With a transfer of a plan’s assets and liabilities, does the transferor employer risk anything?

A labor union wants an employer to transfer assets and liabilities of the employer’s individual-account retirement plan, for the collectively-bargained employees, to the labor union’s multiemployer individual-account retirement plan.

Would this involve risks to the employer?

Can you clarify just a skosh, I can't tell if you're referring to a DC (individual-account) or a DB (liabilities)?

Sorry for my too-hasty description. Each of the transferor plan and the transferee plan is an individual-account (defined-contribution) plan, and neither plan has any defined-benefit obligation.

In general I distrust union multiemployer arrangements, but most of that is centered on the DB side and the draconian treatment towards the participating employers.  Here, I don't have a specific objection; except to question the union motives, retain this option as a future bargaining chip, and/or squeeze some other concession out of them.  Otherwise, I would look at them as any other investment provider and apply the regular fiduciary review process; investment choices, fees, participant access, etc.  Also, I would do a 180 review, and judge in what position the loss of those assets will leave the transferor Plan?

Nate S., thank you.

The labor-relations lawyer (I am her counsel) tells me she has done the bargaining. Her client assents to a 3% nonelective contribution and an up-to-3% matching contribution.

Also, her client assents to the spinoff transfer, unless I advise that the employer is exposed to some horrible ERISA liability.

(I’ve taught the labor-relations law firm to fear withdrawal liabilities, not only for pension plans but also for health and other welfare plans, and other participating-employer liabilities.)

The Teamsters 401(k) plan is big; its purchasing power makes the plan more favorably priced than anything this small-business employer could get.

Only 17 of about 400 participants (and only a small percentage of plan assets) would leave the employer’s 401(k) plan.

Thank you for helping me issue-spot.

In addition to what was discussed above, other than an obligation on the employer's part to make sure that the transferee plan is qualified and getting it to make covenants to preserve optional forms of benefit under Code Section 411(d)(6) (except to the extent the plan administrator eliminates one or more of them pursuant to regulations specifically authorizing such elimination) and getting the transferee plan's commitment to comply with any applicable reporting and disclosure requirements under the Code and/or ERISA, , I do not see any potential liabilities on the part of the employer of the transferor plan.