29 U.S.C. § 1363 : US Code - Section 1363: Liability of substantial employer for withdrawal from single-employer plans under multiple controlled groups

Search 29 U.S.C. § 1363 : US Code - Section 1363: Liability of substantial employer for withdrawal from single-employer plans under multiple controlled groups

(a) Single-employer plans with two or more contributing sponsors
Except as provided in subsection (d) of this section, the plan
administrator of a single-employer plan which has two or more
contributing sponsors at least two of whom are not under common
control -
(1) shall notify the corporation of the withdrawal during a
plan year of a substantial employer for such plan year from the
plan, within 60 days after such withdrawal, and
(2) request that the corporation determine the liability of all
persons with respect to the withdrawal of the substantial
employer.
The corporation shall, as soon as practicable thereafter, determine
whether there is liability resulting from the withdrawal of the
substantial employer and notify the liable persons of such
liability.
(b) Computation of liability
Except as provided in subsection (c) of this section, any one or
more contributing sponsors who withdraw, during a plan year for
which they constitute a substantial employer, from a single-
employer plan which has two or more contributing sponsors at least
two of whom are not under common control, shall, upon notification
of such contributing sponsors by the corporation as provided by
subsection (a) of this section, be liable, together with the
members of their controlled groups, to the corporation in
accordance with the provisions of section 1362 of this title and
this section. The amount of liability shall be computed on the
basis of an amount determined by the corporation to be the amount
described in section 1362 of this title for the entire plan, as if
the plan had been terminated by the corporation on the date of the
withdrawal referred to in subsection (a)(1) of this section
multiplied by a fraction -
(1) the numerator of which is the total amount required to be
contributed to the plan by such contributing sponsors for the
last 5 years ending prior to the withdrawal, and
(2) the denominator of which is the total amount required to be
contributed to the plan by all contributing sponsors for such
last 5 years.
In addition to and in lieu of the manner prescribed in the
preceding sentence, the corporation may also determine such
liability on any other equitable basis prescribed by the
corporation in regulations. Any amount collected by the corporation
under this subsection shall be held in escrow subject to
disposition in accordance with the provisions of paragraphs (2) and
(3) of subsection (c) of this section.
(c) Bond in lieu of payment of liability; 5-year termination period
(1) In lieu of payment of a contributing sponsor's liability
under this section, the contributing sponsor may be required to
furnish a bond to the corporation in an amount not exceeding 150
percent of his liability to insure payment of his liability under
this section. The bond shall have as surety thereon a corporate
surety company which is an acceptable surety on Federal bonds under
authority granted by the Secretary of the Treasury under sections
9304-9308 of title 31. Any such bond shall be in a form or of a
type approved by the Secretary including individual bonds or
schedule or blanket forms of bonds which cover a group or class.
(2) If the plan is not terminated under section 1341(c) or 1342
of this title within the 5-year period commencing on the day of
withdrawal, the liability is abated and any payment held in escrow
shall be refunded without interest (or the bond cancelled) in
accordance with bylaws or rules prescribed by the corporation.
(3) If the plan terminates under section 1341(c) or 1342 of this
title within the 5-year period commencing on the day of withdrawal,
the corporation shall -
(A) demand payment or realize on the bond and hold such amount
in escrow for the benefit of the plan;
(B) treat any escrowed payments under this section as if they
were plan assets and apply them in a manner consistent with this
subtitle; and
(C) refund any amount to the contributing sponsor which is not
required to meet any obligation of the corporation with respect
to the plan.
(d) Alternate appropriate procedure
The provisions of this subsection apply in the case of a
withdrawal described in subsection (a) of this section, and the
provisions of subsections (b) and (c) of this section shall not
apply, if the corporation determines that the procedure provided
for under this subsection is consistent with the purposes of this
section and section 1364 of this title and is more appropriate in
the particular case. Upon a showing by the plan administrator of
the plan that the withdrawal from the plan by one or more
contributing sponsors has resulted, or will result, in a
significant reduction in the amount of aggregate contributions to
or under the plan, the corporation may -
(1) require the plan fund to be equitably allocated between
those participants no longer working in covered service under the
plan as a result of the withdrawal, and those participants who
remain in covered service under the plan;
(2) treat that portion of the plan funds allocable under
paragraph (1) to participants no longer in covered service as a
plan terminated under section 1342 of this title; and
(3) treat that portion of the plan fund allocable to
participants remaining in covered service as a separate plan.
(e) Indemnity agreement
The corporation is authorized to waive the application of the
provisions of subsections (b), (c), and (d) of this section
whenever it determines that there is an indemnity agreement in
effect among contributing sponsors under the plan which is adequate
to satisfy the purposes of this section and of section 1364 of this
title.