**Seventh Circuit Sides with Pension Fund in Penske Dispute**
The Seventh Circuit upheld a district court decision rejecting Penske Truck Leasing’s attempt to escape withdrawal liability to a union pension plan. The appeals court ruled that the trucking company must continue making payments under the Central States pension fund’s calculation, rejecting arguments that the fund’s methods were arbitrary.
The dispute began when Penske withdrew from the Central States Southeast and Southwest Areas Pension Plan, triggering withdrawal liability under federal law. Penske challenged the fund’s assessment, claiming the trustees used improper assumptions and failed to follow required procedures. The district court sided with the pension fund on most issues, and the Seventh Circuit affirmed that ruling in full.
The court held that pension plans have wide discretion in setting withdrawal liability as long as their methods are reasonable and consistent with ERISA. It found no evidence that Central States acted arbitrarily or violated the statute. The decision strengthens pension funds’ ability to collect from trucking and logistics companies that exit multiemployer plans.
For fleet operators and lessors, the ruling signals that challenges to withdrawal calculations face a high bar and that courts will defer to trustees’ actuarial choices.
**Bottom Line:** Penske must pay the assessed withdrawal liability.
https://www.courtlistener.com/opinion/10866290/penske-truck-leasing-lp-v-central-states-southeast-and-southwest-areas/
How might this affect your company’s future decisions on union pension participation?