Lesson learned: Put it in writing
A case decided earlier this year by the U.S. Court of Appeals for the 7th Circuit serves as a cautionary note to multiemployer pension plan sponsors that withdrawal liability assessments against withdrawing employers are not always successful. In the case of Bulk Transport Corp. v. Teamsters Union No. 142 Pension Fund and its Trustees (decided March 22, 2024), the 7th Circuit rejected the concept of “adoption by conduct.” It held that the written terms of pension contributions to multiemployer plans cannot be changed orally — and that any revised terms must be placed into a signed written amendment.
The facts in the case are detailed, but in essence, the court held that although it has been long understood that the parties to a collective bargaining agreement may change most terms by conduct (i.e., without a signed amendment), by contrast, the precise terms of pension contributions contained in an ERISA (Employee Retirement Income Security Act) multiemployer pension plan document can only be changed in writing.
Hence, it is prudent for the written provisions of an ERISA plan document to be updated so they are consistent with operational practice and the understanding of the boards of trustees and participating employers. For many years, Bulk Transport was a party to collective bargaining agreements with Teamsters Local 142.
See attached for the full article by Tom Shaevsky, Benesys General Counsel