schedule shall contain such rates and bases for the application of such rates as the corporation considers to be appropriate. (b) Discretionary supplemental program to reim- burse for payments due from employers uncollectible for other appropriate reasons The corporation may provide under the pro- gram for reimbursement of amounts of with- drawal liability determined to be uncollectible for any other reasons the corporation considers appropriate. (c) Payment of cost of program The cost of the program (including such ad- ministrative and legal costs as the corporation considers appropriate) may be paid only out of premiums collected under such program. (d) Terms and conditions, limitations, etc., of supplemental program The supplemental program may be offered to eligible plans on such terms and conditions, and with such limitations with respect to the pay- ment of reimbursements (including the exclu- sion of de minimis amounts of uncollectible em- ployer liability, and the reduction or elimi- nation of reimbursements which cannot be paid from collected premiums) and such restrictions on withdrawal from the program, as the corpora- tion considers necessary and appropriate. (e) Arrangements by corporation with private in- surers for implementation of program; elec- tion of coverage by participating plans with private insurers The corporation may enter into arrangements with private insurers to carry out in whole or in part the program authorized by this section and may require plans which elect coverage under the program to elect coverage by those private insurers. (Pub. L. 93–406, title IV, § 4222, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1240.)