Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—7th Cir.: Court discusses calculation of employer’s withdrawal liability when it sold piece of business, (Oct 10, 2025)

By Ronald Miller, J.D.

The question is how to calculate installments for an employer’s withdrawal liability when the company previously sold a piece of its business.

The Seventh Circuit agreed with a district court that applying ERISA’s payment-schedule Section 4219 does not require a pension fund to deduct the contribution units from Sold Stores under safe-harbor Section 4204. The text of the operative provision in payment-schedule Section 4219 prescribes a detailed calculation. That text does not reference safe-harbor Section 4204. Therefore, payment-schedule Section 4219 does not exclude the contribution base unit history for stores sold under safe-harbor Section 4204 (SuperValu, Inc. v. United Food and Commercial Workers Unions and Employers Midwest Pension Fund, No. 24-2486 (7th Cir. Oct. 9, 2025)).

Asset sales. The employer, SuperValu, Inc., contributed to a multiemployer pension fund for over 10 years on behalf of employees covered under related collective bargaining agreements. In September 2018, SuperValu, a supermarket chain, sold some of its stores to Schnuck’s Markets. Five of the sold stores employed workers covered by the fund. That sale qualified under 29 U.S.C. § 1384, so-called safe-harbor Section 4204, which addresses asset sales. Thus, SuperValu did not incur withdrawal liability, even though it no longer contributed to the fund for the employees at these “Sold Stores.” Months later, SuperValu closed its remaining stores, completely withdrawing from the fund. This triggered withdrawal liability.

Withdrawal liability calculation. The fund calculated SuperValu’s liability using the equation in withdrawal-liability Section 4211. To begin, SuperValu owed an estimated $96.2 million. The fund then believed the contribution base unit history of the Sold Stores, which amounted to $53.5 million, should be deducted from that total, leaving $42.7 million.

Next, the fund calculated SuperValu’s annual installments under payment-schedule Section 4219. To compensate for the Sold Stores, the fund deducted their contribution base units. It looked to 29 U.S.C. § 1384(b)(1) and deducted the Sold Stores’ units for only the year they were sold and the preceding four years. The fund included the Sold Stores’ units for the first five years of the 10-year lookback period. As a result, when the fund calculated the highest three-year consecutive annual average, it picked from the first five years, as those included the Sold Stores’ contribution history. After applying the 20-year cap, SuperValu owed tens of millions less than it originally did. The final figure was $22.6 million.

Issue on appeal. The fund’s decision not to deduct the Sold Stores’ units for the entire 10 years was at the heart of this case. SuperValu contended that the fund should have deducted the Sold Stores’ units throughout the 10 years, not just the most recent five years. The fund countered that the plain language of payment-schedule Section 4219 and safe-harbor Section 4204 did not mandate that the deduction should apply over all 10 years.

Because SuperValu disagreed with the fund’s payment-schedule calculation, it requested arbitration under 29 U.S.C. § 1401(a)(1). The arbitrator sided with the fund, as did the district court. The district court, “[f]ollow[ing] the text of the statute,” concluded that the fund was not compelled by the text to deduct the Sold Stores’ units for all 10 years.

On appeal, the Seventh Circuit started with the text of the operative provision found in payment-schedule Section 4219. 29 U.S.C. § 1399(c)(1)(C)(i)(I). SuperValu asked the appeals court to read this provision as implicitly requiring a fund to deduct contribution units for asset sales qualifying under safe-harbor Section 4204 for the full 10-year lookback period. But the operative provision’s text does not refer to safe-harbor Section 4204. Thus, Congress likely intended the operative provision not to refer to safe-harbor Section 4204.

Further, the operative provision uses the term “highest” contribution base units. For that reason, when Congress says, “the highest,” it means simply the highest annual three-consecutive-year average over the past 10 years, not the highest after excluding those units from asset sales. Accordingly, the appeals court respected the formula that Congress prescribed.

Payment-schedule Section 4219. SuperValu argued that the Sold Stores’ contribution units should be deducted in the calculation found in payment-schedule Section 4219. The appeals court noted that a company’s withdrawal liability—here, what SuperValu owes the fund—is calculated under the methods set forth in withdrawal-liability Section 4211.

SuperValu argued the calculation under withdrawal-liability Section 4211 deducts the contribution base unit history from sales covered by safe-harbor Section 4204. As SuperValu saw it, the term “employer” in withdrawal-liability Section 4211 should be viewed at the time of withdrawal. At that time, the “employer,” SuperValu, did not have “contributions required to be made” for the Sold Stores because they had been sold to Schnuck’s.

Next, SuperValu pointed to language in payment-schedule Section 4219. Because both payment-schedule Section 4219 and withdrawal-liability Section 4211 use “employer,” the presumption of consistent usage would suggest the term means the same thing in both sections. When SuperValu withdrew, it did not own the five stores sold to Schnuck’s. It was Schnuck’s responsibility to contribute on behalf of those stores. To reflect that, SuperValu argued its withdrawal liability and annual payment should be reduced accordingly.

Faulty interpretation. However, the appeals court found that SuperValu’s interpretation faltered. First, the authorities it cited did not support its interpretation. Second, under the appeals court’s reading of these statutes, a fund would not receive a “double recovery,” nor did that concern drive the court’s decision. Third, SuperValu’s use of the presumption of consistent usage canon was rebutted by the text and statutory structure.

SuperValu’s three authorities addressed the interplay between withdrawal-liability Section 4211 and safe-harbor Section 4204, but they did not support a reading that payment-schedule Section 4219 should exclude the contribution histories of stores previously sold under a safe-harbor Section 4204 asset sale. Further, the appeals court noted that its discussion in CenTra, Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 578 F.3d 592 (7th Cir. 2009) and a PBGC opinion letter applied to withdrawal-liability Section 4211, not to payment-schedule Section 4219.

SuperValu’s authorities interpreted withdrawal-liability Section 4211 and safe-harbor Section 4204. But they did not consider the calculation of the annual payment under Section 4219 and assets previously sold under safe-harbor Section 4204.

Double-recovery. SuperValu next argued that the appeals court should hold that the operative provision’s calculation accounts for asset sales under safe-harbor Section 4204. But, concluded the appeals court, that interpretation suffered from three problems.

First, it was unclear how a calculation in the text of payment-schedule Section 4219 results in the fund recovering anything additional. Changing the schedule for how SuperValu pays its withdrawal liability does not alter the total amount of that liability.

Second, even if a “double recovery” could occur from a plain reading of payment-schedule Section 4219, Congress likely knew that when it enacted these statutes. Congress prescribed a rule—the calculation found in the operative provision. Calculations have as a benefit lower administrative costs and fair notice to companies and funds. The downside, however, is an inflexible equation that fails to account for fairness in its calculation. That was Congress’s legislative choice. The court need not add a fairness consideration to what is, in effect, a math equation.

Third, even if the fund could receive a “double recovery,” the court still must adhere to the statute’s text. The court’s role is to interpret ERISA’s text “the way Congress wrote it.” SuperValu argued the appeals court should place less weight on the text and more on the statute’s “context.” While context is an accepted interpretative inquiry, at times an interpretation motivated by context can look more like an interpretation motivated by outcome. Thus, courts must be careful in invoking context when interpreting statutes.

SuperValu’s interpretation was not based on statutory context. Rather, it was concerned with preventing a particular outcome—“double recovery”—rather than the statute’s text. Properly viewed, SuperValu’s reading was more like “legislation itself.”

Consistent usage. Finally, SuperValu invoked the presumption of consistent usage for further support. But that contextual canon did not support SuperValu’s reading of the applicable ERISA statutes. Super-Valu read the word “employer” to implicitly mean “employer at the time of withdrawal.” SuperValu sold its stores and then withdrew from the fund. At that point, SuperValu had no obligation to contribute to the fund for those Sold Stores. So, the contribution units for those Sold Stores were not included in the withdrawal-liability Section 4211 calculation.

Then, SuperValu asserted, “contributions required to be made under the plan by the employer” (withdrawal-liability Section 4211) and “for which the employer had an obligation to contribute” (payment-schedule Section 4219), should be interpreted similarly under the presumption of consistent usage.

But simply because two statutory sections are part of a patchwork does not mean the presumption controls. The two statutory sections here serve different objectives. Withdrawal-liability Section 4211 provides the method to calculate what the employer must pay. By contrast, the payment-schedule Section 4219 provides for how the employer will pay.

Even if Section 4211 were to require deducting contribution units from Sold Stores under safe-harbor Section 4204, that does not justify imposing that same requirement on payment-schedule Section 4219. The two sections are distinct. Each pursues a different objective, and they bear little similarity, other than that they fall under the general umbrella of plan withdrawals.

The case is No. 24-2486.

Judge: Brennan, M.

Attorneys: Evan Miller, I (Jones Day) for SuperValu, Inc. Daniel G. Murphy (Reinhart Boerner Van Deuren) for United Food and Commercial Workers Unions and Employers Midwest Pension Fund.

Companies: SuperValu, Inc.; United Food and Commercial Workers Unions and Employers Midwest Pension Fund

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