Document: 490 U.S. 714 109 S.Ct. 2156 104 L.Ed.2d 796 MEAD CORPORATION, Petitioner,v.B.E. TILLEY et al. No. 87-1868. Argued Feb. 22, 1989. Decided June 5, Syllabus Under the Employee Retirement Income Security Act of 1974 (ERISA), Pension Benefit Guaranty Corporation (PBGC) guarantees certain nonforfeitable benefits provided by qualified defined benefit pension plans. When an employer voluntarily terminates a single-employer pla , all accrued automatically vest, notwithstanding plan's particular vesting provisions. Plan assets are then distributed to participants in accordance with six-category allocation scheme set forth § 4044(a), which requires that plan administrators first distribute guaranteed PBGC, §§ 4044(a)(1-4); "all other under plan," 4044(a)(5); and finally plan." 4044(a)(6). Any remaining funds may be recouped employer. 4044(d)(1)(A). Respondents, five employees Lynchburg Foundry Company (Foundry), formerly wholly owned subsidiary petitioner Mead Corp. (Mead), were covered Industrial Salaried (Plan), funded entirely included normal retirement payable at age 65, early 55 but reduced for each year preceded age, unreduced available who had 30 or more years service elected retire after 62. sold terminated Plan, it paid only those met both requirements such benefits. Respondents—all 62—received pay equal present value they would have been entitled retired sum less than payments. After distribution, nearly $11 million assets. Respondents filed suit Virginia state court, was later removed Federal District Court, alleging, inter alia, failure violated ERISA. The Court granted summary judgment, concluding since not "accrued benefits" ERISA, respondents any additional sums fund could revert Mead. Appeals reversed, holding before employer, 4044(a)(6) payment even if time termination. Held: 1. Upon termination plan, 4044(a) does require administrator residual Section create entitlements simply provides orderly distribution required ERISA's Pp. 721-725. (a) Neither 4044(a)'s plain language nor its legislative history way indicates intent confer right upon recover elsewhere. Contrary respondents' argument—that contingent benefits, unaccrued, "under plan" category 6 must can recoup assets—the refers terms plan. That is mechanism also illustrated structure, inconceivable Title IV—which insurance generated elsewhere—was designed modify carefully crafted provisions I, determine employee's whose views accepted light history, as well IRS Labor Department, agrees limited created 721-724. (b) mistaken their alternative statutory argument because vest termination, ben fits falling within and, thus, serve no purpose did cover forfeitable issue. PBGC has consistently maintained that, purposes allocation, characterization depends status Respondents' contrary interpretation cannot squared meaning statute, including 5 contravene clear directive give priority 724-725 2. On remand determination whether damages based on either two grounds ERISA surplus employer—that qualify "liabilities" 4044(d)(1)(A)—the should consider IRS. 725-726. 815 F.2d 989 (CA4 1987), reversed remanded. MARSHALL, J., delivered opinion REHNQUIST, C.J., BRENNAN, WHITE, BLACKMUN, O'CONNOR, SCALIA, KENNEDY, JJ., joined. STEVENS, dissenting opinion, post, p. 727. Patrick F. McCartan petitioner. Clifford L. Harrison, Radford, Va., respondents. Justice MARSHALL Court. 1 Today we decide whether, 88 Stat. 1025, amended, 29 U.S.C. 1344(a) (1982 ed. Supp.), 2 * A. 3 Congress enacted part prevent terminations from depriving beneficiaries anticipated 1001(a). Titles I II provide participation, accrual vesting, funding. III contains general administrative IV covers private plans, establishes system creates "body corporate" Department Labor, (PBGC), administer system. 1302. 1322.1 4 A one sets fixed level See 1002(35). Contributions calculated basis number actuarial assumptions about things employee turnover, mortality rates, compensation increases, rate return invested Stein, Raiders Corporate Plan: Reversion Excess Assets Employer, Am.J.Tax Policy 117, 121-122, n. 19 (1986). 26 411(d)(3). six-tier 1344(a). 1344(a)(1)-(4) Supp. V);2 1344(a (5); 1344(a)(6).3 If sufficient categories 1-4, will make up difference. 1361. reimburse unfunded liabilities. 1362. remain liabilities satisfied," 1344(d)(1)(A). Similarly, Internal Revenue Code (Code) conditions favorable tax treatment satisfaction respect [plan]" diverted others. 401(a)(2). B B.E. Tilley, William Crotts, Chrisley H. Reed, J.C. Weddle, D. Goode (Mead).4 Products (Plan). Mead's contributions. 7 As employees. completed 10 attained vested is, earned Plan. App. (Plan, Art. 13). These 65 reference participant's earnings service. Id., 37-41 Arts. IV, 1(b), V). At 55, eligible same manner percent age. 37, 38-39 2, V, 2(a)). subsidized benefit, i.e., 39 2(b)). solely 8 In 1983, P an.5 requirements. four over credited fifth 28. None reached Thus, respondent received value, determined date he 65.6 Had average $9,000 more. Brief finished distributing participants, remained Plan's fund. this money pursuant Article XIII, 4(f), 63.7 9 1984, Circuit city Virginia, 1103(c), 1104(a)(1)(A), 1106(b), 1344. case United States Western Virginia. judgment favor Mead, "[t]he language, law fourth circuit . clearly demonstrate 'accrued benefits' ERISA." Civ. Action 84-0751 (WD Apr. 18, 1986). It therefore held 1344(d)(1) Fourth reversed. (1987). Adopting reasoning Second Amato v. Union Int'l, Inc., 773 1402 (1985), cert. dism'd, 474 1113, 106 1167, 89 288 (1986), court concluded "even termination." F.2d, 991. conclusion, stated, dictated agency interpretation. 992. Finally, formula determining specified lump sum. 11 Because question decided important Courts differed,8 certiorari. 488 815, 52, 102 31 (1988). We now reverse. 12 concede terminated, satisfied Nevertheless, claim because, view, "benefits 6, 4044(a)(6), 4. 13 note preliminarily flatly rejected argument. PBGC's "does entitlements. merely already otherwise Amicus Curiae 9. expressed view Opinion Letters addressing proposed terminations. See, e.g., Nos. 87-11 (Oct. 1987); 86-5 (Mar. 1986); 86-1 (Jan. 15, IRS, agencies responsible administering agree Guidelines Asset Reversions, BPR 724 (1984). 14 interpret statute construed agency, ask "whether directly spoken precise clear, end matter; [but] silent ambiguous specific issue, agency's answer permissible construction statute." Chevron U.S.A. Inc. Natural Resources Defense Council, 467 837, 842-843, 2778, 2781-2782, 81 694 (1984); see INS Cardoza-Fonseca, 480 421, 446-448, 107 1207, 1221-1222, 94 434 turn statute. Blum Stenson, 465 886, 896, 1541, 1547, 79 891 Consumer Product Safety Comm'n GTE Sylvania, 447 102, 108, 100 2051, 2056, 64 766 (1980); Nachman Corporation, 446 359, 373-374, 1723, 1732, 354 (1980). unaccrued contrary, 4044(a)(6)—"benefits "—can refer function made introductory reads: "In shall allocate (available benefits) among following order." possible ambiguity resolved against title 4044(a)—"[a]llocation assets." FTC Mandel Bros., 359 385, 388-389, 818, 822, 893 (1959). 15 source new structure elaborate Those describe detail years. section I. 16 To counter rely heavily history. They contend Congress' include word "accrued," appeared House version survive Conference Committee amendments, evinces provision disagree. do attach decisive significance unexplained disappearance unenacted bill "mute intermediate maneuvers" reliable indicators congressional intent. Trailmobile Co. Whirls, 331 40, 61, 67 982, 992, 91 L.Ed. 1328 (1947); Drummond Coal Watt, 735 469, (CA11 1984). There nothing suggesting intended rather scheme. Senate elsewhere.9 discussed fully areas where altered prior final differed predecessor bills,10 reasonable assume entitlements, change Report. 17 offer suggest 411(d)(3), fall argue, issue here, purpose. 18 mistaken. guarantee asset CFR 2613.6(b) 2618.2 (1987) ("[B]enefits become result [are] considered forfeitable"). Soon enactment stated "priority contain participant." 40 Fed.Reg. 51370 (1975). according 2618.16 failed persuade us unreasonable. For nonforfeitable, there cases insufficient both. This hold relied exclusively entitlement reverse judgment. however, employer: first, ERISA; second, 4044(d)(1)(A), reach these questions. theories. deciding issues, attempt questions without enforcing "embar[k] voyage compass." Ford Motor Credit Milhollin, 444 555, 568, 790, 798, 63 22 (1980).11 20 provision, remanded further proceedings consistent opinion. 21 so ordered. dissenting. 23 Perhaps prudent await advice Solicitor General principal presented case. presently advised, am persuaded though itself 24 my seek 4044(d) three satisfied, satisfied" "the circumstances." 1344(d). "[a]ny Fund, due error, rights returnable [Mead]." 4(f)). term "liabilities," itself, given parallel Code, 401(a)(2), long interpreted satisfy obligations exclusive beneficiaries.1 understand it, answer, believe, yes. 25 far expectancy interest Although "accrued" sense, them serving election reaching 62.2 Cf. Blessitt Employees Dixie Engine Co., 848 1164, 1174, 1988) ("[A]n expect deleted amendment shortly qualifies"). Their position similar frustrated backloaded schedules abrupt unilateral action precisely pre-emptive actions employment passed 374-375, 1731-1733, Petitioner rulings practice accumulate necessary benefits.3 take account requirement. construe Accordingly, affirm Appeals. "nonforfeitable benefit" means "a participant chapter." 1301(a)(8). By assigning categories, "protect[s] evasion limits [PBGC's] use uninsured benefits." S.Rep. 93-383, 84 (1973), U.S.Code Cong. & Admin.News 1974, pp. 4639, 4968. relevant part: "Allocation "(a) Order order: "(1) First, portion individual's accured [sic] derived contributions mandatory "(2) Second, "(3) Third, [benefits workers receiving chosen immediately "(4) Fourth, PBGC]. "(5) Fifth, "(6) Sixth, David Wall, another former party action, died while pending denied motion substitute Richard executor Wall's estate, Wall. 906, 256, 244 sought approval Service (IRS), 1341(a) ed., replied "[b]ased information [Mead] supplied ., [Mead's] discharge when Pet. Cert. 34a. issued letter "not adversely affect qualification purposes" "returned satisfied." 30a-31a. Each receive his annuity. Tilley $87,108.74; Wall $65,360.80; Crotts $87,552.03; Reed $69,882.45; Weddle $50,800.35; $83,923.93. 4(f) provides, "Any released reserves shall, subject pertinent federal law, 63. Ashenbaugh Crucible 1975 854 1516, 1529 (CA3 1988), pending, 88-897; 1178-1179 (en banc); 1402, 1415-1416 (CA2 1985), consisted categories: (1) contributions; (2) termination; (3) benefits; (4) benefit[s]" higher categories. H.R. 93d Cong., 2d Sess., 112(b)(1)-(b)(4) (1974) (as February 28, 1974), reprinted Legislative History, (Committee Print compiled Labor) 3957-3958 (1976) (Legislative History). liabilities, investment Only recouped. 112(d)(1)-(d)(3). much simpler scheme, too provision: voluntary least years; PBGC. March 4, History 3720-3721. adopted administration "combine[d] best features bills." Administration Recommendations Conferees Provide Reform 60 (April 5107. H.R.Conf.Rep. 93-1280, 375 (1974), 4277, 4642. 268-282 (vesting), 4535-4549; id., 306-323 (prohibited transactions), 4573-4590; 355-356 (salary reduction plans), 4622-4623. parties several amici curiae theories not. brief amicus support specifically stated: "Like Circuit, expresses question, arising 3. mention 4044(d)(1)(A) file aware behalf arguing protected elimination 411(d)(6) Code. However, disagree still holds view. Compare 32-33, 27 ("Treasury Regulations 1988 confirm IRS's subsidy benefit"), American Association Retired Persons ("[T]he extend type case"). Without Appeals, reluctant address complicated issues pertaining pensions millions workers. "The 'liabilities' used 401(a)(2) includes example, 1,000 trust forming 300 whom monthly pension, 700 yet period service, nevertheless arisen constitute term. impossible (or nonemployee) amounts 'erroneous computations' obligations." Treas.Reg. 1.401-2(b)(2), 1.401-2(b)(2) explaining Protection Act, Pub.L. 100-203, IX, 9302-9504, 101 1330-333 1330-382, 1987 understanding "if commitments beneficiaries." 100-495, 879, 884 (1987), 1987, 2313-1, 2313-1625. provides: "(b) thirty (30) Credited elects attains sixty-two (62) V rulings, actuary possibility into deriving assumptions. Rev.Rul. 78-331, 1978-2 Cum.Bull. 158; Manual, Actuarial Handbook, CCH Guide ¶ 3565, Ch. 520 R. Osgood, Law Pensions Profit-Sharing 3.4.4, 96 S. Young, Plans 18.06[2], 18-121 (1988); 22[B].03[8], 22B.48.

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