The Supreme Court ruled pension funds may apply post-measurement-date actuarial assumptions to withdrawal liability calculations, resolving a circuit split and raising employer exposure.
The Supreme Court ruled May 21 that multiemployer pension funds may use actuarial assumptions adopted after a plan year's measurement date to calculate withdrawal liability, so long as those assumptions rest on data that existed as of that date [1]. The decision resolves a long-standing circuit split over how trustees may apply actuarial methods when determining what a withdrawing employer owes to an underfunded plan [2]. Justice Ketanji Brown Jackson authored the opinion [1].
The case, *M&K Employee Solutions v. Trustees of IAM National Pension Fund*, centered on the method the IAM National Pension Fund used to calculate M&K Employee Solutions' withdrawal liability under the Employee Retirement Income Security Act of 1974 [1]. M&K challenged the fund's use of actuarial assumptions finalized after the statutory measurement date, arguing the timing rendered the calculations impermissible [2]. The dispute reached the Supreme Court after federal circuits had reached conflicting conclusions on whether such post-measurement-date assumptions were authorized under ERISA's withdrawal liability framework [2].
The Court's holding carries immediate practical weight for any employer participating in an underfunded multiemployer plan. By permitting trustees to adopt or formally approve actuarial assumptions after the plan-year close, so long as underlying data predates that close, the ruling gives pension funds broader discretion in selecting the methodology used to price a withdrawal [1]. That discretion translates directly into larger potential liability figures for departing employers, because funds can apply more conservative actuarial assumptions, such as lower discount rates, that increase the present value of unfunded obligations attributed to a withdrawing contributor [1]. Employers in industries with heavily unionized workforces, including manufacturing, trucking, and construction, face the most direct exposure [1].
The ruling also ends practitioner uncertainty that had complicated transactional due diligence and withdrawal planning for years [2]. Counsel advising clients on asset sales, closures, or restructurings that could trigger a complete or partial withdrawal had lacked a uniform national standard for modeling liability estimates [2]. That ambiguity is now resolved in favor of the funds.
No immediate remand appears necessary under the reported terms of the decision [1]. Employer-side advocates are expected to press Congress for statutory modifications to ERISA's withdrawal liability provisions, while pension fund trustees will likely update their actuarial engagement letters to reflect the Court's sanctioned timing framework [1].