1 Th e M u lti em plo yer Pen si o n Plan Am en d m en ts Ac t o f 1 980 ( “ M PPAA” ) , P. L. 96- 364, 94 Stat . 1 208 ( 1 980 ) , am en d ed se c ti o n 4001 ( a) ( 3) o f ERI SA to d ef i n e “ m u lti em ployer plan ” as a pl an 20 0 1-2 §4 0 0 1(a )(3 ) §4 0 0 1(a )( 15) § 4005 ( a) § 400 5( e) § 400 5( f) § 4006 ( a) § 4022 § 40 22A § 4041 § 4041 A § 4042 § 4048( b) § 4061 § 4063 § 4209(c) §4 2 19 (c ) § 4232 § 4245( f) § 4261 §4 2 8 1(d ) § 4303

29 C . F. R . § 40 41A . 21 [ PBGC Le tterh ead] M ar c h 1 6, 2001 Ro bert Ri d eou t sh ared w i th m e you r Feb ru ary 6 l ette r to h i m an d aske d m e to r espo n d to i t. Yo u ask w h eth er th e ( th e “ Fu n d ” ) c o n tin u es to be a m u ltiem plo yer pla n — bo th i n g en er al a n d pa r tic u lar ly w i th r espec t t o PB G C pr em i u m pa ym en ts — n o w th at th er e i s o n ly o n e em plo yer r eq u i r ed to m ak e c o n tr i bu tio n s to th e Fu n d . Yo u n o te t h at a sec o n d em plo yer pa r tic i pa tes in th e Fu n d an d m ak es c o n tr i bu tio n s th er eto , bu t is n o t r eq u i r ed to d o so by a rele van t co ll ecti ve barg ai n i n g ag reem en t. 1

(A ) to w h i c h m o r e t h an o n e em plo yer i s req u i r ed to c o n tr i bu te, (B ) w h i ch i s m ai n tai n ed pu rsuan t to o n e o r m o re co ll ecti ve barg ai n i n g ag reem en ts betw ee n o n e o r m o re em ployee o rg an i zati o n s an d m o re th an o n e em ployer, an d (C ) w h i ch sa ti s fi es suc h o th er req u i rem en ts as th e S ecretary o f L abo r m ay pres cr i be by reg u latio n , exc ept t h at, i n applyin g th i s para g ra ph — (i) a pl an sh al l b e c o n sid er ed a m u lt iem pl o ye r pl an o n a n d a ft er its ter m i n atio n d ate if th e plan w as a m u lti em plo yer plan u n d er t h i s para g ra ph fo r th e pl an year preced i n g suc h term i n ati o n , an d (ii) fo r an y pl an year w h i ch beg an bef o re th e d ate o f th e e n actm en t o f th e M u ltiem plo yer Pen si o n Pla n Am en d m en ts A c t o f 1980, th e t er m “ m u ltiem plo yer plan ” m ean s a pla n d esc r i bed i n sec tio n 414( f) o f t h e I n ter n al R eve n u e C o d e o f 1 954 a s i n effec t im m ed i at ely b efo r e su c h d at e . . . . 2 9 U . S . C . § 13 0 1(a )( 3 ). B y c o n t r a s t , a “sin g l e -e m p l o y e r p l a n ” is d e f in e d a s “a n y d e f in e d b e n e f it p l a n . . . w h ic h is n o t a m u l t ie m p l o y e r p l a n .” 2 9 U .S.C . § 1 3 0 1 (a )(1 5 ). 2 ER I SA ex pr essly per m i ts a m u ltiem plo yer pla n to bec o m e an o th er ty pe o f pla n u n d er c ertai n extrem el y n arr o w c i rc u m stan c es , n o n e o f w h i c h are rai se d by yo u r i n q u i ry. Th es e are d i sc u ssed be lo w . 2 I n o u r view , a m u ltiem plo yer plan r eta i n s i ts st at u s as su c h even i f th e n u m ber o f e m p l o y e r s r e q u ir e d t o c o n t r ib u t e t o t h e p l a n d e c r e a s e s t o a s in g l e e m p l o y e r . T h is is e v id e n t n o t o n l y f r o m t h e l a n g u a g e o f t h e s t a t u t e a n d it s im p l e m e n t in g reg u lati o n s, but also fro m d i ff erenc es i n d es i g n betw ee n th e m u lti em pl o yer an d sin g le-em plo ye r st at u to r y sc h em es. T u r n in g f ir s t t o t h e l a n g u a g e o f E R IS A , w e n o t e t h a t t h e r e is n o p r o v is io n in M PPA A t h at allo w s fo r a c h an g e i n plan sta tu s fro m m u ltiem plo yer to sin g le-em plo ye r , eith er be fo r e o r af te r a p la n te r m in at es. 2 To th e co n trary, th e te xt o f M PP AA an d its im ple m en tin g r eg u la tio n s c o n te m pla te th at u n d er Tit le IV o f ER ISA, a m u ltiem plo yer plan w i ll ret ain i ts m u ltiem plo yer sta tu s u n til th e last em plo yer i n cu rs a co m pl ete w i th d raw al. Th i s th em e p ervad es th e m u lti em pl o yer rules o n pl an te r m in at io n , w ith d r aw al liab ili ty , fid u c iar y r espo n sibili ty , an d g u ar an te ed be n efits. Fo r ex am ple , u n d er sec tio n 40 41A, a m u lt iem plo ye r pla n te r m in at io n d o es n o t o cc u r u n ti l th e e arli er o f “ th e ces sati o n o f th e obli g ati o n of all employe rs to c o n tr i bu te u n d er th e pla n ” o r pa ssag e o f a p lan am en d m en t w h i c h pr o vid es fo r

3 “ n o c r ed i t . . . fo r serv i c e with any employ er. ” 29 U . S . C . § 134 1A (a )( 1), (2) ( e m p h a s is ad d ed ) . Si m i lar ly, M PPA A set s th e d at e o f a t er m i n at i o n c au sed by em plo yer w i th d r aw al a t t h e ear li er o f “ th e d at e the last emplo yer wi t hdr a ws ” or t he “ f i rs t day o f th e f i rs t p l an ye ar f o r w h i ch no empl oye r cont ri but ions wer e requ ired u n d er th e pla n . ” 29 U . S. C . § 1 341A( b) ( 2) ( em ph asis ad d ed ) . Th e w i th d raw al l i abi li ty ru le s of M PPAA l i kew i se co n tem pl ate th at co n ti n uati o n o f m ulti e m pl o ye r pl an s tat us do e s n o t re q ui re pa rti ci pa ti o n by m o re th an o n e e m pl o yer. Se cti o n 42 09 ( c) , for exam pl e, cease s to apply i n pl an years afte r th e yea r “ i n w h i c h su bst an tially a ll em plo yer s” w i th d r aw fr o m a p lan . 29 U . S. C . § 1 389( c ) . See als o se cti o n 42 1 9( c) , u n d er w h i ch an em pl o yer’ s w i th d raw al l i abi li ty paym en ts are to be r ed eter m i n ed ( w i th o u t r eg ar d to th e 20- yea r c ap o f sec tio n 4219( c ) ( 1 ) ( B) ) i f th e e m p l o y e r w it h d r e w in c o n c e r t w it h “s u b s t a n t ia l l y a l l e m p l o y e r s .” 29 U .S .C . § 13 9 9 (c )(1)(D ). Th e pr o visi o n s o f M PPA A d ealin g w i th th e r espo n si bili ties o f th e bo ar d o f tr u stees a n d o th er fi d u c i ar i es si m i lar ly c o n tem plat e a r eten tio n o f m u ltiem plo yer s t a t u s . T h e s t a t u t e s p e c if ie s t h a t t h e d u t ie s o f a p l a n a d m in is t r a t o r c o n t in u e u n t il “ th e pla n asset s ar e d i str i bu ted i n full sa tisfac tion of a ll nonfor fei table be nefits u n d er th e pl an . ” 29 U . S. C . § 1341A( c ) ( 2) ( em ph as is a d d e d ). P B G C ’ s r e g u l a t io n o n t h e p o w e r s a n d d u t ie s o f a p l a n s p o n s o r f o l l o w in g a m ass w i th d r aw al o f “ su bst an tially all e m plo yer s” fu r th er spec i fies th at th e pla n spo n so r sh all c o n tin u e t o ad m i n i ster th e pla n pu r su an t t o th e m u ltiem plo yer pla n ru le s. 2 9 C. F. R. § 4041 A. 2 1 . N ei th er th e s tatu to ry o r reg u lator y pro vi si o n s w o u ld h ave m ea n i n g i f t h e pla n c ea sed to be a m u ltiem plo yer pla n so lely b ec au se a sin g le em plo yer co n ti n u ed to h ave an o bli g ati o n to co n tri bute. Th e g u ar an ty pr o v isi o n s o f ER ISA a lso m ili ta te ag ain st a c h an g e in pla n st at u s. Se ct i o n 4022 spe cif i es th at th e s i n g le-em plo yer g u ara n ty ru le s appl y to a s i n gle-e m p l oye r p l an “ w h i ch te rm i n at e s . ” By con tr as t, un der s e cti on 40 2 2 A, P BGC’ s g u aran ty o f be n ef i ts un d er a m u lti em pl o yer pl an appl i es to a m u lti em pl o yer pl an “ w h i c h i s i n so lve n t” ( r eg ar d less o f w h et h er i t is ter m i n at ed ) . Th u s, fo r a p lan to tr an sfo r m fr o m a m u ltiem plo yer pla n i n to a sin g le- em plo yer pla n w o u ld n o t o n ly fun d am en tall y al ter th e n atu re an d ti m i n g o f P BG C’ s gu aran ty w i th res pe ct to th e pl an , i t w o u ld als o frustrate Co n g res s’ s cl earl y exp res se d i n ten ti o n th at th e i n su r ab le even ts b e d i ffer en t fo r th e tw o ty pes o f pla n s. 29 U . S. C . § 1 361 . Fu r th er m o r e, b e c a u s e a m u l t ie m p l o y e r p l a n r e m a in s o n g o in g a f t e r it t e r m in a t e s , a p o s t t e r m in a t io n d ev o lu tio n by a m u lt iem plo ye r pla n in to a s in g le-em plo ye r pla n c r ea te s t h e

3 S e c t io n 4 0 4 1's s t a t e m e n t t h a t it is t h e “ex c l u s iv e ” m e a n s o f t e r m in a t in g a si n g le- em plo yer pla n also str o n g ly im plies th at a p lan su bject to i ts pr o visi o n s h as n o t y et been ter m i n at ed . 4 S e c t io n 4 0 6 3 o f E R IS A d e s c r ib e s a s o m e w h a t a n a l o g o u s f o r m o f l ia b il it y in t h e s i n g le-em pl o yer co n text. See gene rally 29 U . S . C. § 1 36 3( b) . 4 an o m alo u s po ssi bili ty o f a pla n te r m i n at i n g tw i c e, first as a m u ltiem plo yer pla n an d th en as a s i n g le-em pl o yer pl an . 3 Th u s, u n d er a t ex tu al a n aly si s, i t is pla i n th at ER I SA d o es n o t a llo w a m u l t ie m p l o y e r p l a n t o d e v o l v e in t o a s in g l e -e m p l o y e r p l a n . T h is c o n c l u s io n is bu tt r essed by m ar k ed d iffer en c es in th e d esig n an d o per at io n o f t h e t w o r eg im es. A m u l t ie m p l o y e r p l a n t e r m in a t e s b y o c c u r r e n c e o f o n e o f t h e e v e n t s s p e c if ie d in E R IS A § 4041 A( a) , w h ereas a si n g le-em pl o yer pl an can o n ly term i n ate i n acc o rd an ce w i th s e c t io n s 4 0 4 1 a n d 4 0 4 2. T h e d a t e o f p l a n t e r m in a t io n f o r a s in g l e -e m p l o y e r p l a n is d e t e r m in e d d if f e r e n t l y f r o m t h a t o f a m u l t ie m p l o y e r p l a n (c o m p a r e s e c t io n 4 0 4 8 (b )( 1) w it h s e c t io n 4 0 4 1A (b )) , a n d ju s t a s a p l a n c a n n o t t e r m in a t e t w ic e , it c a n n o t h a v e t w o te r m in at io n d at es. W h en a m u lt iem plo ye r pla n te r m in at es, it g en er al ly d o es n o t cease to exi st but rath er co n ti n u es to co ll ect co n tri bution s ( an d w i th d raw al li ab i li ty ) u n til th e pla n i s su fficien t. By c o n tr ast , w h en a sin g le- em plo yer pla n term i n ates , i t so o n g o es o u t o f e xi ste n ce, an d th e e m ployer o bli g ati o n to co n tri bu te c ea ses. Th e c o n tr ast bet w een th e m u ltiem plo yer an d si n g le- em plo yer pr o g r am s d o es n o t sto p th ere. Th e i n sur able e ven t fo r a m u lti em plo yer plan i s cash-fl o w i n so lven cy, in w h ic h e v e n t t h e p l a n m u s t s e e k f in a n c ia l a s s is t a n c e f r o m P B G C . 29 U .S .C . §§ 13 2 2 A (a )(2 ), 1 36 1 , 1 42 6( f) , 1 43 1 , 1 441 ( d ) . Th e i n surable eve n t for a si n g le-em pl o yer pl an i s te rm i n ati o n o f t h e pl an at a t im e w h en th e pl an ’ s a sset s a r e in su ffic ien t t o pa y b en efits a t t h e g u ar an te ed lev el. See 2 9 U . S . C . §§ 13 2 2 (a ), 13 4 1(b )(4 ), 13 4 2 (d )(1)( B )(iii), 136 1; P B G C O p . L t r . 9 1-1 (Ja n . 14 , 19 9 1). W h e n a n e m p l o y e r w it h d r a w s f r o m a n u n d e r f u n d e d m u l t ie m p l o y e r p l a n , it g en er ally o w es w i th d r aw al liabili ty , a c o n c ept u n k n o w n to th e si n g le- em plo yer r eg i m e. 4 Prem i u m s, to o , are calcu late d d i ff erently for m u lti em pl o yer an d si n g le- em plo yer pla n s, an d ar e a llo c at ed to sepa r at e fu n d s, w h i c h m ay be u sed o n ly f o r t h e r e s p e c t iv e g u a r a n t y p r o g r a m u n d e r w h ic h t h e p r e m iu m s w e r e p a id . 2 9 U . S . C . §§ 1305( a), ( e) , ( f) , 1306( a), 1361 . Fin al ly, th e n at u r e a n d am o u n t o f PB G C ’ s g u ar an ty is also m ar k ed ly d iffer en t a s be tw een th e t w o ty pes o f pl an s.

5 I t is also si g n i fica n t t h at Title IV o f ER I SA sp ea k s d i r ec tly to o th er po ssi ble ch an g es i n pl an status. Co n vers i o n o f a co vered plan to an i n d i vi d u al acco u n t pl an c o n s t it u t e s a t e r m in a t io n a n d t h u s s u b jec t s a p l a n t o o n e o r t h e o t h e r t e r m in a t io n reg i m e, d ep en d i n g o n w h eth er th e p lan i s a s i n g le em pl o yer pl an , see 29 U . S. C . § § 1 341( e) , o r m u lti em pl o yer pl an , see 29 U . S. C . § 1 341A. Title IV also ad d r esses m er g er s bet w een m u ltiem plo yer pla n s an d si n g le- em plo yer pla n s. 29 U . S. C . § 1 412. Title IV o r i g i n ally per m i tt ed c er ta i n plan s th at w o u ld bec o m e m u ltiem plo yer plan s u n d er M PPA A’ s n ew d e f in it io n ir r e v o c a b l y t o e l e c t s in g l e -e m p l o y e r p l a n t r e a t m e n t , s o l o n g a s t h e y d id s o w it h in o n e y e a r a f t e r M P P A A ’ s e n a c t m e n t . 29 U . S . C . § 14 53 . T h e s e p r o v is io n s d e s c r ib e s p e ci f i c ci rcum s ta n ce s un der w h i ch a cove re d m ul ti e m p l oye r p l an co ul d be com e a n o t h e r t y p e o f p l a n . T h a t C o n g r e s s a t t e n d e d t o m u l t ie m p l o y e r p l a n s c h a n g in g sta tu s i n c er ta i n li m i te d si tu at i o n s str o n g ly im plies th at a m u ltiem plo yer pla n can n o t si m pl y d evo lve i n to a si n g le-em pl o yer pl an i n o th er s i tu ati o n s, as w h en th e n u m ber o f e m ployers i s redu ced to fe w er th an tw o . As th e S en ate Co m m i ttee on Labo r an d H u m an R eso u r c es n o ted , M PPA A “ c lar i fi es th at m u ltiem plo yer sta tu s c o n tin u es aft er ter m i n at i o n even i f, fo r i n sta n c e, th e ter m i n at i o n i s a r esu lt o f all em plo yer s w i th d raw i n g fro m th e p lan . ” Se n ate Co m m . o n Labor an d H u m an Res o u rc es , 96 th Cong. , The Multiemployer Pensi on Plan Am endm ents Act of 1 98 0: Summary and Ana ly si s of Cons ide rati on 11 (C o m m . Prin t 19 80) . Fo r th e fo r eg o in g r ea so n s, w e c o n c lu d e t h at a m u lt iem plo ye r pla n d o es n o t d ev o lv e in to a s in g le-em plo ye r pla n as a r esu lt o f a r ed u c tio n to less t h an tw o th e n u m ber o f e m pl o yers req u i red to co n tri bute pur suan t to a co ll ecti ve barg ai n i n g ag r eem en t. I h o pe t h i s i s h elpfu l. V er y t r u ly y o u r s, / s / J am es J . K ei g h tley Ge ne r a l C ouns e l