Special rules for plans under section 404(c) of title 26

Source Credit

(a) Amount of withdrawal liability; determinative factors
In the case of a plan described in subsection (b)—
(1) if an employer withdraws prior to a termination described in section 1341a(a)(2) of this title, the amount of withdrawal liability to be paid in any year by such employer shall be an amount equal to the greater of—
(A) the amount determined under section 1399(c)(1)(C)(i) of this title, or
(B) the product of—
(i) the number of contribution base units for which the employer would have been required to make contributions for the prior plan year if the employer had not withdrawn, multiplied by
(ii) the contribution rate for the plan year which would be required to meet the amortization schedules contained in section 1423(d)(3)(B)(ii) 1 of this title (determined without regard to any limitation on such rate otherwise provided by this subchapter)
except that an employer shall not be required to pay an amount in excess of the withdrawal liability computed with interest; and
(2) the withdrawal liability of an employer who withdraws after December 31, 1983, as a result of a termination described in section 1341a(a)(2) of this title which is agreed to by the labor organization that appoints the employee representative on the joint board of trustees which sponsors the plan, shall be determined under subsection (c) if—
(A) as a result of prior employer withdrawals in any plan year commencing after January 1, 1980, the number of contribution base units is reduced to less than 67 percent of the average number of such units for the calendar years 1974 through 1979; and
(B) at least 50 percent of the withdrawal liability attributable to the first 33 percent decline described in subparagraph (A) has been determined by the plan sponsor to be uncollectible within the meaning of regulations of the corporation of general applicability; and
(C) the rate of employer contributions under the plan for each plan year following the first plan year beginning after September 26, 1980 and preceding the termination date equals or exceeds the rate described in section 1423(d)(3) 1 of this title.
(b) Covered plans
A plan is described in this subsection if—
(1) it is a plan described in section 404(c) of title 26 or a continuation thereof; and
(2) participation in the plan is substantially limited to individuals who retired prior to January 1, 1976.
(c) Amount of liability of employer; "a year of signatory service" defined
(1) The amount of an employer's liability under this paragraph is the product of—
(A) the amount of the employer's withdrawal liability determined without regard to this section, and
(B) the greater of 90 percent, or a fraction—
(i) the numerator of which is an amount equal to the portion of the plan's unfunded vested benefits that is attributable to plan participants who have a total of 10 or more years of signatory service, and
(ii) the denominator of which is an amount equal to the total unfunded vested benefits of the plan.
(2) For purposes of paragraph (1), the term "a year of signatory service" means a year during any portion of which a participant was employed for an employer who was obligated to contribute in that year, or who was subsequently obligated to contribute.

History

(Pub. L. 93–406, title IV, §4216, as added Pub. L. 96–364, title I, §104(2), Sept. 26, 1980, 94 Stat. 1234.)

Editorial Notes

Editorial Notes

References in Text
Section 1423 of this title, referred to in subsec. (a)(1)(B)(ii), (2)(C), was repealed by Pub. L. 113–235, div. O, title I, §108(a)(1), Dec. 16, 2014, 128 Stat. 2786.