1 11-1322-cv Trustees of the Local 138 Pension Trust Fund v. F.W. Honerkamp Co. Inc. 1 UNITED STATES COURT OF APPEALS 2 3 FOR THE SECOND CIRCUIT 4 5 August Term 2011 6 7 (Argued: March 26, 2012 Decided: August 17, 2012) 8 9 Docket No. 11-1322-cv 10 -----------------------------------------------------x 11 TRUSTEES OF THE LOCAL 138 PENSION TRUST FUND, 12 13 Plaintiff-Appellant, 14 15 -- v. -- 16 17 F.W. HONERKAMP CO. INC., 18 19 Defendant-Appellee

. 20 21 -----------------------------------------------------x 22 23 B e f o r e : WALKER, LYNCH and LOHIER, Circuit Judges

. 24 Appeal from a judgment of the United States District Court 25 for the Southern District of New York (Lewis A. Kaplan, Judge) 26 granting defendant-appellee employer’s motion for summary 27 judgment dismissing claim by plaintiff-appellant -- trustees for 28 a pension plan who sought certain pension contributions from the 29 employer -- and denying the trustees’ cross-motion for summary 30 judgment. The trustees argue that the Pension Protection Act of 31 2006 prevented the employer from withdrawing from the pension 32 plan after the plan entered critical status, and that the 33 district court erred in concluding otherwise. We do not agree 34 and thus AFFIRM the judgment of the district court. 352 LARRY CARY (Andrew M. Katz and 1 Charles Pergue, on the brief), Cary 2 Kane LLP, New York, NY, for 3 Plaintiff-Appellant. 4 5 KEVIN L. WRIGHT, Littler Mendelson, 6 P.C., McLean, VA (Deidre A. 7 Grossman, Littler Mendelson, P.C., 8 New York, NY, on the brief), for 9 Defendant-Appellee. 10 11 12 JOHN M. WALKER, JR., Circuit Judge: 13 Plaintiff-appellant Trustees (the “Trustees”) of the Local 14 138 Pension Trust Fund (the “Fund”) appeal from a decision of the 15 United States District Court for the Southern District of New 16 York (Lewis A. Kaplan, Judge) granting summary judgment in favor 17 of defendant-appellee F.W. Honerkamp Co. (“Honerkamp”) and 18 denying the Trustees’ cross-motion for summary judgment. 19 Honerkamp withdrew from the Fund after the Fund had reached 20 “critical status” as defined by the Pension Protection Act of 21 2006 (the “PPA”), an amendment to the Employee Retirement Income 22 Security Act of 1974 (“ERISA”), and after the collective 23 bargaining agreements (“CBAs”) requiring Honerkamp to contribute 24 to the Fund had expired. The Trustees sued, arguing that the PPA 25 prevented Honerkamp from withdrawing and required the company to 26 make certain ongoing pension contributions pursuant to the Fund’s 27 rehabilitation plan. The district court agreed with Honerkamp 28 that the PPA did not forbid its withdrawal or require those 29 contributions. It therefore granted summary judgment to 303 Honerkamp and denied the Trustees’ cross-motion for summary 1 judgment. 2 On appeal, the Trustees argue that the district court 3 misconstrued the PPA in denying their cross-motion and granting 4 summary judgment to Honerkamp. For the reasons that follow, we 5 reject the Trustees’ argument and AFFIRM the judgment of the 6 district court. 7

**BACKGROUND** 8 **I. Statutory Background** 9 We begin with an overview of the pertinent statutory 10 framework, which provides necessary context for the events of 11 this case: 12

**A. ERISA** 13 ERISA is a comprehensive statutory scheme regulating 14 employee retirement plans. See generallyERISA § 2 et seq., 29 15 U.S.C. § 1001 et seq.Congress has amended the law periodically 16 since originally enacting it in 1974. 17 Among other things, ERISA “was designed to ensure that 18 employees and their beneficiaries would not be deprived of 19 anticipated retirement benefits by the termination of pension 20 plans before sufficient funds have been accumulated in the 21 plans.” Connolly v. Pension Benefit Guar. Corp. , 475 U.S. 211, 22 214 (1986) (internal quotation marks omitted). To that end, the 23 statute created an agency, the Pension Benefit Guaranty 244 Corporation (“PBGC”), to administer an insurance system by 1 collecting premiums from covered pension plans and paying out 2 accrued benefits to employees in the event a pension plan has 3 insufficient funds. SeeERISA § 4006, 29 U.S.C. § 1306; Bd. of 4 Trs. of W. Conference of Teamsters Pension Trust Fund v. Thompson 5 Bldg. Materials, Inc., 749 F.2d 1396, 1399-1403 (9th Cir. 1984). 6
**B. The MPPAA** 7 One type of pension plan regulated by ERISA is the 8 multiemployer pension plan, in which multiple employers pool 9 contributions into a single fund that pays benefits to covered 10 retirees who spent a certain amount of time working for one or 11 more of the contributing employers. Plans of this sort offer 12 important advantages to employers and employees alike. For 13 example, employers in certain unionized industries likely would 14 not create their own pension plans because the frequency of 15 companies going into and out of business, and of employees 16 transferring among employers, make single-employer plans 17 unfeasible. Multiemployer plans allow companies to offer pension 18 benefits to their employees notwithstanding these practicalities, 19 and at the same time to share the financial costs and risks 20 associated with the administration of pension plans. See 21 Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension 22 Trust Fund for S. Cal. , 508 U.S. 602, 605-07 (1993). 23
245 However, 1 [a] key problem of ongoing multiemployer plans, 2 especially in declining industries, is the problem of 3 employer withdrawal. Employer withdrawals reduce a 4 plan’s contribution base. This pushes the contribution 5 rate for remaining employers to higher and higher 6 levels in order to fund past service liabilities, 7 including liabilities generated by employers no longer 8 participating in the plan, so-called inherited 9 liabilities. The rising costs may encourage -— or 10 force -— further withdrawals, thereby increasing the 11 inherited liabilities to be funded by an 12 ever-decreasing contribution base. This vicious 13 downward spiral may continue until it is no longer 14 reasonable or possible for the pension plan to 15 continue. 16 Pension Benefit Guar. Corp. v. R.A. Gray & Co. , 467 U.S. 717, 722 17 n.2 (1984)(quoting Pension Plan Termination Insurance Issues: 18 Hearings before the Subcommittee on Oversight of the House 19 Committee on Ways and Means, 95th Cong., 2nd Sess., 22 (1978) 20 (statement of Matthew M. Lind)) (internal quotation marks 21 omitted). 22 ERISA as originally enacted did not adequately address and 23 even exacerbated these problems. This was because of certain 24 now-obsolete provisions, which we need not detail here, that had 25 the effects of (1) encouraging employers to withdraw from weak 26 multiemployer pension plans, which they often could do without 27 compensating the plans for the inherited liabilities that 28 remaining participants would incur; and (2) encouraging employers 29 who did not withdraw to terminate deteriorating pension plans 30 sooner rather than later. SeeConcrete Pipe, 508 U.S. at 607-08; 316 R.A. Gray & Co., 467 U.S. at 721; Bd. of Trs. of W. Conference of 1 Teamsters Pension Trust Fund, 749 F.2d at 1402. The potential of 2 widespread termination of pension plans caused by cascading 3 withdrawals threatened to impose too heavy a burden on the PBGC 4 (the insurer of protected pension benefits) and, in turn, to 5 “collapse . . . the plan termination insurance program.” R.A. 6 Gray & Co., 467 U.S. at 721. 7 In 1980, Congress responded to this concern by enacting the 8 Multiemployer Pension Plan Amendments Act of 1980 (the “MPPAA”), 9 Pub. L. No. 96-364, 94 Stat. 1208 (codified as amended in 10 scattered sections of 26 and 29 U.S.C.). Under this amendment to 11 ERISA, “an employer [that] withdraws from a multiemployer plan 12 . . . is liable to the plan in the amount determined . . . to be 13 the withdrawal liability.” ERISA § 4201(a), 29 U.S.C. § 1381(a). 14 Withdrawal liability is the withdrawing employer’s proportionate 15 share of the pension plan’s unfunded vested benefits. SeeR.A. 16 Gray & Co., 467 U.S. at 725 (citing ERISA §§ 4201, 4211, 29 17 U.S.C. §§ 1381, 1391). Under the MPPAA, the employer pays its 18 withdrawal liability in annual installments, which are calculated 19 based on the employer’s historical contribution amounts. See 20 ERISA §§ 4211(c), 4219(c), 29 U.S.C. §§ 1391(c), 1399(c). The 21 statute limits the employer’s obligation to make these payments 22 to 20 years, even if it would take more than 20 payments for the 23 employer to pay its full withdrawal liability. SeeERISA 247 § 4219(c)(1)(B), 29 U.S.C. § 1399(c)(1)(B); Nat’l Shopmen Pension 1 Fund v. DISA Indus., Inc. , 653 F.3d 573, 576 (7th Cir. 2011). 2 **C. The PPA** 3 By 2005, a confluence of economic circumstances –- including 4 the actual or forecasted termination of various large pension 5 plans and the erosion of many employees’ retirement savings –- 6 again threatened ERISA’s system for federally insuring 7 multiemployer pension plans. SeeJanice Kay McClendon, The Death 8 Knell of Traditional Defined Benefit Plans: Avoiding a Race to 9 the 401(k) Bottom, 80 Temp. L. Rev. 809, 809-12 (2007). Thus, in 10 2006, Congress revisited the problems associated with underfunded 11 pension plans by enacting the Pension Protection Act of 2006, 12 Pub. L. 109-280, 120 Stat. 780 (codified as amended in scattered 13 sections of 26 and 29 U.S.C.). The law is far-reaching, totaling 14 approximately one thousand pages, and introduced a number of 15 mechanisms aimed at stabilizing pension plans and ensuring that 16 they remain solvent. See generallySarah D. Burt, Note, Pension 17 Protection? A Comparative Analysis of Pension Reform in the 18 United States and the United Kingdom, 18 Ind. Int’l & Comp. L. 19 Rev. 189, 199 (2008); Douglas L. Lineberry, The Pension 20 Protection Act of 2006, S.C. Law. July 2007, at 16. 21 As relevant to this case, the PPA includes measures designed 22 to protect and restore multiemployer pension plans in danger of 23 being unable to meet their pension distribution obligations in 248 the near future. The statute created two categories for such 1 plans: “endangered” and “critical.” Under the PPA, a pension 2 plan is endangered if, inter alia, it is less than eighty percent 3 funded, and it is in critical status if, inter alia, it is less 4 than sixty-five percent funded. ERISA § 305(b), 29 U.S.C. § 5 1085(b). If a pension plan falls into critical status, the plan 6 sponsor must notify the participating employers and unions, ERISA 7 § 305(b)(3)(D), 29 U.S.C. § 1085(b)(3)(D), and each participating 8 employer must contribute an additional surcharge of five to ten 9 percent of the contribution amount required under the applicable 10
CBA. SeeERISA § 305(e)(7), 29 U.S.C. § 1085(e)(7). 11 Additionally, upon a multiemployer pension plan’s entry into 12 critical status, the plan’s sponsor must adopt a rehabilitation 13 plan to restore the Fund’s financial health going forward: 14 A rehabilitation plan is a plan which consists of -- 15 16 (i) actions, including options or a range of options to 17 be proposed to the [employers and unions], formulated, 18 based on reasonably anticipated experience and 19 reasonable actuarial assumptions, to enable the plan to 20 cease to be in critical status by the end of the [ten21 year] rehabilitation period and may include reductions 22 in plan expenditures (including plan mergers and 23 consolidations), reductions in future benefit accruals 24 or increases in contributions, if agreed to by the 25 [employers and unions], or any combination of such 26 actions, or 27 28 (ii) if the plan sponsor determines that, based on 29 reasonable actuarial assumptions and upon exhaustion of 30 all reasonable measures, the plan can not reasonably be 31 expected to emerge from critical status by the end of 32 the rehabilitation period, reasonable measures to 33 emerge from critical status at a later time or to 34 forestall possible insolvency . . . . 359 ERISA § 305(e)(3)(A), 29 U.S.C. § 1085(e)(3)(A). The 1 rehabilitation plan must set forth new schedules of reduced 2 benefits and increased contributions, from which participating 3 employers and unions may choose when it is time to negotiate 4
successor CBAs. SeeERISA § 305(e), 29 U.S.C. § 1085(e). One of 5 those schedules must be designated as the “default schedule,” 6 which “assume[s] that there are no increases in contributions 7 under the plan other than the increases necessary to emerge from 8 critical status after [benefits] . . . have been reduced to the 9 maximum extent permitted by law.” ERISA § 305(e)(1), 29 U.S.C. 10 § 1085(e)(1). 11 Most importantly for present purposes, the PPA provides as 12 follows: 13 (C) Imposition of default schedule where failure to 14 adopt rehabilitation plan 15 16 (i) In general 17 18 If– 19 20 (I) a collective bargaining agreement 21 providing for contributions under a 22 multiemployer plan that was in effect at the 23 time the plan entered critical status 24 expires, and 25 26 (II) after receiving one or more schedules 27 from the plan sponsor [under a rehabilitation 28 plan], the bargaining parties with respect to 29 such agreement fail to adopt a contribution 30 schedule with terms consistent with the 31 rehabilitation plan and a schedule from the 32 plan sponsor . . . , 33 the plan sponsor shall 34 implement the default schedule 35 [of the rehabilitation plan] 3610 beginning on the date 1 specified in clause (ii). 2 3 (ii) Date of implementation 4 5 The date specified in this clause is the date 6 which is 180 days after the date on which the 7 collective bargaining agreement described in 8 clause (i) expires. 9 ERISA § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C). As will be 10 seen, it is this provision and the extent to which it bears on 11 the facts of this case that are at the core of this appeal. 12 **II. Factual Background** 13 The facts, which are not in dispute, are as follows: 14 The Fund is a multiemployer defined-benefit pension plan. 15 The Trustees are its sponsor. 16 Honerkamp is a distributor of wood chips operating out of 17 two New York facilities -- one in the Bronx and one in Central 18 Islip. In early 2008, Honerkamp and the Bakery Drivers Local 19 Union No. 802 (the “Union”) were parties to CBAs that covered 20 Honerkamp’s unionized employees in its two facilities. The CBAs, 21 which were set to expire in late 2008, obligated Honerkamp to 22 contribute to the Fund on behalf of the company’s employees. 23 In March 2008, the Trustees announced that the Fund was in 24 critical status as defined by the PPA, seeERISA § 305(b)(2), 29 25 U.S.C. § 1085(b)(2). They therefore began drafting a 26 rehabilitation plan. But they did not expect to complete the 27 rehabilitation plan until late 2008, around the time the two 2811 Honerkamp CBAs were due to expire. Because the rehabilitation 1 plan would figure prominently in any negotiations between 2 Honerkamp and the Union over successor CBAs, the two sides agreed 3 to extend the existing Bronx and Central Islip agreements through 4 February 10 and March 27, 2009, respectively. 5 In November 2008, the Trustees finalized the rehabilitation 6 plan, which, as required by the PPA, set forth several new 7 schedules of reduced benefits and increased contributions. See 8 ERISA § 305(e), 29 U.S.C. § 1085(e). According to the 9 rehabilitation plan, the Trustees had determined that the Fund 10 was unlikely to emerge from critical status within the statutory 11 ten-year rehabilitation period. SeeERISA § 305(e)(4), 29 U.S.C. 12 § 1085(e)(4). This was because the employer contribution rates 13 required for such a result would have exceeded the amounts that 14 employers would have had to pay to withdraw from the Fund under 15 the MPPAA. As explained by the rehabilitation plan, the Trustees 16 “assum[ed] that employers would be unwilling to continue to 17 participate . . . if the cost of doing so were to exceed the cost 18 of withdrawing.” Joint Appendix (“J.A.”) at 84. The Trustees 19 therefore designed four primary, or non-default, schedules “to 20 impose approximately the same burden actuarially on employers 21 that a withdrawal from the [Fund] would produce.” Id.at 85. 22 Participating employers’ adoption of the non-default schedules 23 was estimated to push back the Fund’s projected date of 24 insolvency from 2021 to 2024. 2512 The Trustees also included in the rehabilitation plan a 1 default schedule, which, in accordance with the PPA, outlined the 2 Fund’s emergence from critical status. SeeERISA § 305(e)(1), 29 3 U.S.C. § 1085(e)(1). But because the Trustees believed that the 4 contribution levels required for the Fund to emerge from critical 5 status were “unrealistic[ally high],” J.A. at 84, they expected 6 the default schedule to be implemented only if a participating 7 employer and union did not agree on one of the four non-default 8 schedules. Presumably, this expectation was due to the earlier9 excerpted portion of the PPA that requires a multiemployer 10 pension plan in critical status to “implement the default 11 schedule” in the event such deadlock persists for 180 days. See 12 ERISA § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C). 13 With the rehabilitation plan finalized, Honerkamp and the 14 Union proceeded to negotiate their successor CBAs. They 15 considered the rehabilitation plan’s schedules as well as the 16 possibility of Honerkamp’s withdrawal from the Fund. As part of 17 that consideration, Honerkamp requested and the Trustees provided 18 an estimate of Honerkamp’s withdrawal liability under the MPPAA. 19 On July 22, 2009, Honerkamp sent the Union a “Last, Best, 20 and Final Offer” for each facility. Both offers provided that, 21 as of August 1 of that year, Honerkamp would withdraw from the 22 Fund and create instead a 401(k) retirement plan for the 23 company’s employees. The Central Islip employees voted to ratify 24 the offer and, together with Honerkamp, entered into a new CBA on 2513 August 1 reflecting this change. The Bronx employees initially 1 rejected Honerkamp’s offer. With the parties then at an impasse, 2 Honerkamp unilaterally implemented its offer -- withdrawing from 3 the Fund in favor of the 401(k) plan -- as permitted by the 4 National Labor Relations Act, 29 U.S.C. § 151 et seq.The Bronx 5 employees and Honerkamp eventually entered into a new CBA in 6 April 2010. Like the agreement reached with the Central Islip 7 employees, the new Bronx CBA provided for Honerkamp’s withdrawal 8 from the Fund in favor of a 401(k) plan. 9 On July 31, 2009, Honerkamp informed the Trustees that it 10 would be withdrawing from the Fund for both locations effective 11 August 1. The Trustees responded that the PPA required Honerkamp 12 to contribute to the Fund under the rehabilitation plan’s default 13 schedule if the company and Union did not agree to a non-default 14 schedule within 180 days of the CBAs’ expiration. Honerkamp 15 countered that withdrawal was permissible and that it would be 16 liable only to pay withdrawal liability as calculated under the 17

MPPAA. 18 **III. Procedural Background** 19 In February 2010, the Trustees brought this suit against 20 Honerkamp. They argued that the PPA prevented Honerkamp from 21 withdrawing from the Fund after the Fund entered critical status. 22 The Trustees sought to compel Honerkamp to make retroactive and 23 prospective contributions under the rehabilitation plan’s default 2414 schedule. Honerkamp moved and the Trustees cross-moved for 1 summary judgment. The magistrate judge submitted to the district 2 court a report and recommendation in favor of summary judgment 3 for Honerkamp. Following oral argument on the parties’ motions, 4 the district court adopted the recommendation. 5 The Trustees appeal from the district court’s grant of 6 summary judgment in favor of Honerkamp and denial of their cross7 motion for summary judgment. 8

**DISCUSSION** 9 **I. Standard of Review** 10 We review de novothe district court’s grant of summary 11 judgment, which relied entirely on its construction of the PPA. 12
SeeFinkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“We 13 review de novoa district court’s application of law to 14 undisputed facts . . . .”). 15 **II. The PPA’s Effect on Withdrawal** 16 At issue here is the extent to which the PPA, in these 17 circumstances, abrogates the ability of a participating employer 18 to withdraw from a multiemployer pension plan in critical status. 19 Honerkamp claims that it may withdraw from the Fund as long as it 20 pays withdrawal liability as calculated under the MPPAA. The 21 Trustees do not dispute that this would have been correct before 22 the enactment of the PPA. But they contend that under that more 23 recent statute, Honerkamp cannot withdraw and must continue 2415 participating in the Fund while contributing in accordance with 1 the rehabilitation plan’s default schedule. SeeERISA 2 § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C). 3 To our knowledge, no other court besides the district court 4 in this action has considered whether the PPA prohibits employers 5 from withdrawing from multiemployer pension plans in critical 6 status. On this issue, the PPA itself is silent. But, as is 7 always the case in issues of statutory interpretation, the 8 “ultimate question” here “is one of congressional intent.” In re 9 Lehman Bros. Mortg.-Backed Secs. Litig. , 650 F.3d 167, 180 (2d 10 Cir. 2011) (internal quotation marks omitted). For the reasons 11 that follow, we agree with the district court and Honerkamp that, 12 in enacting the PPA, Congress did not intend to prevent employers 13 from withdrawing from multiemployer pension plans in critical 14

status. 15 “Because our task is to ascertain Congress’s intent, we look 16 first to the text and structure of the statute” as the surest 17 guide to congressional intent. Lindsay v. Ass’n of Prof’l Flight 18 Attendants, 581 F.3d 47, 52 (2d Cir. 2009). While the text of 19 the PPA does not speak to the issue at hand directly, it does 20 evidence Congress’s understanding that employers can and will 21 withdraw from plans in critical status. Although there is no 22 explicit statement of the right to withdraw, the statute appears 23 to assume withdrawals in these circumstances by revising the 24 calculation of withdrawal liability where the pension plan 2516 withdrawn from is in critical status. SeeERISA § 305(e)(9), 29 1 U.S.C. § 1085(e)(9). Specifically, the PPA provides that 2 calculations of an employer’s withdrawal liability should not 3 take into account (1) contribution surcharges imposed 4 automatically once a pension plan enters critical status, or (2) 5 benefit reductions required by a rehabilitation plan. Seeid. 6 In enacting the PPA, Congress also amended other portions of 7 ERISA dealing with withdrawal and withdrawal liability without 8 the slightest indication that it intended to abrogate employers’ 9 ability to withdraw from pension plans in critical status. See 10 PPA § 204(a)(2) (codified at ERISA § 4225(a)(2), 29 U.S.C. 11 § 1405(a)(2)) (changing the calculation of the limitation on 12 withdrawal liability where the employer company is sold); PPA 13 § 204(b)(1) (codified at ERISA § 4205(b)(2), 29 U.S.C. § 14 1385(b)(2)) (amending the imposition of partial withdrawal 15 liability when, inter alia, the employer’s obligation to 16 contribute to a plan ceases under some but not all CBAs or 17 regarding some but not all facilities); see alsoPPA 18 § 502(b)(codified at ERISA § 101(l)(1), 29 U.S.C. 19 § 1021(l)(l))(redesignating and restating the requirement that 20 the plan sponsor provide an estimate of withdrawal liability upon 21 the employer’s request). That Congress did not hint at -- let 22 alone explicitly state -- such an abrogation, despite clearly 23 having withdrawal and withdrawal liability on its mind, is 2417 significant. This is so in part because, in at least one other 1 clause of the PPA, Congress unambiguously disclaimed an older 2 portion of ERISA that it wished no longer to apply in the context 3 of critical-status pension plans. SeePPA § 202(a) (codified at 4 ERISA § 305(e)(8)(A)(i), 29 U.S.C. § 1085(e)(8)(A)(i)) (allowing 5 the retroactive cutting of certain benefits that typically would 6 be prohibited). 7 The Trustees respond that Congress, in considering 8 withdrawal and withdrawal liability when enacting the PPA, had in 9 mind only “involuntary withdrawals” from plans, such as those 10 caused by an employer’s going out of business or a pension plan’s 11 liquidation. But this interpretation is unpersuasive. Nowhere 12 in the PPA’s repeated references to withdrawal did Congress 13 suggest any voluntary/involuntary distinction, notwithstanding 14 the decades-long precedent of employers “voluntarily” withdrawing 15 from pension plans when financially expedient. 16 Our conclusion that Congress did not intend the PPA to 17 foreclose withdrawal in these circumstances finds further support 18 external to the statute’s text. The PBGC, the agency charged 19 with administering the withdrawal-liability provisions under 20 ERISA, is traditionally afforded substantial deference in its 21 reasonable interpretations of the statute. SeePension Benefit 22 Guar. Corp. v. LTV Corp. , 496 U.S. 633, 647-48 (1990); Kinek v. 23 Paramount Commc’ns, Inc. , 22 F.3d 503, 511 n.5 (2d Cir. 1994); 24 see alsoCent. States Se. & Sw. Areas Pension Fund v. O’Neill 2518 Bros. Transfer & Storage Co. , 620 F.3d 766, 774 (7th Cir. 2010);. 1 In its interpretation of the PPA, the PBGC has adopted 2 regulations for calculating employer liability for withdrawal 3 from plans in critical status. See73 Fed. Reg. 79628-02, 79632- 4 33 (Dec. 30, 2008)(section titled “Withdrawal Liability 5 Computations for Plans in Critical Status--Employer Surcharges”) 6 (explaining 29 C.F.R. § 4211.4). Like the PPA itself, these 7 regulations say nothing about mandatory contributions under 8 rehabilitation plans or prohibiting withdrawals. Nor do they 9 suggest a distinction between voluntary and involuntary 10 withdrawals. To be sure, the PBGC does not appear to have issued 11 an interpretation on the precise question at issue –- whether the 12 PPA forecloses withdrawal in these circumstances –- to which we 13 might defer if we found Congress’s intent unclear. But from 14 every indication, the PBGC’s understanding of the PPA accords 15 with our reading of Congress’s intent in enacting the law. 16 It is noteworthy that the Trustees themselves, before 17 bringing this lawsuit, believed that participating employers like 18 Honerkamp had the option of withdrawing from the Fund after it 19 had entered critical status. The rehabilitation plan stated that 20 its goals would “be met if,” inter alia, “withdrawal liability is 21 imposed and collected with respect to employers that withdraw 22 from the [Fund].” J.A. at 83. Moreover, the Trustees 23 contemplated the possibility of “voluntary” withdrawals. The 24 rehabilitation plan explained that it did not contain only the 2519 high-contribution schedules necessary for the Fund to emerge from 1 critical status because such contribution rates “would 2 undoubtedly drive employers to withdraw from the [Fund],” given 3 the Trustees’ “reasonable assumption that employers would be 4 unwilling to continue to participate in the [Fund] if the cost of 5 doing so were to exceed the cost of withdrawing.” Id.Of 6 course, the ultimate question of statutory interpretation is for 7 the Court and not the Trustees. But we are reassured by the 8 plaintiffs’ own expressed understanding that voluntary withdrawal 9 was permissible notwithstanding the operation of the PPA’s 10 mechanism for dealing with pension plans in critical status. 11 Finally, to pursue the PPA’s aims, it was not necessary for 12 Congress to forbid withdrawal, accompanied by MPPAA liability, 13 from pension plans in critical status. Both statutes aim to 14 protect beneficiaries of multiemployer pension plans by keeping 15 such plans adequately funded. Indeed, the Trustees designed the 16 rehabilitation plan’s non-default schedules “to impose 17 approximately the same burden actuarially on employers that 18 withdrawal from the [Fund] would [have] produce[d].” Id.at 85. 19 Consequently, Honerkamp’s withdrawal from the Fund while paying 20 liability under the MPPAA largely comports with the goals of the 21 PPA. It is true, as the Trustees point out, that the MPPAA caps 22 withdrawal liability such that in some cases the amount paid by 23 withdrawing employers may not fully refund a pension plan. See 24 ERISA § 4219(c)(1)(B), 29 U.S.C. § 1399(c)(1)(B) (withdrawn 2520employers are liable only for twenty years of withdrawal1 liability payments). But implementation of a rehabilitation plan 2 under the PPA may not restore a pension plan’s solvency either. 3 Indeed, the Trustees here determined that the Fund was unlikely 4 to emerge from critical status, and therefore designed the non5 default schedules not to prevent but only to delay the point of 6 insolvency. In any case, it remains true that the MPPAA and PPA 7 pursue the same basic ends, broadly conceived. 8 Against the weight of these considerations, the Trustees 9 offer very little in support of their proposed interpretation of 10 the PPA. For example, in arguing that Congress sought to 11 foreclose withdrawal in circumstances of the sort presented in 12 this case, the Trustees rely largely on a 2008 amendment to the 13
PPA. SeeWorker, Retiree, and Employer Recovery Act of 2008, 14 Pub. L. 110-458 § 102, 122 Stat. 5092, 5100 (2008) (codified at 15 ERISA § 305(e)(3)(C)(ii), 29 U.S.C. § 1085(e)(3)(C)(ii)). The 16 relevant subsection previously stated that the default schedule 17 should be implemented at the earlier of a bargaining impasse 18 between an employer and union or 180 days after expiration of the 19 operative CBA. In 2008, Congress eliminated the former date, so 20 the default schedule now goes into effect 180 days after the 21 pertinent CBA expires. The Trustees argue that Congress enacted 22 this amendment to close a loophole through which employers, via 23 impasse and withdrawal, could escape contributing under 24 rehabilitation plans. However, if Congress had been trying to 2521 eliminate the withdrawal option, one would think that it would 1 have done so explicitly -- not cryptically through a timing 2 amendment. Moreover, the Trustees’ argument would prohibit only 3 a voluntary withdrawal upon impasse, and would not prohibit a 4 voluntary withdrawal agreed to by an employer and union (as 5 happened here with respect to the Central Islip employees). 6

**CONCLUSION** 7 Because we agree with the district court’s conclusion that 8 the PPA does not forbid Honerkamp’s withdrawal from the Fund, we 9 AFFIRM the judgment of the district court. 10