Total Articles: 27
Jackson Lewis P.C. • November 19, 2018
This is another blog on our monitoring the status of defined benefit multi-employer pension funds. Since this author last wrote to you, it has been revealed that the Central States Pension Fund is scheduled to become insolvent sometime in 2025. Worse yet, it has been announced that the multi-employer fund of the Pension Benefit Guaranty Corporation (“PBGC”) which was structured to assist insolvent multi-employer pension funds is also projected to run out of money in 2025.
Jackson Lewis P.C. • August 12, 2018
As our earlier article reported, Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York had recently held that a multiemployer pension fund’s use of the “Segal Blend” to calculate a withdrawn employer’s withdrawal liability violated the provisions of the Employee Retirement Income Security Act (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act (“MPPAA.”)
Ogletree Deakins • June 13, 2018
n June 1, 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that an asset purchaser that was deemed a successor was liable to pay the seller’s withdrawal liability even though the purchaser did not have actual knowledge of the liability. The Ninth Circuit found that constructive notice of the liability was sufficient to impose withdrawal liability on the asset purchaser. This ruling raises the hurdles that a successor must overcome to avoid withdrawal liability in an asset sale transaction.
Jackson Lewis P.C. • June 10, 2018
The expansion of the multiemployer pension plan successor withdrawal liability doctrine continues for asset purchasers. Establishing a constructive notice standard, the federal appellate court in San Francisco has ruled that a common law successor of a seller that withdrew from a multiemployer pension plan covered by the Employee Retirement Income Security Act (ERISA), as amended by the Multiemployer Pension Plan Amendment Act (MPPAA), had constructive notice of, and was therefore liable for, withdrawal liability incurred by the asset seller. Heavenly Hana, LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018).
Jackson Lewis P.C. • April 02, 2018
The district court erred in finding a multiemployer pension plan did not show sufficient continuity of business operations to support imposing successor liability on an asset purchaser, the federal appeals court in Chicago has ruled in a case under the Multiemployer Pension Plan Amendments Act (MPPAA) involving withdrawal liability of $661,978. Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc., No. 16-2840 (7th Cir. Mar. 12, 2018).
Jackson Lewis P.C. • April 02, 2018
In a decision that could have far-reaching implications for multiemployer pension plans and employers, a federal district court has held that the use of the “Segal Blend” to calculate a company’s withdrawal liability when it withdrew from a multiemployer pension plan violated the Employee Retirement Income Security Act (ERISA), as amended by the Multiemployer Pension Plan Amendments Act (MPPAA). The New York Times Co. v. Newspapers & Mail Deliverers’-Publishers’ Pension Fund, No. 1:17-cv-06178-RWS (S.D.N.Y. Mar. 26, 2018). The decision likely will be appealed to the U.S. Court of Appeals for the Second Circuit in New York.
FordHarrison LLP • February 16, 2017
Executive Summary: In a recent decision involving a withdrawal liability assessment by a multiemployer pension plan, an arbitrator reduced the assessment by approximately 50 percent and ruled in favor of the employer on several significant legal issues.
Jackson Lewis P.C. • January 18, 2017
This is another article in our series addressing the continued deterioration and downward spiral of multi-employer defined benefit pension funds and the resulting impact upon participants, unions and most importantly on employers.
Jackson Lewis P.C. • September 27, 2016
The precarious financial status of some multiemployer benefit funds has led to criminal indictment against non-contributors. This troubling expansion of potential sanctions for failure to make required contributions to multiemployer benefit plans appears in a case from the U.S. District Court for the District of Massachusetts.
Jackson Lewis P.C. • June 09, 2016
Employers who cease contributing to an ERISA multiemployer pension plan are liable for their allocable share of any underfunding, or “withdrawal liability.”
Franczek Radelet P.C • June 07, 2016
The Pension Benefit Guaranty Corporation (PBGC) recently released a proposed rule amending the agency’s regulations on mergers and transfers between multiemployer plans. The proposed rule would implement a section of the Multiemployer Pension Reform Act of 2014 (MPRA), which provides that the PBGC may offer assistance to multiemployer plans to facilitate plan mergers.
Jackson Lewis P.C. • May 22, 2016
In a case of first impression, the United States Court of Appeals for the Tenth Circuit held that work performed by a non-union company acquired after a construction industry employer ceased contributing to a multiemployer pension plan (MEP) triggered withdrawal liability. The case, Ceco Concrete Construction, LLC v. Centennial State Carpenters Pension Trust, Nos. 15-1021, 15-1190 (10th Cir. May 3, 2016), should be paid close heed by unionized construction companies.
Jackson Lewis P.C. • May 19, 2016
In the aftermath of the rejection of the Central States Southeast and Southwest Areas Pension Plan (“Central States”) application to reduce core benefits by Treasury Special Master Kenneth Feinberg, it is critical that contributing employers to multi-employer pension funds recognize the harsh reality that help to those funds will not be forthcoming from the government in at least the near term.
Franczek Radelet P.C • April 06, 2016
In a significant decision for both private equity funds and multiemployer pension plans, the U.S. District Court for the District of Massachusetts held last week in Sun Capital Partners III, L.P. v. New England Teamsters & Trucking Industry Pension Fund that a related group of private equity funds are responsible for pension withdrawal liability assessed against a bankrupt portfolio company owned by the funds.
FordHarrison LLP • February 26, 2016
Many multiemployer pension plans are struggling financially today, and, according to the PBGC, about 10 percent of the 1,400 plans are expected to become insolvent within the next 10-15 years. These looming insolvencies were in large measure the motivation behind the 2014 law that now allows plans in "critical and declining" status to cut vested benefits.
Jackson Lewis P.C. • February 22, 2016
We have been monitoring and reporting on several disquieting events which have occurred in the multi-employer pension plan world within the past few months.
Jackson Lewis P.C. • October 29, 2015
Since the passage of the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”) the financial well-being of employers contributing to multi-employer defined benefit pension plans has been tied to the funding of those plans, many of which have been underfunded for decades. The downward spiral has been exacerbated by several unalterable factors: an increase in retirees, a decrease in active participants whose contributions support the retirees and an increase in life expectancy.
Franczek Radelet P.C • October 28, 2015
In a recent decision that has important implications for purchasers of assets that come with a multiemployer union pension plan, the U.S. Court of Appeals for the Seventh Circuit held in Tsareff v. ManWeb Services, Inc., 794 F.3d 841 (7th Cir. 2015) that an asset purchaser’s awareness of a seller’s potential withdrawal liability was enough to make the purchaser responsible for the withdrawal liability, even where the asset purchase agreement did not include the withdrawal liability as an assumed liability. The decision is important because it arguably expands the circumstances under which an asset purchaser can be deemed responsible for a seller’s pension withdrawal liability.
Jackson Lewis P.C. • September 30, 2015
Both buyers and sellers in asset sale transactions should be cognizant of the ongoing erosion of the common law rule that the purchaser is not responsible for the seller’s liabilities absent a contractual assumption of such liabilities, as evidenced by a recent Ninth Circuit case finding that the theory of successor liability may be used to hold an asset purchaser liable for the predecessor’s $2.2 million withdrawal liability obligation to a multiemployer pension plan. Federal courts originally applied successor liability in the context of federal labor law where the successor employer had notice of an unfair labor practice and continued, without interruption or substantial change, the seller’s business operations. Over the years, this “successor liability” rule has been expanded to cover various other statutory liabilities under labor and employment law.
FordHarrison LLP • July 29, 2015
There are approximately 1,400 multiemployer pension plans and nearly 10 percent are projected to become insolvent within the next 15 years. Plan insolvency will trigger a termination and the assessment of withdrawal liability. Collectively, these plans have over $30 billion in unfunded liabilities. These plans are now being designated as in "critical and declining status" and have the authority to reduce benefits under the changes to the law made in 2014. While those benefit cuts, which require regulatory approval, may forestall insolvency for a while, they are not going to reduce any withdrawal liability over the next 10 years.
Littler Mendelson, P.C. • June 19, 2015
On June 17, 2015, the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC) released several regulatory measures implementing the multiemployer pension plan amendments that were enacted in December, 2014.
Vedder Price • May 08, 2015
Labor & Employment Shareholders Charles B. Wolf and Patrick W. Spangler recently updated their white paper on Withdrawal Liability to Pension Plans Under ERISA, which has been used by Mr. Wolf and Mr. Spangler in prior meetings of the ERISA Litigation National Institute, presented by the American Bar Association. The paper was originally authored by Mr. Wolf.
Fisher Phillips • May 04, 2015
Employers and unions locked into failing multiemployer pension plans received an 11th-hour reprieve in late December when Congress passed legislation revising laws that had hobbled these plans for years. Titled the “Multiemployer Pension Reform Act of 2014,” the reforms give multiemployer trustees and the Pension Benefit Guaranty Corporation (PBGC) new tools to address plan underfunding, and seek to eliminate reasons employers abandon these plans prematurely.
Ogletree Deakins • April 04, 2012
The Sixth Circuit Court of Appeals recently held that a collective bargaining agreement (CBA) provision, which obligated a union to indemnify an employer for withdrawal liability did not violate public policy under the Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). This issue was undecided in the Sixth Circuit, and the decision provides some much-needed guidance for employers. Shelter Distribution, Inc. v. Genâ€™l Drivers, Warehousemen & Helpers Local Union No. 89, No. 11-5450, Sixth Circuit Court of Appeals (March 16, 2012).
Franczek Radelet P.C • April 02, 2012
In the case of Shelter Distribution, Inc. v. General Drivers, Warehousemen & Helpers Local Union No. 89, No. 11-5450 (6th Cir. Mar. 16, 2012), a court considered whether a collective bargaining agreement shifted employer withdrawal liability to a union. In Shelter Distribution, a multi-employer pension fund assessed withdrawal liability against an employer. In response, the employer attempted to enforce language contained in its collective bargaining agreement in which the union agreed to indemnify the employer if withdrawal liability was assessed by the pension fund. At arbitration, the union argued that the indemnification language violated the policy expressed in the Multiemployer Pension Plan Amendments Act which prohibits the shifting of withdrawal liability through collective bargaining agreements. The arbitrator rejected the Unionâ€™s argument, and ordered the union to pay the employer the withdrawal liability that was assessed by the pension fund. A district court upheld the arbitration award and the union appealed to the U.S. Court of Appeals for the Sixth Circuit.
Schulte Roth & Zabel LLP • November 11, 2011
To increase transparency, the Financial Accounting Standards Board (â€œFASBâ€) has imposed new disclosure requirements on nongovernmental employers participating in multiemployer plans in its recently issued Accounting Standards Update No. 2011-09, Compensation â€” Retirement Benefits â€” Multiemployer Plans (Subtopic 715-80): Disclosures About an Employerâ€™s Participation in a Multiemployer Plan (the â€œUpdateâ€). Public entities must comply with these new disclosure requirements for fiscal years ending after Dec. 15, 2011; nonpublic entities must comply for fiscal years ending after Dec. 15, 2012. Though not required, the FASB is permitting early application of the disclosure requirements if employers are willing and able to provide the required information before the applicable effective date.
Fisher Phillips • April 02, 2008
Certain notice and funding provisions of the Pension Protection Act (PPA) became law January 1, 2008, and the first impact of these requirements is about to be felt. On or about March 30 most multiemployer pension plans will be sending status notices to employers and others. Many of these notices will contain bad news, although some will not. Here's what's going on in somewhat non-technical terms.