29 U.S.C. § 1363 — Liability of substantial employer for with-

Page 691 TITLE 29—LABOR § 1363 EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–272 effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99–272, set out as a note under section 1341 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–364 effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title. EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–598 effective Oct. 1, 1979, see section 402(a) of Pub. L. 95–598, set out as an Effec- tive Date note preceding section 101 of Title 11, Bank- ruptcy. DIRECTION TO THE PENSION BENEFIT GUARANTY CORPORATION Pub. L. 113–235, div. P, § 1(c), Dec. 16, 2014, 128 Stat. 2827, provided that: ‘‘The Pension Benefit Guaranty Corporation shall not take any enforcement, adminis- trative, or other action pursuant to section 4062(e) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1362(e)], or in connection with an agreement settling liability arising under such section, that is in- consistent with the amendment made by this section [amending this section], without regard to whether the action relates to a cessation or other event that occurs before, on, or after the date of the enactment of this Act [Dec. 16, 2014], unless such action is in connection with a settlement agreement that is in place before June 1, 2014. The Pension Benefit Guaranty Corporation shall not initiate a new enforcement action with re- spect to section 4062(e) of such Act that is inconsistent with its enforcement policy in effect on June 1, 2014.’’ APPLICABILITY OF AMENDMENTS BY SUBTITLES A AND B OF TITLE I OF PUB. L. 109–280 For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Pub. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code. SPECIAL DELAYED PAYMENT RULE Pub. L. 99–272, title XI, § 11012(d), Apr. 7, 1986, 100 Stat. 260, provided that: ‘‘In the case of a distress termi- nation under section 4041(c) of the Employee Retire- ment Income Security Act of 1974 (as amended by sec- tion 11009) [29 U.S.C. 1341(c)] pursuant to a notice of in- tent to terminate filed before January 1, 1987, no pay- ment of liability otherwise payable as provided in sec- tion 4062(c)(2)(B) of such Act [former 29 U.S.C. 1362(c)(2)(B)] (as amended by this section [Act]) shall be required to be made before January 1, 1989.’’ § 1363. Liability of substantial employer for with- drawal from single-employer plans under multiple controlled groups (a) Single-employer plans with two or more con- tributing sponsors Except as provided in subsection (d), the plan administrator of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control— (1) shall notify the corporation of the with- drawal during a plan year of a substantial em- ployer for such plan year from the plan, within 60 days after such withdrawal, and (2) request that the corporation determine the liability of all persons with respect to the withdrawal of the substantial employer. The corporation shall, as soon as practicable thereafter, determine whether there is liability resulting from the withdrawal of the substantial employer and notify the liable persons of such liability. (b) Computation of liability Except as provided in subsection (c), any one or more contributing sponsors who withdraw, during a plan year for which they constitute a substantial employer, from a single-employer plan which has two or more contributing spon- sors at least two of whom are not under common control, shall, upon notification of such contrib- uting sponsors by the corporation as provided by subsection (a), be liable, together with the mem- bers of their controlled groups, to the corpora- tion in accordance with the provisions of section 1362 of this title and this section. The amount of liability shall be computed on the basis of an amount determined by the corporation to be the amount described in section 1362 of this title for the entire plan, as if the plan had been termi- nated by the corporation on the date of the withdrawal referred to in subsection (a)(1) mul- tiplied by a fraction— (1) the numerator of which is the total amount required to be contributed to the plan by such contributing sponsors for the last 5 years ending prior to the withdrawal, and (2) the denominator of which is the total amount required to be contributed to the plan by all contributing sponsors for such last 5 years. In addition to and in lieu of the manner pre- scribed in the preceding sentence, the corpora- tion may also determine such liability on any other equitable basis prescribed by the corpora- tion in regulations. Any amount collected by the corporation under this subsection shall be held in escrow subject to disposition in accord- ance with the provisions of paragraphs (2) and (3) of subsection (c). (c) Bond in lieu of payment of liability; 5-year termination period (1) In lieu of payment of a contributing spon- sor’s liability under this section, the contrib- uting sponsor may be required to furnish a bond to the corporation in an amount not exceeding 150 percent of his liability to insure payment of his liability under this section. The bond shall have as surety thereon a corporate surety com- pany which is an acceptable surety on Federal bonds under authority granted by the Secretary of the Treasury under sections 9304–9308 of title 31. Any such bond shall be in a form or of a type approved by the Secretary including individual bonds or schedule or blanket forms of bonds which cover a group or class. (2) If the plan is not terminated under section 1341(c) or 1342 of this title within the 5-year pe- riod commencing on the day of withdrawal, the liability is abated and any payment held in es- crow shall be refunded without interest (or the bond cancelled) in accordance with bylaws or rules prescribed by the corporation. (3) If the plan terminates under section 1341(c) or 1342 of this title within the 5-year period com- mencing on the day of withdrawal, the corpora- tion shall— (A) demand payment or realize on the bond and hold such amount in escrow for the benefit of the plan; Page 692 TITLE 29—LABOR § 1364 (B) treat any escrowed payments under this section as if they were plan assets and apply them in a manner consistent with this sub- title; and (C) refund any amount to the contributing sponsor which is not required to meet any ob- ligation of the corporation with respect to the plan. (d) Alternate appropriate procedure The provisions of this subsection apply in the case of a withdrawal described in subsection (a), and the provisions of subsections (b) and (c) shall not apply, if the corporation determines that the procedure provided for under this sub- section is consistent with the purposes of this section and section 1364 of this title and is more appropriate in the particular case. Upon a show- ing by the plan administrator of the plan that the withdrawal from the plan by one or more contributing sponsors has resulted, or will re- sult, in a significant reduction in the amount of aggregate contributions to or under the plan, the corporation may— (1) require the plan fund to be equitably allo- cated between those participants no longer working in covered service under the plan as a result of the withdrawal, and those partici- pants who remain in covered service under the plan; (2) treat that portion of the plan funds allo- cable under paragraph (1) to participants no longer in covered service as a plan terminated under section 1342 of this title; and (3) treat that portion of the plan fund allo- cable to participants remaining in covered service as a separate plan. (e) Indemnity agreement The corporation is authorized to waive the ap- plication of the provisions of subsections (b), (c), and (d) of this section whenever it determines that there is an indemnity agreement in effect among contributing sponsors under the plan which is adequate to satisfy the purposes of this section and of section 1364 of this title. (Pub. L. 93–406, title IV, § 4063, Sept. 2, 1974, 88 Stat. 1030; Pub. L. 96–364, title IV, § 403(h), Sept. 26, 1980, 94 Stat. 1301; Pub. L. 99–272, title XI, § 11016(a)(5)(A), Apr. 7, 1986, 100 Stat. 268.) Editorial Notes CODIFICATION In subsec. (c)(1), ‘‘sections 9304–9308 of title 31’’ sub- stituted for ‘‘sections 6 through 13 of title 6, United States Code’’ on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance. AMENDMENTS 1986—Pub. L. 99–272, § 11016(a)(5)(A)(vi), inserted ‘‘from single-employer plans under multiple controlled groups’’ in section catchline. Subsec. (a). Pub. L. 99–272, § 11016(a)(5)(A)(i), in intro- ductory par., substituted ‘‘single-employer plan which has two or more contributing sponsors at least two of whom are not under common control’’ for ‘‘plan under which more than one employer makes contributions (other than a multiemployer plan)’’, in par. (1), sub- stituted ‘‘withdrawal during a plan year of a substan- tial employer for such plan year’’ for ‘‘withdrawal of a substantial employer’’, in par. (2), substituted ‘‘of all persons with respect to the withdrawal of the substan- tial employer’’ for ‘‘of such employer under this sub- title with respect to such withdrawal’’, and in con- cluding provision substituted ‘‘whether there is liabil- ity resulting from the withdrawal of the substantial employer’’ for ‘‘whether such employer is liable for any amount under this subtitle with respect to the with- drawal’’ and ‘‘notify the liable persons’’ for ‘‘notify such employer’’. Subsec. (b). Pub. L. 99–272, § 11016(a)(5)(A)(ii), in intro- ductory par., substituted ‘‘any one or more contrib- uting sponsors who withdraw, during a plan year for which they constitute a substantial employer, from a single-employer plan which has two or more contrib- uting sponsors at least two of whom are not under com- mon control, shall, upon notification of such contrib- uting sponsors by the corporation as provided by sub- section (a), be liable, together with the members of their controlled groups,’’ for ‘‘an employer who with- draws from a plan to which section 1321 of this title ap- plies, during a plan year for which he was a substantial employer, and who is notified by the corporation as provided by subsection (a), shall be liable’’, ‘‘amount of liability’’ for ‘‘amount of such employer’s liability’’, and ‘‘the withdrawal referred to in subsection (a)(1)’’ for ‘‘the employer’s withdrawal’’, in par. (1), sub- stituted ‘‘such contributing sponsors’’ for ‘‘such em- ployer’’, in par. (2), substituted ‘‘all contributing spon- sors’’ for ‘‘all employers’’, and in concluding provision substituted ‘‘such liability’’ for ‘‘the liability of each such employer’’. Subsec. (c)(1). Pub. L. 99–272, § 11016(a)(5)(A)(iii)(I), substituted ‘‘of a contributing sponsor’s liability under this section, the contributing sponsor’’ for ‘‘of his li- ability under this section the employer’’. Subsec. (c)(2). Pub. L. 99–272, § 11016(a)(5)(A)(iii)(II), inserted ‘‘under section 1341(c) or 1342 of this title’’ and substituted ‘‘liability is’’ for ‘‘liability of such em- ployer is’’ and ‘‘(or the bond cancelled)’’ for ‘‘to the em- ployer (or his bond cancelled)’’. Subsec. (c)(3). Pub. L. 99–272, § 11016(a)(5)(A)(iii)(III), in introductory par., inserted ‘‘under section 1341(c) or 1342 of this title’’ and, in subpar. (C), substituted ‘‘con- tributing sponsor’’ for ‘‘employer’’. Subsec. (d). Pub. L. 99–272, § 11016(a)(5)(A)(iv), in intro- ductory par., substituted ‘‘of the plan that the with- drawal from the plan by one or more contributing spon- sors’’ for ‘‘of a plan (other than a multiemployer plan) that the withdrawal from the plan by any employer or employers’’ and struck out ‘‘by employers’’ after ‘‘con- tributions to or under the plan’’, in par. (1), substituted ‘‘the withdrawal’’ for ‘‘their employer’s withdrawal’’, and in par. (2), substituted ‘‘plan terminated under sec- tion 1342 of this title’’ for ‘‘termination’’. Subsec. (e). Pub. L. 99–272, § 11016(a)(5)(A)(v), struck out ‘‘to any employer or plan administrator’’ before ‘‘whenever it determines’’ and substituted ‘‘contrib- uting sponsors’’ for ‘‘all other employers’’. 1980—Subsecs. (a), (d). Pub. L. 96–364 inserted provi- sions excepting a multiemployer plan. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–272 effective Jan. 1, 1986, with certain exceptions, see section 11019 of Pub. L. 99–272, set out as a note under section 1341 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–364 effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title. § 1364. Liability on termination of single-em- ployer plans under multiple controlled groups (a) This section applies to all contributing sponsors of a single-employer plan which has