By Jill E. Hall and Conner Childs
In a unanimous opinion, the U.S. Supreme Court has resolved a circuit split, holding that actuarial assumptions—predictions of a Multiemployer Pension Plan’s (MPP) future performance—need not be locked in as of the measurement date in withdrawal liability calculations made pursuant to the Employee Retirement Income Security Act of 1974 (ERISA). The Court’s decision in M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund requires proactive planning for employers considering a withdrawal from a MPP.
Withdrawal Liability
A multiemployer plan is a single “pool” of assets available to pay benefits to the qualifying employees of multiple employers participating in the plan. When employers withdraw from such a fund by, for example, ceasing business operations or ceasing to use union workers, the plan as a whole can become underfunded for remaining employers and participants. This led Congress to enact the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), which added a provision to ERISA establishing withdrawal liability, an immediate liability that a withdrawing employer owes to the plan upon a withdrawal event. The withdrawal liability is the employer’s share of the plan’s unfunded vested benefits (“UVBs”). ERISA establishes the amount of withdrawal liability owed by a withdrawing employer and leaves the determination and collection of the liability to trustees of the plan, which requires an assessment of hard data and actuarial assumptions. Notably, ERISA requires withdrawal liability to be calculated based on the UVBs “as of” the measurement date. The measurement date is statutorily defined as the last day of the year preceding the employer’s withdrawal. In practice, the measurement date serves as a guidepost for employers to gauge their potential withdrawal liability. While hard data, like the value of assets, is set at the measurement date, the question of whether actuarial assumptions are likewise statutorily frozen in time remained unclear following a circuit split. The United States Supreme Court recently resolved that split.
M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund
On May 21, 2026, the Supreme Court ruled that actuarial assumptions—tools used to predict an MPP’s future performance—need not be set before the measurement date when determining withdrawal liability for employers exiting the MPP.
The Court assessed a consolidated challenge lodged by four employers who withdrew from the IAM National Pension Fund. The employers challenged the assessment of their withdrawal liability on the basis that the MPP utilized actuarial assumptions that were set after the measurement date. Agreeing that UVB calculations based on actuarial assumptions made after the measurement date are valid, Justice Jackson explained that no part of ERISA mandates actuarial assumptions to be set before the measurement date in calculating withdrawal liability. This holding rests primarily on two points. First, the plain text of ERISA provides no deadline to be applied to actuarial assumptions, and the Court was reluctant to read one into the statute’s text. Secondly, the Court characterized actuarial assumptions—predictions of future performance of the MPP made by actuaries—as tools rather than hard data. The Court reasoned that ERISA “froze” the latter at the measurement date, whereas actuarial assumptions were not bound by a similar limitation. The Court thus held that withdrawing employers generally cannot argue that assumptions are invalid solely because they were adopted after the measurement date. The actuary may select assumptions after the measurement date so long as the assumptions are based on information “as of” the measurement date.
Why this matters?
The Court made clear that, although employers cannot argue that a withdrawal liability calculation is invalid simply because assumptions adopted after the measurement date were used, they are free to challenge the substance of actuarial assumptions, and such assumptions are still held to the same reasonableness standard that applied prior to the decision.
Withdrawal liability predictions, however, are less certain in light of the SCOTUS ruling, as it may prove more difficult for withdrawing employers to predict what assumptions will be used from valuation to valuation. Assessing withdrawal liability early on, then, will be more important than ever.
To read the full Supreme Court opinion, click here.
To keep up to date with this and other developments, please contact a member of Jackson Kelly Labor and Employment team.