---
kind: "section"
citation: "29 U.S.C. § 1403"
title: "29"
title_heading: "Labor"
number: "1403"
heading: "Withdrawal liability payment fund"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/29/1403"
units:
  - "Chapter 18 — Employee Retirement Income Security Program"
  - "Subchapter III — Plan Termination Insurance"
  - "Subtitle E — Special Provisions for Multiemployer Plans"
  - "Part 1 — employer withdrawals"
---

# §1403. Withdrawal liability payment fund

- (a) **Establishment of or participation in fund by plan sponsors—** The [plan sponsors](/usc/29/1083.md?p=c-7-F-i) of [multiemployer plans](/usc/29/1301.md?p=a-3) may establish or participate in a withdrawal liability payment [fund](/usc/29/1301.md?p=a-5).
- (b) **Definitions—** For purposes of this section, the term “withdrawal liability payment [fund](/usc/29/1301.md?p=a-5)”, and the term “[fund](/usc/29/1301.md?p=a-5)”, mean a trust which—
  - (1) is established and maintained under [section 501(c)(22) of title 26](/usc/26/501.md?p=c-22),
  - (2) maintains agreements which cover a substantial portion of the participants who are in [multiemployer plans](/usc/29/1301.md?p=a-3) which (under the rules of the trust instrument) are eligible to participate in the [fund](/usc/29/1301.md?p=a-5),
  - (3) is funded by amounts paid by the plans which participate in the [fund](/usc/29/1301.md?p=a-5), and
  - (4) is administered by a Board of Trustees, and in the administration of the [fund](/usc/29/1301.md?p=a-5) there is equal representation of—
    - (A) trustees representing employers who are obligated to contribute to the plans participating in the [fund](/usc/29/1301.md?p=a-5), and
    - (B) trustees representing [employees](/usc/29/1083.md?p=c-7-D-vi) who are participants in plans which participate in the [fund](/usc/29/1301.md?p=a-5).
- (c) **Payments to plan; amount, criteria, etc.**
  - (1) If an employer withdraws from a plan which participates in a withdrawal liability payment [fund](/usc/29/1301.md?p=a-5), then, to the extent provided in the trust, the [fund](/usc/29/1301.md?p=a-5) shall pay to that plan—
    - (A) the employer’s unattributable liability,
    - (B) the employer’s withdrawal liability payments which would have been due but for section [1388](/usc/29/1388.md), [1389](/usc/29/1389.md), [1399](/usc/29/1399.md), or [1405](/usc/29/1405.md) of this title,[^1]
    - (C) the employer’s withdrawal liability payments to the extent they are uncollectible.
  - (2) The [fund](/usc/29/1301.md?p=a-5) may provide for the payment of the employer’s attributable liability if the [fund](/usc/29/1301.md?p=a-5)—
    - (A) provides for the payment of both the attributable and the unattributable liability of the employer in a single payment, and
    - (B) is subrogated to all rights of the plan against the employer.
  - (3) For purposes of this section, the term—
    - (A) “attributable liability” means the excess, if any, determined under the provisions of a plan not inconsistent with regulations of the corporation, of—
      - (i) the value of vested benefits accrued as a result of service with the employer, over
      - (ii) the value of plan assets attributed to the employer, and
    - (B) “unattributable liability” means the excess of withdrawal liability over attributable liability.

    Such terms may be further defined, and the manner in which they shall be applied may be prescribed, by the corporation by regulation.

  - (4)
    - (A) The trust of a [fund](/usc/29/1301.md?p=a-5) shall be maintained for the exclusive purpose of paying—
      - (i) any amount described in [paragraph (1)](#c-1) and [paragraph (2)](#c-2), and
      - (ii) reasonable and necessary administrative expenses in connection with the establishment and operation of the trust and the processing of claims against the [fund](/usc/29/1301.md?p=a-5).
    - (B) The amounts paid by a plan to a [fund](/usc/29/1301.md?p=a-5) shall be deemed a reasonable expense of administering the plan under sections [1103(c)(1)](/usc/29/1103.md?p=c-1) and [1104(a)(1)(A)(ii)](/usc/29/1104.md?p=a-1-A-ii) of this title, and the payments made by a [fund](/usc/29/1301.md?p=a-5) to a participating plan shall be deemed services necessary for the operation of the plan within the meaning of [section 1108(b)(2) of this title](/usc/29/1108.md?p=b-2) or within the meaning of [section 4975(d)(2) of title 26](/usc/26/4975.md?p=d-2).
- (d) **Application of payments by plan—**
  - (1) For purposes of this part—
    - (A) only amounts paid by the [fund](/usc/29/1301.md?p=a-5) to a plan under [subsection (c)(1)(A)](#c-1-A) shall be credited to withdrawal liability otherwise payable by the employer, unless the plan otherwise provides, and
    - (B) any amounts paid by the [fund](/usc/29/1301.md?p=a-5) under [subsection (c)](#c) to a plan shall be treated by the plan as a payment of withdrawal liability to such plan.
  - (2) For purposes of applying provisions relating to the funding standard accounts (and minimum contribution requirements), amounts paid from the plan to the [fund](/usc/29/1301.md?p=a-5) shall be applied to reduce the amount treated as contributed to the plan.
- (e) **Subrogation of fund to rights of plan—** The [fund](/usc/29/1301.md?p=a-5) shall be subrogated to the rights of the plan against the employer that has withdrawn from the plan for amounts paid by a [fund](/usc/29/1301.md?p=a-5) to a plan under—
  - (1) [subsection (c)(1)(A)](#c-1-A), to the extent not credited under [subsection (d)(1)(A)](#d-1-A), and
  - (2) [subsection (c)(1)(C)](#c-1-C).
- (f) **Discharge of rights of fiduciary of fund; standards applicable, etc.** Notwithstanding any other provision of this chapter, a fiduciary of the [fund](/usc/29/1301.md?p=a-5) shall discharge the fiduciary’s duties with respect to the [fund](/usc/29/1301.md?p=a-5) in accordance with the standards for fiduciaries prescribed by this chapter (to the extent not inconsistent with the purposes of this section), and in accordance with the documents and instruments governing the [fund](/usc/29/1301.md?p=a-5) insofar as such documents and instruments are consistent with the provisions of this chapter (to the extent not inconsistent with the purposes of this section). The provisions of the preceding sentence shall supersede any and all State laws relating to fiduciaries insofar as they may now or hereafter relate to a [fund](/usc/29/1301.md?p=a-5) to which this section applies.
- (g) **Prohibition on payments from fund to plan where certain labor negotiations involve employer withdrawn or partially withdrawn from plan and continuity of labor organization representing employees continues—** No payments shall be made from a [fund](/usc/29/1301.md?p=a-5) to a plan on the occasion of a withdrawal or [partial withdrawal](/usc/29/1381.md?p=b-3) of an employer from such plan if the [employees](/usc/29/1083.md?p=c-7-D-vi) representing the withdrawn [contribution base units](/usc/29/1301.md?p=a-11) continue, after such withdrawal, to be represented under [section 159 of this title](/usc/29/159.md) (or other applicable labor laws) in negotiations with such employer by the labor organization which represented such [employees](/usc/29/1083.md?p=c-7-D-vi) immediately preceding such withdrawal.
- (h) **Purchase of insurance by employer—** Nothing in this section shall be construed to prohibit the purchase of insurance by an employer from any other [person](/usc/29/1301.md?p=a-20), to limit the circumstances under which such insurance would be payable, or to limit in any way the terms and conditions of such insurance.
- (i) **Promulgation of regulations for establishment and maintenance of fund—** The corporation may provide by regulation rules not inconsistent with this section governing the establishment and maintenance of [funds](/usc/29/1301.md?p=a-5), but only to the extent necessary to carry out the purposes of this part (other than [section 1402 of this title](/usc/29/1402.md)).

## Footnotes

[^1]: So in original. Probably should be followed by “and”.

## Source credit

(Pub. L. 93–406, title IV, § 4223, as added Pub. L. 96–364, title I, § 104(2), Sept. 26, 1980, 94 Stat. 1241; amended Pub. L. 101–239, title VII, § 7891(a), Dec. 19, 1989, 103 Stat. 2445.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsec. (f), was in the original “this Act”, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of this title and Tables.

### Amendments

1989—Subsecs. (b)(1), (c)(4)(B). 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 Subsidiaries

### 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.