Opinion ID: 441965
Heading Depth: 3
Heading Rank: 5

Heading: Phasing In Employer and PBGC Liability

Text: 89 The PBGC's only remaining argument is that its decision to phase in mandatory as well as voluntary amendments is a reasonable means of protecting the financial viability of the guarantee fund and gradually imposing employer liability for the new vesting provisions. We need not dwell long on the plaintiffs' argument that the PBGC may not consider its own financial interest as a basis for denying benefits. 51 It is clear to us, as it was to the district court, that [g]radual implementation of PBGC liability obviously results in gradual phasing-in of employer liability. 52 The connection between the PBGC's financial status and the program's cost to employers is due first to the contingent liability provisions making an employer maintaining a terminated plan liable to the PBGC for any amount, up to thirty percent of its net worth, paid out for guaranteed benefits not adequately funded by the plan. In addition, the insurance program is self-financing; as the PBGC's costs rise, so do employer premiums. As we have previously noted in Belland v. PBGC, 726 F.2d 839, 843 (D.C.Cir.1984), one explicit purpose of ERISA is to keep insurance premiums at the lowest level consistent with [the PBGC] carrying out its obligations. See 29 U.S.C. Sec. 1302(a)(3). We therefore acknowledge the legitimacy of considering the additional cost to employers of immediately and fully guaranteeing those benefits Title I requires to be vested. 90 Notwithstanding the legitimacy of cost considerations, nothing in the record before us indicates that the agency actually weighed those considerations with any care. Apart from a few general observations in internal memoranda about the added burden on employers and on the program, there is no evidence of any attempt by the PBGC at any point either in its decisionmaking process or in these proceedings even to estimate the additional costs associated with guaranteeing benefits under mandatory vesting provisions. 53 However rational it may have been for the PBGC to weigh the financial burden of guaranteeing those benefits, the PBGC did not do so in any conscientious manner. Although we do not necessarily require the agency to support its policy decision with detailed cost calculations, neither is its decision made reasonable by the mere invocation of a factor that might legitimately have been influential in a reasoned decisionmaking process. 91 We are especially disappointed at the agency's cavalier cost-cutting in light of the truly momentous implications of its decision for many plan participants in the plaintiffs' circumstances. We will not belabor the human consequences of the agency's choice--we could do no better than to repeat the tragic facts of this case. But we do find it necessary to point out that this statute was passed with the overwhelming purpose of protecting the legitimate expectations harbored by millions of employees of a measure of retirement security at the end of many years of dedicated service. 54 The other statutory purposes--encouraging the growth of private pension plans and keeping down the costs of termination insurance for those plans--are important but necessarily secondary: those purposes have meaning only in light of the need for a fair and reliable system of retirement income security for employees. 92 The time-worn canon of statutory construction that requires the generous construction of remedial statutes is only a guideline that must of course give way to clear contrary legislative intent or to concrete and well-grounded policy considerations. But we have here a question of statutory construction in which the more generous reading, although not necessitated by the specific language and legislative history, is supported by the preponderance of evidence of specific congressional intent and by the compelling interests of the intended beneficiaries of this statutory scheme, which is animated throughout by a generous remedial purpose. The agency's reading of the statute, on the other hand, is supported by its marginal ease of administration and by unspecified and completely undocumented concerns for the costs of coverage. We conclude that, in the shadow of such disproportionate competing concerns, the agency's decision to phase in mandatory vesting improvements does not represent a reasonable accommodation of conflicting policies ... committed to the agency's care by the statute. Chevron, --- U.S. at ----, 104 S.Ct. at 2783 (quoting United States v. Shimer, 367 U.S. 374, 383, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961)).