Withdrawal Liability on Bankruptcy/Closing Doors

[Guest hst]

We have a Taft Hartley client (construction industry) who has a few contributing employers who are considering closing their doors or bankruptcy (tough economy). The question has arisen whether the bankrupt/closed employer has a withdrawal liability.

This presumes that an actuarial calculation would show a withdrawal liability exists for the particular employer.

Thanks for any help

[KJohnson]

You need an ERISA attorney. In "ordinary" industries the permanent cessation of operations would be an event to trigger a complete withdrawal and withdrawal liability.

However, there are special exceptions for the construction industry where simply ceasing operations would not be a complete withdrawal. However, the question of whether you are really in what is defined as the construction industry, what the employer will do after bankrtuptcy and possible other issues with a "mass withdrawal" or a partial withdrawal are things that you need to explore with an attorney.