Kellanova v. Central States, Southeast & Southwest Areas Pension Fund
1:24-cv-00918
N.D. Ill.May 5, 2025Background
- Kellanova participated in a multiemployer pension plan (the Fund) and withdrew completely in 2019 after a partial withdrawal in 2012.
- Post-withdrawal, both Kellanova and the Fund disputed the calculation and application of withdrawal liability under ERISA, as amended by MPPAA and related statutes.
- An arbitrator ruled for the Fund on the overall calculation of withdrawal liability, but for Kellanova regarding which contribution rates could be used in setting its payment schedule.
- Both parties sought to modify and enforce different portions of the arbitration award in federal court; the cases were consolidated.
- The district court addressed cross-motions concerning calculation under 29 U.S.C. § 1085(g) (whether post-2014 rate increases could be used) and application of a prior partial credit under 29 U.S.C. § 1386(b)(1).
Issues
| Issue | Plaintiff's Argument (Kellanova) | Defendant's Argument (Fund) | Held |
|---|---|---|---|
| Whether post-2014 contribution rate increases should be excluded when calculating withdrawal liability | Post-2014 increases must be disregarded unless certified by an actuary per statute | Post-2014 increases can be included unless they fall within narrow statutory limits | Court held all post-2014 rate increases must be excluded; enforced arbitrator's award for Kellanova |
| Timing for applying the prior partial credit from a 2012 partial withdrawal | Credit should be applied after all statutory adjustments to unfunded vested benefits (UVB) | Credit should be included during the second adjustment under § 1381(b)(1)(B) | Credit must be applied after all four adjustments; modified arbitration award accordingly |
Key Cases Cited
- Ind. Elec. Workers Pension Ben. Fund v. ManWeb Servs., 884 F.3d 770 (7th Cir. 2018) (discusses purpose and mechanisms of multiemployer plan withdrawal liability)
- Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192 (1997) (explains withdrawal liability calculation structure)
- Milwaukee Brewery Workers’ Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414 (1995) (sets forth withdrawal conditions and policy under MPPAA)
- Upholsterers’ Int’l Union Pension Fund v. Artistic Furniture of Pontiac, 920 F.2d 1323 (7th Cir. 1990) (explains financial impact of employer withdrawal from multiemployer plan)