Building and Construction Employer and Mass Withdrawal

[Brian Haynes]

Under Section 4203(b) of ERISA, there is an exemption to complete withdrawal liability to an employer in the building and construction industry where the employer ceases to have an obligation to contribute to the multiemployer pension plan and does not continue or resume covered work in the relevant geographic area for 5 years. Let's say an employer ceases its obligation to contribute to the plan in year 1 and in year 2 the plan terminates in a mass withdrawal (say a withdrawal of substantially all the employers during the relevant 3-year period). Is the employer subject to any liability for the mass withdrawal? My thinking is that since there has not been an actual wtihdrawal by the employer (we are still waiting to see if the employer resumes covered work) there has been no "withdrawal" and there is nothing to reallocate any liability to. I do understand that the 5-year ban on covered work is reduced to 3 years, but I believe it is reduced to 3 years only if the reason of the employer's cessation of the obligation to contribute is due to the termination of the plan by mass withdrawal. Maybe the 5-year period is reduced to 3 years even if the emoployer's cessation of the obligation was not due to the mass withdrawal. Any thoughts would be greatly appeciated.