| | 82-21 |
| | July 27, 1982 |
| | REFERENCE: |
| | 4203 Complete Withdrawal |
| | 4218(2) Withdrawal - Suspension of Contributions |
| | OPINION: |
| | This responds to your inquiry concerning whether certain types of labor disputes involving an employer's employees would |
| | constitute a withdrawal from a multiemployer plan in which the employer participates under the Employee Retirement |
| | Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("ERISA"). Your |
| | letter cites three types of labor disputes: a strike or a lockout as a result of a strike against another employer; an |
| | "offensive" lockout by an employer after an impasse; and an illegal strike by the union with employees being discharged or |
| | Under ERISA the plan sponsor has the responsibility for determining whether any particular action constitutes a withdrawal |
| | from a multiemployer plan and the amount by any liability arising therefrom. ERISA further provides that any dispute |
| | between a plan sponsor and an employer on these issues is to be resolved first through arbitration and then, if necessary, |
| | in the courts. Given this scheme for enforcement of ERISA, it would be inappropriate for the PBGC to give its opinion on |
| | the application of the law to a particular transaction. The PBGC will, however, continue its practice of issuing general |
| | Under ERISA section 4203(a) a complete withdrawal occurs when an employer: |
| | (1) permanently ceases to have an obligation to contribute under the plan, or |
| | (2) permanently ceases all covered operations under the plan. [Emphasis added.] |
| | On the other hand, ERISA section 4218 provides in relevant part: |
| | Nothwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan |
| | solely because -- |
| | (2) an employer suspends contributions under the plan during a labor dispute involving the employees. |
| | Section 4203 and 4218 indicate that the cessation with respect to the plan must be permanent for a withdrawal to occur. |
| | In explaining sections 4218, one of the sponsors of the Multiemployer Act pointed out -- |
| | ". . . if the facts and circumstances of a particular situation indicate that co tributions have ceased permanently -- for |
| | example, all employees covered under the plan have been permanently replaced or the facility has been closed -- the fact |
| | that the cessation of any contribution obligation was precipitated by a labor dispute does not mean that no withdrawal has |
| | taken place." [126 Cong. Rec. H7898, Aug. 26, 1980; remarks of Rep. Thompson.] |
| | I hope that this letter is of assistance to you. |
| | Henry Rose |
| | General Counsel |