Sec. 231. Withdrawal liability reform
1,143 words·~5 min read·
/bill/116/s/5045/is/section-231A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 4201(b)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1381(b)(1) ) is amended to read as follows: The withdrawal liability of an employer to a plan is the applicable amount determined under subparagraph (B), adjusted— first, in the case of a partial withdrawal, in accordance with section 4206; second, by any de minimis reduction applicable under section 4209; and third, in accordance with section 4225. The applicable amount determined under this subparagraph is the lesser of— the amount determined under section 4211 to be the allocable amount of unfunded vested benefits; or the present value of a series of 20 equal annual payments in the amount determined with respect to the employer under section 4219(c)(1)(C).
In the case of an employer withdrawing from a multiemployer plan described in subparagraph (C), clause
(i)shall be applied by substituting 25 for 20 . A multiemployer plan is described in this subparagraph if the plan— is certified to be in declining status (or, for plan years prior to 2021, in critical or declining status) for the plan year in which the employer’s withdrawal occurs; or terminates as described in section 4041A(a) or 4042. Clause (i)(II) shall apply to each employer who withdraws from a plan during a period of 3 consecutive plan years that includes the withdrawal of every employer from the plan, or the cessation of the obligation of all employers to contribute under the plan, as described in section 4041A(a)(2). For purposes of this clause, withdrawal by an employer from a plan, during a period of 3 consecutive plan years within which substantially all the employers who have an obligation to contribute under the plan withdraw, shall be presumed to be a withdrawal pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence. For purposes of subparagraph (B)(ii), the present value of the annual payments shall be determined based on the assumptions used for the most recent actuarial valuation for the plan used to determine unfunded past service liability for funding purposes. . Section 4209 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1389 ) is amended— in subsection (a)— in the matter preceding paragraph (1), by striking unfunded vested benefits allocable under section 4211 to and inserting applicable amount determined under section 4201(b)(1)(B) with respect to ; in paragraph (2), by striking $50,000 and inserting $100,000 ; and in the flush text following paragraph (2)— by striking the unfunded vested benefits and inserting such applicable amount ; and by striking $100,000 and inserting $200,000 ; in subsection (b)— in the matter preceding paragraph (1), by striking amount determined under section 4211 and inserting applicable amount determined under section 4201(b)(1)(B) with respect to an employer ; in paragraph (2)(B), by striking $100,000 and inserting $250,000 ; and in the flush text at the end— by striking the amount determined under section 4211 for and inserting such applicable amount with respect to ; and by striking $150,000 and inserting $500,000 . Section 4219(c)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1399(c)(1) ) is amended— by striking so much of paragraph
(1)as precedes subparagraph
(C)and inserting: Subject to subparagraph (B), an employer shall pay its liability determined under section 4201(b)(1) in level annual payments determined under subparagraph
(C)over the applicable period of years determined under clause (ii), calculated as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs and as if each subsequent payment were made on the first day of each subsequent plan year. Actual payment shall commence in accordance with paragraph (2). For purposes of clause (i), if the applicable amount used under section 4201(b)(1)(A) is the amount determined— under section 4201(b)(1)(B)(i), the applicable period of years is the period of years necessary to amortize such amount in level annual payments determined under subparagraph (C), or under section 4201(b)(1)(B)(ii), the applicable period of years is 20 years (25 years if the plan is described in section 4201(b)(1)(C)). For purposes of clause (ii)(I), the determination of the amortization period described in clause
(i)shall be based on the assumptions used for the most recent actuarial valuation for the plan to determine unfunded past service liability for funding purposes. If any adjustment is required to the withdrawal liability amount by reason of clause (i), (ii), or
(iii)of section 4210(b)(1)(A), modifications shall be made under subparagraph
(A)to reflect such adjustments in accordance with this subparagraph and in such manner as the corporation shall provide. In the case of a partial withdrawal described in section 4205(a), the amount of each annual payment shall be the product of— the amount determined under subparagraph
(C)(determined without regard to this subparagraph), multiplied by the fraction determined under section 4206(a)(2). In the case of a de minimis reduction under section 4209, the period of years described in subparagraph (A)(ii)(I) shall be adjusted so that the withdrawal liability amount, as reduced under such section, is amortized in level annual payments determined under subparagraph (C). ; in subparagraph (C)— in clause (i)(I)— by striking 3 and inserting 5 ; and by striking 10 and inserting 20 ; and by striking clause (iii); and by striking subparagraphs
(D)and
(E)and inserting the following: In the case of a subsequent partial withdrawal or a complete withdrawal that was preceded by one or more partial withdrawals, the amount of the annual payment with respect to the subsequent partial withdrawal or complete withdrawal shall be reduced by the amounts of the payments determined under subparagraph (B)(ii) with respect to each of the preceding partial withdrawals. The amount of any reductions described in clause
(i)shall be phased out consistent with the method and period of time being used by the plan to allocate unfunded vested benefits under section 4211. The corporation may prescribe regulations as may be necessary to provide for proper adjustments in the reduction in the payment amount under clauses
(i)and (ii). . Section 4211(c)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1391(c)(1) ) is amended— by inserting
(A)after (c)(1) , by striking
(b)or (d). A plan and inserting “(b) or (d). A multiemployer plan , and by striking , to the extent provided and all that follows and inserting “to provide— that the amount of the unfunded vested benefits allocable to an employer that withdraws from the plan is an amount determined under paragraph
(5)of this subsection, rather than under subsection (b), or to the extent provided in regulations prescribed by the corporation, that the amount of the unfunded vested benefits allocable to an employer not described in section 4203(b)(1)(A) shall be determined in a manner different from that provided in subsection (b). .
Connectionstraces to 4
Citation graph
cites case law
Cites 4Cited by 0 across 0 sources