Harry Blackmun

“ Notes
↑ Title IV covers virtually all "defined benefit" pension plans sponsored by private employers. A defined benefit plan is one that promises to pay employees, upon retirement, a fixed benefit under a formula that takes into account factors such as final salary and years of service with the employer. See 29 U.S.C. § 1321. It is distinguished from a "defined contribution" plan (also known as an "individual account" plan) , under which the employer typically contributes a percentage of an employee's compensation to an account, and the employee is entitled to the account upon retirement. ”

“ The insurance program is also financed by statutory liability imposed on employers who terminate under-funded pension plans. Upon termination, the employer becomes liable to the PBGC for the benefits that the PBGC will pay out. [2] Because the PBGC historically has recovered only a small portion of that liability, Congress repeatedly has been forced to increase the annual premiums. Even with these increases, the PBGC in its most recent annual report noted liabilities of $4 billion and assets of only $2.4 billion, leaving a deficit of over $1.5 billion. ”

“ The agency's asserted abuse policy . . . is logically irrelevant to the restoration decision." Brief for Respondents LTV Corp. and LTV Steel 33 (emphasis added) . We think not. The PBGC's anti-follow-on policy is premised on the belief, which we find eminently reasonable, that employees will object more strenuously to a company's original decision to terminate a plan (or to take financial steps that make termination likely) if the company cannot use a follow-on plan to put the employees in the same (or a similar) position after termination as they were in before. ”

“ Although Vermont Yankee concerned additional procedures imposed by the Court of Appeals for the District of Columbia Circuit on the Atomic Energy Commission when the agency was engaging in informal rulemaking, the PBGC argues that the informal adjudication process by which the restoration decision was made should be governed by the same principles.
Respondents counter by arguing that courts, under some circumstances, do require agencies to undertake additional procedures. As support for this proposition, they rely on Citizens to Preserve Overton Park, Inc. ”

“ ERISA insurance does not cover defined contribution plans because employees are not promised any particular level of benefits; instead, they are promised only that they will receive the balances in their individual accounts.↑ Prior to 1987, employers were liable for only 75% of PBGC's expenditures. In that year, Congress eliminated the 75% cap. See Pension Protection Act, Pub.L. 100-203, 101 Stat. 1330-333.↑ The Steelworkers appealed the District Court's judgment (giving effect to the PBGC's termination) to the United States Court of Appeals for the Second Circuit. ”

“ Respondents argue that the PBGC's anti-follow-on policy is irrational because, as a practical matter, no purpose is served when the PBGC bases a restoration decision on something other than the improved financial health of the employer. ”

“ The PBGC contends that the Court of Appeals misapplied the general rule that an agency must take into consideration all relevant factors, see Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971) , by requiring the agency explicitly to consider and discuss labor and bankruptcy law. We agree.
First, and most important, we do not think that the requirement imposed by the Court of Appeals upon the PBGC can be reconciled with the plain language of § 4047, under which the PBGC is operating in this case. ”

“ The PBGC administers and enforces Title IV of ERISA. Title IV includes a mandatory Government insurance program that protects the pension benefits of over 30 million private-sector American workers who participate in plans covered by the Title. [1] In enacting Title IV, Congress sought to ensure that employees and their beneficiaries would not be completely "deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans." ”

“ As noted above, plan termination is the insurable event under Title IV. Plans may be terminated "voluntarily" by an employer or "involuntarily" by the PBGC. An employer may terminate a plan voluntarily in one of two ways. ”

“ In addition, benefit increases resulting from plan amendments adopted within five years of the termination are not paid in full. Finally, active plan participants (current employees) cease to earn additional benefits under the plan upon its termination and lose entitlement to most benefits not yet fully earned as of the date of plan termination. 29 U.S.C. §§ 1322 (a) and (b) , 1301 (a) (8) ; 29 CFR § 2613.6 (1989) .
The cost of the PBGC insurance is borne primarily by employers that maintain ongoing pension plans. Sections 4006 and 4007 of ERISA require these employers to pay annual premiums. ”

“ Vermont Yankee stands for the general proposition that courts are not free to impose upon agencies specific procedural requirements that have no basis in the APA. See 435 U.S., at 524, 98 S.Ct., at 1202. ”