The credit arrived at the right step - and wiped out $9.3 million
A concrete company that left a multiemployer pension plan may owe nothing for leaving.
The US Court of Appeals for the Seventh Circuit on September 17 sided with Consumers Concrete Corp. in a dispute that could slash millions from the company's pension exit bill - and created a circuit split that employers across unionized industries will want to watch.
The backstory is straightforward. Consumers partially withdrew from a defined benefit plan run by Central States, Southeast and Southwest Areas Pension Fund in 2017. Two years later, it walked away entirely. The parties agreed the full exit triggered $23,272,103.41 in unfunded vested benefits, with annual payments of $607,344.90.
The fight was about a credit. Federal law gives employers a credit for liability already paid through an earlier partial withdrawal - a safeguard against paying twice for the same shortfall. The question was where in the calculation that credit lands.
Consumers said: apply it at the end, after the statute's four-step liability formula and its 20-year payment cap. That way, the credit could swallow the entire capped amount - roughly $9.3 million - leaving the company owing nothing. The Fund said: apply it earlier, at step two, before the cap kicks in. That left the full $9.3 million on the table.
An arbitrator picked the Fund's math. The district court flipped the result, and the Seventh Circuit agreed.
The reasoning came down to...
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