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10 Cards in this Set

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Partial WL

A partial withdrawal occurs if
- find the highest 2 years of contribution base units in any 5-year period
- taking 30% of this number compare to the next 3-years after the 5-year period. If all less than the 30% number then a partial termination has occured at the end of the 3-years
Partial WL

Partial cessation of contribution obligation
- The ER permanently ceases to be obligated to contribute under at least one (but not all) of the bargening agreements under which the ER has obligations to contribute, but the ER continues to have that type of work or transfers the work to another facility
- the ER permanently ceases to be obligated to contribute with respect to the work performed at one or more (but not all) of its facilities, but the ER continues to have that type of work performed at that facility
Partial WL

Amount of Partial WL
- If UVB are given, the demnimis credit must be subtracted from this to determine the complate liability
- multiply the complete WL by 1 - (the year after the 3 year decline)/(5-year avg. of the ER's base units for the 5-year period prior to the 3-year period)
* Note that unlike for the determination of the complete WL, the contributions are not used for this purpose - the base units are used even if the contribution rate has not changed.
Partial WL

Timing of complete WL liability
- WL liability determined end of the year prior to the first 3-year period of decline
Partial WL

Reduction of Partial WL for the 70% decline
- if, in any two consecutive years after a partial withdrawal, the ER's base units are at least 90% of the two-year avg. used to determine the 70% decline, then the ER ceases to have an obligation to contribute in the year following the second year

- if, any two consecutive years after the partial withdrawal, the ER's base units exceed 30% of the 2-year avg. used to determine the 70% decline, and the total base units for all ERs is not less than 90% as compared to the base units in the partial withdrawal year, then the ER ceases to have an obligation to contribute in the year following the second year.
Partial WL

A second partial withdrawal or complete WL in later year, occurs if
- Once an ER has a partial WD from an ME plan, the same ER could satisfy the requirements to partial WD again in a subsequent year, or ultimately completely WD. In either case, a liability must be redetermined , and the additional liability, leass a credit for the balance of the previous liability. This is described in ERISA section 4206(b)(1) and ERISA reg. 4206.3-4206.10

- under rolling 5 method, the balance of the previous liab would be the outstanding balance if it were amortized over a 5-year period beg. with the year of partial WD.

*If the partial term was due to a 70% decline, the year of partial WD is deemed to be the first year of the 3-year period.
WD liability payments

The annual payments for the WD Liab is equal to:
- the product of the avg. of the highest 3 consecutive years of contributions base units for the ER (during the 10-year period ending in the year prior to withdrawal) and the highesdt ER contribution rate (during the 10-year period ending in the year of withdrawal).

- In a partial WD, the annual payment is adjusted using the same adjustment factor as is used to determine the partial WD liab.

- In the case of a partial WD due to a 70% decline, the 10-year period used to determine the highest cont. rate ends at the end of the first year in the 3-year period.
WD Liability payments

The annual payment must be made :
- quarterly

- The payments must begin within 60 days of a request
- The plan can specify a different payment schedule
- The withdrawn ER may pre-pay the liability, including accrued interest.
WD Liability payments

Payments are due until the liability is fully amortized, not to exceed
- 20 years
WD liability payments

In order to determine when the liability is fully amortized, assume payments are made annually as of the first day of the plan year, beginning with the plan year following
- the year of withdrawal.

* The assumptions used to amortize are those used in the most recent actuarial valuation

- determined as of the EOY prior to WD and payments are assumed to begin on the first day of the year after WD, for purpose of determining how many payments must be made and the outstanding balance of liab.

*ERISA is not clear if one year of interest s/b included, so do not include a year of interest in first year.