29 U.S.C. § 1405 — Limitation on withdrawal liability

(a) Sale of assets. When an employer makes a genuine sale of all or nearly all assets in an arm’s-length transaction to an unrelated party, the employer’s allocable unfunded vested benefits^*, after applying earlier sections of this part, may not exceed the greater of (A) the paragraph (2) portion of the employer’s liquidation or dissolution value after the sale or exchange, or (B), for a plan using attributable allocation, the unfunded vested benefits attributable to the employer’s employees. This subsection does not apply to an employer reorganizing under title 11 or similar State law. (2) The portion is calculated as follows: if the value is not more than $5,000,000, it is 30 percent of the amount; if more than $5,000,000 but not more than $10,000,000, it is $1,500,000 plus 35 percent of the excess over $5,000,000; if more than $10,000,000 but not more than $15,000,000, it is $3,250,000 plus 40 percent of the excess over $10,000,000; if more than $15,000,000 but not more than $17,500,000, it is $5,250,000 plus 45 percent of the excess over $15,000,000; if more than $17,500,000 but not more than $20,000,000, it is $6,375,000 plus 50 percent of the excess over $17,500,000; if more than $20,000,000 but not more than $22,500,000, it is $7,625,000 plus 60 percent of the excess over $20,000,000; if more than $22,500,000 but not more than $25,000,000, it is $9,125,000 plus 70 percent of the excess over $22,500,000; and if more than $25,000,000, it is $10,875,000 plus 80 percent of the excess over $25,000,000. (b) Insolvent employer. For an insolvent employer being liquidated or dissolved, allocable unfunded vested benefits may not exceed (1) 50 percent of those benefits calculated without this section, plus (2) the part of that 50 percent which does not exceed the employer’s liquidation or dissolution value. That value is measured when liquidation or dissolution begins and after subtracting the amount under paragraph (1). (c) Exempt property. To the extent withdrawal liability comes from an individual employer’s obligation to contribute^* to or under a plan, property that may be exempt from the bankruptcy estate under section 522 of title 11 or similar law is not subject to enforcement of that liability. (d) Definitions. (1) An employer is insolvent when its liabilities, including withdrawal liability calculated without subsection (b), exceed its assets at the start of liquidation or dissolution. (2) Liquidation or dissolution value is determined without counting that withdrawal liability. (e) Related withdrawals. For one or more withdrawals tied to the same sale, liquidation, or dissolution, the corporation’s regulations must treat all withdrawals as one withdrawal for applying this section. Each plan’s liability must have the same ratio to the present value of payments owed to all plans, after applying this section, as that plan’s liability calculated without this section has to the total liability calculated without this section.