withdrawal liability

Withdrawal liability refers to the financial obligation that employers may incur when they terminate their participation in a multi-employer pension plan. These plans are often used by various companies in the same industry, like construction or hospitality. If a company withdraws, it may owe a payment to cover its share of the plan's unfunded pension liabilities—essentially the amount needed to pay promised benefits to retirees. This ensures that remaining employers and their employees are not left to bear the financial burden of pensions for those who have left the plan.