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eBook details

• Title: Central States v. Lady Baltimore Foods Inc.
• Author : United States Court of Appeals for the Seventh Circuit
• Release Date : January 01, 1992
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 74 KB

Description

POSNER, Circuit Judge. A pension fund, Central States, brought this suit against an employer, Lady Baltimore Foods, for withdrawal liability under the Multiemployer Pension Plan Amendments to ERISA (the federal pension law). 29 U.S.C. §§ 1381 et seq. See generally Central States, Southeast & Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369 (7th Cir. 1992); Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247, 1251-56 (7th Cir. 1983). Behind withdrawal liability lies concern that if an employer who has workers with vested pension rights could withdraw from a multiemployer pension fund without any liability to the fund, the burden of honoring those vested rights would be shifted to the other employers covered by the fund. Withdrawal liability is heavy; so, fearing that the enactment of the Multiemployer Pension Plan Amendments Act would precipitate a rash of withdrawals from ERISA pension plans, Congress made the Act (enacted in September 1980) retroactive. Any present or former employer of workers who had obtained vested pension rights while employed by that employer was subject to withdrawal liability even if the rights had vested before 1980, unless the employer had withdrawn from the plan before the effective date of the Act--which was in April 1980, some five months before the Act was passed. Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 81 L. Ed. 2d 601, 104 S. Ct. 2709 (1984); Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 89 L. Ed. 2d 166, 106 S. Ct. 1018 (1986). The backdating of the effective date was later eliminated--but that gets us ahead of our story. Not having withdrawn from the Central States pension plan by the deadline, Lady Baltimore was caught in the net spread by the Act. It withdrew in 1982 (pursuant to the collective bargaining agreement that it had signed in 1979)--much too late--and the following year Central States assessed a withdrawal liability against it of more than $200,000, even though Lady Baltimore had, since joining the plan in 1964, contributed more than $250,000 to it and only a handful of its employees had retired with vested benefits. It has been stipulated that ""As of June 1, 1985, the present value of Lady Baltimore's 1964 to 1982 contributions to the Fund exceeded the present value of what the Fund will likely be required to pay to Lady Baltimore employees [former as well as present employees] by $257,780.00.""

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