S & M Paving, Inc. v. Construction Laborers Pension Trust

I.

BACKGROUND

This action concerns the validity of the Multiemployer Pension Plan Amendment Act of 1980 (MPPAA) ( 29 U.S.C. § 1381 et seq.). That Act amended the Employee Retirement Income Act of 1974, commonly known as ERISA.

Prior to ERISA, numerous private pension plans had experienced difficulty providing promised retirement benefits for their employees. In 1974, Congress attempted to rectify this problem by creating a multiemployer pension plan system under ERISA. ERISA provided for minimum vesting and funding schedules and established a centrally administered insurance fund to protect employees in the event of plan termination. See 29 U.S.C. §§ 1001-1144 , 1301-1381.

Under ERISA-sponsored multiemployer plans, the pension benefits an employee could receive were not directly tied to the actual contributions made by his employer. Thus, the funds held in trust by each plan did not always equal the amount of vested pension benefits that had accrued and were' outstanding. The difference between the two amounts was known as the unfunded vested liability. Under the initial ERISA program, an employer became liable to pay this unfunded vested liability only if a plan…