29 U.S.C. § 1388 — Reduction of partial withdrawal liability

(a) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year^* following the partial withdrawal year; criteria applicable; furnishing of bond in lieu of payment of partial withdrawal liability (1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under section 1385(a)(1) of this title (referred to elsewhere in this section as the “partial withdrawal year”), the number of contribution base units for which the employer has an obligation to contribute^* under the plan for each such year is not less than 90 percent of the total number of contribution base units for which the employer had an obligation to contribute under the plan for the high base year (within the meaning of section 1385(b)(1)(B)(ii) of this title ), then the employer must have no obligation to make payments for such partial withdrawal (other than delinquent payments) for plan years beginning after the second consecutive plan year following the partial withdrawal year. (2) (A) For any plan year for which the number of contribution base units for which an employer who has partially withdrawn under section 1385(a)(1) of this title has an obligation to contribute under the plan equals or exceeds the number of units for the highest year determined under paragraph (1) without regard to “90 percent of”, the employer may furnish (in lieu of payment of the partial withdrawal liability determined under section 1386 of this title ) a bond to the plan in the amount determined by the plan sponsor (not exceeding 50 percent of the annual payment otherwise required). (B) If the plan sponsor determines under paragraph (1) that the employer has no further liability to the plan for the partial withdrawal, then the bond must be cancelled. (C) If the plan sponsor determines under paragraph (1) that the employer continues to have liability to the plan for the partial withdrawal, then— (i) the bond must be paid to the plan, (ii) the employer must immediately be liable for the outstanding amount of liability due for the plan year for which the bond was posted, and (iii) the employer must continue to make the partial withdrawal liability payments as they are due. (b) Obligation of employer for payments for partial withdrawal for plan years beginning after the second consecutive plan year; other criteria applicable If— (1) for any 2 consecutive plan years following a partial withdrawal under section 1385(a)(1) of this title , the number of contribution base units for which the employer has an obligation to contribute for each such year exceeds 30 percent of the total number of contribution base units for which the employer had an obligation to contribute for the high base year (within the meaning of section 1385(b)(1)(B)(ii) of this title , 1 and (2) the total number of contribution base units for which all employers under the plan have obligations to contribute in each of such 2 consecutive years is not less than 90 percent of the total number of contribution base units for which all employers had obligations to contribute in the partial withdrawal plan year; then, the employer must have no obligation to make payments for such partial withdrawal (other than delinquent payments) for plan years beginning after the second such consecutive plan year. (c) Pro rata reduction of amount of partial withdrawal liability payment of employer for plan year following partial withdrawal year In any case in which, in any plan year following a partial withdrawal under section 1385(a)(1) of this title , the number of contribution base units for which the employer has an obligation to contribute for such year equals or exceeds 110 percent (or such other percentage as the plan may provide by amendment and which is not prohibited under regulations prescribed by the corporation) of the number of contribution base units for which the employer had an obligation to contribute in the partial withdrawal year, then the amount of the employer’s partial withdrawal liability payment for such year must be reduced pro rata, under regulations prescribed by the corporation. (d) Building and construction industry; entertainment industry (1) An employer to whom section 1383(b) 2 of this title (relating to the building and construction industry) applies is liable for a partial withdrawal only if the employer’s obligation to contribute under the plan is continued for no more than an insubstantial portion of its work in the craft and area jurisdiction of the collective bargaining agreement of the type for which contributions are required. (2) An employer to whom section 1383(c) 2 of this title (relating to the entertainment industry) applies must have no liability for a partial withdrawal except under the conditions and to the extent prescribed by the corporation by regulation. (e) Reduction or elimination of partial withdrawal liability under any conditions; criteria; procedures applicable (1) The corporation may prescribe regulations providing for the reduction or elimination of partial withdrawal liability under any conditions for which the corporation determines that reduction or elimination of partial withdrawal liability is consistent with the purposes of this chapter. (2) Under such regulations, reduction of withdrawal liability must be provided only for subsequent changes in the employer’s contributions for the same operations, or under the same collective bargaining agreement, that gave rise to the partial withdrawal, and changes in the employer’s contribution base units for other facilities or other collective bargaining agreements must not be taken into account. (3) The corporation must prescribe by regulation a procedure by which a plan may by amendment adopt rules for the reduction or elimination of partial withdrawal liability under any other conditions, subject to the approval of the corporation based on its determination that adoption of such rules by the plan is consistent with the purposes of this chapter.