ERISA § 4208 (29 U.S.C. § 1388)

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Reduction of partial withdrawal liability

USC 2024 ed., current through 2025-01-06 · current · last amended by Pub. L. 96-364

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(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(1) If, for any 2 consecutive plan years following the plan year in which an employer has partially withdrawn from a plan under section 1385(a)(1) of this title (referred to elsewhere in this section as the "partial withdrawal year"), the number of contribution base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 with respect to 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 with respect to 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 shall have no obligation to make payments with respect to 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For any plan year for which the number of contribution base units with respect to which an employer who has partially withdrawn under section 1385(a)(1) of this title has an obligation to contribute under the plan equals or exceeds the number of units for the highest year determined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 shall 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 shall be paid to the plan,

(ii) the employer shall immediately be liable for the outstanding amount of liability due with respect to the plan year for which the bond was posted, and

(iii) the employer shall 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 with respect to which the employer has an obligation to contribute for each such year exceeds 30 percent of the total number of contribution base units with respect to 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 with respect to 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 shall have no obligation to make payments with respect to 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 with respect to 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 with respect to 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 shall be reduced pro rata, in accordance with 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 shall 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 with respect to 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 shall be provided only with respect to 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 with respect to other facilities or other collective bargaining agreements shall not be taken into account.

(3) The corporation shall 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.

Source credit, amendments & notes

(Pub. L. 93–406, title IV, §4208, as added Pub. L. 96–364, title I, §104(2), Sept. 26, 1980, 94 Stat. 1224.)

Editorial Notes

References in Text

"Section 1383(b) of this title" and "section 1383(c) of this title", referred to in subsec. (d), were in the original "section 4202(b)" and "section 4202(c)", respectively, meaning section 4202(b) and section 4202(c) of the Employee Retirement Income Security Act of 1974 and were editorially translated as the probable intent of Congress in view of section 4202 of the Employee Retirement Income Security Act of 1974, which is classified to section 1382 of this title, not having subsection designations and the subject matter of section 4203 of the Act which is classified to section 1383 of this title.

This chapter, referred to in subsec. (e)(1), (3), was in the original "this Act", meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of this title and Tables.

ERISA § 4208 (29 U.S.C. § 1388) — Reduction of partial withdrawal liability · USC 2024 ed., current through 2025-01-06 · https://pensionresource.website/EAMain?content=EAMain.Law&id=usc29-1388&asof=2026-09-17 · printed Oct 16, 2026

(a) Obligation of employer for payments for partial withdrawal …
(b) Obligation of employer for payments for partial withdrawal …
(c) Pro rata reduction of amount of partial withdrawal liabilit…
(d) Building and construction industry; entertainment industry
(e) Reduction or elimination of partial withdrawal liability un…

Cited by (code & regs)

29 C.F.R. § 4207.8 Liability for subsequent partial withdrawals.
29 C.F.R. § 4208.1 Purpose and scope.
ERISA § 4223 (29 U.S.C. § 1403) Withdrawal liability payment fund
ERISA § 4205 (29 U.S.C. § 1385) Partial withdrawals
29 C.F.R. § 4203.1 Purpose and scope.

PBGC Regulations

29 C.F.R. § 4208.1 Purpose and scope.
29 C.F.R. § 4208.2 Definitions.
29 C.F.R. § 4208.3 Abatement.
29 C.F.R. § 4208.4 Conditions for abatement.
29 C.F.R. § 4208.5 Withdrawal liability payments during pendency of abatement determination.
29 C.F.R. § 4208.6 Computation of reduced annual partial withdrawal liability payment.
29 C.F.R. § 4208.7 Adjustment of withdrawal liability for subsequent withdrawals.
29 C.F.R. § 4208.8 Multiple partial withdrawals in one plan year.
29 C.F.R. § 4208.9 Plan adoption of additional abatement conditions.
29 C.F.R. § 4208.10 Method of filing; method and date of issuance.

Guidance addressing this section

No documents are primarily about this section.

Also cited in 1 other documents

PBGC

Opinion Letters

PBGC Op. Ltr. 1995-2 Aug 18, 1995 — Partial withdrawal, Withdrawal liability (b)

Tax Court (0) · DOL/Federal (1)

DOL and federal courts (1)

Also cite this provision (1)

Central States, SE and SW Areas Pension Fund v. Consumers Concrete Corp. Court of Appeals for the Seventh Circuit · Sep 17, 2026 Affirmed
Cites (a)(1) · Text when decided

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Effective	Through	Source	Amended by
Jan 4, 1995	current	USC 2024 ed., current through 2025-01-06 run 1	Pub. L. 96-364	View

Provision-level history (blame)