Court Opinion

ID: 806851
Source: CourtListenerOpinion
Date Created: 2012-08-17 14:20:36+00
Date Added: 2024-06-11T18:00:21.617661
License: Public Domain

11-1322-cv
     Trustees of the Local 138 Pension Trust Fund v. F.W. Honerkamp Co. Inc.
 1
 2                        UNITED STATES COURT OF APPEALS
 3
 4                            FOR THE SECOND CIRCUIT
 5
 6                                August Term 2011
 7
 8         (Argued: March 26, 2012             Decided: August 17, 2012)
 9
10                          Docket No. 11-1322-cv
11         -----------------------------------------------------x

12   TRUSTEES OF THE LOCAL 138 PENSION TRUST FUND,
13
14               Plaintiff-Appellant,
15
16                           -- v. --
17
18   F.W. HONERKAMP CO. INC.,
19
20               Defendant-Appellee.
21
22         -----------------------------------------------------x
23
24   B e f o r e :     WALKER, LYNCH and LOHIER, Circuit Judges.

25         Appeal from a judgment of the United States District Court

26   for the Southern District of New York (Lewis A. Kaplan, Judge)

27   granting defendant-appellee employer’s motion for summary

28   judgment dismissing claim by plaintiff-appellant -- trustees for

29   a pension plan who sought certain pension contributions from the

30   employer -- and denying the trustees’ cross-motion for summary

31   judgment.    The trustees argue that the Pension Protection Act of

32   2006 prevented the employer from withdrawing from the pension

33   plan after the plan entered critical status, and that the

34   district court erred in concluding otherwise.           We do not agree

35   and thus AFFIRM the judgment of the district court.

                                           1
 1                                  LARRY CARY (Andrew M. Katz and
 2                                  Charles Pergue, on the brief), Cary
 3                                  Kane LLP, New York, NY, for
 4                                  Plaintiff-Appellant.
 5
 6                                  KEVIN L. WRIGHT, Littler Mendelson,
 7                                  P.C., McLean, VA (Deidre A.
 8                                  Grossman, Littler Mendelson, P.C.,
 9                                  New York, NY, on the brief), for
10                                  Defendant-Appellee.
11
12
13   JOHN M. WALKER, JR., Circuit Judge:

14        Plaintiff-appellant Trustees (the “Trustees”) of the Local

15   138 Pension Trust Fund (the “Fund”) appeal from a decision of the

16   United States District Court for the Southern District of New

17   York (Lewis A. Kaplan, Judge) granting summary judgment in favor

18   of defendant-appellee F.W. Honerkamp Co. (“Honerkamp”) and

19   denying the Trustees’ cross-motion for summary judgment.

20   Honerkamp withdrew from the Fund after the Fund had reached

21   “critical status” as defined by the Pension Protection Act of

22   2006 (the “PPA”), an amendment to the Employee Retirement Income

23   Security Act of 1974 (“ERISA”), and after the collective

24   bargaining agreements (“CBAs”) requiring Honerkamp to contribute

25   to the Fund had expired.   The Trustees sued, arguing that the PPA

26   prevented Honerkamp from withdrawing and required the company to

27   make certain ongoing pension contributions pursuant to the Fund’s

28   rehabilitation plan.   The district court agreed with Honerkamp

29   that the PPA did not forbid its withdrawal or require those

30   contributions.   It therefore granted summary judgment to

                                      2
 1   Honerkamp and denied the Trustees’ cross-motion for summary

 2   judgment.

 3        On appeal, the Trustees argue that the district court

 4   misconstrued the PPA in denying their cross-motion and granting

 5   summary judgment to Honerkamp.   For the reasons that follow, we

 6   reject the Trustees’ argument and AFFIRM the judgment of the

 7   district court.

 8                                BACKGROUND

 9   I.   Statutory Background

10        We begin with an overview of the pertinent statutory

11   framework, which provides necessary context for the events of

12   this case:

13        A.      ERISA

14        ERISA is a comprehensive statutory scheme regulating

15   employee retirement plans.   See generally ERISA § 2 et seq., 29

16   U.S.C. § 1001 et seq.   Congress has amended the law periodically

17   since originally enacting it in 1974.

18        Among other things, ERISA “was designed to ensure that

19   employees and their beneficiaries would not be deprived of

20   anticipated retirement benefits by the termination of pension

21   plans before sufficient funds have been accumulated in the

22   plans.”   Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211,

23   214 (1986) (internal quotation marks omitted).   To that end, the

24   statute created an agency, the Pension Benefit Guaranty

                                      3
 1   Corporation (“PBGC”), to administer an insurance system by

 2   collecting premiums from covered pension plans and paying out

 3   accrued benefits to employees in the event a pension plan has

 4   insufficient funds.   See ERISA § 4006, 29 U.S.C. § 1306; Bd. of

 5   Trs. of W. Conference of Teamsters Pension Trust Fund v. Thompson

 6   Bldg. Materials, Inc., 749 F.2d 1396, 1399-1403 (9th Cir. 1984).

 7        B.   The MPPAA

 8        One type of pension plan regulated by ERISA is the

 9   multiemployer pension plan, in which multiple employers pool

10   contributions into a single fund that pays benefits to covered

11   retirees who spent a certain amount of time working for one or

12   more of the contributing employers.   Plans of this sort offer

13   important advantages to employers and employees alike.    For

14   example, employers in certain unionized industries likely would

15   not create their own pension plans because the frequency of

16   companies going into and out of business, and of employees

17   transferring among employers, make single-employer plans

18   unfeasible.   Multiemployer plans allow companies to offer pension

19   benefits to their employees notwithstanding these practicalities,

20   and at the same time to share the financial costs and risks

21   associated with the administration of pension plans.   See

22   Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension

23   Trust Fund for S. Cal., 508 U.S. 602, 605-07 (1993).

24

                                      4
 1        However,

 2        [a] key problem of ongoing multiemployer plans,
 3        especially in declining industries, is the problem of
 4        employer withdrawal. Employer withdrawals reduce a
 5        plan’s contribution base. This pushes the contribution
 6        rate for remaining employers to higher and higher
 7        levels in order to fund past service liabilities,
 8        including liabilities generated by employers no longer
 9        participating in the plan, so-called inherited
10        liabilities. The rising costs may encourage -— or
11        force -— further withdrawals, thereby increasing the
12        inherited liabilities to be funded by an
13        ever-decreasing contribution base. This vicious
14        downward spiral may continue until it is no longer
15        reasonable or possible for the pension plan to
16        continue.

17   Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722

18   n.2 (1984)(quoting Pension Plan Termination Insurance Issues:

19   Hearings before the Subcommittee on Oversight of the House

20   Committee on Ways and Means, 95th Cong., 2nd Sess., 22 (1978)

21   (statement of Matthew M. Lind)) (internal quotation marks

22   omitted).

23        ERISA as originally enacted did not adequately address and

24   even exacerbated these problems.       This was because of certain

25   now-obsolete provisions, which we need not detail here, that had

26   the effects of (1) encouraging employers to withdraw from weak

27   multiemployer pension plans, which they often could do without

28   compensating the plans for the inherited liabilities that

29   remaining participants would incur; and (2) encouraging employers

30   who did not withdraw to terminate deteriorating pension plans

31   sooner rather than later.   See Concrete Pipe, 508 U.S. at 607-08;

                                        5
 1   R.A. Gray & Co., 467 U.S. at 721; Bd. of Trs. of W. Conference of

 2   Teamsters Pension Trust Fund, 749 F.2d at 1402.    The potential of

 3   widespread termination of pension plans caused by cascading

 4   withdrawals threatened to impose too heavy a burden on the PBGC

 5   (the insurer of protected pension benefits) and, in turn, to

 6   “collapse . . . the plan termination insurance program.”      R.A.

 7 Gray & Co., 467 U.S. at 721.

 8        In 1980, Congress responded to this concern by enacting the

 9   Multiemployer Pension Plan Amendments Act of 1980 (the “MPPAA”),

10   Pub. L. No. 96-364, 94 Stat. 1208 (codified as amended in

11   scattered sections of 26 and 29 U.S.C.).   Under this amendment to

12   ERISA, “an employer [that] withdraws from a multiemployer plan

13   . . . is liable to the plan in the amount determined . . . to be

14   the withdrawal liability.”   ERISA § 4201(a), 29 U.S.C. § 1381(a).

15   Withdrawal liability is the withdrawing employer’s proportionate

16   share of the pension plan’s unfunded vested benefits.   See R.A.

17 Gray & Co., 467 U.S. at 725 (citing ERISA §§ 4201, 4211, 29

18   U.S.C. §§ 1381, 1391).   Under the MPPAA, the employer pays its

19   withdrawal liability in annual installments, which are calculated

20   based on the employer’s historical contribution amounts.      See

21   ERISA §§ 4211(c), 4219(c), 29 U.S.C. §§ 1391(c), 1399(c).     The

22   statute limits the employer’s obligation to make these payments

23   to 20 years, even if it would take more than 20 payments for the

24   employer to pay its full withdrawal liability.    See ERISA

                                      6
 1   § 4219(c)(1)(B), 29 U.S.C. § 1399(c)(1)(B); Nat’l Shopmen Pension

 2   Fund v. DISA Indus., Inc., 653 F.3d 573, 576 (7th Cir. 2011).

 3        C.   The PPA

 4        By 2005, a confluence of economic circumstances –- including

 5   the actual or forecasted termination of various large pension

 6   plans and the erosion of many employees’ retirement savings –-

 7   again threatened ERISA’s system for federally insuring

 8   multiemployer pension plans.   See Janice Kay McClendon, The Death

 9   Knell of Traditional Defined Benefit Plans: Avoiding a Race to

10   the 401(k) Bottom, 80 Temp. L. Rev. 809, 809-12 (2007).   Thus, in

11   2006, Congress revisited the problems associated with underfunded

12   pension plans by enacting the Pension Protection Act of 2006,

13   Pub. L. 109-280, 120 Stat. 780 (codified as amended in scattered

14   sections of 26 and 29 U.S.C.).   The law is far-reaching, totaling

15   approximately one thousand pages, and introduced a number of

16   mechanisms aimed at stabilizing pension plans and ensuring that

17   they remain solvent.   See generally Sarah D. Burt, Note, Pension

18   Protection? A Comparative Analysis of Pension Reform in the

19   United States and the United Kingdom, 18 Ind. Int’l & Comp. L.

20   Rev. 189, 199 (2008); Douglas L. Lineberry, The Pension

21   Protection Act of 2006, S.C. Law. July 2007, at 16.

22        As relevant to this case, the PPA includes measures designed

23   to protect and restore multiemployer pension plans in danger of

24   being unable to meet their pension distribution obligations in

                                      7
 1   the near future.   The statute created two categories for such

 2   plans: “endangered” and “critical.”   Under the PPA, a pension

 3   plan is endangered if, inter alia, it is less than eighty percent

 4   funded, and it is in critical status if, inter alia, it is less

 5   than sixty-five percent funded.   ERISA § 305(b), 29 U.S.C. §

 6   1085(b).   If a pension plan falls into critical status, the plan

 7   sponsor must notify the participating employers and unions, ERISA

 8   § 305(b)(3)(D), 29 U.S.C. § 1085(b)(3)(D), and each participating

 9   employer must contribute an additional surcharge of five to ten

10   percent of the contribution amount required under the applicable

11   CBA.   See ERISA § 305(e)(7), 29 U.S.C. § 1085(e)(7).

12          Additionally, upon a multiemployer pension plan’s entry into

13   critical status, the plan’s sponsor must adopt a rehabilitation

14   plan to restore the Fund’s financial health going forward:

15          A rehabilitation plan is a plan which consists of --
16
17          (i) actions, including options or a range of options to
18          be proposed to the [employers and unions], formulated,
19          based on reasonably anticipated experience and
20          reasonable actuarial assumptions, to enable the plan to
21          cease to be in critical status by the end of the [ten-
22          year] rehabilitation period and may include reductions
23          in plan expenditures (including plan mergers and
24          consolidations), reductions in future benefit accruals
25          or increases in contributions, if agreed to by the
26          [employers and unions], or any combination of such
27          actions, or
28
29          (ii) if the plan sponsor determines that, based on
30          reasonable actuarial assumptions and upon exhaustion of
31          all reasonable measures, the plan can not reasonably be
32          expected to emerge from critical status by the end of
33          the rehabilitation period, reasonable measures to
34          emerge from critical status at a later time or to
35          forestall possible insolvency . . . .

                                       8
 1   ERISA § 305(e)(3)(A), 29 U.S.C. § 1085(e)(3)(A).     The

 2   rehabilitation plan must set forth new schedules of reduced

 3   benefits and increased contributions, from which participating

 4   employers and unions may choose when it is time to negotiate

 5   successor CBAs.    See ERISA § 305(e), 29 U.S.C. § 1085(e).      One of

 6   those schedules must be designated as the “default schedule,”

 7   which “assume[s] that there are no increases in contributions

 8   under the plan other than the increases necessary to emerge from

 9   critical status after [benefits] . . . have been reduced to the

10   maximum extent permitted by law.”      ERISA § 305(e)(1), 29 U.S.C.

11   § 1085(e)(1).

12        Most importantly for present purposes, the PPA provides as

13   follows:

14        (C) Imposition of default schedule where failure to
15        adopt rehabilitation plan
16
17              (i) In general
18
19              If–
20
21                     (I) a collective bargaining agreement
22                     providing for contributions under a
23                     multiemployer plan that was in effect at the
24                     time the plan entered critical status
25                     expires, and
26
27                     (II) after receiving one or more schedules
28                     from the plan sponsor [under a rehabilitation
29                     plan], the bargaining parties with respect to
30                     such agreement fail to adopt a contribution
31                     schedule with terms consistent with the
32                     rehabilitation plan and a schedule from the
33                     plan sponsor . . . ,
34                               the plan sponsor shall
35                               implement the default schedule
36                               [of the rehabilitation plan]

                                        9
 1                              beginning on the date
 2                              specified in clause (ii).
 3
 4              (ii) Date of implementation
 5
 6              The date specified in this clause is the date
 7              which is 180 days after the date on which the
 8              collective bargaining agreement described in
 9              clause (i) expires.

10   ERISA § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C).   As will be

11   seen, it is this provision and the extent to which it bears on

12   the facts of this case that are at the core of this appeal.

13   II.   Factual Background

14         The facts, which are not in dispute, are as follows:

15         The Fund is a multiemployer defined-benefit pension plan.

16   The Trustees are its sponsor.

17         Honerkamp is a distributor of wood chips operating out of

18   two New York facilities -- one in the Bronx and one in Central

19   Islip.   In early 2008, Honerkamp and the Bakery Drivers Local

20   Union No. 802 (the “Union”) were parties to CBAs that covered

21   Honerkamp’s unionized employees in its two facilities.     The CBAs,

22   which were set to expire in late 2008, obligated Honerkamp to

23   contribute to the Fund on behalf of the company’s employees.

24         In March 2008, the Trustees announced that the Fund was in

25   critical status as defined by the PPA, see ERISA § 305(b)(2), 29

26   U.S.C. § 1085(b)(2).   They therefore began drafting a

27   rehabilitation plan.   But they did not expect to complete the

28   rehabilitation plan until late 2008, around the time the two

                                      10
 1   Honerkamp CBAs were due to expire.     Because the rehabilitation

 2   plan would figure prominently in any negotiations between

 3   Honerkamp and the Union over successor CBAs, the two sides agreed

 4   to extend the existing Bronx and Central Islip agreements through

 5   February 10 and March 27, 2009, respectively.

 6        In November 2008, the Trustees finalized the rehabilitation

 7   plan, which, as required by the PPA, set forth several new

 8   schedules of reduced benefits and increased contributions.    See

 9   ERISA § 305(e), 29 U.S.C. § 1085(e).    According to the

10   rehabilitation plan, the Trustees had determined that the Fund

11   was unlikely to emerge from critical status within the statutory

12   ten-year rehabilitation period.    See ERISA § 305(e)(4), 29 U.S.C.

13   § 1085(e)(4).   This was because the employer contribution rates

14   required for such a result would have exceeded the amounts that

15   employers would have had to pay to withdraw from the Fund under

16   the MPPAA.   As explained by the rehabilitation plan, the Trustees

17   “assum[ed] that employers would be unwilling to continue to

18   participate . . . if the cost of doing so were to exceed the cost

19   of withdrawing.”   Joint Appendix (“J.A.”) at 84.   The Trustees

20   therefore designed four primary, or non-default, schedules “to

21   impose approximately the same burden actuarially on employers

22   that a withdrawal from the [Fund] would produce.”    Id. at 85.

23   Participating employers’ adoption of the non-default schedules

24   was estimated to push back the Fund’s projected date of

25   insolvency from 2021 to 2024.

                                       11
 1        The Trustees also included in the rehabilitation plan a

 2   default schedule, which, in accordance with the PPA, outlined the

 3   Fund’s emergence from critical status.   See ERISA § 305(e)(1), 29

 4   U.S.C. § 1085(e)(1).   But because the Trustees believed that the

 5   contribution levels required for the Fund to emerge from critical

 6   status were “unrealistic[ally high],” J.A. at 84, they expected

 7   the default schedule to be implemented only if a participating

 8   employer and union did not agree on one of the four non-default

 9   schedules.   Presumably, this expectation was due to the earlier-

10   excerpted portion of the PPA that requires a multiemployer

11   pension plan in critical status to “implement the default

12   schedule” in the event such deadlock persists for 180 days.    See

13   ERISA § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C).

14        With the rehabilitation plan finalized, Honerkamp and the

15   Union proceeded to negotiate their successor CBAs.   They

16   considered the rehabilitation plan’s schedules as well as the

17   possibility of Honerkamp’s withdrawal from the Fund.   As part of

18   that consideration, Honerkamp requested and the Trustees provided

19   an estimate of Honerkamp’s withdrawal liability under the MPPAA.

20        On July 22, 2009, Honerkamp sent the Union a “Last, Best,

21   and Final Offer” for each facility.   Both offers provided that,

22   as of August 1 of that year, Honerkamp would withdraw from the

23   Fund and create instead a 401(k) retirement plan for the

24   company’s employees.   The Central Islip employees voted to ratify

25   the offer and, together with Honerkamp, entered into a new CBA on

                                     12
 1   August 1 reflecting this change.      The Bronx employees initially

 2   rejected Honerkamp’s offer.   With the parties then at an impasse,

 3   Honerkamp unilaterally implemented its offer -- withdrawing from

 4   the Fund in favor of the 401(k) plan -- as permitted by the

 5   National Labor Relations Act, 29 U.S.C. § 151 et seq.      The Bronx

 6   employees and Honerkamp eventually entered into a new CBA in

 7   April 2010.   Like the agreement reached with the Central Islip

 8   employees, the new Bronx CBA provided for Honerkamp’s withdrawal

 9   from the Fund in favor of a 401(k) plan.

10        On July 31, 2009, Honerkamp informed the Trustees that it

11   would be withdrawing from the Fund for both locations effective

12   August 1.    The Trustees responded that the PPA required Honerkamp

13   to contribute to the Fund under the rehabilitation plan’s default

14   schedule if the company and Union did not agree to a non-default

15   schedule within 180 days of the CBAs’ expiration.     Honerkamp

16   countered that withdrawal was permissible and that it would be

17   liable only to pay withdrawal liability as calculated under the

18   MPPAA.

19   III. Procedural Background

20        In February 2010, the Trustees brought this suit against

21   Honerkamp.    They argued that the PPA prevented Honerkamp from

22   withdrawing from the Fund after the Fund entered critical status.

23   The Trustees sought to compel Honerkamp to make retroactive and

24   prospective contributions under the rehabilitation plan’s default

                                      13
 1   schedule.   Honerkamp moved and the Trustees cross-moved for

 2   summary judgment.   The magistrate judge submitted to the district

 3   court a report and recommendation in favor of summary judgment

 4   for Honerkamp.   Following oral argument on the parties’ motions,

 5   the district court adopted the recommendation.

 6        The Trustees appeal from the district court’s grant of

 7   summary judgment in favor of Honerkamp and denial of their cross-

 8   motion for summary judgment.

 9                                 DISCUSSION

10   I.   Standard of Review

11        We review de novo the district court’s grant of summary

12   judgment, which relied entirely on its construction of the PPA.

13   See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“We

14   review de novo a district court’s application of law to

15   undisputed facts . . . .”).

16   II. The PPA’s Effect on Withdrawal

17        At issue here is the extent to which the PPA, in these

18   circumstances, abrogates the ability of a participating employer

19   to withdraw from a multiemployer pension plan in critical status.

20   Honerkamp claims that it may withdraw from the Fund as long as it

21   pays withdrawal liability as calculated under the MPPAA.   The

22   Trustees do not dispute that this would have been correct before

23   the enactment of the PPA.   But they contend that under that more

24   recent statute, Honerkamp cannot withdraw and must continue

                                       14
 1   participating in the Fund while contributing in accordance with

 2   the rehabilitation plan’s default schedule.   See ERISA

 3   § 305(e)(3)(C), 29 U.S.C. § 1085(e)(3)(C).

 4        To our knowledge, no other court besides the district court

 5   in this action has considered whether the PPA prohibits employers

 6   from withdrawing from multiemployer pension plans in critical

 7   status.   On this issue, the PPA itself is silent.   But, as is

 8   always the case in issues of statutory interpretation, the

 9   “ultimate question” here “is one of congressional intent.”   In re

10   Lehman Bros. Mortg.-Backed Secs. Litig., 650 F.3d 167, 180 (2d

11   Cir. 2011) (internal quotation marks omitted).   For the reasons

12   that follow, we agree with the district court and Honerkamp that,

13   in enacting the PPA, Congress did not intend to prevent employers

14   from withdrawing from multiemployer pension plans in critical

15   status.

16        “Because our task is to ascertain Congress’s intent, we look

17   first to the text and structure of the statute” as the surest

18   guide to congressional intent.   Lindsay v. Ass’n of Prof’l Flight

19   Attendants, 581 F.3d 47, 52 (2d Cir. 2009).   While the text of

20   the PPA does not speak to the issue at hand directly, it does

21   evidence Congress’s understanding that employers can and will

22   withdraw from plans in critical status.   Although there is no

23   explicit statement of the right to withdraw, the statute appears

24   to assume withdrawals in these circumstances by revising the

25   calculation of withdrawal liability where the pension plan

                                      15
 1   withdrawn from is in critical status.   See ERISA § 305(e)(9), 29

 2   U.S.C. § 1085(e)(9).   Specifically, the PPA provides that

 3   calculations of an employer’s withdrawal liability should not

 4   take into account (1) contribution surcharges imposed

 5   automatically once a pension plan enters critical status, or (2)

 6   benefit reductions required by a rehabilitation plan.   See id.

 7        In enacting the PPA, Congress also amended other portions of

 8   ERISA dealing with withdrawal and withdrawal liability without

 9   the slightest indication that it intended to abrogate employers’

10   ability to withdraw from pension plans in critical status.   See

11   PPA § 204(a)(2) (codified at ERISA § 4225(a)(2), 29 U.S.C.

12   § 1405(a)(2)) (changing the calculation of the limitation on

13   withdrawal liability where the employer company is sold); PPA

14   § 204(b)(1) (codified at ERISA § 4205(b)(2), 29 U.S.C. §

15   1385(b)(2)) (amending the imposition of partial withdrawal

16   liability when, inter alia, the employer’s obligation to

17   contribute to a plan ceases under some but not all CBAs or

18   regarding some but not all facilities); see also PPA

19   § 502(b)(codified at ERISA § 101(l)(1), 29 U.S.C.

20   § 1021(l)(l))(redesignating and restating the requirement that

21   the plan sponsor provide an estimate of withdrawal liability upon

22   the employer’s request).   That Congress did not hint at -- let

23   alone explicitly state -- such an abrogation, despite clearly

24   having withdrawal and withdrawal liability on its mind, is

                                     16
 1   significant.   This is so in part because, in at least one other

 2   clause of the PPA, Congress unambiguously disclaimed an older

 3   portion of ERISA that it wished no longer to apply in the context

 4   of critical-status pension plans.      See PPA § 202(a) (codified at

 5   ERISA § 305(e)(8)(A)(i), 29 U.S.C. § 1085(e)(8)(A)(i)) (allowing

 6   the retroactive cutting of certain benefits that typically would

 7   be prohibited).

 8        The Trustees respond that Congress, in considering

 9   withdrawal and withdrawal liability when enacting the PPA, had in

10   mind only “involuntary withdrawals” from plans, such as those

11   caused by an employer’s going out of business or a pension plan’s

12   liquidation.   But this interpretation is unpersuasive.    Nowhere

13   in the PPA’s repeated references to withdrawal did Congress

14   suggest any voluntary/involuntary distinction, notwithstanding

15   the decades-long precedent of employers “voluntarily” withdrawing

16   from pension plans when financially expedient.

17        Our conclusion that Congress did not intend the PPA to

18   foreclose withdrawal in these circumstances finds further support

19   external to the statute’s text.    The PBGC, the agency charged

20   with administering the withdrawal-liability provisions under

21   ERISA, is traditionally afforded substantial deference in its

22   reasonable interpretations of the statute.     See Pension Benefit

23   Guar. Corp. v. LTV Corp., 496 U.S. 633, 647-48 (1990); Kinek v.

24   Paramount Commc’ns, Inc., 22 F.3d 503, 511 n.5 (2d Cir. 1994);

25   see also Cent. States Se. & Sw. Areas Pension Fund v. O’Neill

                                       17
 1   Bros. Transfer & Storage Co., 620 F.3d 766, 774 (7th Cir. 2010);.

 2   In its interpretation of the PPA, the PBGC has adopted

 3   regulations for calculating employer liability for withdrawal

 4   from plans in critical status.    See 73 Fed. Reg. 79628-02, 79632-

 5   33 (Dec. 30, 2008)(section titled “Withdrawal Liability

 6   Computations for Plans in Critical Status--Employer Surcharges”)

 7   (explaining 29 C.F.R. § 4211.4).       Like the PPA itself, these

 8   regulations say nothing about mandatory contributions under

 9   rehabilitation plans or prohibiting withdrawals.      Nor do they

10   suggest a distinction between voluntary and involuntary

11   withdrawals.   To be sure, the PBGC does not appear to have issued

12   an interpretation on the precise question at issue –- whether the

13   PPA forecloses withdrawal in these circumstances –- to which we

14   might defer if we found Congress’s intent unclear.      But from

15   every indication, the PBGC’s understanding of the PPA accords

16   with our reading of Congress’s intent in enacting the law.

17        It is noteworthy that the Trustees themselves, before

18   bringing this lawsuit, believed that participating employers like

19   Honerkamp had the option of withdrawing from the Fund after it

20   had entered critical status.   The rehabilitation plan stated that

21   its goals would “be met if,” inter alia, “withdrawal liability is

22   imposed and collected with respect to employers that withdraw

23   from the [Fund].”   J.A. at 83.   Moreover, the Trustees

24   contemplated the possibility of “voluntary” withdrawals.      The

25   rehabilitation plan explained that it did not contain only the

                                       18
 1   high-contribution schedules necessary for the Fund to emerge from

 2   critical status because such contribution rates “would

 3   undoubtedly drive employers to withdraw from the [Fund],” given

 4   the Trustees’ “reasonable assumption that employers would be

 5   unwilling to continue to participate in the [Fund] if the cost of

 6   doing so were to exceed the cost of withdrawing.”   Id.   Of

 7   course, the ultimate question of statutory interpretation is for

 8   the Court and not the Trustees.    But we are reassured by the

 9   plaintiffs’ own expressed understanding that voluntary withdrawal

10   was permissible notwithstanding the operation of the PPA’s

11   mechanism for dealing with pension plans in critical status.

12          Finally, to pursue the PPA’s aims, it was not necessary for

13   Congress to forbid withdrawal, accompanied by MPPAA liability,

14   from pension plans in critical status.   Both statutes aim to

15   protect beneficiaries of multiemployer pension plans by keeping

16   such plans adequately funded.   Indeed, the Trustees designed the

17   rehabilitation plan’s non-default schedules “to impose

18   approximately the same burden actuarially on employers that

19   withdrawal from the [Fund] would [have] produce[d].”   Id. at 85.

20   Consequently, Honerkamp’s withdrawal from the Fund while paying

21   liability under the MPPAA largely comports with the goals of the

22   PPA.   It is true, as the Trustees point out, that the MPPAA caps

23   withdrawal liability such that in some cases the amount paid by

24   withdrawing employers may not fully refund a pension plan.     See

25   ERISA § 4219(c)(1)(B), 29 U.S.C. § 1399(c)(1)(B) (withdrawn

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 1   employers are liable only for twenty years of withdrawal-

 2   liability payments).    But implementation of a rehabilitation plan

 3   under the PPA may not restore a pension plan’s solvency either.

 4   Indeed, the Trustees here determined that the Fund was unlikely

 5   to emerge from critical status, and therefore designed the non-

 6   default schedules not to prevent but only to delay the point of

 7   insolvency.   In any case, it remains true that the MPPAA and PPA

 8   pursue the same basic ends, broadly conceived.

 9          Against the weight of these considerations, the Trustees

10   offer very little in support of their proposed interpretation of

11   the PPA.   For example, in arguing that Congress sought to

12   foreclose withdrawal in circumstances of the sort presented in

13   this case, the Trustees rely largely on a 2008 amendment to the

14   PPA.   See Worker, Retiree, and Employer Recovery Act of 2008,

15   Pub. L. 110-458 § 102, 122 Stat. 5092, 5100 (2008) (codified at

16   ERISA § 305(e)(3)(C)(ii), 29 U.S.C. § 1085(e)(3)(C)(ii)).    The

17   relevant subsection previously stated that the default schedule

18   should be implemented at the earlier of a bargaining impasse

19   between an employer and union or 180 days after expiration of the

20   operative CBA.   In 2008, Congress eliminated the former date, so

21   the default schedule now goes into effect 180 days after the

22   pertinent CBA expires.   The Trustees argue that Congress enacted

23   this amendment to close a loophole through which employers, via

24   impasse and withdrawal, could escape contributing under

25   rehabilitation plans.    However, if Congress had been trying to

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 1   eliminate the withdrawal option, one would think that it would

 2   have done so explicitly -- not cryptically through a timing

 3   amendment.   Moreover, the Trustees’ argument would prohibit only

 4   a voluntary withdrawal upon impasse, and would not prohibit a

 5   voluntary withdrawal agreed to by an employer and union (as

 6   happened here with respect to the Central Islip employees).

 7                               CONCLUSION

 8        Because we agree with the district court’s conclusion that

 9   the PPA does not forbid Honerkamp’s withdrawal from the Fund, we

10   AFFIRM the judgment of the district court.

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