Laner’s Will Daniels Wins Important Pension Case for Employers
Key takeaway:
If your company contributes to a union (multiemployer) pension plan, this case shows how important it is to verify how your withdrawal liability is calculated — mistakes can cost hundreds of thousands of dollars or more.
What Happened
Two companies, Event Media and Pack Expo, had been contributing to the Central States Pension Fund, a large multiemployer union pension plan.
When they stopped contributing in 2019, the Fund claimed they owed large “withdrawal liability” payments — meant to cover their share of the plan’s unfunded pension benefits.
- The Fund used a higher contribution rate from 2019 ($424 per week) to calculate what the companies owed.
- Laner Muchin, representing the employers, argued the Fund should have used the lower 2014 rate ($328 per week) because federal law excludes certain post-2014 contribution increases from withdrawal liability calculations.
The 7th Circuit Court of Appeals agreed with Laner Muchin Employee Benefits partner William T. Daniels, ruling that the Fund used the wrong rate and overcharged the employers.
The Court ordered the Fund to refund the difference, plus interest.
Why This Matters for Employers
Union pension withdrawal liability can be devastatingly expensive — often hundreds of thousands or even millions of dollars — and the rules are complex.
Many employers don’t realize they might owe money years after selling or closing a business.
This decision helps clarify how withdrawal liability should be calculated and reinforces that:
- Funds can’t automatically use post-2014 contribution increases to inflate withdrawal liability payments.
- Employers can challenge incorrect calculations through arbitration and court review.
- Courts are willing to side with employers when a Fund oversteps statutory limits.
Practical Steps for Employers
If your company contributes to a union pension plan — or has recently stopped —
here’s what to do:
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Review Your Union Contracts
- Know your current contribution rates and when they were increased.
- Understand whether any increases were part of a rehabilitation or funding improvement plan.
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Monitor Plan Status
- If the plan is in “critical” or “critical and declining” status, extra rules apply.
- Ask your accountant or lawyer to help assess potential withdrawal exposure.
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Evaluate Before Selling or Closing
- A sale, shutdown, or merger can trigger withdrawal liability.
- Plan ahead with legal and financial advisors before taking major business actions.
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Check Any Withdrawal Assessments Carefully
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Act Quickly if Assessed
- Employers have tight deadlines (often 60–90 days) to challenge assessments through arbitration.
- Delay can mean losing your right to contest an overcharge.
The Bigger Picture
Congress and the courts continue to adjust the rules to stabilize troubled pension funds without unfairly penalizing participating employers. This case confirms that employers have rights — and that Fund calculations must strictly follow the law.
Need Help?
If your business contributes to a union pension plan or has been assessed withdrawal liability, contact Laner Muchin for guidance. Our attorneys help employers analyze exposure, negotiate with pension funds, and defend withdrawal liability claims.
