Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...
A rubber company must pay a $1.7 million withdrawal liability assessment for withdrawal from a multiemployer pension plan, a federal court ruled.
The company claimed that it was not subject to the assessment because its withdrawal from a multiemployer pension plan was union-mandated. The court found that such a withdrawal does not provide the company with a federal claim for equitable relief under ERISA.
The company pointed to a Pension Benefit Guaranty Corporation's report dealing with union-mandated withdrawals, which found that such withdrawal occurs when a union voluntarily disclaims its status representing a group of employees and the relevant pension plan refuses to accept the continued contributions submitted by the employer.
Although the report stated that union-mandated withdrawals were rare and did not justify the creation of special rules, the report also offered three methods for calculating liability in these instances in case Congress decided that special rules were appropriate. Congress has not acted on the report or amended ERISA to account for union-mandated withdrawals.
The rubber company claimed that the arbitrator failed to use the PBGC's alternate method for calculating withdrawal liability when an employer's withdrawal resulted from union action. Under this method, the company argued that its liability totaled only $312,000.
According to the court, ERISA includes a comprehensive scheme for determining withdrawal liability. That scheme includes several specific exceptions that reduce withdrawal liability in certain circumstances, “but an exception for union-mandated withdrawals is not among them,” the court said.
For more information, see Compensation and Benefits Library's “Collectively Bargained Multiemployer Pension Plans” chapter.
To contact the editor on this story: Michael Trimarchi at email@example.com.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)