The Pension Benefit Guaranty Corporation (PBGC) recently
proposed amendments to the regulations that govern how
multiemployer plans calculate withdrawal liability. The PBGC has
invited comment on these proposed regulations through April 8,
2019.
By way of background, under sections 4201 through 4225 of ERISA,
when a contributing employer withdrawals from an underfunded
multiemployer plan, the plan sponsor assesses withdrawal liability
against the employer. Withdrawal liability represents a withdrawing
employer's proportionate share of the plan's unfunded
benefit obligations.
In response to financial difficulties faced by many
multiemployer plans, Congress amended ERISA in 2006 and 2014. These
amendments permit financially weak plans to reduce adjustable
benefits (e.g., post-retirement death benefits and early
retirement benefits), suspend (either temporarily or permanently)
current or future benefits to participants or beneficiaries, impose
surcharges on
