Endangered Plan

[Effen]

IRC Section 432(a)(1)(A) states that a plan sponsor cannot accept any bargaining agreement that provides for the reduction in the level of contributions or the suspension of contributions for any participants in the Endangered Plan.

Since this is the case, is an employer ever able to voluntary withdraw from a plan once it has been certified Endangered? Assuming the employers bargaining unit wants to withdraw, would the fact the plan is Endangered preclude that option?

Is there a way to withdraw short of union decertification?

[Peter Gulia]

While I'm not a labor-relations lawyer, it would seem that a collective-bargaining agreement is an agreement between the employer and the represented workers, and that such an agreement might not require any acceptance by a third person for the agreement to be effective between those bargaining parties.

Rather, the way that a multiemployer pension plan can protect itself from a CBA that would provide insufficient contributions (or other terms unacceptable to the plan) is to deny continued participation to the employer and its employees.

That would result in a withdrawal, triggering the employer's withdrawal liability.

[RTK]

I have interpreted ERISA and the IRC as not restricting the right of the bargaining parties to agree to cease all contributions to the pension plan. Since no contributions would be required under the CBA, there would be nothing for the Board of Trustees of the pension plan to accept or reject. As noted, the cessation of contributions could trigger W/L.