What Employers Need to Know About Pension Fund Withdrawal Liability After M & K Employee Solutions v. Trustees of the IAM National Pension Fund

On May 21, 2026, the U.S. Supreme Court held that when an employer withdraws from an underfunded multiemployer pension fund, the fund’s actuary is not required to use assumptions that were already in place on the “measurement date” (i.e., the last day of the fund’s year preceding the employer’s withdrawal). The measurement date fixes facts, but not the actuary’s assumptions. The actuary may select assumptions after the measurement date, so long as the assumptions are based on information “as of” the measurement date. For example, if the fund’s measurement date is December 31, 2025, the actuary may set their actuarial assumptions on March 1, 2026, retroactive to December 31, 2025, provided those assumptions are based on information “as of” December 31, 2025. 

What Is Withdrawal Liability?

If an employer stops contributing to an underfunded multiemployer pension fund, ERISA requires the employer to pay its share of the fund’s unfunded vested benefits (UVBs)—the present value of the fund’s nonforfeitable liabilities less the value of its assets—after application of certain statutorily required reductions. This allocation of adjusted UVBs is called withdrawal liability. The amount is determined as of the last day of the fund year before the withdrawal (the measurement date). 

The calculation is heavily affected by actuarial assumptions, especially the discount rate, which is the interest rate used to determine the present value of the fund’s nonforfeitable benefits (i.e., how much money is needed today to pay vested pension benefits owed in the future). A lower discount rate increases the present value of nonforfeitable benefits, and therefore the UVBs, which significantly increases withdrawal liability. Conversely, a higher discount rate reduces the present value of nonforfeitable benefits and therefore reduces the UVBs. 

What Happened?

M & K involved four employers that withdrew from the IAM National Pension Fund in 2018. Their withdrawal liability had to be measured “as of” December 31, 2017. Before then, the fund’s actuary had been using a 7.50% discount rate. In January 2018, however, the actuary adopted a lower 6.50% discount rate for withdrawal liability purposes. Using that lower rate caused the UVBs to increase sharply and raised the employers’ withdrawal liability by millions of dollars. For one employer, the liability rose from about $1.8 million to about $6.2 million. 

The employers challenged the assessments in arbitration and initially won. The arbitrators said the fund had to use the assumptions that were “in effect” on the measurement date. But the district courts and the D.C. Circuit—creating a circuit split with the Second Circuit’s decision in National Retirement Fund on Behalf of Legacy Plan of National Retirement Fund v. Metz Culinary Management, Inc., 946 F.3d 146 (2d Cir. 2020)—ruled against the employers. The Supreme Court granted certiorari and ultimately sided with the fund on appeal. 

What Did the Supreme Court Decide?

The Supreme Court said ERISA’s requirement that withdrawal liability be calculated “as of” the measurement date does not mean actuarial assumptions must be fixed as of the measurement date. The Supreme Court explained that the measurement date fixes the facts about the fund—such as assets and participant data—but actuarial assumptions are not facts. The assumptions are predictive judgments or tools used by actuaries to calculate withdrawal liability, not historical facts that are “in effect” on a particular day.

The Supreme Court also pointed to ERISA section 1393, which governs actuarial assumptions. That section says assumptions must be reasonable, must take account of the fund’s experience and reasonable expectations, and must reflect the actuary’s best estimate of anticipated experience. But the statute does not require the assumptions to be selected on or before the measurement date. The Supreme Court refused to read a timing rule into the law when Congress did not put one there. 

Why This Matters to Employers

M & K forecloses an employer’s argument that a withdrawal liability assessment is invalid simply because the fund used assumptions adopted after the measurement date. Instead, a fund’s actuary can update their assumptions after the measurement date, so long as the assumptions are based on facts “as of” the measurement date. 

M & K, however, is not a windfall for funds. The Supreme Court did not say that pension funds can use any assumptions they want. Employers may still challenge whether the assumptions are reasonable and whether they are truly based on the characteristics of the plan representing the actuary’s best estimate of anticipated future experience as required by ERISA. In other words, the fight returns to the pre-Metz landscape where the real issue is whether an actuary’s assumptions are substantively justified by the fund’s history and future expectations. The litigants in M & K themselves still have the ability to challenge the fund’s substantive decision to use a 6.5% discount rate while still assuming the fund will earn 7.5% on its investments into the future.

Practical Takeaways for Employers

1. Expect more volatility in withdrawal liability estimates. Even a small change in actuarial assumptions—especially the discount rate—can cause a very large change in the amount owed. Employers should not assume that the assumptions used in one valuation will be the same assumptions used if they later withdraw. However, this does not necessarily change the landscape significantly, as post-Metz, funds simply needed to, and did, adopt assumptions on the last day of the plan year. Thus, post-Metz, employers still might not have had guarantees that the assumptions would not change. Now, however, a fund’s actuary can change his or her assumptions after the end of the plan year. 
2. Model withdrawal exposure early. As always has been the case, if a business is considering restructuring, selling operations, closing a facility, replacing a multiemployer pension fund with another retirement vehicle, or changing union relationships, withdrawal liability should be evaluated early in the process. Waiting until after a withdrawal event to address withdrawal liability can leave an employer facing an unexpectedly large bill. 
3. Focus on the substance of the assumptions. After M & K, employers may still challenge whether the actuarial assumptions are reasonable and properly supported based on the fund’s characteristics including historical performance and future expectations. 
4. Keep monitoring pension fund exposure. Employers contributing to a multiemployer pension fund should regularly request or develop updated withdrawal liability estimates and monitor contribution obligations, funding levels, and union contract changes. Because the statute permits funds to provide withdrawal liability estimates that are stale, even before the M & K decision, the recommended practice is for employers to develop their own estimates. This was recommended even before M & K.

Bottom Line

The Supreme Court’s decision in M & K gives multiemployer pension funds’ actuaries more time to set assumptions for purposes of calculating an employer’s withdrawal liability. Employers should not rely on stale withdrawal liability estimates and should be aware that funds may use later-adopted actuarial assumptions, including assumptions that can increase the liability significantly. At the same time, employers still have room to challenge whether those assumptions are reasonable and supported under ERISA.