We recently reported on a district court decision holding that the Central States Pension Fund’s calculation of withdrawal liability should not have included contribution rate increases imposed after the Fund’s implementation of a rehabilitation plan.  In Central States, S.E. & S.W. Pension Fund v. Event Media Inc., Nos. 24-1739 & 1740-42, 2025 WL 1185368 (7th Cir. Apr. 24, 2025), the Seventh Circuit affirmed two prior district court rulings that had reached the same conclusion.  

The Multiemployer Pension Reform Act of 2014 (“MPRA”) requires rate increases to be excluded from the withdrawal liability calculation unless the increases satisfy one of two statutory exceptions.  The parties agreed that the first exception (pertaining to increases due to increased levels of work, employment, or compensation) did not apply, and the Seventh Circuit affirmed that the plan could not satisfy the second exception.  The second exception applies if: (i) the plan is amended to increase benefits, and (ii) the plan’s actuary certifies that the increase will be paid for out of contribution rate increases not contemplated by the rehabilitation plan.  The court held that the plan could not satisfy either requirement because the increase in benefits predated the rehabilitation plan, and even if it did not, there was no actuarial certification that the benefits would be paid using the increased contributions or that those increases were not contemplated by the rehabilitation plan.  In so ruling, the court rejected the plan’s urging to interpret the exceptions to effectuate the purposes underlying MPRA, concluding that the statutory text was unambiguous, and such policy considerations were left to Congress.

Proskauer’s Perspective

Employers have been challenging the Central States Pension Fund’s efforts to include post-2014 contribution rate increases in its withdrawal liability calculations for several years.  Barring a subsequent appeal and reversal, the Seventh Circuit’s decision stands to conclusively resolve those cases, and provide interpretive guidance for other plans administered in the Seventh Circuit.  Regardless of location, employers that contribute to or have withdrawn from plans that have adopted funding improvement or rehabilitation plans should closely review their withdrawal liability assessment to determine whether rate increases are being excluded in accordance with MPRA.

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Photo of Justin Alex Justin Alex

Justin S. Alex is a partner and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans.

He has particular experience in the sports…

Justin S. Alex is a partner and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans.

He has particular experience in the sports industry, including employment agreements for executives at the highest levels in professional sports and the benefits and compensation aspects of numerous transactions, such as the purchase or sale of the Buffalo Bills, Carolina Panthers, Denver Broncos, Miami Marlins, Real Salt Lake, OL Reign, Professional Hockey Federation, the Licensed Sports Group Unit of VF Corporation, Full Swing Golf, and ADPRO Sports and the merger of the USFL and XFL.

In addition to Justin’s general benefits and compensation practice, he spends a significant portion of his time advising employers and financial sponsors with respect to pension liabilities. He also advises the trustees of collectively bargained single-employer and multiemployer plans with respect to their administration, governance, and legal compliance.

Prior to joining Proskauer, Justin was an attorney in the Office of Chief Counsel at the Pension Benefit Guaranty Corporation (PBGC), where he gained significant experience with pension termination and underfunding issues. He also represented the PBGC in corporate bankruptcies and federal court litigation.

Justin is the co-editor of Proskauer’s Employee Benefits & Executive Compensation Blog and the Hiring Partner for Proskauer’s Washington office. He also serves on the Board of the Washington Lawyers’ Committee for Civil Rights and Urban Affairs.

Photo of Neil V. Shah Neil V. Shah

Neil V. Shah is a member of the Employee Benefits & Executive Compensation Group, where he focuses on ERISA litigation.

He is the lead attorney representing the firm’s Taft-Hartley plan clients in withdrawal liability and delinquent contributions matters.  As part of his practice…

Neil V. Shah is a member of the Employee Benefits & Executive Compensation Group, where he focuses on ERISA litigation.

He is the lead attorney representing the firm’s Taft-Hartley plan clients in withdrawal liability and delinquent contributions matters.  As part of his practice, Neil pursues employers, their owners and officers, and affiliated companies to collect the amounts owed to these plans using a variety of complex legal theories, and has secured several precedential opinions and multi-million-dollar judgments in their favor.  Neil also defends these plans in arbitrations challenging the methods and assumptions used to calculate withdrawal liability, which has yielded a number of notable arbitration decisions and court opinions.  Owing to his experience in this area, Neil is a co-editor of the withdrawal liability chapter of the premier employee benefits treatise, Employee Benefits Law, published by Bloomberg, and regularly presents on the topic before practitioners and consultants that work in the area, such as at meetings of the Conference of Consulting Actuaries and the Employee Benefits Section of ABA’s Section of Labor & Employment Law.

In addition to his Taft-Hartley plan experience, Neil has represented several plan sponsors and fiduciaries in ERISA class actions alleging that the plan’s investments or other practices are imprudent, such as excessive fee and stock drop cases.

Prior to joining Proskauer, Neil was an associate at a large regional firm, where he litigated individual and class actions involving challenges to insurer claims adjudication procedures under ERISA, fraud recoveries against healthcare providers, and claims for benefits.

Neil has authored several articles, including those published in the New Jersey Law Journal and Bloomberg National Affairs.  He is also a frequent contributor to Proskauer’s Employee Benefits & Executive Compensation Blog.