partial plan termination?

[Effen]

Do the parital plan termination rules apply to multiemployer plans? We work with a multiemployer plan that is loosing actives members at a fairly good pace, mostly due to withdrawing employers. These withdrawing employers are triggering withdrawal payments, but the question came up about a potential partial plan termination.

Assume the decline would meet any reasonble criteria for a partial termination if the Plan was a single employer.

I did find this that seemed to imply that they were not deemed 100% vested because they were unfunded at the time of the withdrawal. Is that they way most look at this or do we need to dig deeper?

Sammy Joe Freeman v. The Central States, Southeast and Southwest Areas Pension Fund, United States Court of Appeals, Fourth Circuit, Nos. 93-2559 and 94-1150, August 10, 1994.

[Relevant Law Sections: Code Sec. 411(d)(3)]

Participants' accrued multiemployer pension benefits were not vested when an employer withdrew from the plan because the benefits were not fully funded at the time of the withdrawal. The plan's assets were $1.74 billion short of the current value of vested benefits, and, if terminated, the plan would not have enough funds to pay vested benefits. Thus the participants were not entitled to benefits.