Acceleration of Withdrawal Liability Payments

[Brian Haynes]

If a Pension Fund accelerates interim withdrawal liability payments under the rationale of the recent Central States v. O'Neill Bros. Transfer & Storage 7th Circuit decision, the full amount of the assessed withdrawal liability amount becomes due. Is the amount due from the employer subject to the 20-year cap? Thanks for any input.

[Bill Ecklund]

I do not believe it is subject to the 20 year cap, but in my excperience it makes no diffference. Although the present value of the stream of 20 annual payments may be less than the assessed withdrawal liability the sum of the 20 years of payments will far exceed the withdrawal liability.

[Peter Gulia]

Recently, I advised a client on a situation in which even the simple sum of the 20 years' payments (not adjusted to a present value) is less than half of the assessed withdrawal liability.

A plan could argue that a straight reading of the statute means that a missed payment leads to acceleration of the gross withdrawal liability (without the 20 years' limit).

I advised my client to make every payment with super-promptness.