Opinion letters database

Discussion of whether withdrawal occurs when construction industry employer ceases to contribute after CBA expires but continues to perform work through subcontractors.

No withdrawal occurs when corporation X organizes a wholly-owned subsidiary corporation Y and transfers all the assets of one of its divisions; the sale by X of all stock in Y is not a withdrawal as long as Y continues contribute; if a principal purpose of any transaction is to evade or avoid liability, under § 4212(c) liability shall be determined and collected.

PBGC is returning Notice of Intent to Terminate because Plan's annuity bid does not provide for annuity purchase for participants other than retirees and terminated vested employees. To terminate the Plan, there must be vesting and annuitization of the accrued benefits of all participants who were in the Plan; spinning off the assets and liabilities of active participants to a new plan does not negate this requirement.

A transaction involving the allocation of all assets to benefits in the six categories of section 4044, with no assets remaining for distribution, can be compliant with title IV and if the transaction also includes a distribution to a profit sharing plan, it is not required to be offered as an annuity or a lump sum.

Discussion of purchase of assets from a bankrupt employer that contributed to a multiemployer plan; as buyer will not provide a bond or escrow account nor provide secondary liability for seller, the transaction does not meet the requirements for application of § 4204.

Benefits which became vested solely on account of termination or partial termination are not guaranteed.

Whether scheduled payments to a substantial owner on an on-going basis would require repeated reportable event filings.

A particular fund is not a single pension plan but an aggregate of separate plans.

Spinoffs of plan assets and liabilities do not constitute terminations because the former Plans will still be ongoing despite covering fewer employees. Regarding premiums, they are calculated with respect to each plan participant counted as of the last day of the last plan year prior to the year for which the premium payment is being made.

Plan sponsor is responsible for determining the meaning of "substantially all" in § 4209(c)(1) and (2); § § 4219 and 4221 provide a procedure for resolving a dispute.

Complete reversion of excess plan assets to employer upon termination is precluded because employee contributions were mandatory within the meaning of § 4044(b)(5) and thus, the excess plan assets are subject to the distribution rules of § 4044(d)(2) and 29 C.F.R. Part 2618.

Discussion of scope of § 4203(b)(1) and exemption for building and construction industry.

Discussion of whether a partial withdrawal occurs under § 4205(b)(2)(A)(i), when an employer which operates 2 terminals in a metropolitan area, each under a separate collective bargaining agreement requiring contributions to the same multiemployer plan, closes one but continues to perform the work of the closed terminal through the remaining metropolitan terminal and through other outlying terminals of the employer.

Inquiry concerning opinion letter 82-34, and presumptive method of allocating withdrawal liability under § 4211. UVB is zero anytime a plan's assets exceed vested liabilities. A legal opinion issued by General Counsel is authoritative.

Discussion of application of § 4203 and 4218; there is no withdrawal where there is a substantial identity between the predecessor and the successor employer.

Plans may adopt reasonable rules to waive or reduce withdrawal liability when a withdrawn employer reenters the plan. Such rules must include restrictions and conditions contained in PBGC regulations under § 4207.

Plan maintained by government contractor is not excluded from coverage under § 4021(b)(2) because contractor is a private entity, not a government instrumentality.

PBGC affirms its initial determination that Notice of Intent to Terminate filed by the Company was valid because the Company is the plan administrator and thus authorized under ERISA § 4041(a) to file such a notice. Documents presented to PBGC to challenge the initial determination do not contradict or supersede the express provision in the plan document that the Company is the plan administrator.

Discussion of application of § 4203(b); nothing in Title IV prohibits the adoption of an agreement by the bargaining parties that § 4203(b) applies to a "construction employer."

PBGC will not reject properly completed Notices of Intent to Terminate for two plans that have sufficient assets to provide all benefits under their terms.

Section 4218 provides that a withdrawal doesn't occur solely because of a change in corporate structure described in § 4062(d) as long as there is no interruption of employer contributions or obligations under plan.

Discussion of calculation of withdrawal liability for a partial withdrawal where there has been a sale of assets under § 4204. Discussion of calculations under § 4211 if there is a later complete withdrawal and for partial withdrawal under § 4205.

PBGC recognizes credited service regardless of whether it is earned as a result of employment or as a result of a layoff provision. However, PBGC cannot recognize credited service for periods after the date of plan termination.

A purchaser of assets that fails to provide security under § 4204(a)(1)(B) in the first plan year after the sale for the entire five year period provided in § 4204(a)(1)(B) will not, by itself, result in non-compliance. There is compliance with § 4204(a)(1)(B) as long as there is an appropriate amount of security in place during the five year period.

Discussion of a Security Agreement executed by PBGC and plan sponsor which secures repayment by plan of the financial assistance loans made by PBGC to plan pursuant to § 4261(c). On the basis of described Agreement and facts reviewed, Plan sponsor does not need to deliver to PBGC the employer contributions paid to the plan, nor any other cash, checks, drafts, notes or other instruments or writings which the Plan may receive in payment of collateral or which constitute evidence of collateral under Agreement.