Labor and Employment > Pension and Benefits Strategy

Akin Gump Strauss Hauer & Feld LLP excels in providing strategic guidance and long-term planning to clients regarding pension and benefit obligations related to unionized employees. Our team regularly advises clients on the multitude of complex issues that can arise from the intersection of traditional labor law and employee benefits, with a particular focus on multiemployer pension (MEP) plans.

The U.S. MEP system is facing its worst funding crisis since the enactment of the Multiemployer Pension Plan Amendments Act. A system-wide liability of nearly $500 billion is rapidly pushing many of the 1,400 multiemployer plans in this country toward insolvency. As a result, participating employers are faced with rapidly increasing liabilities. Despite these risks, participation in multiemployer plans remains common in industries such as construction, retail, hospitality, energy, manufacturing, transportation and entertainment, among many others.

We strive to help employers that participate in multiemployer pension plans better understand the risks associated with continued participation, the tools available to manage those risks and other operational considerations, including collective bargaining strategy, related to plan participation. We represent clients in cutting-edge benefits and withdrawal liability disputes, as well as counsel clients on issues such as labor and collective bargaining strategy, withdrawal liability risk management, plan design and corporate transactions. We are also directly involved in pension reform efforts in Congress, having played an active role in the recent passage of the Multiemployer Pension Reform Act of 2014. Our team has developed several additional legislative proposals to further reform the U.S. pension system, including H.R. 458 introduced by Rep. Pete Sessions, chairman of the House Rules Committee, and others that are currently being considered by the House Education and Workforce Committee.

As options thin for distressed multiemployer plans, we expect to see an increase in pension litigation, collective bargaining disputes and increased legislative activity. In this rapidly changing legal landscape, contributing employers turn to us to anticipate and adeptly address their needs. Our team has highly substantive business and industry knowledge, the technical legal acumen and the requisite professional backgrounds in both labor and benefits law to assist clients with all facets of multiemployer pension plan involvement.

One of our team members lends his deep prior government experience to this area, previously serving as assistant chief counsel of the Pension Benefit Guaranty Corporation (PBGC), a government agency that oversees and maintains voluntary, private, defined benefit pension plans. In this capacity, he managed the MEP section in PBGC’s Office of Chief Counsel, bringing a highly technical and specialized perspective to his current representations.

Our services run the gamut between transactional and advisory and, when necessary, dispute resolution. In every engagement, our goal is to position our clients to minimize their exposure and to foresee and mitigate financial losses.

Representative Matters

  • Securing a victory on behalf of a large trade association before the U.S. Court of Appeals for the 7th Circuit in a case involving our client’s exit from the Central States Southeast & Southwest Areas Pension Fund. In 2011, this pension fund was critically underfunded and rapidly approaching insolvency, forcing our client to exit the fund in an effort to cap the related liabilities, which were expected to be at least $250 million in total. At issue in the case was when our client and its member companies lawfully exited the fund—a distinction that could increase the group’s liability by more than $100 million. The appeals court reversed the district court’s grant of summary judgment for Central States and determined that our client and its members had properly exited the fund in 2011.
  • Assisting a major hospitality company participating in numerous multiemployer pension plans in devising a strategy to address its potential exposure to these plans for withdrawal liability in an aggregate amount of almost $600 million. We also representing them in litigation in connection with one of these plans with respect to the plan’s efforts to expel our client from continued participation in the plan due to its restructuring, thereby causing withdrawal liability of nearly $400 million.
  • Representing trade association trustees in the establishment and continued maintenance of a 140 percent funded, industry wide multiemployer pension plan for the pipeline construction industry that was established as an alternative to continued participation in a critical and declining multiemployer pension plan.
  • Representing a large paper manufacturer in a dispute with a multiemployer pension plan illegally attempting to impose an additional penalty on withdrawing employers, in addition to withdrawal liability, that, if valid, would create a mass withdrawal from the plan, expedite benefit cuts and more than double employers’ liability.
  • Analyzing potential exposure to multiemployer pension plans withdrawal liability and developing a strategy for reducing this exposure on behalf of a major musical instrument manufacturer engulfed in a failing fund. As part of this representation, we are building a coalition with other contributing employers to restore the fund.
  • Counseling a national entertainment company on potential withdrawal liability exposure for partial and complete withdrawals due to its participation in multiemployer pension plans throughout the country.
  • Advising a national trucking company that is a logistics provider to a large grocery chain on a strategy for reducing withdrawal liability exposure to a large, national, critical and declining multiemployer pension plan.
  • Representing a large sports and entertainment client on various benefit matters, including its participation in a multibillion-dollar multiemployer pension plan.
  • Representing a hospital as the sponsor of a single-employer pension plan in negotiations with the PBGC regarding client’s proposed standard termination of the plan.
  • Serving as a controlled-group liability expert in litigation involving claims of professional malpractice.