Page 549 TITLE 29—LABOR § 1388

(i) except as provided in clause (ii), the 5

plan years immediately preceding the plan

year in which the partial withdrawal occurs, or

(ii) in the case of a partial withdrawal

described in section 1385(a)(1) of this title

(relating to 70-percent contribution decline), the 5 plan years immediately preceding the beginning of the 3-year testing

period.

(b)(1) In the case of an employer that has withdrawal liability for a partial withdrawal from a

plan, any withdrawal liability of that employer

for a partial or complete withdrawal from that

plan in a subsequent plan year shall be reduced

by the amount of any partial withdrawal liability (reduced by any abatement or reduction of

such liability) of the employer with respect to

the plan for a previous plan year.

(2) The corporation shall prescribe such regulations as may be necessary to provide for proper adjustments in the reduction provided by

paragraph (1) for—

(A) changes in unfunded vested benefits arising after the close of the prior year for which

partial withdrawal liability was determined,

(B) changes in contribution base units occurring after the close of the prior year for which

partial withdrawal liability was determined,

and

(C) any other factors for which it determines

adjustment to be appropriate,

so that the liability for any complete or partial

withdrawal in any subsequent year (after the application of the reduction) properly reflects the

employer’s share of liability with respect to the

plan.

(Pub. L. 93–406, title IV, §4206, as added Pub. L.

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

1222.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1381, 1388, 1399,

1401 of this title.

§ 1387. Reduction or waiver of complete withdrawal liability; procedures and standards

applicable

(a) The corporation shall provide by regulation for the reduction or waiver of liability for

a complete withdrawal in the event that an employer who has withdrawn from a plan subsequently resumes covered operations under the

plan or renews an obligation to contribute under

the plan, to the extent that the corporation determines that reduction or waiver of withdrawal

liability is consistent with the purposes of this

chapter.

(b) The corporation shall prescribe by regulation a procedure and standards for the amendment of plans to provide alternative rules for

the reduction or waiver of liability for a complete withdrawal in the event that an employer

who has withdrawn from the plan subsequently

resumes covered operations or renews an obligation to contribute under the plan. The rules may

apply only to the extent that the rules are consistent with the purposes of this chapter.

(Pub. L. 93–406, title IV, §4207, as added Pub. L.

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

1223.)

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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1401 of this title.

§ 1388. Reduction of partial withdrawal liability

(a) Obligation of employer for payments for partial withdrawal for plan years beginning

after the second consecutive plan year following the partial withdrawal year; criteria

applicable; furnishing of bond in lieu of payment of partial withdrawal liability

(1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under section

1385(a)(1) of this title (referred to elsewhere in

this section as the ‘‘partial withdrawal year’’),

the number of contribution base units with respect to which the employer has an obligation

to contribute under the plan for each such year

is not less than 90 percent of the total number

of contribution base units with respect to which

the employer had an obligation to contribute

under the plan for the high base year (within the

meaning of section 1385(b)(1)(B)(ii) of this title),

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 consecutive plan year following the partial withdrawal year.

(2)(A) For any plan year for which the number

of contribution base units with respect to which

an employer who has partially withdrawn under

section 1385(a)(1) of this title has an obligation

to contribute under the plan equals or exceeds

the number of units for the highest year determined under paragraph (1) without regard to ‘‘90

percent of’’, the employer may furnish (in lieu of

payment of the partial withdrawal liability determined under section 1386 of this title) a bond

to the plan in the amount determined by the

plan sponsor (not exceeding 50 percent of the annual payment otherwise required).

(B) If the plan sponsor determines under paragraph (1) that the employer has no further liability to the plan for the partial withdrawal,

then the bond shall be cancelled.

(C) If the plan sponsor determines under paragraph (1) that the employer continues to have liability to the plan for the partial withdrawal,

then—

(i) the bond shall be paid to the plan,

(ii) the employer shall immediately be liable

for the outstanding amount of liability due

with respect to the plan year for which the

bond was posted, and

(iii) the employer shall continue to make

the partial withdrawal liability payments as

they are due.

(b) Obligation of employer for payments for partial withdrawal for plan years beginning

after the second consecutive plan year; other

criteria applicable

If—