Opinion ID: 495432
Heading Depth: 1
Heading Rank: 1

Heading: overview of mppaa

Text: 2 Under the Employee Retirement Income Security Act of 1974, Pub.L. No. 93-406, 88 Stat. 1020 (ERISA), as amended by MPPAA, employers may make contributions to one or more pension plans on behalf of all their employees who belong to a participating union. Congress enacted MPPAA in particular because it found that existing legislation did not adequately protect plans from the adverse consequences that resulted when individual employers terminate[d] their participation in, or withdr[e]w from, multiemployer plans. 1 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722, 104 S.Ct. 2709, 2714, 81 L.Ed.2d 601 (1984) (R.A. Gray ); accord IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 127 (3d Cir.1986) (The MPPAA was designed '(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) ... to ensure benefit security to plan participants.' ) (original ellipses) (quoting H.R.Rep. No. 869, 96th Cong., 2d Sess. 71 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News 2918, 2939) (Barker & Williamson ). The Act addressed this problem by assessing such employers with withdrawal liability, defined in the statute as the employer's adjusted allocable amount of unfunded vested benefits. 29 U.S.C. Sec. 1381(b)(1) (1982). 3 We will briefly outline the MPPAA provisions that are relevant to this case. The Act requires that all ... trades or businesses (whether or not incorporated) [that] are under common control, as defined in regulations issued by amicus curiae the Pension Benefit Guaranty Corporation (PBGC), shall be treated ... as a single employer. 2 29 U.S.C. Sec. 1301(b)(1) (1982). Since a controlled group is to be treated as a single employer, each member of such a group is liable for the withdrawal of any other member of the group. See Barker & Williamson, 788 F.2d at 127-28. In determining whether a withdrawal has occurred, MPPAA explicitly provides that any transaction designed to evade or avoid withdrawal liability should be ignored: [i]f a principal purpose of any transaction is to evade or avoid liability under this part, this part shall be applied (and liability shall be determined and collected) without regard to such transaction. 29 U.S.C. 1392(c) (1982). 4 Provisions for the quick and informal resolution of withdrawal liability disputes are an integral part of MPPAA's statutory scheme. The Act requires a plan's trustees to determine initially whether a withdrawal has occurred. 29 U.S.C. Secs. 1382(1), 1399(b)(1)(A)(i) (1982). When the trustees conclude that a withdrawal has taken place, they must then notify the employer of the amount of liability and demand payment in accordance with an amortization schedule. 29 U.S.C. Secs. 1382(2), 1382(3), 1399(b)(1)(B) (1982). Thereafter, the employer may within 90 days ask the trustees to conduct a reasonable review of the computed liability. 29 U.S.C. Sec. 1399(b)(2)(A)(i) (1982). If a dispute remains, either party may initiate arbitration proceedings. MPPAA provides that 5 [a]ny dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of ... title shall be resolved through arbitration. Either party may initiate the arbitration proceeding within [specified time periods]. 6 29 U.S.C. Sec. 1401(a)(1) (1982). Finally, [u]pon completion of the arbitration proceedings in favor of one of the parties, MPPAA permits any party thereto to bring an action to enforce, vacate or modify the arbitrator's award in the appropriate federal district court. 29 U.S.C. Sec. 1401(b)(2) (1982). Regardless of whether the employer requests review by a plan's trustees or initiates arbitration, however, the employer must begin making interim payments of the withdrawal liability in accordance with the plan's schedule within 60 days of notice of liability. See 29 U.S.C. Secs. 1399(c)(2), 1401(d) (1982); see also Banner Indus., Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 663 F.Supp. 1292, 1297-98 (N.D.Ill.1987) (Congress has clearly established the balance it deems appropriate with respect to which party should have use of the money during the pendency of a dispute over withdrawal liability.); Robbins v. Pepsi-Cola Metro. Bottling Co., 636 F.Supp. 641, 677 (N.D.Ill.) (The MPPAA contemplates a 'pay now, dispute later' procedure.), petition for supersedeas bond or entry of stay pending appeal denied, 800 F.2d 641 (7th Cir.1986).