29 USC 1403 - Withdrawal liability payment fund

U.S Code last checked for updates: Nov 22, 2024

§ 1403.

Withdrawal liability payment fund

(a)

Establishment of or participation in fund by plan sponsors

(b)

Definitions

For purposes of this section, the term “withdrawal liability payment fund”, and the term “fund”, mean a trust which—

(1)

is established and maintained under section 501(c)(22) of title 26,

(2)

maintains agreements which cover a substantial portion of the participants who are in multiemployer plans which (under the rules of the trust instrument) are eligible to participate in the fund,

(3)

is funded by amounts paid by the plans which participate in the fund, and

(4)

is administered by a Board of Trustees, and in the administration of the fund there is equal representation of—

(A)

trustees representing employers who are obligated to contribute to the plans participating in the fund, and

(B)

trustees representing employees who are participants in plans which participate in the fund.

(c)

Payments to plan; amount, criteria, etc.

(1)

If an employer withdraws from a plan which participates in a withdrawal liability payment fund, then, to the extent provided in the trust, the fund shall pay to that plan—

(A)

the employer’s unattributable liability,

(B)

the employer’s withdrawal liability payments which would have been due but for section 1388, 1389, 1399, or 1405 of this title,1

 So in original. Probably should be followed by “and”.

(C)

the employer’s withdrawal liability payments to the extent they are uncollectible.

(2)

The fund may provide for the payment of the employer’s attributable liability if the fund—

(A)

provides for the payment of both the attributable and the unattributable liability of the employer in a single payment, and

(B)

is subrogated to all rights of the plan against the employer.

(3)

For purposes of this section, the term—

(A)

“attributable liability” means the excess, if any, determined under the provisions of a plan not inconsistent with regulations of the corporation, of—

(i)

the value of vested benefits accrued as a result of service with the employer, over

(ii)

the value of plan assets attributed to the employer, and

(B)

“unattributable liability” means the excess of withdrawal liability over attributable liability.

Such terms may be further defined, and the manner in which they shall be applied may be prescribed, by the corporation by regulation.

(4)

(A)

The trust of a fund shall be maintained for the exclusive purpose of paying—

(i)

any amount described in paragraph (1) and paragraph (2), and

(ii)

reasonable and necessary administrative expenses in connection with the establishment and operation of the trust and the processing of claims against the fund.

(B)

The amounts paid by a plan to a fund shall be deemed a reasonable expense of administering the plan under sections 1103(c)(1) and 1104(a)(1)(A)(ii) of this title, and the payments made by a fund to a participating plan shall be deemed services necessary for the operation of the plan within the meaning of section 1108(b)(2) of this title or within the meaning of section 4975(d)(2) of title 26.

(d)

Application of payments by plan

(1)

For purposes of this part—

(A)

only amounts paid by the fund to a plan under subsection (c)(1)(A) shall be credited to withdrawal liability otherwise payable by the employer, unless the plan otherwise provides, and

(B)

any amounts paid by the fund under subsection (c) to a plan shall be treated by the plan as a payment of withdrawal liability to such plan.

(2)

For purposes of applying provisions relating to the funding standard accounts (and minimum contribution requirements), amounts paid from the plan to the fund shall be applied to reduce the amount treated as contributed to the plan.

(e)

Subrogation of fund to rights of plan

The fund shall be subrogated to the rights of the plan against the employer that has withdrawn from the plan for amounts paid by a fund to a plan under—

(1)

subsection (c)(1)(A), to the extent not credited under subsection (d)(1)(A), and

(2)

subsection (c)(1)(C).

(f)

Discharge of rights of fiduciary of fund; standards applicable, etc.

(g)

Prohibition on payments from fund to plan where certain labor negotiations involve employer withdrawn or partially withdrawn from plan and continuity of labor organization representing employees continues

(h)

Purchase of insurance by employer

(i)

Promulgation of regulations for establishment and maintenance of fund

(Pub. L. 93–406, title IV, § 4223, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1241; amended Pub. L. 101–239, title VII, § 7891(a), Dec. 19, 1989, 103 Stat. 2445.)

cite as: 29 USC 1403