Clarifying “Permitted by Subsection (f)(1)(B)”: Disregarding Post-2014 Contribution Rate Increases in Multiemployer Pension Plan Withdrawal Liability

Introduction

This commentary examines the United States Court of Appeals for the Seventh Circuit’s decision in Central States, Southeast and Southwest Areas Pension Fund & Charles A. Whobrey v. Event Media Inc., d/b/a Complete Crewing; Event Media Inc., d/b/a Complete Crewing v. Central States, Southeast and Southwest Areas Pension Fund; Pack Expo Services, LLC v. Central States, Southeast and Southwest Areas Pension Fund; Central States, Southeast and Southwest Areas Pension Fund & Charles A. Whobrey v. Pack Expo Services, LLC (Nos. 24-1739, 24-1740, 24-1741 & 24-1742), decided April 24, 2025. The narrow legal question on appeal was how to interpret 29 U.S.C. § 1085(g)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) as amended by the Pension Protection Act of 2006 and the Multiemployer Pension Reform Act of 2014. Specifically, the dispute involved whether post-2014 increases in employer contribution rates—required under a rehabilitation plan—must be included in the calculation of withdrawal liability periodic payments. The Seventh Circuit affirmed the district court’s ruling that such increases are to be disregarded, thereby setting precedent on the meaning of the phrase “permitted by subsection … (f)(1)(B).”

Case Background and Key Issues

Parties:

Plaintiffs-Appellants: Central States, Southeast and Southwest Areas Pension Fund (“the Fund”) and Charles A. Whobrey (Fund fiduciary)
Defendant-Appellees: Event Media Inc., d/b/a Complete Crewing, and Pack Expo Services, LLC (collectively, “the Employers”)

Procedural History: After the Fund’s actuary certified its critical status (2008) and critical and declining status (2019), the Employers withdrew and incurred withdrawal liability. The district court held that post-2014 rehabilitation plan contribution‐rate increases must be excluded from withdrawal liability calculations under § 1085(g)(3). The Fund appealed; the Seventh Circuit affirmed.

Statutory Context: ERISA sets withdrawal liability rules for multiemployer pension plans (29 U.S.C. § 1399). The Pension Protection Act of 2006 added remedial mechanisms (funding improvement and rehabilitation plans, 29 U.S.C. § 1085(a)-(f)). The Multiemployer Pension Reform Act of 2014 amended § 1085(g)(3) to exclude from withdrawal liability calculations certain post-2014 contribution increases required by those remedial plans, subject to two exceptions.

Summary of the Judgment

The Seventh Circuit held that:

Under § 1085(g)(3)(A), any post-2014 increase in contribution rates “required … to enable the plan to meet the requirement of the funding improvement plan or rehabilitation plan” must be disregarded when determining the “highest contribution rate” for withdrawal liability.
Two exceptions in § 1085(g)(3)(B) could override that general rule, but neither applied here:
- Exception 1 (increased levels of work/employment)—not at issue.
- Exception 2 (“additional contributions … used to provide an increase in benefits … permitted by subsection (d)(1)(B) or (f)(1)(B)”)—did not apply because no post-rehabilitation plan amendment increased benefits nor was there an actuarial certification under § 1085(f)(1)(B).
Accordingly, the district court correctly excluded the Employers’ post-2014 rate increases—from $328 in 2014 to $424 in 2019—from the withdrawal liability calculation. The Seventh Circuit affirmed.

Analysis

Precedents Cited

Concrete Pipe & Products of California v. Constr. Laborers Pension Trust for Southern California, 508 U.S. 602 (1993): ERISA’s purpose—to protect employee benefits from plan underfunding.
Milwaukee Brewery Workers’ Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414 (1995): Original withdrawal‐liability regime encouraged “stampede for the exits.”
Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of California, Inc., 522 U.S. 192 (1997): Multiemployer Pension Plan Amendments Act of 1980 required withdrawal liability roughly matching an employer’s share of underfunding.
Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984): Conceptual alignment between unfunded vested benefits and withdrawal liability.
Federal Register guidance, Methods for Computing Withdrawal Liability (86 Fed. Reg. 1256 (2021)): Interpretation of § 1085(g)(3) post-2014 amendments.

Legal Reasoning

The court applied traditional tools of statutory interpretation:

Textual Analysis: Section 1085(g)(3)(A) establishes a general rule excluding post-2014 contribution increases required by a rehabilitation plan. Section 1085(g)(3)(B) creates two narrow, enumerated exceptions.
Exception Scope: The second exception covers only those rate increases used to fund benefit expansions “permitted by subsection (f)(1)(B).” The court held that “permitted” carries an affirmative meaning: only plan amendments post-rehabilitation—backed by an actuary’s certification—are within the exception. Employers’ ordinary rate hikes under an existing rehabilitation plan are not affirmative “permitted” amendments.
Canons of Construction:
- Noscitur a sociis and the ejusdem generis principle: the phrase “permitted by subsection (f)(1)(B)” must be read in context with § 1085(f)(1)(B)’s specific requirements (plan amendment plus actuarial certification).
- Expressio unius est exclusio alterius: Congress’s enumeration of two exceptions implies no others exist.
Rejection of the Fund’s “Not Prohibited” Reading: The court declined the Fund’s argument that “permitted” simply means “not prohibited,” because:
- Statutory language could have said “not prohibited” if that were the intent.
- Permitting an interpretation that stretches beyond the text risks judicial rewriting of Congress’s carefully calibrated remedial scheme.

Impact

This decision clarifies the calculation of withdrawal liability in several respects:

It protects withdrawing employers from being penalized for rehabilitation-required rate increases: such increases are excluded unless accompanied by a post-plan amendment and actuarial certification under § 1085(f)(1)(B).
It curtails pension-fund attempts to broaden exceptions in § 1085(g)(3), preserving the 2014 statute’s balance between encouraging employer plan support and avoiding unfair withdrawal penalties.
It provides guidance to plan sponsors, actuaries, and employers on how to structure post-2014 rate changes and benefit amendments to trigger or avoid inclusion in withdrawal liability.
Lower courts will rely on this precedent when addressing similar statutory‐interpretation disputes over § 1085(g)(3), reducing future litigation uncertainty.

Complex Concepts Simplified

Withdrawal Liability: A financial obligation an employer owes when it permanently stops contributing to a multiemployer pension plan, designed to share the cost of unfunded vested benefits.

Rehabilitation Plan: A corrective action plan adopted by a pension plan in critical or critical and declining status (per ERISA § 1085(f)), requiring employers to raise contribution rates and/or reduce benefits to restore the plan’s funding.

“Permitted by Subsection (f)(1)(B)”: Under ERISA § 1085(f)(1)(B), only benefit‐increasing amendments made after the rehabilitation plan’s adoption, certified by the plan actuary as funded by additional contributions, are “permitted.” Ordinary, plan‐mandated rate hikes are not affirmative amendments and therefore not “permitted.”

Conclusion

The Seventh Circuit’s decision in Central States Southeast and Southwest Areas Pension Fund v. Event Media Inc. resolves a critical question of statutory interpretation under ERISA: post-2014 contribution rate increases mandated by a rehabilitation plan are to be excluded from withdrawal liability calculations unless they constitute post-plan amendments approved and certified under § 1085(f)(1)(B). By emphasizing the affirmative nature of “permission” in the statute and rejecting an expansive “not prohibited” reading, the court upheld Congress’s precise remedial framework. This ruling preserves the balance between incentivizing employers to remain in distressed pension plans and ensuring fair withdrawal liability assessment, and it will guide practitioners and lower courts in applying the Multiemployer Pension Reform Act of 2014’s exclusions.