Withdrawal Liability Calculation Question

[MultisRule]

I am new to this forum but I am hoping that someone on here can help.

Under 4219(c)(1)(C), the annual payment for withdrawal liability is the product of:

(i) average annual CBUs for the 3 consecutive plan years during the 10 consecutive plan years ending before the plan year in which the withdrawal occurs, in which the number of CBUs for which the employer had an obligation to contribute under the plan is the highest; and 

(ii) the employer's highest contribution rate . . . 

 

If an employer contributes to a plan for less than 3 years (and the free look rule does not apply), how are the average CBUs calculated? For instance, if an employer is in the plan for 2 years, is the average computed by putting a zero for the third year? Are the two years just added and divided by 2?

 

Thanks.

[Effen]

Is this a real life situation?  Are you saying an employer bargained to be in a multiemployer plan, signed a 2-year agreement and now is bargaining to get out?   

I would think you would use a zero, but I also don't know if this could really happen.