OCTOBER TERM, 1994
certiorari to the united states court of appeals for the seventh circuit
No. 93-768. Argued December 5, 1994—Decided February 21, 1995
The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), 29 U. S. C. §§ 1381-1461, permits an employer withdrawing from an under-funded multiemployer pension plan to "amortize" the charge it is required to pay to cover its fair share of the plan's unfunded liabilities by making installment payments to the plan. Following the August 14, 1981, withdrawal of respondent Schlitz from petitioner multiemployer pension plan (Plan), a dispute arose as to when, for purposes of calculating Schlitz's amortization schedule, interest began to accrue on the company's withdrawal charge. The Plan claimed that accrual began on the last day of the plan year preceding withdrawal, December 31, 1980, the "valuation date" as of which the withdrawal charge was determined. Schlitz, however, argued for January 1, 1982, the first day of the plan year following withdrawal. Under the Plan's reading, Schlitz's last annual installment would be substantially greater than it would under Schlitz's own reading. The District Court disagreed with Schlitz, but the Court of Appeals reversed.
Held: MPPAA calculates its installment schedule on the assumption that interest begins accruing on the first day of the plan year following withdrawal. Pp. 421-431. (a) For computation purposes, § 1399(c)(1)(A)(i)—which (the parties agree) governs this case and which authorizes an employer "to amortize the [withdrawal] amount in . . . annual payments . . . , calculated as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs and as if each subsequent payment were made on the first day of each subsequent plan year"— causes interest to accrue over subsequent plan years, but not during the withdrawal year itself. Although the statute does not mention interest directly, the word "amortize" assumes interest charges. However, the word does not indicate that interest accrues during the withdrawal year. One generally does not pay interest on a debt of the kind here at issue until that debt arises—i. e., until its principal is outstanding. Under the statute, the withdrawing employer's debt does not arise at the end of the year preceding the year of withdrawal. Rather, § 1399(c)(1) (A)(i)'s instruction to calculate payments as if the "first payment" werePage: Index 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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