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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
Satisfied Customers: 111571
Experience:  20+ Years of Employment Law Experience
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Can an employer legally withdraw from a pension plan and

Customer Question

Can an employer legally withdraw from a pension plan and for what reason/s?
Can you explain in details please.
Submitted: 8 months ago.
Category: Employment Law
Customer: replied 8 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 8 months ago.
I also found out that the Company I'm working for is willing to pay a large amount of money to our union to completely withdraw
from the pension plan, and the union rejected that offer.
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Are you talking about withdrawal from a multi-employer pension plan with the union and other employers involved?
Customer: replied 8 months ago.
When will I get a response to my questions
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
If you would please read above, you were asked to supply us with more information, as you did not supply us sufficient information for us to give you any answer.
So please tell us more and answer what we asked you and we would be glad to answer your questions.
Customer: replied 8 months ago.
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
Under the laws, an employer participation in a union multi employer plan is a matter of contractual agreement between the union and the employer. So, the employer an withdraw from the plan, but they would owe a large payment for buying out of the plan and most employers cannot afford that payment, which is why they stay in. If your employer can afford the buyout price from the union, then it is perfectly legal for them to get out of the plan as long as it does not violate your union contract with the employer.
If the union has rejected the offer, then legally the employer must continue to participate in the plan or the union can sue the employer for breach of contract.
Customer: replied 8 months ago.
In my case the Employer is willing to pay so that they can permanently exit from the defined pension plan but the union has rejected the offer from the employer this is the labor dispute that we're experiencing at our plant right now so the employer is not obligated to except a union defined plan since they are introducing their own defined contribution plan
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
The union has to also agree, the employer cannot just get out, since this is a contractual agreement between union and the employer. The employer cannot just drop the multi-employer plan unless the union agrees to it though, that would be an unfair labor practice and breach of contract.
Customer: replied 8 months ago.
What happens if the contract has expired and both parties cannot come to an agreement on the matter?
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
Then the parties have to seek contract mediation or arbitration through the labor board process to negotiate some contract agreement.