The United States Supreme Court has agreed to review Trustees of the IAM National Pension Fund v. M&K Employee Solutions, LLC, a case that could significantly reshape how multiemployer pension plans calculate withdrawal liability under the Multiemployer Pension Plan Amendments Act (MPPAA). The central question is whether ERISA requires plans to use actuarial assumptions in effect at the end of the plan year in which an employer withdraws, or whether plans may adopt new assumptions after year-end based on information available as of the withdrawal date. This issue matters because actuarial assumptions, particularly interest rates, can dramatically alter withdrawal liability amounts, often by millions of dollars.
What Are Actuarial Assumptions and Why Do They Matter?
Actuarial assumptions are estimates used by pension plan actuaries to project future obligations and convert them into present values. These assumptions include interest rates, mortality tables, retirement ages, and expected contribution patterns. They matter because they determine how much an employer owes when leaving a multiemployer pension plan.
The interest rate assumption is especially important. It reflects the expected return on plan investments over time. A lower interest rate assumes slower growth, which increases the present value of future pension obligations and therefore raises withdrawal liability. A higher interest rate assumes faster growth, reducing the liability.
In the M&K case, the IAM Fund adopted a more conservative interest rate after year-end because new information suggested greater risk of employer withdrawals and market volatility. Lowering the interest rate from 7.5 percent to 6.5 percent significantly increased M&K’s liability, illustrating how timing and discretion in setting assumptions can have major financial consequences.
Trustees of the IAM National Pension Fund v. M&K Employee Solutions, LLC
M&K Employee Solutions participated in the IAM National Pension Fund through collective bargaining agreements at three facilities. In late 2017, the Fund’s actuary valued the plan’s unfunded obligations at approximately $448 million using an interest rate of 7.5 percent. In January 2018, after reviewing year-end data and market conditions, the actuary recommended lowering the interest rate to 6.5 percent to reflect a more conservative outlook. This change dramatically increased withdrawal liability for employers leaving the plan.
M&K had already begun withdrawing when two facilities stopped participating in 2017. When M&K fully withdrew in 2018, the Fund calculated its liability using financial data as of December 31, 2017, but applied the new assumptions adopted in January 2018. This resulted in a withdrawal liability bill of over $6 million. The company challenged their bill through arbitration and initially won, with arbitrators ruling that the Fund could not use assumptions created after the December 31, 2017 measurement date.
The District Court for the District of Columbia vacated the arbitration awards, holding that plans may adopt assumptions after year-end as long as they rely on data taken from the date of withdrawal. The D.C. Circuit affirmed, reasoning that requiring assumptions to be fixed before year-end would be impractical because actuaries often need late-year data to make informed decisions. The court also upheld the Fund’s discretion to use lower interest rates to reflect withdrawal risk, noting that ERISA does not require uniformity between funding and withdrawal assumptions.
This ruling allows plans to incorporate late-year experience, such as market downturns or demographic changes, into liability calculations. It also deepened a circuit split, setting the stage for Supreme Court review.
The Circuit Split on Actuarial Assumptions
The Second Circuit in National Retirement Fund v. Metz Culinary Management, Inc., held that withdrawal liability must be calculated using assumptions in effect on the last day of the prior plan year. The court rejected post-year-end changes, emphasizing predictability and preventing manipulation. This approach favors employers by freezing assumptions earlier, reducing uncertainty.
The D.C. Circuit reinforced actuary discretion, allowing plans flexibility to reflect risk factors. The Sixth Circuit rejected blended interest rates that were not based on plan-specific characteristics, signaling that assumptions must align with actual plan experience. Similarly, the Ninth Circuit struck down assumptions that ignored historical data, emphasizing statutory compliance over policy preferences. More recently, the Seventh Circuit in Central States v. Event Media, Inc. and the Sixth Circuit in Ace-Saginaw Paving Co. v. Operating Engineers Local 324 Pension Fund criticized actuaries for implementing policy-driven assumptions rather than those grounded in ERISA requirements. These rulings illustrate the lack of uniformity in timing and methodology for actuarial assumptions, creating uncertainty for over 1,400 multiemployer plans nationwide.
Supreme Court Oral Argument: Judicial Concerns and Emerging Themes
The Supreme Court granted certiorari in May 2025, and briefs have since been filed by both parties, with oral arguments being heard on January 20, 2026. During oral argument, the Justices focused less on formal actuarial standards and more on how ERISA’s statutory language should operate in practice, repeatedly probing whether actuarial assumptions are fixed historical inputs or professional judgments that can be finalized after the measurement date. Several Justices expressed concern that a rigid interpretation freezing assumptions at yearend could require actuaries to rely on incomplete or outdated information, potentially undermining accuracy and plan funding integrity. At the same time, members of the Court questioned the limits of plan discretion, pressing whether allowing postyearend assumption changes could permit plans to increase withdrawal liability after an employer’s withdrawal becomes likely. The questioning reflected an effort to reconcile ERISA’s technical structure with competing policy concerns of predictability for employers and flexibility for actuaries, suggesting the Court is sensitive both to manipulation risk and to the practical realities of actuarial work.
What Happens Next?
The Supreme Court’s decision will shape withdrawal liability calculations nationwide. If the Court affirms the D.C. Circuit, multiemployer plans will continue to have flexibility to adopt assumptions after year end, provided those assumptions are based on information available as of the valuation date. This outcome would strengthen plan solvency and allow actuaries to incorporate late year market and demographic experience. However, it could also increase liabilities for withdrawing employers and leave employers with less certainty about potential exposure.
If the Court reverses and adopts the Second Circuit’s approach, plans will lose the ability to update assumptions after year end. That outcome would provide employers with clearer expectations and greater predictability, but would require many plans to change their internal assumption adoption processes. Plans would need to ensure that any updated assumptions for a plan year are formally adopted before the last day of that year. This would require earlier trustee meetings, revised governance calendars, more rapid data collection, and new procedures for actuaries to prepare assumption recommendations in time for year-end adoption.
Plans may want to begin evaluating their governance practices now so they can adapt quickly once the decision is issued. Implementing clearer procedures for assumption adoption, documenting decision making more thoroughly, and coordinating more closely with actuaries can help mitigate the operational challenges that may arise under either outcome.
In any scenario, the Supreme Court’s decision will have broad effects. It will influence how plans evaluate funding needs, how employers assess potential withdrawal liability, and how actuaries structure their assumption setting processes. Given the financial stakes involved, the ruling will likely become one of the most consequential ERISA decisions for multiemployer plans in recent years.
Takai Gillam is an associate in the Employee Benefits practice of Seyfarth Shaw. He is based in the law firm’s Los Angeles office and can be reached at tgillam@seyfarth.com.
Seong J. Kim is a partner in the Employee Benefits practice of Seyfarth Shaw. He is based in the law firm’s Los Angeles office, and can be reached at sjkim@seyfarth.com.