by Michael J. Crumbock, Esq.
If your company ever acquires another company that has multiemployer pension or health benefit plan obligations through a union, beware. You could wind up being responsible for any delinquent contributions or underfunded benefit liabilities of the seller.
Generally, a benefit plan is a multiemployer plan if it is maintained by more than one employer in connection with a union collective bargaining agreement.
ERISA benefit obligations
The Employee Retirement Income Security Act (ERISA) gives multiemployer plans the right to collect an employer’s delinquent contributions.
Additionally, an employer that withdraws from a multiemployer plan—for example, by being acquired by another company—may have “withdrawal liability” imposed under ERISA or the terms of the plan. If the assets of the company are sold, that may trigger a withdrawal, unless the buyer agrees to assume the contribution obligations.
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