On April 24, 2025, the Seventh Circuit upheld a Northern District of Illinois decision requiring a multiemployer pension plan to exclude the employers’ post-2014 rehabilitation plan contribution rate increases from the employers’ withdrawal liability calculation.
Withdrawal Liability and Funding Reforms for Multiemployer Plans
The Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), sets standards including minimum funding for multiemployer defined benefit pension plans. Under ERISA and MPPAA, an employer that exits a multiemployer plan must pay “withdrawal liability” to the fund to cover the employer’s “share” of the fund’s unfunded vested liabilities. One datapoint used in calculating an employer’s “share” of the fund’s unfunded vested liabilities is the employer’s highest rate of contributions in the 10 years before withdrawal.
The 2006 Pension Protection Act (PPA) requires that some underfunded multiemployer pension plans take added remedial measures. Under the PPA, pension plans in “endangered status” must adopt “funding improvement plan[s],” and pension plans in “critical status” or “critical and declining status” must adopt “rehabilitation plan[s].” 29 U.S.C. § 1085(a). Both measures require the pension plan to propose changes—reduce future benefit accruals, increase contributions, or both—that would enable the plan to recover from its underfunded status. 29 U.S.C. § 1085(c)(1)(B)(i)...
Business The Managing Director of PWAN Plus Business Concerns Ltd, Prof. Julius Oyedemi has refuted allegations made by social media influencer, Scott Iguma, over the ownership and allocation of la...