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The U.S. Supreme Court case Pension Benefit Guaranty Corporation v. Yahn & McDonnell, Inc., et al., 1986 revolved around the issue of whether an employer who withdraws from a multiemployer pension plan is liable for unfunded vested benefits under the Employee Retirement Income Security Act (ERISA). The court held that employers are indeed responsible for these liabilities upon withdrawal, even if they have already paid their fixed and contingent liability to the pension fund as required by ERISA. This decision was based on the interpretation of Section 4219(c)(1)(C) of ERISA which states that an employer's obligation to contribute continues until all obligations are met. Therefore, any shortfall in funding must be made up by withdrawing employers.
In the dissenting opinion for Pension Benefit Guaranty Corporation v. Yahn & McDonnell, Inc., Justice Blackmun disagreed with the majority's interpretation of ERISA (Employee Retirement Income Security Act). He argued that Congress intended to protect employees' pension benefits and ensure their financial security upon retirement. The majority's decision, he believed, undermined this purpose by allowing employers to withdraw from multiemployer pension plans without fully paying withdrawal liability if they sell substantially all their assets before withdrawing. This loophole could potentially leave a significant funding gap in these plans and jeopardize workers' pensions. Furthermore, he contended that the legislative history of ERISA did not support the majority’s reading of it; rather than encouraging asset sales as a means to avoid withdrawal liability, Congress sought to prevent such evasion tactics through its amendments to ERISA.