An important decision issued by the Ninth Circuit Court of Appeals last month once again illustrates the one-sided nature of many withdrawal liability disputes and will likely have significant ramifications for many employers withdrawing from underfunded pension plans. The decision holds that the plan correctly applied a credit for a prior partial withdrawal against the employer’s subsequent complete withdrawal before calculating the twenty-year limitation on annual payments provided by ERISA.

By way of background, withdrawal liability is imposed upon an employer when it withdraws from a multiemployer pension fund, and a withdrawal may be either partial or complete. If an employer incurs a partial withdrawal and subsequently incurs either another partial or a complete withdrawal, ERISA directs that the employer be given a credit for the first partial withdrawal. ERISA also limits an employer’s obligation to twenty years of payments.

In GCIU-Employer Retirement Fund v. Quad Graphics, Inc., the employer incurred a partial withdrawal followed by a complete. In calculating the subsequent complete withdrawal liability, the plan applied Continue reading →