On May 21, 2026, a unanimous Supreme Court in M&K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund resolved a long-running dispute over the timing of actuarial assumptions used to calculate withdrawal liability under the Employee Retirement Income Security Act of 1974 (ERISA). Writing for the Court, Justice Jackson held that ERISA does not require an actuary to lock in withdrawal-liability assumptions as of the statutory measurement date. Instead, assumptions adopted after that date may be applied, provided they remain reasonable and reflect the actuary's best estimate. The decision marks a significant shift in favor of multiemployer pension funds and has immediate implications for contributing employers contemplating an exit from underfunded plans.
The ruling addresses a question that has divided employers and plan trustees for years: whether the assumptions driving withdrawal-liability assessments must be those in effect on the measurement date, or whether actuaries retain flexibility to incorporate later-adopted assumptions. By endorsing the latter view, the Court has given multiemployer funds broader latitude in shaping the inputs that drive liability calculations. Because withdrawal liability is highly sensitive to assumptions regarding investment returns, mortality, and demographic experience, even modest revisions can translate into materially higher assessments against exiting employers.
For contributing employers, the practical consequences are substantial. Employers participating in underfunded multiemployer plans now face heightened exposure when modeling potential withdrawal liability, and the timing of any exit decision becomes more difficult to evaluate with precision. Assumptions that appeared favorable as of a planned measurement date may be displaced by updated assumptions adopted later, so long as those updated assumptions satisfy the reasonableness and best-estimate standard. Dispute strategies must likewise adapt: challenges that rely on the timing of assumption selection are unlikely to succeed, and arbitration efforts may need to focus more squarely on whether the assumptions themselves meet the statutory standard.
Employers should consider revisiting their withdrawal-liability exposure analyses, stress-testing assumption scenarios, and coordinating closely with counsel and independent actuaries before initiating or finalizing a withdrawal. Early engagement may help identify opportunities to manage risk in light of the funds' expanded flexibility.
This alert is provided for general informational purposes only and does not constitute legal advice. Clients should consult counsel for advice tailored to their specific circumstances.