The Multiemployer Pension Plan Amendments Act of 1974 (MPPAA) was enacted purposefully by Congress to seize moneys from contributing employers to fund multiemployer defined benefit pension funds regardless of the employers’ culpability for the underfunding of those plans. However, the construction industry is one of a few industries in which the impact of withdrawal liability upon employers has been eliminated.
The goal of MPPAA practitioners who represent employers in arbitrations against the funds is to eliminate or reduce withdrawal liability. Unlike other aspects of American jurisprudence that provide a defendant or charged party a presumption of innocence or lack of liability, MPPAA presumes that an employer owes withdrawal liability.
Moreover, MPPAA imposes the burden of proof upon the withdrawn employer to prove it does not owe withdrawal liability. To ensure that such liability exists, all actions of a pension fund or its trustee are presumed to be correct. By a preponderance of evidence, an employer must rebut the presumption of correctness that attaches to the determinations of the trustees that withdrawal liability is due and owing.
MPPAA provides a few exemptions to help an employer. One is the labor dispute exemption that recognizes that a permanent cessation of operations (the reason for a withdrawal) cannot occur in a strike or lockout, both of which are presumed to be short term.
The other major exemption is the building and construction...
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