On May 21, 2026, the US Supreme Court issued a unanimous decision in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209, resolving a circuit split on a question of enormous financial consequence to employers participating in multiemployer pension plans (MPPs): whether a plan’s actuary must adopt its actuarial assumptions for purposes of withdrawal liability calculations on or before the “measurement date” for those calculations, or whether it may instead select assumptions after that date. In an opinion authored by Justice Jackson, the Court held that ERISA does not require actuarial assumptions to be adopted “as of” the measurement date, but stressed that these actuarial assumptions must still reflect the actuary’s “best estimate of anticipated experience under the plan,” which generally requires that the assumptions reflect information about the plan’s conditions as they stood on the measurement date.
Background
Under ERISA and the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), an employer that withdraws from an underfunded MPP must pay “withdrawal liability,” which is its proportionate share of the plan’s unfunded vested benefits (UVBs). The statute requires this liability to be calculated “as of” the last day of the plan year preceding the employer’s withdrawal, or the “measurement date.” Calculating UVBs requires actuarial assumptions about the plan and its future benefit obligations, most notably a discount rate that converts the plan’s future liabilities to present-day dollars. The discount rate dramatically affects the total withdrawal liability figure.
In this case, the IAM National Pension Fund’s actuary had used a 7.50% discount rate through 2017. In January 2018 — after the December 31, 2017, measurement date but before the contributing employers withdrew during 2018 — the actuary adopted a new 6.50% discount rate. That 1% decrease in the discount rate had the effect of increasing the Fund’s assessed UVBs from roughly $500 million to over $3 billion, causing one employer’s individual withdrawal liability assessment to jump from approximately $1.8 million to $6.2 million.
The Court’s Reasoning
The Court rejected the employers’ argument that the statutory phrase requiring withdrawal liability calculations to be conducted “as of” the measurement date establishes a deadline for the selection of actuarial assumptions. Justice Jackson explained that “as of” fixes the factual inputs — for example, the plan’s actual assets and vested benefit obligations on that date — but does not dictate when predictive tools for calculating withdrawal liability, including actuarial assumptions, must be adopted.
The Court stressed, however, that ERISA § 4213 (29 U.S.C. § 1393), the statute governing these actuarial assumptions, requires that withdrawal liability actuarial assumptions be “reasonable,” “tak[e] into account the experience of the plan and reasonable expectations,” and “offer the actuary’s best estimate of anticipated experience under the plan.” This will generally require that the assumptions be based on facts reflecting the plan’s actual conditions as of the measurement date, even if the data and information about those conditions becomes available to the actuary sometime after the measurement date.
Practical Takeaways for Employers Contributing to Multiemployer Pension Plans
Withdrawal liability may be higher — and less predictable — than you expect. Because plans may adopt retroactive actuarial assumptions after the measurement date, an employer contemplating withdrawal cannot simply look at the assumptions in place at the measurement date to estimate its potential exposure. A plan’s actuary could lower the discount rate or change other actuarial assumptions after the measurement date, substantially increasing assessed liability, as happened here.
Arbitration remains your primary remedy. Employers subject to withdrawal liability assessments must challenge the actuarial assumptions underlying those assessments in mandatory arbitration. That includes challenges that the assumptions are not “reasonable” because they do not reflect the actuary’s best estimate of anticipated experience under the plan as of the measurement date. This would also allow employers to challenge assumptions that appear to have been adopted in bad faith or with the goal of improperly manipulating withdrawal liability assessments.
Engage actuarial and legal advisers early. Employers considering withdrawing should work with legal counsel and potentially their own actuaries to understand their potential withdrawal liability, accounting for any potential retroactive changes in the actuarial assumptions underlying the calculations. Understanding how sensitive your exposure is to changes in the applicable discount rate or other actuarial assumptions could inform the timing and strategy of any exit. If you have control over the timing of any withdrawal, you may consider waiting to withdraw until, at a minimum, the plan’s valuation for the prior plan year is complete, which may provide valuable information about the actuarial assumptions that could be in effect “as of” your measurement date. You may be entitled to request copies of the relevant plan valuations and other actuarial reports from the plan.
Monitor plan communications closely. Because assumption changes can occur after year-end, employers should track plan funding notices and other communications that may signal that a plan could revisit its withdrawal liability actuarial assumptions.
This is a significant decision affecting when and how MPPs may calculate and assess withdrawal liability. Employers that contribute to MPPs and are considering withdrawal should consult with experienced ERISA counsel to understand how this ruling may affect their specific circumstances.
The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.
