§ 1389 TITLE 29—LABOR Page 550

1So in original. Probably should be ‘‘title),’’.

2See References in Text note below.

(1) for any 2 consecutive plan years following

a partial withdrawal under section 1385(a)(1) of

this title, the number of contribution base

units with respect to which the employer has

an obligation to contribute for each such year

exceeds 30 percent of the total number of contribution base units with respect to which the

employer had an obligation to contribute for

the high base year (within the meaning of section 1385(b)(1)(B)(ii) of this title,1 and

(2) the total number of contribution base

units with respect to which all employers

under the plan have obligations to contribute

in each of such 2 consecutive years is not less

than 90 percent of the total number of contribution base units for which all employers

had obligations to contribute in the partial

withdrawal plan year;

then, the employer shall have no obligation to

make payments with respect to such partial

withdrawal (other than delinquent payments)

for plan years beginning after the second such

consecutive plan year.

(c) Pro rata reduction of amount of partial withdrawal liability payment of employer for

plan year following partial withdrawal year

In any case in which, in any plan year following a partial withdrawal under section 1385(a)(1)

of this title, the number of contribution base

units with respect to which the employer has an

obligation to contribute for such year equals or

exceeds 110 percent (or such other percentage as

the plan may provide by amendment and which

is not prohibited under regulations prescribed

by the corporation) of the number of contribution base units with respect to which the employer had an obligation to contribute in the

partial withdrawal year, then the amount of the

employer’s partial withdrawal liability payment

for such year shall be reduced pro rata, in accordance with regulations prescribed by the corporation.

(d) Building and construction industry; entertainment industry

(1) An employer to whom section 1383(b) 2 of

this title (relating to the building and construction industry) applies is liable for a partial withdrawal only if the employer’s obligation to contribute under the plan is continued for no more

than an insubstantial portion of its work in the

craft and area jurisdiction of the collective bargaining agreement of the type for which contributions are required.

(2) An employer to whom section 1383(c) 2 of

this title (relating to the entertainment industry) applies shall have no liability for a partial

withdrawal except under the conditions and to

the extent prescribed by the corporation by regulation.

(e) Reduction or elimination of partial withdrawal liability under any conditions; criteria; procedures applicable

(1) The corporation may prescribe regulations

providing for the reduction or elimination of

partial withdrawal liability under any conditions with respect to which the corporation determines that reduction or elimination of partial withdrawal liability is consistent with the

purposes of this chapter.

(2) Under such regulations, reduction of withdrawal liability shall be provided only with respect to subsequent changes in the employer’s

contributions for the same operations, or under

the same collective bargaining agreement, that

gave rise to the partial withdrawal, and changes

in the employer’s contribution base units with

respect to other facilities or other collective

bargaining agreements shall not be taken into

account.

(3) The corporation shall prescribe by regulation a procedure by which a plan may by amendment adopt rules for the reduction or elimination of partial withdrawal liability under any

other conditions, subject to the approval of the

corporation based on its determination that

adoption of such rules by the plan is consistent

with the purposes of this chapter.

(Pub. L. 93–406, title IV, §4208, as added Pub. L.

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

1224.)

REFERENCES IN TEXT

‘‘Section 1383(b) of this title’’ and ‘‘section 1383(c) of

this title’’, referred to in subsec. (d), were in the original ‘‘section 4202(b)’’ and ‘‘section 4202(c)’’, respectively, meaning section 4202(b) and section 4202(c) of

the Employee Retirement Income Security Act of 1974

and were editorially translated as the probable intent

of Congress in view of section 4202 of the Employee Retirement Income Security Act of 1974, which is classified to section 1382 of this title, not having subsection

designations and the subject matter of section 4203 of

the Act which is classified to section 1383 of this title.

This chapter, referred to in subsec. (e)(1), (3), 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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1385, 1401, 1403

of this title.

§ 1389. De minimis rule

(a) Reduction of unfunded vested benefits allocable to employer withdrawn from plan

Except in the case of a plan amended under

subsection (b) of this section, the amount of the

unfunded vested benefits allocable under section

1391 of this title to an employer who withdraws

from a plan shall be reduced by the smaller of—

(1) 3

⁄4 of 1 percent of the plan’s unfunded

vested obligations (determined as of the end of

the plan year ending before the date of withdrawal), or

(2) $50,000,

reduced by the amount, if any, by which the unfunded vested benefits allowable to the employer, determined without regard to this subsection, exceeds $100,000.

(b) Amendment of plan for reduction of amount

of unfunded vested benefits allocable to employer withdrawn from plan

A plan may be amended to provide for the reduction of the amount determined under section
Page 551 TITLE 29—LABOR § 1391

1391 of this title by not more than the greater

of—

(1) the amount determined under subsection

(a) of this section, or

(2) the lesser of—

(A) the amount determined under subsection (a)(1) of this section, or

(B) $100,000,

reduced by the amount, if any, by which the

amount determined under section 1391 of this

title for the employer, determined without regard to this subsection, exceeds $150,000.

(c) Nonapplicability

This section does not apply—

(1) to an employer who withdraws in a plan

year in which substantially all employers

withdraw from the plan, or

(2) in any case in which substantially all employers withdraw from the plan during a period of one or more plan years pursuant to an

agreement or arrangement to withdraw, to an

employer who withdraws pursuant to such

agreement or arrangement.

(d) Presumption of employer withdrawal from

plan pursuant to agreement or arrangement

applicable in action or proceeding to determine or collect withdrawal liability

In any action or proceeding to determine or

collect withdrawal liability, if substantially all

employers have withdrawn from a plan within a

period of 3 plan years, an employer who has

withdrawn from such plan during such period

shall be presumed to have withdrawn from the

plan pursuant to an agreement or arrangement,

unless the employer proves otherwise by a preponderance of the evidence.

(Pub. L. 93–406, title IV, §4209, as added Pub. L.

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

1225.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1381, 1386, 1391,

1394, 1399, 1401, 1403 of this title.

§ 1390. Nonapplicability of withdrawal liability

for certain temporary contribution obligation periods; exception

(a) An employer who withdraws from a plan in

complete or partial withdrawal is not liable to

the plan if the employer—

(1) first had an obligation to contribute to

the plan after September 26, 1980,

(2) had an obligation to contribute to the

plan for no more than the lesser of—

(A) 6 consecutive plan years preceding the

date on which the employer withdraws, or

(B) the number of years required for vesting under the plan,

(3) was required to make contributions to

the plan for each such plan year in an amount

equal to less than 2 percent of the sum of all

employer contributions made to the plan for

each such year, and

(4) has never avoided withdrawal liability

because of the application of this section with

respect to the plan.

(b) Subsection (a) of this section shall apply to

an employer with respect to a plan only if—

(1) the plan is not a plan which primarily

covers employees in the building and construction industry;

(2) the plan is amended to provide that subsection (a) of this section applies;

(3) the plan provides, or is amended to provide, that the reduction under section

411(a)(3)(E) of title 26 applies with respect to

the employees of the employer; and

(4) the ratio of the assets of the plan for the

plan year preceding the first plan year for

which the employer was required to contribute

to the plan to the benefit payments made during that plan year was at least 8 to 1.

(Pub. L. 93–406, title IV, §4210, as added Pub. L.

96–364, title I, §104(2), Sept. 26, 1980, 94 Stat. 1226;

amended Pub. L. 101–239, title VII, §7891(a)(1),

Dec. 19, 1989, 103 Stat. 2445.)

AMENDMENTS

1989—Subsec. (b)(3). 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 section 1401 of this title.

§ 1391. Methods for computing withdrawal liability

(a) Determination of amount of unfunded vested

benefits allocable to employer withdrawn

from plan

The amount of the unfunded vested benefits

allocable to an employer that withdraws from a

plan shall be determined in accordance with subsection (b), (c), or (d) of this section.

(b) Factors determining computation of amount

of unfunded vested benefits allocable to employer withdrawn from plan

(1) Except as provided in subsections (c) and

(d) of this section, the amount of unfunded vested benefits allocable to an employer that withdraws is the sum of—

(A) the employer’s proportional share of the

unamortized amount of the change in the

plan’s unfunded vested benefits for plan years

ending after September 25, 1980, as determined

under paragraph (2),

(B) the employer’s proportional share, if

any, of the unamortized amount of the plan’s

unfunded vested benefits at the end of the plan

year ending before September 26, 1980, as determined under paragraph (3); and

(C) the employer’s proportional share of the

unamortized amounts of the reallocated unfunded vested benefits (if any) as determined

under paragraph (4).

If the sum of the amounts determined with respect to an employer under paragraphs (2), (3),

and (4) is negative, the unfunded vested benefits

allocable to the employer shall be zero.