§ 1415 TITLE 29—LABOR Page 566

§ 1415. Transfers pursuant to change in bargaining representative

(a) Authority to transfer from old plan to new

plan pursuant to employee participation in

another multiemployer plan after certified

change of representative

In any case in which an employer has completely or partially withdrawn from a multiemployer plan (hereafter in this section referred to

as the ‘‘old plan’’) as a result of a certified

change of collective bargaining representative

occurring after September 25, 1980, if participants of the old plan who are employed by the

employer will, as a result of that change, participate in another multiemployer plan (hereafter in this section referred to as the ‘‘new

plan’’), the old plan shall transfer assets and liabilities to the new plan in accordance with this

section.

(b) Notification by employer of plan sponsor of

old plan; notification by plan sponsor of old

plan of employer and plan sponsor of new

plan; appeal by new plan to prevent transfer;

further proceedings

(1) The employer shall notify the plan sponsor

of the old plan of a change in multiemployer

plan participation described in subsection (a) of

this section no later than 30 days after the employer determines that the change will occur.

(2) The plan sponsor of the old plan shall—

(A) notify the employer of—

(i) the amount of the employer’s withdrawal liability determined under part 1 of

this subtitle with respect to the withdrawal,

(ii) the old plan’s intent to transfer to the

new plan the nonforfeitable benefits of the

employees who are no longer working in covered service under the old plan as a result of

the change of bargaining representative, and

(iii) the amount of assets and liabilities

which are to be transferred to the new plan,

and

(B) notify the plan sponsor of the new plan

of the benefits, assets, and liabilities which

will be transferred to the new plan.

(3) Within 60 days after receipt of the notice

described in paragraph (2)(B), the new plan may

file an appeal with the corporation to prevent

the transfer. The transfer shall not be made if

the corporation determines that the new plan

would suffer substantial financial harm as a result of the transfer. Upon notification described

in paragraph (2), if—

(A) the employer fails to object to the transfer within 60 days after receipt of the notice

described in paragraph (2)(A), or

(B) the new plan either—

(i) fails to file such an appeal, or

(ii) the corporation, pursuant to such an

appeal, fails to find that the new plan would

suffer substantial financial harm as a result

of the transfer described in the notice under

paragraph (2)(B) within 180 days after the

date on which the appeal is filed,

then the plan sponsor of the old plan shall transfer the appropriate amount of assets and liabilities to the new plan.

(c) Reduction of amount of withdrawal liability

of employer upon transfer of appropriate

amount of assets and liabilities by plan sponsor of old plan to new plan

If the plan sponsor of the old plan transfers

the appropriate amount of assets and liabilities

under this section to the new plan, then the

amount of the employer’s withdrawal liability

(as determined under section 1381(b) of this title

without regard to such transfer and this section)

with respect to the old plan shall be reduced by

the amount by which—

(1) the value of the unfunded vested benefits

allocable to the employer which were transferred by the plan sponsor of the old plan to

the new plan, exceeds

(2) the value of the assets transferred.

(d) Escrow payments by employer upon complete

or partial withdrawal and prior to transfer

In any case in which there is a complete or

partial withdrawal described in subsection (a) of

this section, if—

(1) the new plan files an appeal with the corporation under subsection (b)(3) of this section, and

(2) the employer is required by section 1399

of this title to begin making payments of

withdrawal liability before the earlier of—

(A) the date on which the corporation finds

that the new plan would not suffer substantial financial harm as a result of the transfer, or

(B) the last day of the 180-day period beginning on the date on which the new plan

files its appeal,

then the employer shall make such payments

into an escrow held by a bank or similar financial institution satisfactory to the old plan. If

the transfer is made, the amounts paid into the

escrow shall be returned to the employer. If the

transfer is not made, the amounts paid into the

escrow shall be paid to the old plan and credited

against the employer’s withdrawal liability.

(e) Prohibition on transfer of assets to new plan

by plan sponsor of old plan; exemptions

(1) Notwithstanding subsection (b) of this section, the plan sponsor shall not transfer any assets to the new plan if—

(A) the old plan is in reorganization (within

the meaning of section 1421(a) of this title), or

(B) the transfer of assets would cause the old

plan to go into reorganization (within the

meaning of section 1421(a) of this title).

(2) In any case in which a transfer of assets

from the old plan to the new plan is prohibited

by paragraph (1), the plan sponsor of the old

plan shall transfer—

(A) all nonforfeitable benefits described in

subsection (b)(2) of this section, if the value of

such benefits does not exceed the withdrawal

liability of the employer with respect to such

withdrawal, or

(B) such nonforfeitable benefits having a

value equal to the withdrawal liability of the

employer, if the value of such benefits exceeds

the withdrawal liability of the employer.
Page 567 TITLE 29—LABOR § 1421

(f) Agreement between plan sponsors of old plan

and new plan to transfer in compliance with

other statutory provisions; reduction of withdrawal liability of employer from old plan;

amount of withdrawal liability of employer

to new plan

(1) Notwithstanding subsections (b) and (e) of

this section, the plan sponsors of the old plan

and the new plan may agree to a transfer of assets and liabilities that complies with sections

1411 and 1414 of this title, rather than this section, except that the employer’s liability with

respect to the withdrawal from the old plan

shall be reduced under subsection (c) of this section as if assets and liabilities had been transferred in accordance with this section.

(2) If the employer withdraws from the new

plan within 240 months after the effective date

of a transfer of assets and liabilities described in

this section, the amount of the employer’s withdrawal liability to the new plan shall be the

greater of—

(A) the employer’s withdrawal liability determined under part 1 of this subtitle with respect to the new plan, or

(B) the amount by which the employer’s

withdrawal liability to the old plan was reduced under subsection (c) of this section, reduced by 5 percent for each 12-month period

following the effective date of the transfer and

ending before the date of the withdrawal from

the new plan.

(g) Definitions

For purposes of this section—

(1) ‘‘appropriate amount of assets’’ means

the amount by which the value of the nonforfeitable benefits to be transferred exceeds

the amount of the employer’s withdrawal liability to the old plan (determined under part

1 of this subtitle without regard to section

1391(e) of this title), and

(2) ‘‘certified change of collective bargaining

representative’’ means a change of collective

bargaining representative certified under the

Labor-Management Relations Act, 1947 [29

U.S.C. 141 et seq.], or the Railway Labor Act

[45 U.S.C. 151 et seq.].

(Pub. L. 93–406, title IV, §4235, as added Pub. L.

96–364, title I, §104(2), Sept. 26, 1980, 94 Stat. 1247;

amended Pub. L. 98–369, div. A, title V,

§558(b)(1)(A), July 18, 1984, 98 Stat. 899.)

REFERENCES IN TEXT

The Labor-Management Relations Act, 1947, referred

to in subsec. (g)(2), is act June 23, 1947, ch. 120, 61 Stat.

136, as amended, which is classified principally to chapter 7 (§141 et seq.) of this title. For complete classification of this Act to the Code, see section 141 of this title

and Tables.

The Railway Labor Act, referred to in subsec. (g)(2),

is act May 20, 1926, ch. 347, 44 Stat. 577, as amended,

which is classified principally to chapter 8 (§151 et seq.)

of Title 45, Railroads. For complete classification of

this Act to the Code, see section 151 of Title 45 and

Tables.

AMENDMENTS

1984—Subsec. (a). Pub. L. 98–369 substituted ‘‘September 25, 1980’’ for ‘‘April 28, 1980’’.

EFFECTIVE DATE

Section effective Sept. 26, 1980, see section 1461(e)(4)

of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1461 of this title.

PART 3—REORGANIZATION; MINIMUM CONTRIBUTION

REQUIREMENT FOR MULTIEMPLOYER PLANS

§ 1421. Reorganization status

(a) Reorganization index of plan for plan year

greater than zero

A multiemployer plan is in reorganization for

a plan year if the plan’s reorganization index for

that year is greater than zero.

(b) Determination of reorganization index of

plan for plan year; applicable factors, definitions, etc.

(1) A plan’s reorganization index for any plan

year is the excess of—

(A) the vested benefits charge for such year,

over

(B) the net charge to the funding standard

account for such year.

(2) For purposes of this part, the net charge to

the funding standard account for any plan year

is the excess (if any) of—

(A) the charges to the funding standard account for such year under section 412(b)(2) of

title 26, over

(B) the credits to the funding standard account under section 412(b)(3)(B) of title 26.

(3) For purposes of this part, the vested benefits charge for any plan year is the amount

which would be necessary to amortize the plan’s

unfunded vested benefits as of the end of the

base plan year in equal annual installments—

(A) over 10 years, to the extent such benefits

are attributable to persons in pay status, and

(B) over 25 years, to the extent such benefits

are attributable to other participants.

(4)(A) The vested benefits charge for a plan

year shall be based on an actuarial valuation of

the plan as of the end of the base plan year, adjusted to reflect—

(i) any—

(I) decrease of 5 percent or more in the

value of plan assets, or increase of 5 percent

or more in the number of persons in pay

status, during the period beginning on the

first day of the plan year following the base

plan year and ending on the adjustment

date, or

(II) at the election of the plan sponsor, actuarial valuation of the plan as of the adjustment date or any later date not later

than the last day of the plan year for which

the determination is being made,

(ii) any change in benefits under the plan

which is not otherwise taken into account

under this subparagraph and which is pursuant

to any amendment—

(I) adopted before the end of the plan year

for which the determination is being made,

and

(II) effective after the end of the base plan

year and on or before the end of the plan

year referred to in subclause (I), and

(iii) any other event (including an event described in subparagraph (B)(i)(I)) which, as de-