SUPERVALU, INC., Plaintiff, v. BOARD OF TRUSTEES OF the SOUTHWESTERN PENNSYLVANIA AND WESTERN MARYLAND AREA TEAMSTERS AND EMPLOYERS PENSION FUND a/k/a the Trustees of the Southwestern Pennsylvania and Western Maryland Area Teamsters and Employers Pension Fund, Defendants, 442 F. Supp. 2d 252

MEMORANDUM ORDER JOY FLOWERS CONTI, District Judge. On June 5, 2005, this ease involving an appeal from an award of an arbitrator was referred to United States Magistrate Judge Francis X. Caiazza for pretrial proceedings in accordance with the Magistrates Act, 28 U.S.C. §§ 636(b)(Z )(

A) and (B), and Rules 72.1.3 and 72.1.4 of the Local Rules for Magistrates. On April 11, 2006 the magistrate judge issued a Report (Doc. 21) recommending that the district court grant the Motion for

Summary Judgment filed by the plaintiff, SUPERVALU, Inc. (the “plaintiff’), asking that the final award of the arbitrator be set aside. (Doc. 13). At the same time, the magistrate judge recommended that the court deny the Motion for

Summary Judgment filed by defendants, Board of Trustees of the Southwestern Pennsylvania and Western Maryland Area Teamsters and Employers Pension Fund a/k/a the Trustees of the Southwestern Pennsylvania and Western Maryland Area Teamsters and Employers Pension Fund (the “Fund”), seeking confirmation of the final award. (Doc. 11). Service of the Report and Recommendation was made on the parties. On May 2, 2006, lengthy objections were filed by the Fund. (Doc. 22). On May 12, 2006, a response to those objections (Doc. 23) was filed by the plaintiff.

The court approaches this case knowing that it should balance, similar to situations involving the National Labor Relations Act, 29 U.S.C. § 158 et seq., “on the one hand, an employer’s ‘freedom to contract ... including the right to transfer its assets, reorganize its business or close a portion thereof,’ ... and, on the other, ... to ‘prevent employers from evading obligations under [the applicable statute] ....’” Stardyne, Inc. v. National Labor Relations Board, 41 F.3d 141, 148 (3d Cir.1994)(internal citations omitted).

With this responsibility in mind, the court reviewed the submissions of the parties and the record before the magistrate judge. The court adopts the Report and Recommendation as the opinion of the court subject to the following determinations made with respect to the Fund’s major objections. These objections are addressed se-riatim. The Fund argues first that the magistrate judge did not accord due deference to the findings of the arbitrator, and failed to understand the unique circumstances surrounding the collective bargaining agreement. The court disagrees.

The magistrate judge applied the correct standard of review, adopting the arbitrator’s findings of fact, and reviewing his conclusions of law de novo. China Minmetals Materials Import and Export Co., Ltd. v. Chi Mei Corp., 334 F.3d 274, 278 (3d Cir. 2003). The magistrate judge identified the legal issues and explained in detail his disagreement with the arbitrator’s conclusions of law. The Fund next contends that the magistrate judge failed to appreciate critical differences between the facts of this case and those in ITU Pension Plan and Ft.

Worth Star Telegram, 5 E.B.C. 1193 (Arbit.1984), and Cuyamaca Meats, Inc. v. San Diego and Imperial Counties Butchers’and Food Employer’s Pension Trust Fund, 827 F.2d 491 (9th Cir.1987). Again, the court disagrees. The magistrate judge expressly addressed the factual differences in these decisions, and explained why, despite those differences, the legal analysis in each was persuasive and applicable to this case.

The Fund turns next to 29 U.S.C. § 1392(c), arguing that the magistrate judge ignored the section’s “plain meaning.” “It is axiomatic that ‘[t]he starting point in every case involving construction of a statute is the language itself.’ ” Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S.Ct. 2297, 85 L.Ed.2d 692 (1985) (quoting Blue Chip Stamps v. Manor Drug Stores, 95 S.Ct. 1917, 421 U.S. 723, 756, 44 L.Ed.2d 539 (1975) (Powell, J., concurring)). In other words, the threshold question is whether the “language is clear and unambiguous.” 2a Norman J.

Singer, Sutherland Statutory Construction § 46.01, at 121-22 (6th ed. 2000). The “plain meaning rule” has been articulated many ways. The court finds the following formulation helpful: What has come to known as the plain meaning rule has been given expression in a variety of ways. When the intention of the legislature is so apparent from the face of the statute that there can be no question as to its meaning, there is no room for construction. Id. at 118-19 (quoting Meeks v. West, 12 Vet.App. 352 (1999)).

The Fund argues that the magistrate judge erred in failing to adopt the arbitrator’s finding that § 1392(c) “ha[s] a straightforward reading” requiring that the date of withdrawal specified in the collective bargaining agreement made between the plaintiff and the unions be set aside. The court reexamined the arbitrator’s decision and finds that his references to the plain meaning of § 1392(

c) are (1) conclusory; (2) unsupported by citation to authority of any kind; and (3) inconsistent with the arbitrator’s prior

interpretation of the section. The first two observations were reflected in the Report and Recommendation. Report and Recommendation at 6-7. The court, therefore, focuses here on the third observation. In determining whether the magistrate judge erred in failing to invoke a plain meaning rule, the court finds it significant that the arbitrator, in another decision, recognized that the language of § 1392(

c) is susceptible of more than one meaning. In the decision captioned In re Flying Tiger Lines, Inc. and Teamsters Pension Trust of Philadelphia, 19 E.B.C. 2830, (Arbit.1993), enforced sub nom. Trustees of Teamsters Pension Trust Fund of Philadelphia and Vicinity v. Federal Express Corp., 20 E.B.C. 1050, 1995 WL 791371 (D.Del. Dec. 27,1995) aff'd sub nom. Flying Tiger Line, Inc. v. Central States, Southwest and Southeast Areas Pension Fund, 96 F.3d 1432 (3d Cir.l996)(Table, No. 96-7050), the arbitrator held that the reach of § 1392(

c) was limited. He wrote: “Judging at least from the reported decisions, it appears that this provision has seldom been invoked and, with one exception, has never been held applicable.” 19 E.B.C. 2846. He then identified five decisions in which § 1392(

c) was found inapplicable, noting that the single contrary decision was later withdrawn. Id. at n. 5. The arbitrator also discussed the decision of the United States Court of Appeals for the Third Circuit in Dorn’s Transportation v. Teamsters Pension Trust Fund, 787 F.2d 897 (3d Cir.1986), summarizing its holding narrowly: “[I]n the context of the sale of a business, a transaction has as its principal purpose the evasion of withdrawal liability within the meaning of the statute only if both parties to the transaction share that purpose.” Flying Tiger, 19 E.B.C. at 2847 (emphasis in original).

The arbitrator commented: ‘While the statutory language might well support a more expansive reading, other courts have also read the provision narrowly.” Id. at n. 6 (emphasis added)(citing Cuyamaca Meats, Inc. v. San Diego & Imperial Counties Butchers’ Pension Fund, 638 F.Supp. 885 (S.D.Cal.1986), aff'd, 827 F.2d 491 (9th Cir. 1987), as rejecting application of § 1392(

c) where employer timed withdrawal to minimize liability). The arbitrator’s broad

interpretation of § 1392(

c) in this case does not square with his narrow reading of the same provision in Flying Tiger. If the phrase “evade and avoid” has a plain meaning, that meaning cannot expand and contract depending upon the circumstances. Although the arbitrator articulated that the applicable statute had a plain meaning, the arbitrator clearly looked beyond the parameters of § 1392(

c) in order to reach his decision. He discussed other provisions of the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1382, et seq. (the “MPPAA”), explaining that the results in ITU and Cuyamaca turned on the financial status of the plan rather than on the language of the provision alone. He also looked to the provision’s legislative history. The Fund’s “plain meaning” argument is also undercut by the fact that decision makers have differed as to the “plain meaning” of the same language. While the arbitrator in this case found that § 1392(

c) is not limited to situations involving deception or fraud, the arbitrator in ITU disagreed. He found that the phrase “evade or avoid” has a well understood meaning in the law; it is limited to essentially fraudulent transactions designed to prevent the employer from being assessed the true withdrawal liability which is owed under the statute. The Report and Recommendation’s note seven collects decisions adopting this .view, applying § 1392(

c) to situations where only the parties have engaged in some variety of sham transaction. The

section has been applied almost exclusively in these narrow circumstances. The court is persuaded by the relevant case law, particularly the decision in ITU, that the better view is that the meaning of the phrase “avoid or evade” is not plain, but that the phrase has a well understood meaning in the law. Proper application of § 1392(

c) can, therefore, be determined only by considering the overall statutory scheme, and the context in which the

section is invoked. Because the magistrate judge was convinced that § 1392(

c) was subject to more than one

interpretation, he adopted the reasoning of the arbitrator in ITU. He found that it was necessary to examine § 1392(

c) in the context of other ERISA provisions, the case law, and the available legislative history. The magistrate judge conducted this examination, fully articulating his reasoning. The court finds that his reasoning and his conclusion were sound. Finally, the Fund argues that the magistrate judge erred in determining the date of the plaintiffs withdrawal. One of the primary points made by the magistrate judge is that determining the date of withdrawal under ERISA does not involve the exercise of discretion; it is fixed instead by a statutory formula.

The date of withdrawal is determined with reference to interrelated provisions of the MPPAA. The statute defines the term “complete withdrawal,” 29 U.S.C. §§ 1381(b)(2), 1383(a). A complete withdrawal takes place when an employer permanently ceases to have an obligation to contribute under the plan or when the employer permanently ceases all covered operations under the plan. The “obligation to contribute” is defined as an obligation arising under the collective bargaining agreement. 29 U.S.C. § 1392(a).

Under the terms of these provisions, the plaintiffs complete withdrawal from the plan occurred on June 29, 2003. Nothing in the record or the statutory scheme permits the Fund, an arbitrator, or a court to vary that date. The court agrees with the magistrate judge that in creating withdrawal liability Congress acted to protect the financial well-being of funds — not by taking a scat-tershot approach — but by imposing a specific, calculable disincentive for employers contemplating withdrawal. Withdrawal liability is the penalty.

Congress elected to implement this penalty by incorporating specific, detailed, and comprehensive withdrawal liability provisions into an already complex ERISA framework. Countless funds, employers, and employees rely on these provisions in ordering and administering their retirement plans. Where, as here, the facts do not show clearly that the plaintiff acted to evade or avoid, rather than minimize, its exposure to withdrawal liability, the court will not interfere with the established framework. The court is convinced that the circumstances of this case do not warrant expansion of the reach of § 1392(c).

To hold otherwise would significantly alter the rules governing withdrawal liability. This is not the province of the court. If the reach of § 1392(

e) is to be expanded to the extent that it trumps 1392(a), this expansion should come from Congress. In reaching this conclusion, both the magistrate judge and the court recognize that the plaintiff, in effect, marched openly to the outer margin of established rules governing withdrawal liability. Because the court concludes that the plaintiffs conduct did not violate the law, it declines to modify unilaterally the penalty provisions of ERISA by reading § 1392(

c) more expansively than it has ever been read. Doing so could topple the proverbial first domino. Changing one ERISA provision could require modifying another, injecting uncertainty and confusion into a scheme where consistency and predictability are critical. In a final comment, the court assures the parties that it considered their request for oral argument. Because the factual questions have been resolved, and the legal issues have been ably articulated by the parties in their submissions and thoroughly analyzed, the court finds that oral argument is unnecessary.

After a de novo review of the submissions of the parties and the record before the court, together with the Report and Recommendation and the objections thereto, the following order is entered: AND NOW, this 26th day of July, 2006, IT IS HEREBY ORDERED that the plaintiffs Motion for

Summary Judgment setting aside the final award of the arbitrator (Doc. 13) is GRANTED, and the defendants’ Motion for

Summary Judgment (Doc. 11) seeking confirmation of the final award of the arbitrator is DENIED. The Report and Recommendation of Magistrate Judge Caiazza dated April 11, 2006 is hereby adopted as the opinion of the court, together with the conclusions set forth in this order. IT IS ORDERED AND ADJUDGED that judgment is entered in favor of the plaintiff, SUPERVALU, Inc., and against defendants, Board of Trustees of the Southwestern Pennsylvania and Western Maryland Area Teamsters and Employers Pension Fund. The clerk shall mark this case closed. REPORT AND RECOMMENDATION FRANCIS X.

CAIAZZA, United States Magistrate Judge. I. Recommendation Acting pursuant to §§ 4301 and 4221 of the Employee Retirement Income Security Act of 1974 (“ERISA” or “the Act”), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C. §§ 1451 and 1401, SUPERVALU filed a complaint in this court seeking modification of a final arbitration award made in favor of The Board of Trustees of the Southwestern Pennsylvania and Western Maryland Area Teamsters and Employers Pension Fund (“the Fund”). The award was based on the Arbitrator’s finding that SUPERVALU violated 29 U.S.C. 1392(

c) by executing an agreement with its employees’ union in order to evade or avoid withdrawal liability to the Fund. Ruling on cross motions for

summary judgment, the Arbitrator granted

summary judgment in favor of the Fund, obligating SUPERVALU to pay withdrawal liability in the amount of $4,316,996.00. Because the court is left with the firm impression that the Arbitrator erred in applying the law to the facts of this case, it recommends that the Arbitrator’s final award be set aside. The Motion for

Summary Judgment filed by SUPER-VALU (Doc. 13) should be granted, and the Motion for

Summary Judgment filed by the Fund (Doc. 11) should be denied. II. Factual and Procedural Background The facts are undisputed. In 2002, SU-PERVALU, a nationwide wholesale food distributor, operated a facility in Belle Vernon, Pennsylvania. Pursuant to sequential collective bargaining agreements made with representatives of Teamsters Local 872 (“the Union”), SUPERVALU contributed to a multiemployer pension plan established to provide retirement benefits to eligible union employees. The 2002 bargaining agreement was scheduled to expire at the end of January 2003.

Approximately one year prior to the expiration date, SUPERVALU, responding to a business downturn, decided to close its Belle Vernon facility, consolidating that operation with another in New Stanton. Hoping to accomplish this reorganization in the summer of 2002, SUPERVALU initiated discussions with the Union in the spring to resolve issues associated with the effects of the closing. One of these issues — how long SUPERVALU would continue to contribute to the pension plan— had significant economic repercussions for SUPERVALU.

The MPPAA provides that an employer, for various reasons, may opt out of a mul-tiemployer pension plan. Where there is a complete withdrawal the employer immediately incurs “withdrawal liability” to the Fund. This liability is defined as “the employer’s proportionate share of the plan’s ‘unfunded benefits,’ calculated as the difference between the present value of the vested benefits and the current value of the plan’s assets.” Robbins v. Pepsi Metro. Bottling Co., 636 F.Supp. 641, 647 (N.D.Ill.1986)(quoting Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984)).

The Act specifies that withdrawal liability is to be calculated with reference to a plan’s unfunded benefits outstanding at the end of the plan year preceding the year of an employer’s withdrawal. 29 U.S.C. § 1391(b)(2)(A)(ii). Because the Fund’s plan year ended on June 30, the amount owing in the event of SUPERVA-LU’s withdrawal during the 2002 plan year would have been based on the Fund’s unfunded vested benefits as of June 30, 2001. Similarly, withdrawal liability for the plan year 2003 would have been calculated on the basis of unfunded vested benefits outstanding as of June 30, 2002.

In April 2002, SUPERVALU consulted the Fund’s actuary. It learned that if it withdrew in plan year 2002, it would not incur withdrawal liability because, at the end of 2001, the Fund did not have unfunded benefits. Due to a drop in the value of Fund assets, withdrawing in plan year 2003 would result in significant withdrawal liability, based on the 2002 shortfall. In order to effect the less costly 2002 withdrawal, SUPERVALU negotiated a revised collective bargaining agreement with the Union, terminating its obligation to contribute to the Fund as of the end of June 2002.

In return for the Union’s consent to this termination, SUPERVALU offered and the Union accepted lump sum severance pay and wage premiums. There was nothing clandestine about this agreement; each party understood the financial implications of the withdrawal date. On June 26, 2002, SUPERVALU remitted its final payment of the 2002 plan year, and notified the Fund that it would not make contributions beyond June 29. About eight months after the withdrawal, the Fund demanded that SUPERVA-LU begin payments on withdrawal liability of more than four million dollars.

This liability assessment was based on the Fund’s conclusion that SUPERVALU had not withdrawn from the plan until 2003, and was liable for its pro rata share (23%) of the Fund’s unfunded vested benefits outstanding at close of plan year 2002. The Fund contended that SUPERVALU had not withdrawn from the Fund until 2003 because its attempt to limit its liability by withdrawing on the last day of plan year 2002 violated the terms of 29 U.S.C. § 1392(c).

Under this section: If a principal purpose of any transaction is to evade or avoid liability under this part, this part shall be applied (and liability shall be determined and collected) without regard to such transaction. According to the Fund, SUPERVALU’s purported 2002 withdrawal from the plan and the bargaining agreement upon which it was based should be disregarded. This pushed the withdrawal date into plan year 2003, the year in which SUPERVALU closed its Belle Vernon operation. The Arbitrator found in favor of the Fund, and issued a final award for the full amount of the withdrawal liability assessed.

This timely appeal followed. III. Standard of Review An arbitrator’s conclusions of law in a withdrawal liability case are subject to de novo review in federal court. Parmac, Inc. v. I.A.M. Nat’l Pension Fund Benefit Plan A, 872 F.2d 1069, 1071 (D.C.Cir. 1989); Trustees of Iron Workers Local 473 Pension Trust v. Allied Products Corp., 872 F.2d 208, 210-14 (7th Cir.1989); Union Asphalts and Roadoils, Inc. v. MORAN Teamsters Pension Fund, 857 F.2d 1230, 1233-34 (8th Cir.1988). Arbitration is the primary method for resolution of disputes arising under ERISA and the arbitrators’ decisions are entitled to deference.

A court will not overturn an arbitrator’s application of the law absent a firm conviction that an error was been made. TV. Discussion A. The Legal Basis for the Arbitrator’s Award The parties do not contest and the court accepts the Arbitrator’s

summary of relevant facts: SUPERVALU was fully aware that its intended withdrawal from the Fund after June 30, 2002, would result in ... substantial withdrawal liability due to the investment losses the Fund was experiencing during the plan year ending on that date. It accordingly induced the Union and its members to agree to terminate their existing [collective bargaining agreements] ... as of June 29, 2002, and to replace them with identical [agreements] stripped of the obligation to contribute to the Fund, thus effecting withdrawal from the Fund one day short of plan year end.

To secure the agreement of the Union and its members, SUPERVALU agreed to share the resulting liability withdrawal savings.... (Arb. Findings, Op. and Award 7-8). Based on these findings and the language of § 1392(c), the Arbitrator concluded that the bargaining agreement between SU-PERVALU and the Union setting the date on which SUPERVALU would no longer contribute to the Fund should be disregarded.

He wrote: Giving the [evade and avoid] provision [of § 1392(c)] a straightforward reading, and according to its words their natural meaning, the conclusion seems inescapable that just such a transaction occurred here. Id. at 7. The Arbitrator did not cite authority endorsing this reading of the provision. SUPERVALU challenged the Arbitrator’s reliance on § 1392(

c) on the ground that the provision does not apply to a bona fide collective bargaining agreement setting the date of an employer’s withdrawal from a plan. It argued that this is the law even where the parties to the agreement concede that the date was chosen in order to minimize the employer’s withdrawal liability.

The Arbitrator rejected SUPERVALU’s argument, finding that adopting SUPER-VALU’s position would perpetuate the very problems that ERISA and the MPPAA were enacted to correct: SUPERVALU and its employees had the benefit of a full year of participation — including the accrual of a full year’s worth of pension benefits — during which the Fund suffered losses, but by maneuvering, with the Union’s acquiescence, to pull out one day short of year end, [SUPERVALU] attempted to avoid any responsibility for underfunded liabilities associated with that experience.

As a result, the full burden of funding those liabilities would be shifted to those employers who remained — one of the consequences that the MPPAA was specifically intended to prevent. Id. at 12 (footnote omitted). On this basis, the Arbitrator upheld the Fund’s assessment of withdrawal liability. B. Analysis The precise question raised here appears to be one of first impression. The court has not found, and has not been directed to another decision invoking ERISA’s evade or avoid provision to invalidate the terms of a bona fide arms length collective bargaining agreement.

In fact, there are few cases construing § 1392(c)in any context. For the reasons detailed below, the court is nonetheless convinced that the arbitrator erred in disregarding the date of withdrawal specified in the collective bargaining agreement considered here. 1. The Statutory Framework Because this appeal turns on the underlying purpose and the

interpretation of the MPPAA, the court looks first to the broad goals of the Act and the scheme designed to achieve them. ERISA took effect in 1974 to ensure that “if a worker has been promised a defined pension benefit upon retirement — and if he has fulfilled whatever conditions are required to obtain a vested benefit — he actually will receive it.” Nachman Corp. v. Pension Ben. Guar. Corp., 446 U.S. 359, 375, 100 S.Ct. 1723, 64 L.Ed.2d 354 (1980). In the years immediately following its enactment, ERISA’s shortcomings became apparent.

The primary criticism leveled at the Act was its failure to “protect plans from the adverse consequences that resulted when individual employers terminate[d] their participation in, or [withdrew] from multiem-ployer plans.” R.A. Gray, 467 U.S. at 723, 104 S.Ct. 2709. In order to remedy this flaw, Congress amended ERISA by enacting the MPPAA in 1980. The MPPAA changed the strategic considerations for an employer contemplating withdrawal: It transformed what was only a risk (that a withdrawing employer would have to pay a fair share of underfunding) into a certainty.

That is to say, it imposed a withdrawal charge on all employers withdrawing from an underfunded plan whether or not the plan later became insolvent. And, it set forth a detailed set of rules for determining and collecting that charge. Milwaukee Brewery Workers’ Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414, 417, 115 S.Ct. 981, 130 L.Ed.2d 932 (1995). In other words, the MPPAA required that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the abandoned plan. Robbins, 636 F.Supp. at 668.

This debt or withdrawal liability is the proportionate share of the plan’s unfunded vested benefits and is calculated as the difference between the present value of the vested benefits and the current value of the plan’s assets. Id., at 671 n. 41; 29 U.S.C. §§ 1381, 1391. This exposure to a significant financial penalty was intended to reduce the employers’ incentive to leave the plan, and to cushion the financial impact on a plan should a withdrawal occur. R.A. Gray, 467 U.S. at 724, 104 S.Ct. 2709. 2.

Application of the Law Evaluating the facts of this case against the background of the law, the Arbitrator concluded, in effect, that the MPPAA provisions governing withdrawal liability were inadequate to safeguard the financial welfare of the Fund. In an effort to remedy this perceived inadequacy, the Arbitrator ventured beyond the MPPAA into virgin legal territory, ignoring the terms of the parties’ bona fide collective bargaining agreement and conditioning SUPERVA-LU’s right to withdraw on the financial status of the plan. The court is convinced that the Arbitrator’s application of § 1392(

c) to the facts of this case is inconsistent with the Act and contrary to relevant case law. The court draws from a number of sources to support this conclusion. The court turns first to the decision in an arbitration proceeding with markedly similar facts conducted four years after enactment of the MPPAA. In Int'l Typographical Union Negotiated Pension Plan and Ft. Worth Telegram, 5 Empl. Benefits Cases 1193,(Arbit.

March 9, 1984), a collective bargaining agreement between the Fort Worth Star Telegram (“the Star”) and the Fort Worth Typographical Union Local(“ITU”) obligated the Star to contribute to a multi-employer pension plan. During renegotiation of the agreement in August 1981, the Star proposed that it discontinue plan contributions in favor of increasing employee wages. The ITU agreed to this proposal and, knowing that the Star was concerned about the extent of its exposure to withdrawal liability, allowed the Star to set the date of withdrawal.

The Star determined that withdrawing at any point though December 31, 1982, would result in liability totaling $79,376. If, however, it could delay withdrawal into 1983, it would not have liability. This was because the plan did not have unfunded assets at the close of the 1982 plan year. The Star opted to terminate its pension obligation at 12:01 a.m. on January 2,1983. There was no attempt to conceal the fact that the date set was selected in order to minimize its withdrawal liability. The plan sought to compel the Star to pay withdrawal liability as though it had left the pension plan in 1982.

The plan contended, as the Fund does here, that the withdrawal date established in the collective bargaining agreement should be disregarded under § 1392(c). It argued that the Star violated that

section when it “manipulate[d] the date for cessation of its contributions solely for the purpose of evading or avoiding withdrawal liability.” Id. at 1195. The ITU arbitrator rejected this argument in a multi-step analysis, much of which is applicable here. He first observed that the 1983 withdrawal date was an integral part of a bona fide arms length collective bargaining agreement benefiting both parties. Concluding that this was not the type of transaction targeted by § 1392(c), the arbitrator wrote: This

section is totally inapplicable on the facts herein presented. The terms “evade or avoid” have a well understood meaning in the law. They refer to essentially fraudulent transactions ... which are designed to prevent the employer from actually being assessed the true withdrawal liability which it owes under the statute. Id. at 1197. The Star had complied with its statutory obligation, and there was not a reasonable basis for contending otherwise. The court agrees with the ITU arbitrator that § 1392(

e) must be considered in the context of the Act as a whole. The MPPAA does not contain a provision authorizing a plan to select a contributor’s withdrawal date. Instead, “the law is clear that an employer’s withdrawal liability under the MPPAA must be determined by looking at the employer’s collective bargaining agreement.” Parmac, Inc. v. I.A.M. Nat’l Pension Fund Ben. Plan A, 872 F.2d 1069, 1072 (D.C.Cir.1986). Under the terms of the MPPAA, withdrawal liability and the collective bargaining agreement are inextricably linked.

Section 1381 states that “complete withdrawal” from a plan occurs when an employer “permanently ceases to have an obligation to contribute under the plan.” The “obligation to contribute”, is defined as “an obligation to contribute arising under one or more collective bargaining agreements.” 29 U.S.C. § 1392(a)(1). In ITU, as in this case, the arbitrator recognized that the bona fide collective bargaining agreement fixed the end date of the employer’s obligation to contribute to the pension plan.

His observation applies with equal force here: The Plan has not pointed to anything in the National Labor Relations Act, or any other law, which precludes the parties from picking whatever date they wish to determine when the employer’s obligation to contribute to a multi-em-ployer pension plan will cease ... The matter is simply left to the business judgment of the employer, and its ability to obtain agreement from the union with which it negotiates. 5 Empl. Benefits Cases at 1198.

There is no statutory support for the proposition that a fund “is simply ... free to disregard the economic reality of [a] transaction in order to impose a greater withdrawal liability.” Id. The court agrees. The Act as a whole dictates that the collective bargaining agreement between SUPERVALU and the Union be given effect; the date of withdrawal specified in that agreement is controlling. This result is reinforced by the small body of case law which has considered the scope of § 1392(c). In Cuyama- ca Meats, Inc., v.

San Diego and Imperial Counties Butchers’ and Food Employers’ Pension Trust Fund, 827 F.2d 491 (9th Cir.1987), the Court of Appeals held that an employer’s decision to pursue collective bargaining to the point of impasse in order to delay its withdrawal from a pension plan until the next plan year did not transgress § 1392(c). This was the case although the motive for the delay was the reduction of withdrawal liability. Id. at 499.

Explaining this result, the Court of Appeals quoted the section’s legislative history which instructs the arbitrator, the plan sponsor, and the courts to “follow the substance rather than the form” of transactions alleged to run afoul of [§ 1392(c)]. Id. at 449. The legislative history also indicates that § 1392(

c) was drafted in order that: employers not be able to evade or avoid withdrawal liability through changes in identity, form, or control, or through transactions which are less than bona fide and arm’s length. [An employer] will not be able to evade withdrawal liability by going out of business and resuming business under a different identity. 126 Cong. Rec. 23038 (1980)(statement of Rep. Frank Thompson).

According to the Court of Appeals, bona fide arm’s length negotiations which are not deceptive and do not violate or undermine the purposes of the MPPAA do not constitute evasion or avoidance within the meaning of 1392(c). The Arbitrator in this case deemed the decision in ITU irrelevant and rejected the reasoning of the Court of Appeals in Cuya-maca because in those cases, the plan did not have unfunded vested benefits at the time of the employer’s withdrawal. Consequently, the burden on the remaining employers did not change. Although this view is superficially appealing, it does not comport with the Act.

Congress did not address the risk that an employer’s withdrawal would burden the remaining employers by forbidding withdrawal. Nor did it tie the right to withdraw to the financial health of the plan. Instead, Congress chose to reduce that risk by requiring that an employer choosing to withdraw accept specific economic consequences. The Arbitrator’s approach to § 1396(

c) unduly restricts an employer’s ability to make economic decisions, imposing limitations on an employer’s ability to withdraw from a plan that do not appear — even by implication — in the Act. Under the Arbitrator’s reasoning, an employer and a union may agree to time a withdrawal to minimize the employer’s withdrawal liability only if the plan is fully funded at the time of withdrawal. Stated another way, the Arbitrator’s approach forbids an employer and a union from negotiating a withdrawal date in a plan year where the plan has or is predicted to have a shortfall, but was healthy in the prior plan year.

Agreeing to a withdrawal date in a “down” year will trigger the application of § 1392(c), nullifying the collective bargaining agreement, effectively forcing the employer to incur withdrawal liability or remain in the plan. The court does not find any reason to believe that this is what Congress intended. The court’s rejection of the Arbitrator’s reading of § 1392(

c) does not mean that it fails to recognize that SUPERVALU’s decision to favor its own economic interest by withdrawing from the plan on the very last day of the plan year seems, on its face, unfair. As is true of most legislation, however, the Act is not perfect. Admittedly, in some circumstances it is possible for employers and unions to squeeze through statutory loopholes in order to realize an economic advantage at the expense of others. Assuming, arguendo, that this was SUPERVALU’s motive, its acts certainly did not rise above, nor did they fall below what the law requires.

What is unfair, of course, is not always illegal. Although he sought to safeguard the economic well being of all of the employers contributing to a plan, the Arbitrator was not free to do so by adopting rules more stringent than those enacted by Congress. The court is convinced that even where an employer withdraws from a plan with unfunded benefits, the ITU arbitrator’s analysis is more faithful to the Act as a whole.

Accordingly, the court adopts the following portion of that opinion as its holding: [The] MPPAA should be construed similarly to the Internal Revenue Code, under which taxpayers are encouraged to use all legitimate means to minimize their tax liability ... The transaction ... had full economic substance, insofar as the employer’s and employees’ relationship to the Plan [was] concerned. Nothing in the MPPAA requires an employer to pick a withdrawal date to the Plan’s advantage rather than its own. 5 Empl. Benefits Cases at 1196. V.

Conclusion For the foregoing reasons, the court recommends that the Arbitrator’s award be set aside. The Motion for

Summary Judgment filed on behalf of SUPERVALU (Doc. 13) should be granted; SUPERVA-LU’s withdrawal liability should be calculated based on its withdrawal at end of plan year 2002. The motion for

Summary Judgment filed on behalf of the Fund (Doc. 11) seeking confirmation of the Arbitrator’s award fixing SUPERVALU’s withdrawal in plan year 2003 should be denied. In accordance with the Magistrate’s Act, 28 U.S.C. § 636(b)(1)(B), 636(b)(1)(

b) and (c), and Rule 72.1. 4(

B) of the Local Rules for Magistrates, objections to this Report and Recommendation are due by May 2, 2006. Responses to objections are due by May 12, 2006. . The objections not discussed in this order were adequately addressed by the magistrate judge in the Report and Recommendation which is adopted by this court as its opinion. . The Fund criticizes, too, the magistrate judge's treatment of the decision in Dorn’s Transportation, Inc. v. Teamsters Pension Trust Fund of Philadelphia, 787 F.2d 897 (3d Cir.1986). Although the magistrate judge confined his discussion of Dorn’s to a footnote, that note summarized the essence of Dorn's holding: parties do not violate § 1392(

c) when they act in good faith. Beyond that, the court does not find that Dorn’s is particularly helpful to either side. Contrary to the finding of the arbitrator, the decision did not define "good faith.” Furthermore, Dorn’s involved facts dissimilar to those in this case, and, as the parties’ analyses make clear, its "rule” is difficult to articulate outside those facts. Dorn’s does not, in and of itself, dictate the outcome of this decision. . The arbitrator in Flying Tiger, however, discussed Cuyamaca in a footnote, highlighting the court's narrow

interpretation of § 1392(c): "[T]he court rejected a fund’s assertion that the employer's timing of a withdrawal so as to minimize liability [was covered].” 19 E.B.C. at 2847 n. 6. The arbitrator also noted that the court in Cuyamaca read the legislative history to suggest that § 1392(

c) was directed at “ 'essentially fraudulent maneuvers lacking in economic substance.’ ” Id. (quoting 638 F.Supp. at 889-90). . Even assuming that a "plain meaning” could be found, one could argue that when the kind of transaction in issue — here, the collective bargaining agreement — is a transaction contemplated by the statute under which the date for determining withdrawal liability may be established, the completion of the transaction could not be a means under the statute to avoid or evade liability.

See discussion infra concerning the interrelated provisions of the MPPAA, especially the definition of "obligation to contribute.” “[S]tatutory language must always be read in its proper context 'In ascertaining the plain meaning of [a] statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.’ ” McCarthy v. Bronson, 500 U.S. 136, 139, 111 S.Ct. 1737, 114 L.Ed.2d 194 (1991) (quoting K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 100 L.Ed.2d 313 (1988)). .

This is not to say that a hypothetical date of withdrawal would not be precluded in cases involving a fraudulent or sham transaction. As the plaintiff pointed out, using a hypothetical date in that situation would not require ignoring a specific statutory provision, such as § 1383(a). That

section unequivocally establishes the date of withdrawal, eliminating the option of setting a hypothetical date. . ERISA provides that a complete withdrawal occurs if an employer (1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan. 29 U.S.C. § 1383(a). . The parties raised additional issues before the Arbitrator that are not pursued here and will not be discussed. .

In this statement, the Arbitrator seems to say that SUPERVALU accrued withdrawal liability before the actual withdrawal, beginning at the point where the Fund developed unfunded vested benefits. In its decision in Trustees of Teamsters Pension Trust Fund, of Philadelphia and Vicinity v. Federal Express Corp., No. 86-304, 1995 WL 791371, 1995 U.S. Dist. Lexis 1980, at *24 (D.Del. December 27, 1995), the District Court rejected this position, writing: "The

section of MPPAA that defines withdrawal liability ... does not support this reading.” This court agrees.

Section 1381(

a) states: "If an employer withdraws from a multiemployer plan in a corn-píete withdrawal or a partial withdrawal, then the employer is liable to the plan.” (emphasis added). The same

interpretation of this

section was adopted by the Court of Appeals in Godchaux v. Conveying Techniques, Inc., 846 F.2d 306, 310 (5th Cir.1988): Unfunded vested liability does not completely define or determine withdrawal liability. ERISA does not impose withdrawal liability on every employer that belongs to a pension plan that has an unfunded vested liability. Moreover, ERISA calculates withdrawal liability according to when the employer withdraws from the pension plan. (emphasis added). . The Act provides different methods for computing withdrawal liability.

Each method involves allocating the plan’s unfunded vested benefits among the participating employers. Unfunded vested benefits are defined as the actuarial present value of all nonforfeitable benefits under the plan, minus the value of the plan’s assets. 29 U.S.C. §§ 1391; and 1393(a)(1). . This observation is echoed in the case law. "lT]he parties to a [collective bargaining agreement] may freely determine the extent of the employer’s obligation to contribute to a fund, including the exact date of withdrawal." Malden Mills Industries, Inc., v.

ILGWU National Retirement Fund, 766 F.Supp. 1202, 1209 (D.Mass.1991). .

Section 1392(

c) has not been discussed frequently, but where it has been addressed, it has typically been construed narrowly. See Pension Trust Fund of Philadelphia and Vicinity v. Fed. Exp. Corp., No. 80-304, 1995 WL 791371 at *8 n. 3 (D.Del. Dec. 27, 1995). . Courts addressing the application of § 1392(

c) have done so most often where a conveyance of assets to or other dealings with subsidiaries are suggestive of bad faith. See e.g., Sherwin-Williams Co. v. N.Y. State Teamsters Conference Pension, Retirement Fund, 158 F.3d 387 (2d Cir,1998)(stating that weak financial status of subsidiary made avoid or evade motive more likely); Santa Fe Pacific Corp. v. Central States, Southeast and Southwest Areas Pension Fund, 22 F.3d 725, 729 (7th Cir.1994)(finding employer's sale of subsidiary's stock instead of assets suggested intent to avoid or evade liability); Flying Tiger Line v.

Teamsters Pension Trust Fund of Philadelphia, 830 F.2d 1241 (3d Cir.1987)(focusing on whether sale of subsidiary’s stock was sham transaction); Dorn’s Transportation, Inc. v. Teamsters Pension Trust Fund of Philadelphia, 787 F.2d 897 (3d Cir.l986)(finding that sale of motor freight business did not violate § 1392(

c) where, regardless of seller’s motive, buyer continued to make payments to fund; characterizing § 1392 as embodying "good faith” requirement). . Congress underscored the right to withdraw in § 1401(

e) of the Act. This

section authorizes an employer to obtain from the plan sponsor "general information” in order "to compute its withdrawal liability." It also allows the employer to request "an estimate of ... [its] withdrawal liability." This information is available to facilitate the employer's withdrawal decision. Reliable Liquors, Inc. v. Truck Drivers & Helpers Local Union No. 355 Pension Fund, 240 F.Supp.2d 450 (D.Md. 2003). . The level of uncertainty created by the Arbitrator's reasoning is highly problematic.

Is it permissible to set a withdrawal date in a current plan year if it is only likely that a plan will experience a shortfall? How likely must it be? Who will decide? The conundrum can also be framed in terms of identifying the point in the plan year when § 1392(

c) is applicable. The Arbitrator does not explain how it is possible to determine the date before which an employer must withdraw in order to avoid the application of § 1392(c). Is an employer "safe” within the first six months of the year? Is November risky?