Multi-employer pension plan

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Private equity funds that acquire unionized portfolio companies may face significant withdrawal liability under ERISA’s multiemployer pension plan rules. A recent federal court decision in Longroad Asset Management, LLC v. Boilermaker-Blacksmith National Pension Trust underscores that liability hinges on whether the fund is deemed a “trade or business” and under “common control.” While the court…

Unionized employers participating in an underfunded multiemployer pension plan face significant financial exposure when withdrawing (completely or partially) from the plan.  The cost (called “withdrawal liability”) is generally based on the employer’s pro rata share of the pension plan’s unfunded vested benefits and typically amounts to hundreds of thousands or millions of dollars.  This withdrawal…

Withdrawal liability is a statutory obligation under the Employee Retirement Income Security Act (ERISA) that any unionized employer may have to confront. Exemptions from liability include one applicable to construction industry employers. More…

The recently published final regulation implementing last year’s massive multiemployer pension plan bailout contains a very thin silver lining, but overall, more bad news for already overburdened employers.

Last year, the Pension Benefit Guaranty Corporation (PBGC) issued its interim final rule on the process for eligible troubled Multiemployer Pension Plans (MEPPs) to apply for and…

It’s no secret that the statutory deck under ERISA is stacked heavily in favor of multiemployer pension plans (MEPPs) and against employers contributing to (or withdrawing from) Taft-Hartley trust funds. For example, an employer who receives a demand to pay its alleged allocable share of a multiemployer pension plan’s unfunded vested benefits (Withdrawal Liability) will…

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), because it was not the actuary’s best estimate, the federal appeals court in Cincinnati has held in…

An employer’s permanent cessation of contributions to a multiemployer pension plan can trigger withdrawal liability. This liability may reach affiliated trades or businesses with sufficient common ownership to be under “common control” with the employer. The affiliates would be jointly and severally liable for withdrawal liability incurred and unpaid by the withdrawing affiliate.

Courts often…

On July 9, 2021, the PBGC issued its interim final rule (the “Rule”) on the process for eligible troubled Multiemployer Pension Plans (“MEPPs”) to apply for and obtain Special Financial Assistance (“SFA”) under the American Rescue Plan Act of 2021 (“ARPA”). The Rule was posted on PBGC’s website and became effective as guidance on July…