Seventh Circuit Holds Employers Receive Full Benefit of Prior Partial Withdrawal Liability Credits

On September 17, 2026, the U.S. Court of Appeals for the Seventh Circuit issued an employer-friendly decision in Consumers Concrete Corp. v. Central States Southeast and Southwest Areas Pension Fund.¹ The court held that when an employer first incurs partial withdrawal liability from a multiemployer pension plan and later triggers a second partial or a complete withdrawal, the credit from the first partial withdrawal must be applied against the employer’s final withdrawal liability after all statutory adjustments are made, including the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA)’s 20-year payment cap.

The ruling can substantially reduce, and in some cases potentially eliminate, an employer’s withdrawal liability arising from a later withdrawal. The Seventh Circuit also expressly disagreed with the Ninth and Eleventh Circuits on this issue, creating a direct circuit split on an issue affecting employers participating in multiemployer pension plans nationwide. 

What Are Partial Withdrawal Liability Credits?

Under the MPPAA, employers that withdraw from an underfunded multiemployer pension plan generally must pay withdrawal liability representing their share of the plan’s unfunded vested benefits. An employer triggers a partial withdrawal when the employer has a significant decline in its contribution base units or if it stops contributing under one or more—but not all—of its collective bargaining agreements while continuing similar work at that location. Meanwhile, an employer triggers a complete withdrawal when it permanently ceases to have an obligation to contribute to a fund.

Congress recognized that an employer could incur withdrawal liability more than once. To prevent employers from effectively being charged twice for the same unfunded vested benefits, Employment Retirement Income Security Act of 1974 (ERISA) Section 1386 provides that when an employer that previously withdrew later incurs withdrawal liability in a subsequent year, that liability must be reduced by previously assessed partial withdrawal liability.

The dispute in Consumers Concrete was not whether a credit was available. Rather, the issue was when the credit should be applied during the period when the statutory withdrawal liability is calculated.

So…What Happened?

Consumers Concrete partially withdrew from the Central States Pension Fund (“Fund”) in 2017 and completely withdrew in 2019. The parties agreed that approximately $23.3 million in unfunded vested benefits were allocable to Consumers Concrete and that Consumers Concrete’s annual withdrawal liability payment amount was approximately $607,000. The Fund’s withdrawal liability assessment applied the credit for the prior partial withdrawal immediately after calculating the $23.3 million in unfunded vested benefits. Because of the application of the 20-year cap, Consumers Concrete still, according to the Fund, owed $9.3 million in withdrawal liability plus interest payable in 20 annual payments of $607,344.90.

Meanwhile, Consumers Concrete argued that the credit for the prior partial withdrawal should instead be applied to the final withdrawal liability amount after all statutory adjustments had been completed, including application of the MPPAA’s 20-year payment cap. Consumers Concrete asserted that the prior partial credit should be applied directly to the 20 annual payments of $607,344.90, effectively reducing its complete withdrawal liability to be as low as zero.

An arbitrator adopted the Fund’s position, but the district court vacated the arbitration award and sided with Consumers Concrete. The Seventh Circuit affirmed the district court decision. 

What Did the Seventh Circuit Decide?

The Seventh Circuit concluded that ERISA’s text requires the prior partial withdrawal credit to be applied against the employer’s final withdrawal liability, not against intermediate figures used in the calculation process.

According to the court, the MPPAA defines “withdrawal liability” as the amount remaining after the statute’s four-step calculation process has been completed. Because Section 1386 states that prior partial withdrawal liability “shall reduce” subsequent withdrawal liability, the court reasoned that the credit must be applied against that final figure.

The court rejected the Fund’s contention that the credit must be applied earlier in the process. In doing so, it emphasized that Section 1386 is designed to prevent employers from being charged twice for the same unfunded vested benefits.

The Seventh Circuit also found support in longstanding Pension Benefit Guaranty Corporation (PBGC) guidance. The PBGC submitted an amicus brief reaffirming its position that partial withdrawal credits should be applied after withdrawal liability has been fully calculated under ERISA’s statutory framework. The court found that interpretation persuasive.

Why This Matters to Employers

The decision is significant because it can dramatically increase the value of prior partial withdrawal liability credits. Many employers participate in plans where the MPPAA’s 20-year payment cap substantially limits the amount ultimately collectible by the pension fund. Applying a credit before the cap could significantly reduce the practical benefit of the credit or, in some circumstances, render the credit functionally meaningless. The Seventh Circuit’s approach ensures that employers receive the full economic benefit of prior partial withdrawal liability payments.

Just as important, employers now have favorable appellate authority supporting this position in the Seventh Circuit. The court expressly declined to follow decisions from the Ninth and Eleventh Circuits, meaning withdrawal liability calculations may now depend on the jurisdiction in which the dispute is litigated.

The Seventh Circuit’s decision in Consumers Concrete provides employers with a significant victory in the continuing evolution of withdrawal liability law. By holding that prior partial withdrawal liability credits are applied to the employer’s final withdrawal liability after all statutory adjustments, including the twenty-year payment cap, the court increased the potential practical value of those credits. 

In light of this decision, employers can consider taking the following steps:

• Reevaluate pending withdrawal liability disputes. Employers currently facing a withdrawal liability assessment or arbitrating a dispute can assess whether they need to assert any new arguments in light of Consumers Concrete, particularly if the applicable fund is administered in states outside the jurisdiction of the Ninth and Eleventh Circuits.
• Consider venue implications. The Seventh Circuit expressly disagreed with the Ninth and Eleventh Circuits, creating a circuit split that may affect litigation strategy.
• Incorporate credits into withdrawal planning. Employers considering restructurings, facility closures, bargaining changes, or complete withdrawals should plan carefully and consider the impact of prior partial withdrawals on potential withdrawal liability.
• Monitor future developments. Given the existing circuit split, employers should watch for additional appellate decisions or potential Supreme Court review that could resolve the disagreement nationwide.