OCTOBER TERM, 1994
Syllabus
MILWAUKEE BREWERY WORKERS' PENSION PLAN
v. JOS. SCHLITZ
BREWING CO. ET AL.
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
underfunded 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" were
415
made on the "first day" of the year following withdrawal
demonstrates that the debt must be treated as if it arose at that
time. The Plan's contrary reading of the statute cannot be easily
reconciled with statutory provisions permitting an employer to pay
the amount owed in a lump sum and thereby avoid paying amortization
interest, § 1399(c)(4), and defining a withdrawing employer's basic
liability without reference to interest during the withdrawal year,
§§ 1381(b)(1), 1391. Pp.422-425.
(b) The several arguments of the Plan and its
amici-(l)
that allowing a withdrawing employer to avoid interest during the
withdrawal year works against the statute's basic objective of
requiring the employer to pay a fair share of the plan's
underfunding; (2) that the statute's language actually favors
calculating interest from the last day of the plan year before
withdrawal; and (3) that the legislative history demonstrates that
Congress expressly rejected the idea of a "funding gap" between the
valuation date at the end of the plan year before withdrawal and
the beginning of the year following withdrawal-are not persuasive.
Pp.425-430.
3 F.3d
994, affirmed.
BREYER, J., delivered the opinion for a unanimous Court.
Michael G. Bruton argued the cause for petitioner. With him on
the briefs were Neil K. Quinn, Robert Marc Chemers, and Mary Anne
H. Capron.
Richard K. Willard argued the cause for respondents.
With him on the brief were Sara E. Hauptfuehrer, James W Greer,
and David C. Hertel.
*
JUSTICE BREYER delivered the opinion of the Court.
The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA),
94 Stat. 1208, 29 U. S. C. §§ 1381-1461, provides that an employer
who withdraws from an underfunded multiemployer pension plan must
pay a charge sufficient to cover that employer's fair share of the
plan's unfunded liabilities. The statute permits the employer to
pay that charge in lump
*Briefs of
amici curiae urging reversal were filed for
the Central States Southeast and Southwest Areas Pension Fund by
Thomas C.
Nyhan and
Terence G.
Craig;
and for the National Coordinating Committee for Multiemployer Plans
by
K. Peter Schmidt and
Philip WHorton.
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416 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
sum or to "amortize" it, making payments over time. This case
focuses upon a withdrawing employer who amortizes the charge, and
it asks when, for purposes of calculating the amortization
schedule, interest begins to accrue on the amortized charge. The
Court of Appeals for the Seventh Circuit held that, for purposes of
computation, interest begins to accrue on the first day of the year
after withdrawal. We agree and affirm its judgment.
I
We shall briefly describe the general purpose of MPPAA, the
basic way MPP AA works, and the relevant interestrelated facts of
the case before us.
A
MPPAA's General Purpose
MPPAA helps solve a problem that became apparent after Congress
enacted the Employee Retirement Income Security Act of 1974
(ERISA), 88 Stat. 829, 29 U. S. C. § 1001
et seq. ERISA
helped assure private-sector workers that they would receive the
pensions that their employers had promised them. See,
e. g.,
Concrete Pipe &
Products of Cal., Inc. v.
Construction Laborers Pension Trust for Southern Cal.,
508 U. S. 602,
605-609 (1993). To do so, among other things, ERISA required
employers to make contributions that would produce pension plan
assets sufficient to meet future vested pension liabilities; it
mandated termination insurance to protect workers against a plan's
bankruptcy; and, if a plan became insolvent, it held any employer
who had withdrawn from the plan during the previous five years
liable for a fair share of the plan's underfunding. See 26 U. S. C.
§ 412 (minimum funding standards); 29 U. S. C. § 1082 (same); 29 U.
S. C. § 1301
et seq. (termination insurance); 29 U. S. C. §
1364 (withdrawalliability).
Unfortunately, this scheme encouraged an employer to withdraw
from a financially shaky plan and risk paying its share if the plan
later became insolvent, rather than to re-
417
main and (if others withdrew) risk having to bear alone the
entire cost of keeping the shaky plan afloat. Consequently, a
plan's financial troubles could trigger a stampede for the exit
doors, thereby ensuring the plan's demise. See
Connolly v.
Pension Benefit Guaranty Corporation, 475 U. S. 211, 216
(1986);
Pension Benefit Guaranty Corporation v.
R. A.
Gray &
Co., 467 U. S. 717, 722-723,
n. 2 (1984); see also 29 U. S. C. § 1001a(a)(4); H. R. Rep. No.
96-869, pt. 1, pp. 54-55 (1980); D. McGill & D. Grubbs,
Fundamentals of Private Pensions 618-619 (6th ed. 1989). MPPAA
helped eliminate this problem by changing the strategic
considerations. It transformed what was only a risk (that a
withdrawing employer would have to pay a fair share of
underfunding) into a certainty. That is to say, it imposed a
withdrawal charge on all employers withdrawing from an underfunded
plan (whether or not the plan later became insolvent). And, it set
forth a detailed set of rules for determining, and collecting, that
charge.
B
MPPAA's Basic Approach
The way in which MPP AA calculates interest is related to the
way in which that statute answers three more general, and more
important, questions:
First, how much is the withdrawal
charge? MPPAA's lengthy charge-determination section, § 1391, sets
forth rules for calculating a withdrawing employer's fair share of
a plan's underfunding. See 29 U. S. C. § 1391. It explains (a) how
to determine a plan's total underfunding; and (b) how to determine
an employer's fair share (based primarily upon the comparative
number of that employer's covered workers in each earlier year and
the related level of that employer's contributions).
One might expect § 1391 to calculate a withdrawal charge that
equals the withdrawing employer's fair share of a plan's
underfunding
as of the day the employer withdraws. But,
instead, § 1391 instructs a plan to make the withdrawal
418
418 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
charge calculation, not as of the day of withdrawal, but
as
of the last day of the plan year preceding the year during
which the employer withdrew-a day that could be up to a year
earlier. See §§ 1391(b)(2)(A)(ii), (b)(2)(E)(i), (c)(2)(C)(i),
(c)(3)(A), and (c)(4)(A). Thus (assuming for illustrative purposes
that a plan's bookkeeping year and the calendar year coincide), the
withdrawal charge for an employer withdrawing from an underfunded
plan in 1981 equals that employer's fair share of the underfunding
as calculated on December 31, 1980, whether the employer withdrew
the next day (January 1, 1981) or a year later (December 31, 1981).
The reason for this calculation date seems one of administrative
convenience. Its use permits a plan to base the highly complex
calculations upon figures that it must prepare in any event for a
report required under ERISA, see 29 U. S. C. § 1082(c) (9), thereby
avoiding the need to generate new figures tied to the date of
actual withdrawal.
Second, how may the employer pay the withdrawal charge?
The statute sets forth two methods: (a) payment in a lump sum; and
(b) payment in installments. The statute's lump-sum method is
relatively simple. A withdrawing employer may pay the entire
liability when the first payment falls due; pay installments for a
while and then discharge its remaining liability; or make a partial
balloon payment and afterwards pay installments. See 29 U. S. C. §
1399(c)(4). The statute's installment method is more complex. The
statutory method is unusual in that the statute does not ask the
question that a mortgage borrower would normally ask, namely, what
is the amount of each of my monthly payments? What size monthly
payment will amortize, say, a 7% 30-year loan of $100,000? Rather,
the statute fixes the amount of each payment and asks how many such
payments there will have to be. To put the matter more precisely,
(1) the statute fixes the amount of each annual payment at a level
that (roughly speaking) equals the withdrawing employer's typical
contribution in earlier years; (2) it sets an interest rate,
419
equal to the rate the plan normally uses for its calculations;
and (3) it then asks how many such annual payments it will take to
"amortize" the withdrawal charge at that interest rate. 29 U. S. C.
§§ 1399(c)(1)(A)(i), (c)(l)(A)(ii), (c)(l)(C).
It is as if Brown, who owes Smith $1,000, were to ask, not, "How
much must I pay each month to payoff the debt (with 7% interest)
over two years?"-but, rather, "Assuming 7% interest, how many $100
monthly payments must I make to payoff that debt?" To bring the
facts closer to those of this case, assume that an employer
withdraws from an underfunded plan in mid-1981; that the withdrawal
charge (calculated as of the end of 1980) is $23.3 million; that
the employer normally contributes about $4 million per year to the
plan; and that the plan uses a 7% interest rate. In that case, the
statute asks: "How many annual payments of about $4 million does it
take to payoff a debt of $23.3 million if the interest rate is 7%?"
The fact that the statute poses the installment-plan question in
this way, along with an additional feature of the statute, namely,
that the statute forgives all debt outstanding after 20 years, 29
U. S. C. § 1399(c)(1)(B), suggests that maintaining level funding
for the plan is an important goal of the statute. The practical
effect of this concern with maintaining level payments is that any
amortization interest § 1399(c)(1)(A)(i) may cause to accrue is
added to the end of the payment schedule (unless forgiven by §
1399(c)(1)(B)).
Third, when must the employer pay? The statute could not
make the employer pay the calculated sum (or begin to pay that sum)
on the date in reference to which one calculates the withdrawal
charge, for that date occurs before the employer withdraws. (It is
the last day of the preceding plan year, i.
e., December 31,
1980, for an employer who withdraws in 1981.) The statute, of
course, might make the withdrawing employer pay (or begin payment)
on the date the employer actually withdraws. But, it does not do
so. Rather, the statute says that a plan must draw up a
schedule
420
420 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
for payment and "demand payment" as "soon as practicable" after
withdrawal. 29 U. S. C. § 1399(b)(1). It adds that
"[w]ithdrawalliability shall be payable ... no more than 60 days
after the date of the demand." § 1399(c)(2).
Thus, a plan that calculates quickly might demand payment the
day after withdrawal and make the charge "payable" within 60 days
thereafter. A plan that calculates slowly might not be able to
demand payment for many months after withdrawal. For example, in
the case of the employer who withdraws on August 14, 1981,
incurring a withdrawal charge of $23.3 million (calculated as of
December 31, 1980), the lump sum of $23.3 million, or the first of
the installment payments of roughly $4 million, will become
"payable" to the plan "no later than 60 days" after the plan sent
the withdrawing employer a demand letter. The day of the first
payment may thus come as soon as within 60 days after August 15,
1981, or it may not come for many months thereafter, depending upon
the plan's calculating speed.
C This Case
The facts of this case approximate those of our example.
Three brewers, Schlitz, Pabst, and Miller, contributed for many
years to a multiemployer pension plan (Plan). On August 14, 1981,
Schlitz withdrew from the Plan. See App. 151-152. By the end of
September 1981, the Plan completed its calculations, created a
payment schedule, and sent out a demand for payment (thereby making
the first installment payment "payable") "on or before November 1,
1981."
Id., at 153, 154. From the outset, the parties agreed
that the annual installment payment amounted to $3,945,481, and
that the relevant interest rate was 7% per year. After various
controversies led to arbitration and a court proceeding between
Schlitz and the Plan, the courts and parties eventually determined
that the withdrawal charge (calculated as of the
421
last day of the previous plan-bookkeeping year, December 31,
1980) amounted to $23.3 million.
But the parties disagreed whether interest accrued during 1981,
the year in which Schlitz withdrew. The Plan claimed that, for
purposes of calculating the installment schedule, interest started
accruing on the last day of the plan year preceding withdrawal
(December 31, 1980). Schlitz, on the other hand, argued that
accrual began on the first day of the plan year following
withdrawal (January 1, 1982). Under either reading, the number of
annual payments is eight. But, under the Plan's reading, the final
payment would amount to $3,499,361, whereas, in Schlitz's reading,
that payment would amount to $880,331.
The arbitrator in this case agreed with Schlitz's reading.
See 9 EBC 2385, 2405 (1988). The District Court, reviewing the
arbitration award, disagreed, No. 88-C-908 (ED Wis., June 6, 1991),
reprinted in App. 25, 62-69, but the Court of Appeals for the
Seventh Circuit reversed the District Court,
3 F.3d
994 (1993). Because the Seventh Circuit's decision conflicts
with a holding of the Third Circuit,
Huber v.
Casablanca
Industries, Inc., 916 F.2d
85, 95-100 (1990), cert. dism'd, 506 U. S. 1088 (1993), this
Court granted certiorari, 512 U. S. 1234 (1994). Our conclusion,
like that of the Seventh Circuit, is that, for purposes of
computation, interest does not start accruing until the beginning
of the plan year after withdrawal.
II
At first glance, the statutory provision that (the parties
agree) governs this case seems silent on the issue of
withdrawal-year interest. Indeed, it does not mention interest
directly at all. Rather, it says that a withdrawing employer
"shall pay the amount determined under section 1391 ... over the
period of years necessary to amortize the amount in level
annual payments determined under sub-
422
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v.
JOS. SCHLITZ BREWING
CO.
paragraph (C), 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." 29 U. S. C. §
1399(c)(1)(A)(i) (emphasis added).
After considering the parties' arguments, which focus upon the
emphasized language, we have become convinced that, for purposes of
computation, this provision, although causing interest to accrue
over subsequent plan years, does not cause interest to accrue
during the withdrawal year itself.
A
The Plan points out, and we agree, that the word "amortize"
normally assumes interest charges. After all, the very idea of
amortizing, say, a mortgage loan, involves paying the principal of
the debt over time along with interest. But the Plan (supported by
the Government, which is taking a view of the matter contrary to
the view the Pension Benefit Guaranty Corporation took in the
Huber case, see 916 F. 2d, at 96) goes on to claim that the
word "amortize" indicates that interest accrues during the
withdrawal year as well as during subsequent years. We do not agree
with that claim. In our view, one generally does not pay interest
on a debt until that debt arises-that is to say, until the
principal of the debt is outstanding. And the instruction to
calculate payment as if the first payment were made at the
beginning of the following year tells us to treat the debt as if it
arose at that time (i.
e., the first day of the year after
withdrawal), not as if it arose one year earlier.
For one thing, unless a loan is involved, one normally expects a
debtor to make a first payment at the time the debt arises, not one
payment cycle later. Suppose, for example, that a taxpayer arranges
to pay a large tax debt in four quarterly installments. Would one
not expect the taxpayer to make the first payment on April 15, the
day the tax debt
423
becomes due? Similarly, would one not expect a buyer of, say, a
business to make the first payment (a down payment) at the time of
the closing? By way of contrast, when a loan is involved (say, when
one borrows money on a home mortgage and repays it in
installments), interest accrual normally does begin before the
first payment. That is because the borrower has had the use of the
money for one cycle before the first payment. In the case of a
loan, it would seem pointless, and would simply generate an
unnecessary back-andforth transfer of money, for a first repayment
to take place on the very day the lender disburses the loan
proceeds.
The "first payment" at issue here, however, looks more like a
tax or purchase-money installment than a loan installment. Under
the statute, the withdrawing employer's debt does not arise at the
end of the year preceding the year of withdrawal. In fact, the
employer may not have withdrawn from the plan at the beginning of
the year, but instead may have continued to make its ordinary
contribution until well into the year. In any event, the statute
makes clear that the withdrawing employer owes nothing until its
plan demands payment, which will inevitably happen some time after
the beginning of the year. See 29 U. S. C. §§ 1399(b)(1), (c)(2).
In fact, the withdrawing employer cannot determine, or pay, the
amount of its debt until the plan has calculated that amount-which
must take place some time after the beginning of the withdrawal
year. All these features make it difficult to find any analogy in
withdrawal liability to a loan.
For another thing, we cannot easily reconcile the Plan's reading
of the statute with the statutory provision that permits an
employer to pay the amount owed in a lump sum. That provision says
that a withdrawing employer
"shall be entitled to prepay the outstanding amount of the
unpaid annual withdrawal liability payments determined under [§
1399(c)(1)(C)], plus accrued interest, if any, in whole or in part,
without penalty." § 1399(c)(4).
424
424 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
We read this provision to permit an employer, by paying a lump
sum, to avoid paying the amortization interest that §
1399(c)(1)(A)(i) would otherwise cause to accrue. (Under any other
reading, the prepayment provision would not create much of an
"entitle[ment]." Moreover, the prepayment provision refers to
"payments determined under [§ 1399(c)(1) (C)]"-not §
1399(c)(1)(A), the provision that causes amortization
interest to accrue.) It would seem odd if the prepayment provision
enabled an employer to avoid all interest except the interest
accruing during the year of withdrawal. And, if interest accrued
from the last day of the year before withdrawal, there would hardly
ever be a time that no interest was due. Such a reading would thus
make it very difficult to give meaning to the words "if any" in the
phrase "plus accrued interest, if any." (The Third Circuit
suggested that these words might refer to a lump-sum payment made
immediately after a scheduled installment. See
Huber, 916
F.2d, at 99. We agree that they could, theoretically. But,
realistically speaking, it seems unlikely that Congress inserted
"if any" to deal with such an unusual event.)
Further, the interpretation under which interest would accrue
from the last day of the year before withdrawal is difficult to
reconcile with the statutory language that defines a withdrawing
employer's basic liability. Section 1381(a) says that the
withdrawing employer becomes "liable to the plan in the amount
determined under this part to be the withdrawal liability." Section
1381(b)(1) defines "withdrawal liability" as "the amount determined
under section 1391." Yet, § 1391 says nothing about a year's worth
of interest. Why then read the provision here at issue so that it
inevitably and always creates liability in the amount of the
withdrawal charge
plus one year's interest, irrespective of
when the employer, in fact, withdraws and how or when the employee
begins to pay?
Finally, the provision here at issue asks one to calculate the
installment payments as if the "first payment" was made,
425
not on the
last day of the withdrawal year, but on the
"first day" of the next year, i.
e., one year
plus
one day after the withdrawal charge calculation date. This
choice of time (a year and a day) would be an odd way to signal
that one is to treat the first payment as if it occurred at the
end of a cycle.
B
The Plan (and supporting
amici) make several arguments in
support of a reading in which, for purposes of calculation,
interest starts accruing on the last day of the year before
withdrawal. But we are not persuaded.
First, the Plan argues that our interpretation works
against the basic objective of the statute, requiring a withdrawing
employer to pay a fair share of the underfunding. Under our
interpretation, says the Plan, the withdrawing employer will fail
to pay a year's worth of interest on the withdrawal charge, thereby
requiring the remaining employers to make up what, in fact, was
part of the withdrawing employer's fair share. Suppose, for
example, that an underfunded plan needed exactly $20 million as of
the end of 1980 to create a sum that would grow to just the amount
needed to pay then-vested benefits falling due, say, in 1999. By
the end of 1981 that same plan would need more money; indeed, if we
assume the $20 million would have grown 7% each year, it would need
7% more to pay those same vested 1999 benefits. Thus, if the
withdrawing employer's fair share of the $20 million is $3 million
as of the end of 1980, its fair share must have grown to $3,210,000
by the end of 1981. Why, asks the Plan, should the remaining
employers have to make up for this missing $210,000?
One answer to the Plan's question is that the $210,000 will not
necessarily be missing. For one thing, until the employer
withdraws, it will be required to make contributions that should
contain a component designed to reduce underfunding. See 26 U. S.
C. § 412(b)(2); 29 u. S. C. § 1082. For another thing, if a plan
moves quickly, it may be able to force
426
426 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
a withdrawing employer to begin making installment payments even
before the end of the withdrawal year. Either way, to charge such
an employer a full year's worth of interest would overcharge that
employer and thereby provide the remaining employers with a kind of
underfunding-reduction windfall.
Another answer is that we are not convinced that MPP AA aims to
make withdrawing employers pay an actuarially perfect fair share,
namely, a set of payments in amounts that, when invested, would
theoretically produce (on the plan's actuarial assumptions) a sum
precisely sufficient to pay (the employer's proportional share of)
a plan's estimated vested future benefits. For one thing, the
statute forgives
de minimis amounts. See 29 U. S. C. § 1389.
For another thing, it forgives all annual installment payments
after 20 years, see § 1399(c)(1)(B)-and that means that, if an
employer's normal annual contribution was low compared to the
withdrawal charge, the presence or absence of withdrawal-year
interest (which shows up at the end of the payment schedule, see
supra, at 419) will make no difference (for the last
payments will never be made). Finally, in making the first
installment "payable" only after a plan demands it, MPP AA
contemplates that an employer sometimes may pay its actual first
installment long after the withdrawal year-as was the case in
Huber, supra, at 88 (2112-year delay)-in which case no
interpretation of the statute can avoid an employer's actually
paying something less than its fair share of interest.
Second, the Plan argues that the statute's language
favors its interpretation. It refers to a dictionary that defines
an amortization plan as " 'one where there are partial payments of
the principal,
and accrued interest, at stated periods for a
definite time, at the expiration of which the entire indebtedness
will be extinguished,'" Brief for Petitioner 27 (quoting Black's
Law Dictionary 76 (5th ed. 1979)) (emphasis added), and to another
definition that says that, "'[i]f a loan is being repaid by the
amortization method,
each payment
427
is partially repayment of principal and partially payment of
interest,'" Brief for Petitioner 27 (quoting S. Kellison, The
Theory of Interest 169 (2d ed. 1991)) (emphasis added). These
definitions accurately describe the repayment of loans. But, they
do not seem to focus upon whether or not one would normally include
interest in the first installment of an amortized payment of a debt
that is not a loan. We have no reason to believe they intend to
define away the issue before us here.
The Plan adds that our reading of the statute makes the first
"as if" clause in § 1399(c)(1)(A)(i) superfluous because, "if
Congress had not intended to include interest in the first payment,
it could have simply provided that the presumed payment schedule
should be calculated as if payments were made annually." Brief for
Petitioner 38. It seems to us that the premise of this argument is
that, without contrary indication, one would expect that, in the
case of an indebtedness of the kind here at issue, interest would
not start accruing before the first payment is due-a premise with
which we agree, see
supra, at 422-423. More importantly, had
Congress not used the words "as if the first payment were made on
the first day of the plan year following the plan year in which the
withdrawal occurs," the reader might have thought that interest
would begin to accrue immediately upon withdrawal, a reading that
has some intuitive appeal, see 3 F. 3d, at 1004 ("An assessment of
interest between the date of withdrawal and the date on which
payments begin ... would not be troubling"). But, the first "as if"
clause makes clear that interest does not begin accruing on that
date. (The same concern may explain the second "as if" clause in §
1399(c)(1)(A)(i), concerning subsequent payments. Without that
clause, one might think that one should calculate the amortization
schedule as if the first payment is made out of order, and as if
each successive payment is made on the anniversary of the date of
withdrawal.)
428
428 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
We recognize that Congress might have been more specific. For
example, it could have said: "Calculate amortization as if the
first payment is made on the date the employer's withdrawal
liability is due" (had it intended interest to start accruing on
that date); or: "Calculate amortization as if each payment is made
on the last day of the year at the beginning of which it is due"
(had it intended interest to start accruing one cycle before the
first payment is due). Instead, Congress said that one should
calculate amortization "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, that actual language, as we have said,
offers more support for our interpretation than for the
alternative. Were we to read the actual language as does the Plan,
we would have to analogize the valuation date (the last day of the
year preceding withdrawal) to the date on which liability arises;
to the date on which the debt becomes "payable"; or to the date on
which the employer withdraws. But, in fact, the calculation date is
none of those things; it is a date chosen simply for ease of
administration; and ease of administration does
not require
choosing the same date for interest-accrual purposes. See 3 F. 3d,
at 1004 ("Establishing a simple rule for calculating funding
shortfalls has nothing to do with interest").
Third, the Plan points to legislative history. The Plan
says that the original bill provided that interest would not begin
accruing until the date of withdrawal. And, the Plan points out,
just like the version that ultimately became law, the bill located
the valuation date (the date as of which the withdrawing employer's
share in the plan's underfunding is determined) at the end of the
plan year before withdrawal. Thus, the Plan says, the original bill
contemplated a "funding gap"-from the valuation date to the
withdrawal date. Because the section providing that interest
started accruing on the withdrawal date did not make it into the
statute as en-
429
acted, the Plan argues, Congress expressly rejected the idea of
a "gap." Brief for Petitioner 41.
For the reasons stated above, see
supra, at 426-427, we
doubt that our reading, as a practical matter, will cause a
significant gap to occur. But, regardless, if we were to consider
legislative history in this case, we would find that it undermines,
rather than supports, the Plan's reading. The Plan's rendering is
incomplete, for the relevant statutory provisions went through not
two but four versions:
(1) the original bill, calling for a valuation on the last day
of the year before withdrawal and for interest accrual beginning on
the date of withdrawal,
see S. 1076, 96th Cong., 1st Sess., § 104 (1979) (adding ERISA
§§ 4201(d)(1)(A), (e)(5)), reprinted in 125 Congo Rec. 9800, 9803
(1979); H. R. 3904, 96th Cong., 1st Sess., § 104 (1979) (adding
ERISA §§ 4201(d) (l)(A), (e)(5)), reprinted in Hearings on the
Multiemployer Pension Plan Amendments Act of 1979 before the Task
Force on Welfare and Pension Plans of the Subcommittee on
Labor-Management Relations of the House Committee on Education and
Labor, 96th Cong., 1st Sess., pp. 3, 21, 25 (1979) (hereinafter
Task Force Hearings);
(2) a second version, which moved the valuation date to the end
of the withdrawal year and also said that interest shall be
determined "as if each payment were made at the end of the year in
which it is due" (thus apparently indicating that interest would
start accruing one year before the first payment fell due),
see H. R. 3904,
supra, § 104 (adding ERISA §§4201(e)
(2)(E), (f)(2)(C), (f)(3)(A), (f)(4) (A), (i)(2)(A) (ii)),
reprinted in Task Force Hearings 246-247, 249, 251, 252,256;
(3) a third version, which kept the valuation date at the end of
the withdrawal year but changed the interest-
430
430 MILWAUKEE BREWERY WORKERS' PENSION PLAN
v.
JOS. SCHLITZ BREWING
CO.
accrual language to the "as if" clauses found in the statute as
we now know it,
see H. R. 3904, 96th Cong., 1st Sess., § 104 (1980) (adding
ERISA §§ 4201(e)(2)(E)(i), (f)(2)(C)(i), (f) (3)(A), (f)(4)(A),
(i)(2)(A)(i)), reprinted in H. R. Rep. No. 96-869, pt. 1, pp. 12-15
(1980); H. R. 3904, 96th Cong., 1st Sess., § 104 (1980) (adding
ERISA §§ 4201(e)(2)(E)(i), (f)(2)(C)(i), (f)(3)(A), (f)(4)(A),
4202(c)(1)(A)(i)), reprinted in H. R. Rep. No. 96-869, pt. 2, pp.
129-131, 135-136 (1980); and
(4) a final version, which moved the valuation date back to the
end of the year preceding withdrawal but retained the third
version's interest-accrual language,
see H. R. 3904, 96th Cong., 1st Sess., § 104 (1980) (adding
ERISA §§ 4211(b)(2)(E)(i), (c)(2)(C)(i)(I), (c)(3)(A),
(c)(4)(A)(i), 4219(c)(1)(A)(i)), reprinted in 126 Congo Rec. 23003,
23014, 23016 (1980).
This history suggests two things, neither of which helps the
Plan.
First, throughout the bill's history, the valuation
date and interest-accrual date moved about in an apparently
uncoordinated way. This somewhat undermines the Plan's suggestion
that Congress was very concerned about the interplay between the
two. It certainly dispels the notion that the final version should
primarily be viewed as a rejection of the "funding gap" found in
the original bill.
Second, the evolution of the "as if"
clause from "as if each payment were made at the end of the year in
which it is due" to "as if the payment were made on the first day
of the plan year [following withdrawal]" suggests that Congress
replaced a scheme in which interest starts accruing a full payment
cycle before the first payment with a scheme in which interest
starts accruing on the first day of the year following
withdrawal.
431
III
We consequently hold that MPPAA calculates its installment
schedule on the assumption that interest begins accruing on the
first day of the year following withdrawal. The judgment of the
Court of Appeals is therefore
Affirmed.
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