No § 4204 Carve-Out in § 4219 Installment Calculations: Seventh Circuit Clarifies That “the highest” Means the Highest

Case: SuperValu, Inc. v. United Food and Commercial Workers Unions and Employers Midwest Pension Fund

Court: U.S. Court of Appeals for the Seventh Circuit

Panel: Chief Judge Brennan (author), Judges Hamilton and Scudder

Date: October 9, 2025

Introduction

This appeal presented a focused but consequential question under ERISA’s Multiemployer Pension Plan Amendments Act (MPPAA): when an employer withdraws from a multiemployer plan and has previously sold part of its business in a § 4204 “safe-harbor” asset sale, must the plan exclude the sold assets’ contribution history from the statutory formula that sets the employer’s annual installment amount under § 4219?

SuperValu, a supermarket chain, sold certain stores to Schnuck’s Markets in a transaction that satisfied the § 4204 safe harbor, then later completely withdrew from the UFCW Unions and Employers Midwest Pension Fund. The Fund computed SuperValu’s overall withdrawal liability under § 4211 and then determined the annual installment amount under § 4219. To account for the prior sale, the Fund excluded contribution base units from the sold stores for only the most recent five years of the ten-year look-back period when computing the § 4219 “highest” three-year average. SuperValu argued the plan must exclude those units for the entire ten-year period.

Both the arbitrator and the district court rejected SuperValu’s position. The Seventh Circuit affirmed, announcing a clear rule: § 4219’s installment calculation contains no textual carve-out for § 4204 asset sales. The opinion emphasizes textual fidelity—“the highest” means what it says—and separates the question of what is owed (§ 4211) from how it is paid (§ 4219).

Summary of the Opinion

Holding: ERISA § 4219(c)(1)(C)(i)’s formula for calculating annual withdrawal liability installments does not incorporate an exclusion for contribution history associated with assets previously sold under the § 4204 safe harbor. The statute says calculate using “the highest” three-year average of contribution base units in the ten-year lookback; it does not authorize or require adjustments for § 4204 sales.
Standard of review: De novo review of legal questions decided in MPPAA arbitration and on summary judgment.
Core reasoning: The text of § 4219 is detailed and contains carefully drawn exceptions; it does not mention § 4204. Courts may not add atextual carve-outs, especially in ERISA’s intricate formulas. Terms like “the highest” and the definite article “the” are unqualified and do not admit exceptions.
“Double recovery” rejected as a basis to rewrite § 4219: Concerns about “double recovery” may bear on § 4211’s amount calculation (as the Fourth Circuit held in Borden), but § 4219 governs how the amount is paid and does not change the total owed. Policy concerns cannot override the statute’s text.
Scope: The court did not decide whether § 4211 must exclude the contribution history of assets sold under § 4204 when computing total withdrawal liability. It held only that § 4219’s installment formula contains no § 4204 carve-out.
Disposition: Judgment for the Fund affirmed.

Analysis

Precedents Cited and How They Shaped the Decision

The opinion positions itself squarely within a modern textualist approach, drawing on decisions that caution courts against adding terms to detailed statutory schemes, especially ERISA.

Concrete Pipe & Products v. Construction Laborers Pension Trust (1993) and Milwaukee Brewery Workers’ Pension Plan v. Schlitz (1995): Provide MPPAA’s background—multiemployer plans pool contributions, withdrawal liability assigns a withdrawing employer its fair share, and § 4219 sets a 20-year cap on installments.
Banner Industries (7th Cir. 1989), Chicago Truck Drivers v. CPC Logistics (7th Cir. 2012): Describe congressional balance between discouraging exits and not over-penalizing participation.
Textual-structure authorities:
- Rotkiske v. Klemm (2019) and Bostock v. Clayton County (2020): Courts cannot supply absent provisions or exceptions; apply broad rules as written.
- University of Texas Southwestern Medical Center v. Nassar (2013), Advocate Christ Medical Center v. Kennedy (2025): Respect precise, carefully calibrated statutory formulas.
- Bauwens v. Revcon (7th Cir. 2019): Declined to “decelerate” where ERISA allowed acceleration; courts apply ERISA’s technical rules as written.
- Central States v. Bell Transit (7th Cir. 1994) and Iron Workers Local 473 v. Allied Products (7th Cir. 1989): Do not add remedies to § 4204; “all” means 100%—unqualified terms mean what they say.
- C & S Wholesale Grocers (3d Cir. 2015): “The highest” means the highest; the definite article leaves no ambiguity.
Deference and who interprets the statute: Loper Bright Enterprises v. Raimondo (2024) confirms courts, not agencies or plans, have the “final interpretation” of statutes; the Sixth Circuit similarly refused deference in Teamsters Pension Trust v. Central Michigan Trucking (1988).
Authorities invoked by SuperValu and cabined by the court:
- Borden, Inc. v. Bakery & Confectionery (4th Cir. 1992): Interpreted § 4211’s amount calculation to transfer pre-sale contribution history to the buyer to avoid “double recovery.” The Seventh Circuit noted Borden does not address § 4219 and itself acknowledged ERISA’s silence in detailed computations is “telling.”
- CenTra, Inc. v. Central States (7th Cir. 2009): Dicta suggested an employer could “shed” contribution history via a qualifying § 4204 transaction, but CenTra addressed § 4211 and did not hold on § 4219.
- PBGC Opinion Letter 83-10 (1983): Advocated reflecting § 4204 transfers in withdrawal liability computations to avoid “double recovery,” but its persuasive force is limited and it speaks to § 4211, not § 4219.
Policy-is-not-text reminders: Cunningham v. Cornell University (2025), Continental Can v. Chicago Truck Drivers (7th Cir. 1990), and others instruct that policy concerns cannot trump clear statutory text.

Legal Reasoning

The court’s analysis proceeds in three main steps, all grounded in text and structure.

Start and end with the § 4219 text. The operative provision directs plans to compute the annual installment by multiplying (i) “the average annual number of contribution base units” for the “three consecutive plan years” within the “ten consecutive plan years” ending before withdrawal “in which the number of [units] is the highest,” by (ii) “the highest contribution rate” over the same period. Congress embedded exceptions elsewhere in § 4219 and cross-referenced other sections, but never referenced § 4204 or any deduction for sold assets. In a statute that prescribes calculations with this level of specificity, silence is meaningful.
Unqualified language means no carve-outs. Terms like “the highest” (coupled with the definite article “the”) do not admit exceptions. The court invoked Seventh and Third Circuit cases holding that unqualified terms such as “all” and “the highest” carry their ordinary, full meanings in ERISA.
Structure distinguishes § 4211 (what is owed) from § 4219 (how it is paid). As the Supreme Court explained in Milwaukee Brewery, the MPPAA proceeds in two steps: the withdrawal charge is calculated under § 4211, then the payment schedule under § 4219. SuperValu’s plea to import an anti–double-recovery principle from § 4204/§ 4211 into § 4219 fails because the two provisions serve different functions and use different formulas. The presumption of consistent usage does not overcome those contextual differences.

The court also made two clarifying points:

No deference to the Fund’s statutory construction. The Fund had, in practice, excluded five years of contribution units based on § 1384(b)(1), but the court emphasized that it is not deferring to the Fund’s reading and that § 1384(b)(1) speaks to purchaser liability, not the seller’s schedule. The ultimate question is statutory interpretation for courts, not administrators.
“Double recovery” is not implicated by the schedule. The annual payment formula does not increase the total withdrawal liability; it sets the cadence of payment. The risk of “double recovery,” if any, belongs to the § 4211 stage. Moreover, Congress deliberately adopted a rule-like mathematical formula in § 4219—the “rough cuts” that flow from a rule are legislative choices the courts must respect.

Impact

The decision draws a bright line for the payment schedule calculation in the Seventh Circuit and, practically, may materially affect how much of a withdrawing employer’s total liability is actually collected before the 20-year cap forgives any remainder.

For plans: Administrators should compute § 4219 annual installments using the unadjusted “highest” three-year average in the ten-year lookback, without subtracting contribution base units attributable to assets previously sold under § 4204. Many plans that previously adopted “partial” exclusions (like the Fund’s five-year approach) will need to realign their practice with this textual command.
For employers: The annual installment amount will likely be higher than under approaches that exclude sold-asset history, especially when the sold unit’s contributions coincided with peak contribution base units. Because the 20-year cap can forgive unpaid balances, a higher installment often means less of the total liability will be forgiven. In short, while the decision does not change the total liability set under § 4211, it can increase the amount actually paid over 20 years.
Transaction planning: Sellers can still rely on § 4204 to avoid an immediate withdrawal assessment upon sale and to shift primary contribution obligations to the purchaser, with five years of seller secondary liability. But they should not expect § 4204 to reduce their future § 4219 installment calculation if they subsequently withdraw.
Litigation posture and arbitration strategy:
- Arguments that ask arbitrators or courts to reshape § 4219 based on purpose or to avoid “double recovery” are unlikely to succeed post–SuperValu.
- The Seventh Circuit left open (in this case) whether § 4211’s amount calculation must exclude contribution history for § 4204 sales (as the Fourth Circuit held in Borden). That question remains a potential battleground in this circuit.
Uniformity and potential for circuit dialogue: The ruling aligns with the Third Circuit’s textual reading of “the highest” and contributes to a national trend of strict textualism in ERISA administration. Because it expressly cabined Borden to § 4211, there is no direct circuit split on § 4219. Future cases may test whether other circuits adopt the same § 4219 approach.
Agency guidance and deference post–Loper Bright: PBGC opinion letters will be evaluated for persuasive power only; they cannot rewrite § 4219’s formula. Plan fiduciaries should not rely on agency letters to import non-textual adjustments into § 4219 calculations.

Complex Concepts, Simplified

Multiemployer pension plan: A collectively bargained, multi-employer retirement plan where contributions are pooled to pay benefits regardless of which participating employer the worker serves.
Withdrawal liability: When an employer exits such a plan, it must pay its fair share of underfunded vested benefits. ERISA § 4211 supplies the methods to compute the total amount owed.
Payment schedule (installments): Instead of paying in a lump sum, the employer pays annually under § 4219. The annual amount equals:
- (1) the “highest” three-year average of “contribution base units” (a measure of covered work, such as hours or weeks) from the previous ten plan years, times
- (2) the “highest” contribution rate (dollars per unit) in that same ten-year period.
The schedule generally caps at 20 years. Any remaining balance after the 20th payment is forgiven.
Contribution base units: Units that track covered work (e.g., hours or weeks) on which contributions are owed. For example, if a plan defines units as “weeks worked,” two full-time employees working 52 weeks yield 104 units that year.
§ 4204 safe harbor (asset sales): When a seller transfers a business and the buyer agrees to continue contributing at roughly the same level (and other conditions are met), the sale does not trigger withdrawal liability for the seller. The seller remains secondarily liable for the buyer’s contributions for five years.
“Double recovery” concern: The fear that if both the seller and buyer later withdraw, the plan might count the sold unit’s contribution history twice in amount calculations. The Seventh Circuit explained that this concern (rightly or wrongly) belongs to § 4211, not § 4219’s schedule.
Deference after Loper Bright: Courts do not defer to agency (or plan) interpretations of statutes based on Chevron. Statutory meaning is a judicial question; agency views may be persuasive but are not controlling.

Conclusion

SuperValu is a strong reaffirmation of textualism in ERISA’s carefully calibrated regime. The Seventh Circuit held that § 4219’s payment schedule calculation contains no safe-harbor deduction for previously sold assets: “the highest” three-year average over the ten-year lookback means just that, without judicially crafted carve-outs. The court carefully separated the computation of the total withdrawal liability (§ 4211) from the schedule for paying it (§ 4219), rejected appeals to policy outcomes such as avoiding “double recovery,” and underscored that, in ERISA’s technical formulas, silence is significant.

Practically, the ruling increases clarity and likely increases actual recoveries in capped-payment scenarios, because higher annual installments reduce the chance that large portions of withdrawal liability will be forgiven after 20 years. For plans and employers alike, the message is straightforward: compute § 4219 installments by the statute’s math as written. Disagreements about § 4204’s effect belong, if anywhere, in the § 4211 calculation—a question the Seventh Circuit left for another day.