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Authored by: Taylor A. Franklin
In 1974, Employee Retirement Income Security Act (“ERISA”) was enacted, which provides comprehensive regulation for private pension plans surrounding funding, management, and benefit provision standards.[1] Following the enactment of ERISA, the Multiemployer Pension Plan Amendments Act (“MPPAA”) was passed by Congress and signed into law by the President on September 26, 1980.[2] As part of ERISA, the MPPAA established withdrawal liability giving multiemployer pension funds the financial stability they previously lacked.[3] The Act reduced their risk of insolvency in the event of an employer’s withdrawal ensuring retirees receive a pension.[4] As a result of the MPPAA, if an employer withdraws from a multiemployer plan, it incurs “withdrawal liability” in the form of “a fixed and certain debt to the pension plan” determined by the plan’s actuary.[5] MPPAA provisions provide how to calculate withdrawal liability.[6] Withdrawal liability can be calculated either based on the “proportionate share of the plan’s unfunded vested benefits,” or the amount of the plan’s underfunding, “as of the end of the plan year preceding the plan year in which the employer withdraws” under 29 U.S.C. § 1391.[7]
In M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, at various points throughout 2018, four employers, M & K Employee Solutions, LLC (“M&K”), Ohio Magnetics, Inc., Phillips Liquidating Trust, and Toyota Logistics Services, Inc. (collectively “the Employers”) withdrew from the IAM National Pension Fund (“Fund”).[8] The Fund, a multi-employer pension plan, supplies retirement benefits to employees who are covered by collective bargaining agreements with labor union, International Association of Machinists and Aerospace Workers.[9] At the relevant time period, the Fund used actuary consulting firm, Cheiron to calculate withdrawal liability.[10] For the 2018 Plan Year, Cheiron used December 31, 2017, the end of the regular calendar year to calculate the employees’ withdrawal liability, or the amount of money each company owed for withdrawing from the fund.[11] However, when the Employers received their withdrawal liability, they realized that Cheiron changed various methods and assumptions for calculating withdrawal liability for employers withdrawing during the 2018 Plan Year.[12] After the Employers each received their withdrawal liability from the Fund, they commenced separate arbitration actions to challenge whether their calculations were correct under ERISA and the MPPAA.[13] The arbitrators of each suit found that the Fund’s actuary’s erred in their calculations by using the wrong assumptions.[14] Following these conclusions, the Fund initiated separate lawsuits challenging the arbitration awards in favor of employers regarding their liability for withdrawing from the plan.[15] These actions were consolidated for the appeal.[16]
On appeal, the D.C. Circuit affirmed both district court rulings that the arbitrators erred in finding that actuaries cannot adopt actuary assumptions after the relevant measurement date when calculating withdrawal liability.[17] The D.C. Circuit concluded that actuaries are allowed to use information that becomes available after the withdrawal measurement date, if the resulting assumptions are applied as of the measurement date.[18] However, not all circuits agree. Contrarily, the Second Circuit held that withdrawal-liability interest rate assumptions are locked in as of the last day of the plan year preceding withdrawal and, unless modified by the measurement date, automatically roll over from the prior plan year.[19] The circuit split creates real uncertainty for employers, who may face dramatically different withdrawal liability depending on which court’s rule governs. The amount at stake can be substantial, particularly for larger plans or partial withdrawals.[20]
For M&K, the Fund assessed a withdrawal liability assessment of $6,158,482.[21] While for Ohio Magnetics, Inc., the Fund assessed a withdrawal liability of $447,475.[22] In assessing withdrawal liability for each entity, Cheiron did not base the actuarial assumptions that were in effect in the previous year on December 31, 2017.[23] But instead, the actuary used January 2018 assumptions which reflected a change from the assumptions in effect.[24] The Employers disputed the liability, contending that it was improper for Cheiron to use these new assumptions, which were adopted after the December 31, 2017, measurement date to calculate their withdrawal liability.[25] The dispute over the calculations, with different courts reaching contrary conclusions, raised a question for the Supreme Court: whether actuaries are required to base the computation on the withdrawal liability assumptions based on those most recently adopted before the end of the year, or different “actuarial assumptions that were adopted after, but based on information available as of, the end of the year” under the 29 U.S.C. § 1391’s instruction to compute withdrawal liability “as of the end of the plan year.”[26]
As codified in 29 U.S.C. § 1393(a)(1), an actuary’s “best estimate” must be based on assumptions that are “reasonable” and consider the plan’s experience and reasonable expectations.[27] A “best estimate” requires an actuary to look at the multiemployer actuarial community, and this practice includes the use of expected return interest rates, market observation interest rates, and techniques that blend these interest rates.[28] If the Court rules in favor of the petitioners, employers could face withdrawal liability based on interest rates higher than they planned, but if it rules for the respondents, actuaries would be limited to prior-year assumptions, restricting their discretion.[29] Supporters of the respondent-employers contend that a “bright-line rule is essential to preserv[ing] integrity and fairness.”[30] However, supporters of the petitioner, find that instead a “bright-line rule” will do the opposite because employers who remain after others withdraw would be liable for all shifting interest rates risks, market declines, unstable industries, and an underfunded pension plan.[31] Considering this dilemma, the Supreme Court’s upcoming decision will be closely watched by employers, pension funds, and actuaries, particularly given the Justices’ concerns about confining interest rate assumptions to the previous plan year.[32]
The Trustees of the Fund, as petitioners, presented their arguments before the Supreme Court on January 20, 2026, and now await a final decision that could change MPPAA withdrawal liability in all jurisdictions.[33] At oral argument, the petitioners argued that under the MPPAA, actuaries are allowed to calculate withdrawal liability based on the Fund’s new assumptions based on the current year.[34] Contrarily, the respondents argued that calculating the withdrawal liability “as of” the valuation date requires the actuary to use the Fund’s previous year assumptions.[35] Justices Kavanaugh and Jackson took concern with the respondent’s argument that the MPPAA’s “as of” requirement refers to the use of previous year assumptions.[36] The Justices discussed that the respondent’s argued interpretation fails to consider unforeseeable events and circumstances that may take place during the current year that were not previously considered, like COVID-19.[37] The Justices shared concern with undermining an actuary’s ability to give his or her “best estimate” of liability as required by the MPPAA[38] suggests that a “bright-line” rule may not be likely to come from the Supreme Court’s decision.
[1] U.S. Dep’t of Labor, Employee Retirement Income Security Act (ERISA), https://www.dol.gov/general/topic/retirement/erisa, (last visited Jan. 29, 2026).
[2] Trs. of IAM Nat’l Pension Fund v. M & K Emp. Sols., LLC, 92 F.4th 316, 319 (D.C. Cir. 2024).
[3] Id.
[4] Pension Benefit Guaranty, Establishment of Current Multiemployer Program, Pension Benefit Guaranty Corp,, https://www.pbgc.gov/prac/multiemployer/establishment-of-current-multiemployer-program, (last updated July 26, 2023).
[5] Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725 (1984).
[6] Connolly v. Pension Ben. Guar. Corp., 475 U.S. 211, 211 (1986).
[7] 29 U.S.C. § 1391.
[8] 92 F.4th 316, 321 n.9. (D.C. Cir. 2024).
[9] Id. at 319.
[10] Id. at 318.
[11] Id. at 320.
[12] Id.
[13] Id. at 320-21.
[14] Id.
[15] Id. at 318.
[16] Id. at 321.
[17] Id. at 323; Trs. of Iam Nat’l Pension Fund v. M & K Emp. Sols., LLC, No. 1:21-CV-02152-RCL, 2022 WL 4534998, at *18 (D.D.C. Sept. 28, 2022) (“The presence of an anti-retroactivity provision in the section dealing with plan rules and amendments, and the absence of one in the section dealing with actuarial assumptions, suggests that anti-retroactivity was purposefully omitted in the latter.”); Trs. of IAM Nat’l Pension Fund v. Ohio Magnetics, Inc., 656 F. Supp. 3d 112, 136-37 (D.D.C. 2023) (“In sum, the MPPAA’s text reflects a balance struck by Congress between the competing considerations of actuarial flexibility and fairness to employers, and it is not for this Court to rewrite that legislative balance.”).
[18] Trs. of IAM Nat’l Pension Fund, 92 F.4th at 322-23.
[19] Nat’l Ret. Fund On Behalf of Legacy Plan of Nat’l Ret. Fund v. Metz Culinary Mgmt., Inc., 946 F.3d 146, 152 (2d Cir. 2020).
[20] Trs. of IAM Nat’l Pension Fund, 92 F.4th 316 at 320.
[21] Id.
[22] Id.
[23] Id. at 320-21.
[24] Id.
[25] Id.
[26] M & K Emp. Sols., LLC v. Trs. of the IAM Nat’l Pension Fund, 145 S. Ct. 2871, 2871 (2025).
[27] 29 U.S.C. § 1393(a)(1).
[28] Craig Hanna & Linda K. Stone, Determining Withdrawal Liability for Multiemployer Pension Plans: A Range of Approaches to Actuarial Assumptions, American Academy of Actuaries Apr. 2020, https://www.actuary.org/wp-content/uploads/2020/04/Withdrawal_Liability.pdf
[29] International Foundation of Employment Benefit Plans, Freezing the Frame: Supreme Court Withdrawal Liability Case to Address Timing of Actuarial Assumptions, https://blog.ifebp.org/freezing-the-frame-supreme-court-withdrawal-liability-case-to-address-timing-of-actuarial-assumptions/ (last visited Jan. 29, 2026).
[30] Legal Information Institute, M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, https://www.law.cornell.edu/supct/cert/23-1209 (last visited Jan. 29, 2026).
[31] Id.
[32] Id.
[33] Id.
[34] Transcript of Oral Argument at 5, M & K Emp. Sols., LLC v. Trs. of the IAM Nat’l Pension Fund, 145 S. Ct. 2871 (2025) (No. 23-1209).
[35] Id.
[36] Id. at 20-23.
[37] Id. at 23.
[38] Id. at 20-21.
American Journal of Trial Advocacy 