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The Employee Retirement Income Security Act of 1974 (ERISA
) made the contractors who are signatories to collective bargaining agreements liable for the obligations of the defined benefit plans to which they contribute. 29 U.S.C. §§1001 to 1461. Thus, even if your contract that you signed does not specify anything if you were signed onto a union contract then you become liable for your share of the union pension plan
that is supposed to be prorated per contractor.
The Multi-Employer Pension Plan Amendments Act of 1980 (MPPAA). MPPAA created “withdrawal liability” which, in simplified form, imposes on the withdrawing contractor its pro rata share of a plan’s underfunding, based upon the amount previously contributed to the plan by the contractor, at the time of the contractor’s withdrawal. 29 U.S.C. §1381.
Contractors that discontinue operations, change to open-shop labor
, or whose employees vote to withdraw from the union are all deemed to have “withdrawn” from the plan. This is what happened here in your situation, your contract expired and you became liable for the withdrawal liability under the federal law, even though it does not say it in your contract.
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