Withdrawal liability/mid-contract negotiation of increase in employer contribution?

[Guest deboer]

Health and welfare multi-employer plan subject to collective bargaining agreement. Trustees want to negotiate increase in employer contribution mid-contract. If employers do not agree to increase, and option to voluntarily withdraw from plan is given, are employers subject to withdrawal liability? If so, is this complete or partial withdrawal?

[Guest jmccreaa]

Multiemployer health and welfare funds are not subject to statutory withdrawal liablility; only ME pension plans are. The labor agreement or the plan document could have some provision imposing withdrawal liablity, but such a provision is unusual (IIRC, the UMWA H&W plan has a withdrawal liability feature). A midyear increase to contributions to a pension plan probably wouldn't do a thing to decrease withdrawal liability, since under the MPPAA, withdrawal liability is based on the unfunded status of the end of the plan year immediately preceding the withdrawal event.

[Bill Ecklund]

I represent three Health & Welfare funds that have withdrawal liability. It is contractual , not statutory. The rules vary. You need to find out if the plan does have withdrawal liability, how it is calculated and when it applies. In all three of the plans I represent, what your client proposes to do would result in the imposition of complete withdrawal liability. Having said that, the right of the employer to withdraw is subject to the terms of the CBA. It is unusual for an employer to have the right to withdraw mid term of a contract