SCOTUS sides with plans over withdrawal liability assumption 

June 1, 2026

The US Supreme Court has ruled that multiemployer defined benefit plans may determine employers’ withdrawal liability using actuarial assumptions adopted after the “measurement date.” The unanimous decision in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund resolved a split among the circuit courts as to whether the plans’ actuaries must set assumptions before the measurement date or may do so afterward based on information available as of that date. The decision should settle at least one contentious aspect of withdrawal liability calculations for multiemployer plans across the country. 

Multiemployer plans are collectively bargained plans in which different employers­­ — generally in the same or a related industry — participate. When employers withdraw from multiemployer pension plans, they must pay a withdrawal liability to avoid unfairly shifting their share of a plan’s underfunding to the employers remaining in the plan. ERISA requires that withdrawal liability be based on the employer’s unfunded vested benefits (UVBs) “as of” the measurement date, which is generally the last day of the plan year before the plan withdraws.

ERISA also requires that actuaries determine UVBs using assumptions “which, in the aggregate, are reasonable … and offer the actuary’s best estimate of anticipated experience under the plan.” Typically, the discount rate is the most significant assumption for this calculation. However, nothing in the statute explicitly discusses when the actuary should actually set the assumptions.

Assumptions “as of” the measurement date. Actuaries typically set assumptions after the measurement date to reflect all relevant information available as of that date. This means that employers withdrawing early in a year might initially receive estimates of their withdrawal liability prepared using the prior year’s assumptions and then revised assessments reflecting the new assumptions and other updated information. This can result in a larger final assessment than the estimate if interest rates drop from one year to the next, because a lower discount rate produces a larger withdrawal liability.

The Supreme Court’s ruling in M & K was limited to a single question: whether a plan can use assumptions adopted after the measurement date based on information available on that date. The case involved four employers disputing the plan’s assessment of withdrawal liability based on assumptions set in 2018 after the December 31, 2017, measurement date. Following arbitration (which found for the employers) and a lawsuit (which found for the plans), the DC Circuit appellate court sided with the plans, ruling that plans may use assumptions adopted after the measurement date considering only information available on or before the measurement date.

This decision created a split among the circuit courts. The Second Circuit Court previously addressed the same question in Nat’l Ret. Fund on Behalf of Legacy Plan of Nat’l Ret. Fund v. Metz Culinary Mgmt., Inc. and held that “[a]bsent any change to the previous plan year’s assumption made by the Measurement Date, the discount rate assumption in place from the previous plan year will roll over automatically.”

In their request to the Supreme Court, the employers argued that the split in the circuit courts would lead to the law being applied differently in different parts of the country — and consequently, employers will no longer be able to make “rational, informed decisions” about their pension plans when negotiating union contracts because they “cannot reliably predict what assumptions would govern their possible withdrawal.”

In a relatively brief opinion, the Supreme Court held that ERISA does not require actuarial assumptions to be selected before the measurement date. The Court said that ERISA’s “as of” language does not set the measurement date as the deadline for selecting assumptions, explaining that actuarial assumptions are not facts of the plan that must be fixed on the measurement date, but are tools used in the calculation of withdrawal liability that takes place after the measurement date. The Court was also persuaded by the lack of any statutory deadline for this purpose, in contrast to the explicit statutory deadline for determining the amortization period for the employer’s withdrawal-liability payments.

The Court further acknowledged that setting assumptions after the measurement date aligns with standard actuarial practice when following the statutory directive to reflect the actuary’s best estimate of anticipated experience under the plan. To interpret the statute “with the minds of the specialists,” the opinion referenced Actuarial Standard of Practice No. 27, which governs the selection of assumptions for pension valuations and says that actuaries should reflect knowledge about the plan as it stood on the measurement date. The opinion further pointed to an American Academy of Actuaries issue brief on selecting assumptions for multiemployer plans, which explains that relevant information as of the measurement date may not become available until after the measurement date.

• M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund (Supreme Court of the United States, May 21, 2026)
• M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund (DC Circuit Court of Appeals, February 9, 2024)
• Nat’l Ret. Fund on Behalf of Legacy Plan of Nat’l Ret. Fund v. Metz Culinary Mgmt., Inc. (Second Circuit Court of Appeals, January 2, 2020)

• Supreme Court will review withdrawal liability assumption setting (September 3, 2025)
• At long last, PBGC proposes withdrawal liability assumption rules (November 14, 2022)