HB Ad Slot
HB Mobile Ad Slot
“Highest Contribution Rate” Means Highest of Any Collective Bargaining Agreement for ERISA Withdrawal Liability Payments
Wednesday, September 30, 2015

The Third Circuit held that where an employer has been party to multiple collective bargaining agreements (“CBAs”) with a multiemployer fund, an employer’s withdrawal liability should be based on “the single highest contribution rate” established under the CBAs.  In so ruling, the Court observed that ERISA requires annual withdrawal liability payments to be based on “the highest contribution rate at which the employer had an obligation to contribute under the plan,” and rejected the employer’s argument that a “weighted average” of the contribution rates should apply. 

The parties also disagreed about whether the annual payment should include a ten percent surcharge the employer had been paying to the fund, as required by the Pension Protection Act of 2006 for plans in “critical status.”  Consistent with the Multiemployer Pension Reform Act of 2014, the Third Circuit concluded that the surcharge should not factor into the employer’s withdrawal liability payment, since surcharges are not part of contribution rates used to calculate the payment.  The case is Bd. of Trustees of IBT Local 863 Pension Fund v. C & S Wholesale Grocers, Inc., No. 14-1956, 2015 WL 5438539 (3d Cir. Sept. 16, 2015).

HB Ad Slot
HB Ad Slot
HB Mobile Ad Slot
HB Ad Slot
HB Mobile Ad Slot
 
NLR Logo
We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins