Court Rules that One-Time Voluntary Separation Program is Not an ERISA Plan

By Bruce H. Schwartz on

Whether a one-time voluntary separation program should be treated as an ERISA-covered severance plan depends on whether the program requires an “ongoing administrative scheme” – a requirement first established by the Supreme Court in Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987).

In Fort Halifax, the Supreme Court held that ERISA does not apply to a one-time severance payment —such as one dictated by a state plant-closing law ― that is triggered by an external event and requires no administration or administrative interpretation to make payments.  The subsequent court decisions understandably have not established a hard and fast rule regarding how much administration is required to trigger ERISA plan status.  As a result, the rulings have been unpredictable in determining whether an employer has established an “administrative scheme” to provide benefits in situations that fall between one-time corporate events and ongoing benefit payments.

Recently, in Girardot v. The Chemours Company, 2018 WL 2017914 (04/30/2018), the Third Circuit held that a one-time voluntary separation program required no ongoing administrative scheme and dismissed the ERISA complaint of former employees who had separated under the program.  The terms of the program were common to many current programs:

  • Eligible employees could elect to be considered for the program during a short window period;
  • The company had the discretion to determine whether an employee could separate and receive the program severance benefits;
  • The company had the discretion to determine a participating employee’s separation date;
  • Participants had to sign a general release and a restrictive covenant agreement;
  • Participants could receive a lump sum severance payment based on years of service plus a lump sum payment equal to the cost of 3 months of COBRA medical coverage, and a pro-rated bonus for the year of separation; and
  • Participants were ineligible to be rehired within 12 months following separation.

The Third Circuit stated that the crucial factor in determining whether a program constitutes an ERISA plan is whether the employer expresses the intention to provide benefits on a regular and long-term basis.  But here, the Court found that the company merely had entered into an obligation to provide lump-sum payments to a class of employees over a defined and relatively brief period.  According to the Court, determining these lump sum payments required no new administrative body or exercising discretion – rather, it involved the mechanical application of a simple formula based on time of employment with the company.  The Court found that this was generally akin to a Fort Halifax plan and held that the voluntary separation program was not subject to ERISA.

COMMENT:  The Second Circuit has applied similar factors in determining whether a severance benefits plan requires an administrative scheme that is sufficient to trigger ERISA plan status.  See Okun v. Montefiore Medical Center, 793 F.3d 277 (2015).  Based on these factors, one-shot involuntary reductions in force and voluntary separation programs usually will not be subject to ERISA.  Nevertheless, even if ERISA does not apply, clear drafting and communications to affected employees resolve many issues under these types of programs.

Notice 2018-76: Taking a Bite Out of the Business Expense Deductions for Meals, Entertainment

By Stephanie O. Zorn on

On October 3, 2018, the IRS issued transitional guidance in Notice 2018-76 concerning the business expense deductions for meals and entertainment following the changes made by the Tax Cuts and Jobs Act (“TCJA”) — which generally disallowed a deduction for expenses related to entertainment, amusement or recreation, but did not specifically address the deductibility of business meal expense.

The Notice explained that, under Code Section 274(k), no deduction is allowed for food and beverage expense unless the expense is not lavish or extravagant under the circumstances and the taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverage. If those requirements are satisfied, the amount of the deduction is limited to 50 percent of the amount of the food and beverage expense under Code Section 274(n)(1).

Under pre-TCJA law, a deduction for entertainment expense was allowed if the entertainment was directly related to the active conduct of the taxpayer’s trade or business or in the case of entertainment directly proceeding or following a substantial and bona fide business discussion, the entertainment was associated with the active conduct of the taxpayer’s trade or business. The amount of the deduction was limited to 50 percent of the amount of the entertainment expense under Code Section 274(n)(1).

The TCJA did not address the circumstances under which food and beverages might constitute entertainment — and would, therefore, not be deductible. The Notice announced that the Treasury Department and IRS intended to publish proposed regulations under Code Section 274 clarifying when business meals might constitute nondeductible entertainment expense. Until the proposed regulations become effective, taxpayers may rely on the Notice and may deduct 50 percent of food and beverage expense if:

• The expense is ordinary and necessary under Code Section 162(a) or incurred in carrying on a trade or business;

• The expense is not lavish or extravagant;

• The taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverage;

• The food and beverage are provided to current or potential customers, clients, consultants or similar business contacts; and

• In the case of food and beverage provided during or at an entertainment activity or event, the food and beverages are purchased separately from the entertainment or the cost of the food and beverages is stated separately from the cost of the entertainment on the bill, invoice or receipt.

The Notice stated that the Treasury Department and IRS intend to issue separate guidance concerning the treatment of food and beverages furnished primarily to employees on the employer’s business premises.

Key Take Away: Whether sitting with clients in the cheap seats or a luxury party box, make sure those ballpark beers and hot dogs are paid for or itemized separately from the ballgame itself.

Are You “Doing Enough” to Avoid ERISA Statutory Penalties?

By Robert M. Wood on

Clients often are surprised to learn they are liable for ERISA statutory penalties associated with participant document requests even though they have retained an independent third party to administer their ERISA welfare benefits plans (such as disability, life, and health plans). It is fairly well established in most of the federal circuits that only the plan administrator, as defined by ERISA, can be penalized for failure to respond to document requests. In virtually all circumstances, the plan administrator will be the employer/plan sponsor or a particular employee of the plan sponsor. Many employers, by handing off plan administration to an insurer or other third-party administrator – arrangements usually handled by their insurance broker, assume they have what amounts to a “turnkey” plan, and that mundane plan chores, such as responding to participant document requests, are not any concern of theirs. Members of the ERISA plaintiff’s bar are well aware of this dangerous complacency among many uninformed employers and are ready, willing, and able to take advantage of it.

The issue commonly arises when a plaintiff’s attorney addresses a letter requesting copies of plan documents to both the employer and the plan insurer. The insurer usually knows it has no liability for ERISA statutory penalties, and may simply ignore the request. Meantime, the employer assumes the insurer is taking care of things and also ignores the letter.

BAM! – the employer is served with a lawsuit demanding ERISA statutory penalties, and possibly consequential damages. The penalties, alone, can run as high as $110.00 per day, with no statutory outer limit to the total accrued amount. The clock starts ticking 30 days after the date of the request and will continue ticking for however many weeks, months, or even years it takes for the plaintiff to finally receive the requested documents. Further, if the insurer denies the plaintiff’s benefit claim because the claim was untimely, or for some other reason the plaintiff could have avoided but did not know about because he did not have the plan document containing the necessary information, the plaintiff may seek to charge the employer with the value of the lost benefits as a remedy that is within the “such other relief” the court may grant in its discretion under the ERISA penalty statute.

What if the document sought by a plaintiff was not created or maintained by the employer, but is a proprietary internal document created by the plan’s insurer or third-party administrator – is an employer liable for ERISA penalties if the insurer or administrator refuses to produce such a document?

The Seventh Circuit Court of Appeals thinks so. That Court has sustained an award of substantial daily penalties, and interest on delayed payment of health benefits imposed upon the plan sponsor of a health plan for failure to produce proprietary documents created, and owned by, its third-party claims administrator. There, the health plan was funded entirely by the employer.  However, to ensure against even the appearance of a conflict of interest, the employer retained an insurance company to act as claims administrator, ceding complete and final authority to the insurance company for all claim decisions. The claims administrator initially denied the plaintiff’s claim for speech therapy benefits, relying upon certain “Resource Tools” it had developed internally for evaluation of speech therapy claims. After the claims administrator refused the plaintiff’s requests for copies of the Resource Tools, she went to the employer for help. However, the claims administrator also refused to provide these documents to the employer, advising, among other reasons, that the documents were proprietary. The claims administrator eventually relented, after over 300 days, and Plaintiff’s counsel submitted an appeal letter arguing that the Resource Tools contained requirements not specified in the plan documents. The claims administrator reversed its decision and paid the claim.  The plaintiff then sued the employer, seeking $1,000,000.00 in statutory penalties for failure to provide the Resource Tools, and other documents, within 30 days of the plaintiff’s request.

After seven years of litigation, including two trips to the Court of Appeals, the employer was ultimately slapped with a penalty of almost $10,000.00, plus an award of interest to compensate for the claims administrator’s delay in paying the health benefit claim. The latter relief arose from a finding that the employer’s failure to provide the requested documents not only violated the penalty provision, but it was also a separately compensable breach of fiduciary duty. The Court also ordered the employer to pay almost $40,000.00 towards the plaintiff’s attorneys’ fees and costs.

Significantly, the Court of Appeals conceded the fact that the claims administrator created, owned, and had sole possession of the Resource Tools may have presented “a bit of a challenge” to the employer. The Court concluded, however, “[a]ny dilemma this may have posed for [the employer] did not excuse its statutory obligation to [the plaintiff]” to respond to lawful document requests. The Court noted it was the employer’s decision to engage a third party to administer claims as its agent. The Court concluded the employer could have, and should have, ensured its contract with the claims administrator gave the employer the right to require the production of “internal documents” when necessary to respond to ERISA document requests.  The Court remanded to the district court for the determination of the amount of penalties and damages to award.

On remand, the district court recognized the employer “made many efforts” to assist the plaintiff, “both to improve her chances of persuading [the claims administrator that the] speech therapy was medically necessary as well as to obtain the documents she wanted.” Ultimately, however, the court concluded the employer “could have done more” to assist the plaintiff to obtain copies of the Resource Tools timely, and awarded penalties at a rate of $30.00 per day for 309 days.

Determining how to ensure one is “doing enough” to comply with the “could have done more standard” is a daunting task. But for a start, employers must consciously accept there is no such thing as a “turnkey” ERISA plan. Insurers or third-party administrators will rarely assume certain basic legal, fiduciary responsibilities placed upon the Plan Administrator by ERISA, such as responding to document requests. This fact, in our experience, is often not appreciated by employers or the insurance brokers employers often rely upon to set up their benefit plans. Before signing up for such plans, ask your benefits lawyer to review the proposed contract or service agreement.

And never, ever, ignore a letter asking for plan documents.

In Private Letter Ruling, IRS Approves 401(k) Student Loan Repayment Benefit

By Amy M. Thompson on

The IRS has released a Private Letter Ruling (“PLR”) 201833012, in which it approved a student loan repayment program as a 401(k) benefit.  Although the PLR can only be applied by the taxpayer/plan sponsor requesting it, it is a promising development for employers seeking to provide stronger incentives for a workforce increasingly saddled with student loan debt.

The PLR allows student loan payments made by employees to be treated as if they were 401(k) elective contributions which are matched by the employer.  The 401(k) student loan repayment (“SLR”) benefit effectively gives employees with significant student loan debt an opportunity to participate in the 401(k) Plan and receive matching retirement funds without requiring compensation deferrals.

The approved design was part of a 401(k) Plan that already provides employees the opportunity to make pre-tax, Roth, and after-tax elective deferral contributions. The employer provides matching contributions equal to 5% of the employee’s compensation for each pay period an employee’s elective contribution equals 2% or more of eligible compensation for the pay period.  The SLR benefit, proposed as a plan amendment, provides a nonelective employer matching formula with the following features:

  • Participation is voluntary.
  • Any participant who makes a student loan payment equal to 2% or more of eligible compensation for a pay period is eligible to receive non-elective employer contributions equal to the amount of matching contribution that would have been provided had an elective deferral been made.
  • The SLR benefit replaces employer matching contributions for those participating in the program.  Thus, any elective deferrals made while participating in the SLR program would not be eligible for matching contributions.
  • SLR contributions are subject to the plan qualification requirements such as vesting, coverage and nondiscrimination testing, contribution limits, and eligibility and distribution rules; however, SLR benefits are not considered a regular matching contribution for 401(m) testing purposes.
  • The Plan Sponsor does not and will not provide student loans to participants.

The IRS found that this particular arrangement does not violate the “contingent benefit rule” under applicable Treasury regulations.  The contingent benefit rule generally prohibits employers from making benefits conditional upon participant elective deferral contributions to a qualified cash or deferred arrangement under a Code § 401(k) plan.  The SLR nonelective contribution benefit did not violate the rule because benefits are conditioned on student loan repayments instead of elective deferrals, and participation in the SLR program does not impact participants’ ability to make elective deferrals.

As a reminder, PLRs are only binding on those taxpayers requesting rulings and are limited to specific arrangements proposed by them.  Employers interested in incorporating student loan repayment benefits into their 401(k) plans should consult with their preferred Jackson Lewis attorney for assistance.

The President Urges Regulatory Action to Expand Access to Employer-Sponsored Retirement Plans

By Joy M. Napier-Joyce and Kathryn W. Wheeler on

On August 31, 2018, President Trump issued an Executive Order (the “Order”) calling on the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) to consider issuing regulations and guidance directed at expanding the availability of employer-sponsored retirement plans.  The Order mainly takes aim at the availability of retirement plans to all employees, noting that one-third of workers in the private sector have no access to workplace retirement plans.

Amongst the Order’s directives are expanding access to retirement plans for American workers by allowing employers to join together to offer Association Retirement or Multiple Employer Plans (“MEPs”), revising required notices associated with plans, and assessing the accuracy of current mortality tables used to calculate Required Minimum Distributions (“RMDs”) for retirees age 70 ½ and older.

In particular, the DOL is tasked with considering the expansion of MEPs, enabling groups of smaller employers to band together to offer a retirement plan to their employees while sharing the cost and responsibility of sponsorship with other employers.  According to the Order, such guidance will allow small employers to avail themselves of the benefits and purchasing power available to larger qualified retirement plans.

The DOL has 180 days from the execution of the Order (February 27, 2019) to consider issuing proposed rulemaking and guidance on whether a group or association of employers can be considered a single employer under ERISA.  The IRS has the same 180 days to consider amendments to regulations and other guidance regarding the qualified status of MEPs, including the consequences of a participating employer failing to do all that is required for the MEP to be qualified under the Code.  The Order dictates coordination and consultation between the DOL and IRS before issuing any proposed guidance.

The DOL, in coordination with the IRS, has one year from the issuance of the Order (August 31, 2019) to consider improvements to notice and disclosure requirements for qualified retirement plans, including expanding the use of electronic delivery.  If the DOL determines improvements are possible, it will work with the IRS to produce regulations and guidance for improved and less burdensome notice and disclosure requirements.

The Order also directs the IRS to evaluate the soundness of the current mortality tables upon which RMDs are calculated.  Within 180 days of issuance of the Order, (February 27, 2019), the IRS must evaluate the current mortality tables and make a recommendation on the applicability of the current tables, whether tables should be updated, and how often tables should be evaluated on a prospective basis.

It is also important to note that the legislative calendar includes the Retirement Enhancement and Savings Act of 2018 (“RESA”), which has the support of both parties.  RESA has the same ultimate goal of improving retirement plan access and lowering the costs and administrative burdens associated with sponsoring qualified retirement plans.  While the ultimate impact of the Order is not certain, it may also spur Congress to address and reconcile the House and Senate versions of RESA before mid-term elections.  We will, of course, continue to monitor these legislative and regulatory developments.  Please contact your Jackson Lewis attorney with any questions.

The IRS Doesn’t Disappoint

By Allan S. Friedland and Kathryn W. Wheeler on

As anticipated by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 2018-69, the fourth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014.  The extended relief applies to plan years beginning before 2020 for those “closed” plans that satisfy certain conditions in Notice 2014-5.  The relief for “closed” defined benefit plans refers to those defined benefit plans amended prior to December 13, 2013, to limit ongoing accruals to some or all employed participants in the plan as of a particular date, thus no longer admitting new participants into the plan.

Each extension has been in anticipation of finalization of the proposed regulations issued in January 2016.  The IRS received many comments on the proposed regulations and expects the final regulations to include several significant changes in response to the comments.  By extending the relief another year, the IRS acknowledges the plans will need sufficient time to make plan design decisions based on the final regulations, yet to be published, before the end of the most recent extension which is December 31, 2018.

Notice 2018-69 does not indicate when to expect the final regulations but states an expectation the final regulations will allow reliance on the proposed regulations for plan years beginning before 2020.  Stay tuned as we continue to monitor the status of the final regulations.

IRS Finalizes Regulations Allowing Plan Forfeitures to Fund QNECS and QMACS

By Joshua Rafsky on

The IRS recently finalized regulations that allow 401(k) plans to use forfeiture money to fund qualified non-elective contributions (“QNECs”) and qualified matching contributions (“QMACs”).  These regulations finalize proposed regulations issued last year (you can read our prior coverage of the proposed regulations here).

By way of background, QNECs and QNECs are types of employer contributions used by many 401(k) plans to help pass annual nondiscrimination testing (also known as ADP and ACP testing).  QNECs and QMACs are also used by safe-harbor 401(k) plans, which are automatically deemed to pass the ADP and ACP tests if certain requirements are followed.  QNECs and QMACs cannot be subject to a vesting schedule, which means that participants are fully vested in those contributions when allocated to them.

Prior to issuing the proposed regulations last year, plans could not use money in the plan’s forfeiture account to fund QNECs and QMACs.  This is because prior regulations required that QNECs and QMACs be non-forfeitable when contributed to the plan.  There is no way that money in a forfeiture account would be vested when contributed to the plan (because it is money that a participant forfeited for not satisfying the vesting schedule), so the IRS has long held the position that forfeiture money could never be used to fund QNECs or QMACs.

The final regulations change the requirements to provide that QNECs and QMACs must be vested when allocated to participants.  This means that unvested money in the plan’s forfeiture account can fund QNECs and QMACs, as long as those contributions become vested when allocated to participants.

The new regulations apply to plan years ending on or after July 20, 2018.  However, plans have been allowed to rely on the relaxed restrictions of the new rules since the proposed regulations were issued last year.  Keep in mind that these changes are permissive, so plans need not be amended to allow for these relaxed restrictions if the plan will not use forfeitures in this way.  However, plans that want to begin using forfeiture money to fund QNECs and QMACs may need to be amended, since the plan may still contain language stating that QNECs and QMACs cannot be funded from the plan’s forfeiture account.

If you would like assistance with amending your plan to incorporate the relaxed restrictions of the new regulations, or if you have questions about the information discussed here, please contact your preferred Jackson Lewis attorney for assistance.

Illinois Secure Choice Retirement Savings Program No Longer Mandatory?

By Joshua Rafsky on

The future of the Illinois Secure Choice Savings Program Act (Secure Choice) is uncertain following Governor Bruce Rauner’s amendatory veto which could make employer participation in the Secure Choice program optional.

The legislation, as enacted, makes participation in the Secure Choice program mandatory for covered employers that do not offer employees a qualified retirement plan. These employers are required to automatically withhold five percent of an employee’s compensation (up to the IRS annual maximum allowed for IRA contributions each year), unless the employee elects a different amount or opts out of the program entirely. Employers then remit those contributions to the Secure Choice program. The program is set to roll out in November 2018.

On August 14, 2018, Governor Rauner issued an amendatory veto to a bill that makes several technical changes to the program. The veto makes the Secure Choice program permissive, rather than mandatory. It is unclear whether the veto will stand or whether a majority of the Illinois Legislature will override it. A vote by the Legislature may not occur until November, when the body is scheduled next to be in session.

For more information, see our legal update here.

Illinois Secure Choice Savings Program – A Mandatory Retirement Plan 

By Kathryn W. Wheeler and Joshua Rafsky on

Employers in Illinois with at least 25 employees must comply with the Illinois Secure Choice Savings Program Act (Secure Choice) or offer employees an employer-sponsored retirement plan. Secure Choice is set to roll out in November 2018.

Secure Choice applies to Illinois employers that do not sponsor a qualified retirement plan. The program, adopted in 2015, requires employers to automatically withhold five percent of an employee’s compensation (up to the annual maximum allowed for IRA contributions each year as provided by the IRS), unless the employee elects a different amount or opts out of the program entirely, and remit those contributions to the Secure Choice program.

Employers who do not comply with the Illinois Secure Choice Savings Program Act may face a penalty of $250 per employee for the first year and $500 per employee for each subsequent year.

For more information, see our legal update here.

Segal Blend Litigation, Part Two: New Jersey District Court Holds That Use of Segal Blend Did Not Violate MPPAA

By Robert R. Perry on

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.”)  The “Segal Blend” is a proprietary method of valuing a plan’s unfunded vested benefits to calculate withdrawal liability that was developed by The Segal Company, one of the preeminent actuarial firms servicing multiemployer pension plans.  By blending the plan’s investment-return interest rate assumption with the lower risk-free rates published by the Pension Benefit Guaranty Corporation (called “PBGC Rates”), the Segal Blend generally results in greater withdrawal liability assessments against withdrawn employers.  Judge Sweet’s decision (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)) has been appealed to the United States Circuit Court of Appeals for the Second Circuit.

On July 3, however, Judge Kevin McNulty of the United States District Court for New Jersey held that using the Segal Blend by the UAW Local 259 Pension Fund did not violate MPPAA.  The decision (Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund, No. 2:17-cv-05076-KM-MAH (DNJ July 3, 2018)) creates a split within the two district courts to have considered the issue, and opens the door to a possible Circuit Court split (pending the resolution of the New York Times appeal by the Second Circuit and the potential appeal of the Manhattan Ford decision to the Third Circuit.)  A Supreme Court decision on this issue would then become a real possibility.

Both Judge Sweet and Judge McNulty looked at the same two potential bases for disallowing the use of the Segal Blend.  Both judges initially looked at whether using different interest rates for different purposes (namely funding and withdrawal liability) is always impermissible under Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 US 602 (1993), in which the Supreme Court discussed (albeit in dicta) “the necessity” of a Fund actuary to apply “the same assumptions and methods in more than one context” while highlighting the critical interest rate assumption.

The significance of this issue is readily demonstrated by the fact that in both cases, using the 7.5% funding interest rate assumption would have generated zero withdrawal liability for each employer.  Using the Segal Blend, however, generated withdrawal liability amounts of approximately $25 million (in The New York Times) and $2.5 million (in Manhattan Ford.)

Similar to Judge Sweet, Judge McNulty held that “Concrete Pipe does not impose a statutory bar” on the use of a different interest rate assumption for withdrawal liability than that used for funding purposes, concluding that Concrete Pipe “leaves open the possibility of separate actuarial assumptions being permissibly applied to funding and withdrawal liability.”

Where Judge Sweet and Judge McNulty diverged, however, was in determining whether using the Segal Blend for withdrawal liability purposes represented the actuary’s “best estimate of estimated experience under the plan” (as required by Section 4213(a)(1) of ERISA.)  Judge Sweet found compelling the plan actuary’s testimony that a 7.5% interest assumption (the rate used for funding) was her “best estimate of how the Pension Fund’s assets…will on average perform over the long term.”  Judge Sweet concluded that if 7.5% represents the actuary’s “best estimate,” it “strains reason to see how the Segal Blend” (which blends that 7.5% rate with lower, no-risk PBGC Rates) “can be accepted as the anticipated plan experience.”  Judge Sweet therefore ordered the plan to recalculate the employer’s withdrawal liability using the 7.5% “best estimate” rate.  (As noted above, this resulted in zero withdrawal liability.)

Judge McNulty disagreed.  Unlike Judge Sweet, he focused on case law developed under the minimum funding standards for single-employer pension plans.  Judge McNulty found this precedent established that the “best estimate” requirement “ is “basically procedural in nature and is principally designed to insure that the chosen assumptions actually represent the actuary’s own judgment rather than the dictates of plan administrators or sponsors.”  This, Judge McNulty found, mandated a “deferential analysis” on whether the “actuarial assumptions chosen were reasonable in the aggregate.”  This deference allowed Judge McNulty to conclude that the arbitrator did not clearly err in finding that the employer did not meet its burden to rebut the reasonableness of the actuary’s approach, and therefore hold that using the Segal Blend to calculate the employer’s withdrawal liability was permissible.

This figures to be a hot area of litigation in the years to come.  Many multiemployer plans currently use different interest rate assumptions for funding and withdrawal liability purposes.  In addition to the plans that use the Segal Blend for withdrawal liability purposes, many others use the PBGC Rates to do so.  These lower rates generate even higher withdrawal liability amounts than those generated by using the Segal Blend.  The law in this area is evolving, and we will continue to monitor this situation for you.

LexBlog