DISCLAIMER: Before I go too far into what I say, this could be all wrong, so take it with a grain of salt.
Withdrawal Liability, A Hidden Liability of Union Employers.
Withdrawal Liability is an Exit-Fee Triggered when an Employer Completely STOPS Contribution to a Union's Multi-Employer Defined Benefit (DB) Pension Plan - or when an employer reduces its annual contributions beyond certain percentages over time.
Withdrawal Liability is a creation of Statute and Subject to STRICT Enforcement, meaning there is very little subjective application to the process. Withdrawal Liability assessments are typically significant and can, and often do, exceed the million-dollar threshold, regardless of the fact that an employer may only contribute to the Union pension Plan on behalf of a small number of Union Employees.
So what does this mean for a union member that started a business, signed a union contract because it was the right thing to do. I have also paid all Union Benefit Obligation over the many years and owe no one. If the Union and the Pension Fund was under the classification as an Entertainment Fund, Entertainment Industry (means theater, motion picture, radio, television, sound or visual recording, music, and dance and such other entertainment activities as the corporation may determine to be appropriate) which they are not. Strange to have a stagehand union, not be an entertainment union. Local 720 supplies more convention labor than entertainment labor. May 720 should be called a Convention Union. Those Personal Service Contract (PSC) employers that have signed an IATSE Union contract in Las Vegas as I have, will find out that the Stagehands Union Pension Plan is not an Entertainment Plan. Because of this, everyone of the PSC contractors is subject to Withdrawal Liability Fees.
As an owner of a stagehand business providing stagehand labor for shows, events, conventions and 99% of all the stagehand union crews I use are temporary, on-call, or per job employees. All the employees I use also work for a group of union labor providers. One employee can have 15 W-forms at the end of each year.
What happened back in 1974 was the government wanted more control over the Private Pension Plans so Congress passed the Employer Retirement Income Security Act is known as (ERISA).
If a DB pension plan is not fully funded and has insufficient funding for its members through the member's retirement years, ERICA funding rules kick in and require the employers to make sure the funding is there through the life of those employees that worked for the company. This is Withdrawal Liability.
This all started because of Studebaker closing and the workers lost all benefits accrued during their employment. I don't understand how In-House Production (IHP) and the work, IHP does with on-call labor compare with Studebaker, but I guess it does.
Look for more in the coming future on Withdrawal Liability from IHP.
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