Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—U.S.: Withdrawal liability assessment may arise from actuarial assumptions adopted after measurement date, (May 21, 2026)

By Ronald Miller, J.D.

The statute governing the selection and use of actuarial assumptions in the withdrawal-liabil­ity context contains no requirement that actuaries use as­sumptions adopted prior to the measurement date.

A unanimous U.S. Supreme Court ruled that ERISA does not require pension plans to assess with­drawal liability based on actuarial assumptions adopted be­fore the measurement date. ERISA Sections 1391 and 1393 govern the calculation of with­drawal liability, and neither requires that actuarial assumptions be selected on or before the measure­ment date. The assumptions should “reflect the actuary’s knowledge as of the measurement date.” But the relevant information about the plan’s performance, as it stood on the measurement date, may not become available until after the measure­ment date. Thus, requiring actuaries to use assumptions se­lected before the measurement date could prevent them from relying on the most up-to-date data when select­ing their assumptions (M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209 (U.S. May 21, 2026)).

Actuarial assumptions. The IAM National Pension Fund (Fund) is multiemployer pension plan (MPP) serv­ing employees who are covered by collective bargaining agreements with the Machin­ists union. In November 2017, its actuar­ial firm published the annual valuation of the Fund’s assets and liabilities for the 2016 Plan Year. Using a discount rate of 7.50 percent, the actuary valued the Fund’s unfunded vested benefits (UVBs) at close to $500 million.

Two months later, on January 24, 2018, actuary met with the Fund’s trustees to discuss the actuarial assumptions it would use to calculate withdrawal liability for employers who withdrew in 2018. They settled on a discount rate of 6.50 percent. The actuary published its actuarial valuation for Plan Year 2017 on April 17, 2019. Using the 6.50 percent discount rate, it valued the Fund’s UVBs at just over $3 billion—six times the prior year’s figure.

With­drawal liability. Petitioners are four employers who used to contribute to the Fund. Each withdrew from the Fund between April and December 2018. Pursuant to Section 1391, the Fund assessed each employer’s withdrawal liability “as of ” December 31, 2017 (the last day of the plan year preceding the year in which they withdrew). The Fund applied the 6.50 percent discount rate adopted in January 2018 to calculate their with­drawal liability. Using the 6.50 percent discount rate dramatically increased the petitioners’ withdrawal liability.

The petitioners initiated separate arbitrations to challenge their withdrawal-liability assessments. Each of the arbitrators determined that the assessment was er­roneous because the Fund had applied actuarial assump­tions adopted after December 31, 2017.

The Fund sought review of the arbitral awards in federal district court. The district courts disagreed with the arbitrators, holding that actuaries could use assumptions adopted after the meas­urement date to calculate withdrawal liability. In a consolidated appeal, the D.C. Circuit affirmed. The appeals court held that actuaries could adopt assumptions after the measurement date as long as the assumptions were “based on the body of knowledge available up to the measurement date.”

The D.C. Circuit’s decision conflicted with a decision of the Second Circuit, which held that MPPs must adopt their interest rate assumptions for withdrawal-liability purposes on or before the measurement date, National Retirement Fund v. Metz Culinary Mgmt., Inc., 946 F. 3d 146, 152 (2020). The Supreme Court granted certiorari to resolve this split over when actuarial assumptions may be selected for purposes of cal­culating withdrawal liability.

By statute, an em­ployer’s withdrawal liability is based on the value of the plan’s unfunded vested benefits “as of ” the last day of the plan year preceding the employer’s withdrawal, also known as the measurement date. The question presented in this case is whether the “as of ” language sets the measurement date as the deadline by which actuaries must select the assumptions that underlie the withdrawal-liability calculation.

The D.C. Circuit held that it does not, concluding that actuaries may select their assumptions after the measure­ment date. A unanimous U.S. Supreme Court, in an opinion by Justice Jackson, noted that the statute governing the selection and use of actuarial assumptions in the withdrawal-liabil­ity context contains no requirement that actuaries use as­sumptions adopted prior to the measurement date.

Measurement date. The Supreme Court held that withdrawal liability can be calculated based on actu­arial assumptions adopted after the measurement date.

ERISA requirements. Two sections of ERISA govern the calculation of with­drawal liability: Sections 1391 and 1393. Neither requires that actuarial assumptions be selected on or before the measure­ment date.

ERISA Section 1391. Section 1391 lays out the various methods that plans can use to calculate withdrawal liability. It does not mention actuarial assumptions at all. Section 1391’s use of “as of” means two things. First, the hard data about the plan that feeds the UVB calculation must be fixed on the measurement date. Second, the actual UVB calculation can be performed after the measurement date.

Actuarial as­sumptions are adopted for the purpose of a particular cal­culation or measurement; they are not generally “in effect.” Be­cause actuarial assumptions are tools used to calculate UVBs rather than hard data about the plan, they cannot be “frozen” on the measurement date. Section 1391’s “as of ” requirement thus has no bearing on when actu­aries must select the tools, including assumptions, they use to calculate a plan’s UVBs.

Section 1393. ERISA Section 1393, which governs the use of actuarial assumptions for assessing withdrawal liability, confirms that the measurement date is not a deadline by which actuaries must select their assumptions. The statute merely says that the actuary’s assumptions must be “reasonable,” must “tak[e] into account the experience of the plan and reason­able expectations,” and must “offer the actuary’s best esti­mate of anticipated experience under the plan.” It does not provide a deadline at all.

Moreover, Section 1393’s instruction that actuarial assumptions reflect the actuary’s “best estimate of anticipated experi­ence under the plan,” § 1393(a)(1), supports the conclusion that actuaries can select their assumptions after the meas­urement date. Thus, the assumptions should “reflect the actuary’s knowledge as of the measurement date.” But the relevant information about the plan’s performance or macroeconomic conditions, as it stood on the measurement date, may not become available until after the measure­ment date. Requiring actuaries to use assumptions se­lected before the measurement date could therefore prevent them from relying on the most up-to-date data when select­ing their assumptions.

Accordingly, the Supreme Court ruled that ERISA does not require pension plans to assess withdrawal liability based on actuarial assumptions adopted be­fore the measurement date. The judgment of the D.C. Circuit was affirmed.

The case is No. 23-1209.

Judge: Jackson, K.

Attorneys: Michael Edward Kenneally, Jr. (Morgan, Lewis & Bockius) for M & K Employee Solutions, LLC. John Edward Roberts (Proskauer Rose) for Trustees of the IAM National Pension Fund.

Companies: M & K Employee Solutions, LLC; Trustees of the IAM National Pension Fund

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