The statute governing the selection and use of actuarial assumptions in the withdrawal-liability context contains no requirement that actuaries use assumptions adopted prior to the measurement date.
A unanimous U.S. Supreme Court ruled that ERISA does not require pension plans to assess withdrawal liability based on actuarial assumptions adopted before the measurement date. ERISA Sections 1391 and 1393 govern the calculation of withdrawal liability, and neither requires that actuarial assumptions be selected on or before the measurement date. The assumptions should “reflect the actuary’s knowledge as of the measurement date.” But the relevant information about the plan’s performance, as it stood on the measurement date, may not become available until after the measurement date. Thus, requiring actuaries to use assumptions selected before the measurement date could prevent them from relying on the most up-to-date data when selecting their assumptions (M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209 (U.S. May 21, 2026)).
Actuarial assumptions. The IAM National Pension Fund (Fund) is multiemployer pension plan (MPP) serving employees who are covered by collective bargaining agreements with the Machinists union. In November 2017, its actuarial firm published the annual valuation of the Fund’s assets and liabilities for the 2016 Plan Year. Using a discount rate of 7.50 percent, the actuary valued the Fund’s unfunded vested benefits...
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