U.S. Code » Title 29 » Chapter CHAPTER 18— EMPLOYEE RETIREMENT INCOME SECURITY PROGRAM › Subchapter SUBCHAPTER III— PLAN TERMINATION INSURANCE › Subtitle Subtitle E— Special Provisions for Multiemployer Plans › Part part 1— employer withdrawals

29 U.S.C. § 1390

Nonapplicability of withdrawal liability for certain temporary contribution obligation periods; exception

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(a) An employer who withdraws from a plan in complete or partial withdrawal is not liable to the plan if the employer—(1) first had an obligation to contribute to the plan after September 26, 1980,(2) had an obligation to contribute to the plan for no more than the lesser of—(A) 6 consecutive plan years preceding the date on which the employer withdraws, or(B) the number of years required for vesting under the plan,(3) was required to make contributions to the plan for each such plan year in an amount equal to less than 2 percent of the sum of all employer contributions made to the plan for each such year, and(4) has never avoided withdrawal liability because of the application of this section with respect to the plan.(b) Subsection (a) shall apply to an employer with respect to a plan only if—(1) the plan is amended to provide that subsection (a) applies;(2) the plan provides, or is amended to provide, that the reduction under section 411(a)(3)(E) of title 26 applies with respect to the employees of the employer; and(3) the ratio of the assets of the plan for the plan year preceding the first plan year for which the employer was required to contribute to the plan to the benefit payments made during that plan year was at least 8 to 1.(Pub. L. 93–406, title IV, § 4210, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1226; amended Pub. L. 101–239, title VII, § 7891(a)(1), Dec. 19, 1989, 103 Stat. 2445; Pub. L. 109–280, title II, § 204(c)(1), Aug. 17, 2006, 120 Stat. 887.)Editorial NotesAmendments

2006—Subsec. (b)(1) to (4). Pub. L. 109–280 redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “the plan is not a plan which primarily covers employees in the building and construction industry;”.

1989—Subsec. (b)(3). Pub. L. 101–239 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text.

Statutory Notes and Related SubsidiariesEffective Date of 2006 Amendment

Pub. L. 109–280, title II, § 204(c)(3), Aug. 17, 2006, 120 Stat. 887, provided that: “The amendments made by this subsection [amending this section and section 1391 of this title] shall apply with respect to plan withdrawals occurring on or after January 1, 2007.”

Effective Date of 1989 Amendment

Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) of Pub. L. 101–239, set out as a note under section 1002 of this title.

Notes of Decisions
Cited in 7 cases (2 in the last 5 years), 1982–2024 · leading case: Peick v. Pension Benefit Guar. Corp., 539 F. Supp. 1025 (N.D. Ill. 1982).
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Peick v. Pension Benefit Guar. Corp., 539 F. Supp. 1025 (N.D. Ill. 1982). “The PBGC’s reliance upon the “free look” rule of 29 U.S.C.A. § 1390 (Supp. 1981) is, however, misplaced.”
Cent. States Pension Fund v. Rogers, 843 F. Supp. 1135 (E.D. Mich. 1992). “In the Final Pretrial Order, and for the first time, Rogers asserted a defense under 29 U.S.C. § 1390 . That defense is also barred under the exhaustion of administrative remedies doctrine.”
Cent. States, Se. & Sw. Areas Pension Fund v. Auffenberg Ford, Inc., 637 F.3d 718 (7th Cir. 2011). “Under 29 U.S.C. § 1390 (a), "[a]n employer who withdraws from a plan in complete or partial withdrawal is not liable to the plan [for withdrawal liability] if the employer .”
Cent. States, Se. & Sw. Areas Pension Fund v. Louisville Auto Rail Servs., Inc., 67 F. Supp. 2d 933 (N.D. Ill. 1999). “Defendants argue that they are not subject to withdrawal liability because they fall under the “free look” exemption discussed in 29 U.S.C. § 1390 . Yet ERISA clearly states that “any dispute between an employer and the plan sponsor .”
Trs. of the IAM Nat'l Pension Fund v. Ohio Magnetics, Inc. (D.C. Cir. 2024). · cites it 5× “At arbitration, the issues for resolution included: (1) whether it was a violation of ERISA, as amended, for the discount rate to be changed after the December 31, 2017, measurement date and (2) whether the “free-look” exception, 6 29 U.S.C. § 1390 (a), applies to M&K and…”
Auto. Indus. Pension v. South City Motors, Inc. (9th Cir. 2020). · cites it 2× “See 29 U.S.C. § 1390 . The arbitrator granted summary judgment in favor of the Trust and awarded attorney’s fees.”
Trs. of the Iam Nat'l Pension Fund v. M & K Emp. Solutions, LLC (D.D.C. 2022). “See 29 U.S.C. § 1390 (a). The best reading of the combined language “an employer who withdraws from a plan in complete or partial withdrawal” and “had an obligation to contribute to the plan for no more than [a specified time period]” is that, together, they require the length…”
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