The Supreme Court ruled 9-0 that ERISA lets pension funds use post-measurement-date actuarial assumptions, a decision that could sharply raise employer exit costs.
The Supreme Court held unanimously on May 21, 2026, that ERISA does not require multiemployer pension plans to use actuarial assumptions adopted before the statutory measurement date when calculating an employer's withdrawal liability [1]. Justice Ketanji Brown Jackson authored the opinion, which resolved a direct conflict between the D.C. Circuit and the Second Circuit over how and when plans may apply actuarial assumptions in withdrawal liability calculations [1]. The ruling means plans may use assumptions set after the date an employer's withdrawal is measured, a shift that can substantially increase the liability an exiting employer owes [2].
The case, *M&K Employee Solutions v. Trustees of IAM National Pension Fund*, arose from a dispute between a staffing company and the pension fund administered by the International Association of Machinists and Aerospace Workers [1]. M&K Employee Solutions challenged the fund's methodology after the fund applied actuarial assumptions adopted following M&K's withdrawal measurement date, rather than those in effect at the time of the triggering event [2]. The central statutory question was whether ERISA's withdrawal liability framework imposes a timing constraint on which actuarial assumptions a plan may use, a question the lower courts had answered in contradictory ways [1].
The Court's answer carried immediate financial stakes. In M&K's own case, the application of the later actuarial assumptions pushed the company's calculated withdrawal liability from $1.8 million to $6.2 million [2]. The decision grants pension funds broad discretion to select assumptions, including discount rates, after the measurement date, provided those assumptions otherwise satisfy ERISA's standards [1]. For employers in or contemplating an exit from any underfunded multiemployer plan, that discretion introduces a variable they cannot fix at the moment of withdrawal [2].
Employers and their benefits counsel will now need to reassess withdrawal liability exposure as a dynamic figure, not one locked at the moment of triggering [2]. Multiemployer plans, many of which carry substantial unfunded obligations, gain a tool that can preserve or expand recovery from departing employers [1]. Legislative attention to ERISA's actuarial assumption framework is possible, though no corrective bill is currently pending before Congress [2]. Employers in industries heavily reliant on multiemployer plans, including construction, transportation, and manufacturing, face the most direct exposure under the new rule [2].
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