Treatment of Unvested in Multiemployer Plan Withdrawal

A client has chosen to withdraw from a union MEP and wonders how other employers in this situation have addressed the loss of potential future benefit to unvested participants. Has anybody had this experience / negotiated with a union to address some recompense?

I am not really sure, but assuming the participants are still in the union and there has been no separation from service, I would think they would continue to earn vesting credit in their MEP benefits in the future.  Not 100% sure of that.

If they are leaving the union, then they are probably term non-vested in the MEP benefits. The MEP would have no obligation to then, nor would they generally care about people who leave the union.  

This is something the labor lawyer should be asking about as they negotiate the withdrawal.  The "recompense" would have to come from the employer, not the MEP.  The employer is choosing to leave so they are the one who needs to "make it right" for their employees if they want them to go along with the withdrawal.

I fully admit I am a DC guy not a DB guy.   So what comes next could be worthless.

However, in the DC world if a plan was changed to stop people from being able to accrue a benefit that were still employed by the plan sponsor the conversation would be if we have to make everyone 100% vested.   The Partial Plan Termination rules, which as far as I can tell cover both DB and DC plans, are clear a plan amendment can trigger an event that would make the affected people 100% vested. 

So if this withdrawal is anything like a plan amendment I think one might need to ask, "are these people really 100% vested?"

Like I said I am happy to be told this is nothing like what I am talking about and I should go back to my DC world and be a good boy! 

ESOP guy, it sounds like a collectively bargained multiemployer union plan that they are withdrawing from which is a whole different animal. And there is usually a reason that there is something called multiemployer withdrawal liability and not  mulitiemployer withdrawal credit. But I agree with Effen this is probably something they want an attorney familiar with withdrawing from union plans to negotiate any questions concerning the withdrawal with the union and plan.