Supreme Court clarifies timing of withdrawal liability assumptions

A recent U.S. Supreme Court decision provides important guidance for multiemployer pension plan trustees, employers and advisors regarding how withdrawal liability is calculated under ERISA. The ruling addresses a long-debated issue: when actuarial assumptions must be selected for purposes of determining an employer’s withdrawal liability.

In M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, issued May 21, 2026, the Court unanimously held that ERISA does not require actuarial assumptions to be selected on or before the plan’s measurement date. Instead, the measurement date establishes the relevant factual information — such as participant and plan data — while the actuary may select assumptions afterward.

This decision reinforces the role of professional actuarial judgment in withdrawal liability determinations and provides greater clarity around the administration of these calculations.

Why the decision matters

Withdrawal liability is intended to ensure that employers exiting a multiemployer pension plan pay their share of the plan’s unfunded vested benefits. Because actuarial assumptions directly affect the value of those liabilities, even relatively small changes can have a significant financial impact.

One of the most important assumptions is the discount rate used to value future benefit obligations. Lower discount rates generally increase unfunded vested benefit liabilities, which can in turn increase the withdrawal liability assessed to an employer.

The Court’s ruling confirms that these assumptions do not need to be locked in by the measurement date itself, giving actuaries flexibility to apply assumption changes after the measurement date.

Implications for trustees and employers

Employers considering withdrawing from a plan should recognize that withdrawal liability calculations may reflect assumptions selected after the measurement date, creating uncertainty and potentially influencing financial exposure.

For trustees, the ruling reduces uncertainty created by conflicting lower court decisions and reinforces the importance of maintaining consistent and well-documented actuarial processes.

Safeguards against manipulation

The Court acknowledged concerns that plans could attempt to retroactively select assumptions designed to increase withdrawal liability. However, it emphasized that ERISA already contains safeguards against that outcome.

Actuarial assumptions must still be reasonable and represent the actuary’s best estimate. In addition, employers retain the ability to challenge withdrawal liability calculations through arbitration if they believe assumptions were improperly selected or applied.

Questions remain

While the decision resolved the primary timing issue, the Court stopped short of definitively answering whether actuarial assumptions must rely exclusively on information available as of the measurement date. That question may continue to be addressed in future litigation.

The Court also recognized that the Actuarial Standards of Practice may help courts interpret statutory requirements for actuaries.

Takeaway for trustees

This decision provides helpful clarity for multiemployer pension plans navigating withdrawal liability calculations. Trustees should work closely with plan actuaries and counsel to ensure assumptions are appropriately documented, consistently applied and aligned with actuarial standards of practice.

As withdrawal liability disputes continue to evolve, maintaining strong governance and communication practices will remain critical for protecting plan funding and managing employer expectations.

At Rael & Letson our consultants and actuaries continue to closely monitor legal and regulatory developments affecting multiemployer plans, including evolving guidance on withdrawal liability and actuarial standards. We work with trustees to help evaluate the practical implications of these changes, support sound fiduciary decision-making and provide clear, strategic guidance in an increasingly complex environment. Contact us for more information.