WITHDRAWAL LIABILITYThe Trustees of the Trust Fund have adopted the following rules to govern the calculation and collection of withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), a statutory amendment to the Employee Retirement Income Security Act of 1974 (“ERISA”). These rules shall be interpreted consistently with all applicable laws and policies under ERISA. The statutory provisions, and accompanying regulation, of MPPAA are incorporated herein by reference.
Section A. Method for Computing Withdrawal Liability:Withdrawal Liability will be calculated under the Presumptive Method, set forth in ERISA § 4211 (b).
Section B. Determination of When Contributions are Made:Contributions shall be considered paid in the year in which they accrue, provided that they are paid by May 31 of the following year. Contributions made to the Fund after the May 31 cut-off date will be considered paid in the year in which they are received by the Fund.
Section C. Actuarial Assumptions:In accordance with the advice of the Trust Fund’s enrolled actuary, the actuarial assumptions used in calculating withdrawal liability shall be the same actuarial assumptions used in determining the Trust Fund’s minimum funding standards under the Internal Revenue Code.
Section D. Payment of Withdrawal Liability:An employer which is assessed withdrawal liability shall have the following options for satisfaction of the debt:
- to pay the entire withdrawal liability immediately in one sum;
- to pay the withdrawal liability in annual installments, determined under ERISA § 4219, provided that each installment is fully paid at the beginning of the year for which the installment is due; or
- to pay the entire sum in quarterly installments determined by the Administrator in accordance with ERISA § 4219. The Administrator shall have authority to make reasonable changes in any payment schedule promulgated under the Rule, provided that the modified schedule secures for the Trust Fund all rights guaranteed by ERISA.
Section E. Review of Withdrawal Liability:
An employer which is assessed withdrawal liability may seek review through the following procedures. The time limits for invoking these procedures are set forth in ERISA §§ 4219 and 4221.
- Request for Review Pursuant to ERISA § 4219(B)(2)(A), an employer may:
- request the Trust Fund to review any specific matter relating to determination of the withdrawal liability or the payment schedule;
- identify any inaccuracy in the assessment; and/or
- furnish any additional relevant information.
Any such Request for Review shall be made in writing, addressed to the Administrator, and shall identify the specific matter which the employer challenges or questions.
The Administrator shall make a preliminary examination of each Request For Review. The Administrator shall then either issue a ruling on the Request for Review or refer the matter to the Trustees for a final ruling. If the matter is submitted to the Trustees, each Trustee may be consulted and vote individually if the Administrator determines that a formal meeting is not practical.
An employer which wishes to submit any disputes concerning withdrawal liability to arbitration under ERISA § 4221 shall do so under the auspices of the Philadelphia Regional Office of the American Arbitration Association (“AAA”). The employer must initiate the arbitration proceeding in accordance with the AAA rules and simultaneously serve upon the Administrator written notice of the initiation of arbitration and the issues that shall be contested.
The employer shall pay the filing fee necessary to initiate the arbitration. Unless the Administrator expressly agrees otherwise in writing, all arbitration hearings will be held in Philadelphia, Pennsylvania.
- Litigation As provided by ERISA §§ 4201 and 4301, any party to an arbitration under ERISA § 4221 may file suit in United States District Court to enforce, vacate, or modify the arbitration award.
Section F. Remedies:In litigation, the Trust Fund shall be entitled to all remedies permitted by law. Liquidated damages shall be 20% (or such higher percentage as may be permitted under federal or state law) of the amount owed by the employer, unless the Trust Fund is entitled to a greater sum by a doubling of the interest.
Section G. Free Look:
Pursuant to ERISA Section 4210, 29 U.S.C Section 1390, an employer who withdraws form the Plan in a complete or partial withdrawal is not liable to the Plan if the employer:
- first had an obligation to contribute to the Plan after September 26, 1980; and
- had an obligation to contribute to the Plan for no more than five consecutive plan years preceding the date on which the employer withdraws; and
- was required to make contributions to the Plan for each such plan year in an amount equal to less than two percent of the sum of all employer contributions made to the Plan for each such year as reported on the Form 5500 filed by the Plan for each such plan year; and
- has never avoided withdrawal liability because of the application of this Section G of Article IX.
Section H. Construction Industry Exemption:The Construction Industry Exemption authorized by Section 4203(b)(1)(B)(ii) of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1383(b)(1)(B)(ii), shall apply to all withdrawals that occur after September 12, 1996.
Potential Withdrawal Liability CalculationsEmployers wishing to request a calculation (with worksheets) of that Employer’s potential withdrawal liability may do so by submitting a written request addressed to:
Teamsters Pension Trust Fund of Philadelphia and Vicinity
2500 McClellan Ave, Suite 140
Pennsauken, NJ 08109
In general, such requests are processed within ten working days. Delays may occur depending upon when the request is made and whether the requesting party wishes to delay processing of the request until the latest actuarial valuation is completed by the Fund’s Enrolled Actuary.