Timing of complete withdrawal

[Guest Salvador A Mander]

Is anyone aware of any cases finding that an employer did NOT have a complete withdrawal under 4203(a)(1) upon ratification of a new CBA that did not require any contributions to be made on behalf of any employee? That would seem like a permanent cessation of the obligation to contribute (as described in 4212(a)(1)).

[Brian Haynes]

Doubt you will find any cases that help. As you stated, without an available exception, bargaining out of a Pension Fund will constitute a permanent cessation of the obligation to contribute which can trigger withdrawal liability.

[Guest Salvador A Mander]

Doubt you will find any cases that help. As you stated, without an available exception, bargaining out of a Pension Fund will constitute a permanent cessation of the obligation to contribute which can trigger withdrawal liability.

That's where I was coming out, too. So that would mean that there is no longer any requirement to make contributions with respect to work performed after that date, correct? Is there any requirement for notifying the plan of the withdrawal or does that obligation end by operation of law? Assume for the moment that there is no withdrawal liability.

[Brian Haynes]

If you are sure there is no withdrawal liability, then I would put a note on the last remittance report transmitting employer contributions to the Fund to let them know. This way, they will not be looking for further contributions. If there is withdrawal liability, the date of the cessation of the obligation to contrribute is a date determined under ERISA. Was the employer making any contributions while the new contract was being negotiated? If not, then the date the obligation ended would be the expiration of the last agreement, absent some other provision in the new contract extending the date the last contributions were due.

[Guest Salvador A Mander]

If you are sure there is no withdrawal liability, then I would put a note on the last remittance report transmitting employer contributions to the Fund to let them know. This way, they will not be looking for further contributions. If there is withdrawal liability, the date of the cessation of the obligation to contrribute is a date determined under ERISA. Was the employer making any contributions while the new contract was being negotiated? If not, then the date the obligation ended would be the expiration of the last agreement, absent some other provision in the new contract extending the date the last contributions were due.

100% agreed. Thanks, Brian.