§ 1404 TITLE 29—LABOR Page 562

(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) of this section 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) of this section 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the plan against the employer that has withdrawn from the plan for amounts paid by a fund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) of this section, to the

extent not credited under subsection (d)(1)(A)

of this section, and

(2) subsection (c)(1)(C) of this section.

(f) Discharge of rights of fiduciary of fund; standards applicable, etc.

Notwithstanding any other provision of this

chapter, a fiduciary of the fund shall discharge

the fiduciary’s duties with respect to the fund in

accordance with the standards for fiduciaries

prescribed by this chapter (to the extent not inconsistent with the purposes of this section),

and in accordance with the documents and instruments governing the fund insofar as such

documents and instruments are consistent with

the provisions of this chapter (to the extent not

inconsistent with the purposes of this section).

The provisions of the preceding sentence shall

supersede any and all State laws relating to fiduciaries insofar as they may now or hereafter

relate to a fund to which this section applies.

(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where certain labor negotiations involve employer withdrawn or partially withdrawn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

No payments shall be made from a fund to a

plan on the occasion of a withdrawal or partial

withdrawal of an employer from such plan if the

employees representing the withdrawn contribution base units continue, after such withdrawal,

to be represented under section 159 of this title

(or other applicable labor laws) in negotiations

with such employer by the labor organization

which represented such employees immediately

preceding such withdrawal.

(h) Purchase of insurance by employer

Nothing in this section shall be construed to

prohibit the purchase of insurance by an employer from any other person, to limit the circumstances under which such insurance would

be payable, or to limit in any way the terms and

conditions of such insurance.

(i) Promulgation of regulations for establishment

and maintenance of fund

The corporation may provide by regulation

rules not inconsistent with this section governing the establishment and maintenance of funds,

but only to the extent necessary to carry out

the purposes of this part (other than section 1402

of this title).

(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.)

REFERENCES IN TEXT

This chapter, referred to in subsec. (f), was in the

original ‘‘this Act’’, meaning Pub. L. 93–406, known as

the Employee Retirement Income Security Act of 1974.

Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of

this Act to the Code, see Short Title note set out under

section 1001 of this title and Tables.

AMENDMENTS

1989—Subsecs. (b)(1), (c)(4)(B). Pub. L. 101–239 substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal

Revenue Code of 1954’’, which for purposes of codification was translated as ‘‘title 26’’ thus requiring no

change in text.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by Pub. L. 101–239 effective, except as

otherwise provided, as if included in the provision of

the Tax Reform Act of 1986, Pub. L. 99–514, to which

such amendment relates, see section 7891(f) of Pub. L.

101–239, set out as a note under section 1002 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1002, 1082 of this

title; title 26 sections 194A, 412, 501, 4975.

§ 1404. Alternative method of withdrawal liability

payments

A multiemployer plan may adopt rules providing for other terms and conditions for the satisfaction of an employer’s withdrawal liability if

such rules are consistent with this chapter and

with such regulations as may be prescribed by

the corporation.

(Pub. L. 93–406, title IV, §4224, as added Pub. L.

96–364, title I, §104(2), Sept. 26, 1980, 94 Stat.

1242.)

REFERENCES IN TEXT

This chapter, referred to in text, was in the original

‘‘this Act’’, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles

I, III, and IV of such Act are classified principally to

this chapter. For complete classification of this Act to

the Code, see Short Title note set out under section

1001 of this title and Tables.

§ 1405. Limitation on withdrawal liability

(a) Unfunded vested benefits allocable to employer in bona fide sale of assets of employer

in arms-length transaction to unrelated

party; maximum amount; determinative factors

(1) In the case of bona fide sale of all or substantially all of the employer’s assets in an

arm’s-length transaction to an unrelated party

(within the meaning of section 1384(d) of this

title), the unfunded vested benefits allocable to

an employer (after the application of all sections of this part having a lower number designation than this section), other than an employer undergoing reorganization under title 11