M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund

    Issues

    Does 29 U.S.C. § 1391 require actuaries of multiemployer pension plans to calculate a withdrawing employer’s liability based on actuarial assumptions made before the last day of the year? 

    Oral argument:
    January 20, 2026
    Court below:
    United States Court of Appeals for the D.C. Circuit

    This case asks the Supreme Court to consider the deadline by which 29 U.S.C. § 1391 requires multiemployer pension plans to calculate the liability an employer would have should they choose to withdraw from that plan. The Employers argue that the plain text of § 1391 supports a bright-line rule that requires multiemployer pension plan actuaries to calculate the unfunded vested benefits, or the plan’s underfunding, as of the end of the year prior to the year a given employer withdraws from the plan. Trustees of the IAM National Pension Fund argue that because § 1391 is silent on the date as of which actuarial assumptions must be calculated, unlike other statutes addressing similar subject matters, that silence is controlling. The Employers further argue that Congress intended the statute to provide employers information about their potential withdrawal liability, which limits the information actuaries can use in determining this liability. The Trustees counter that Congress did not intend for employers to have advanced notice of the assumptions an actuary will use to calculate withdrawal liability, nor is it practical to do so. This case will directly impact how employers make business decisions related to multiemployer pension plans. Additionally, this case raises fairness concerns related to who will bear the risks when employers withdraw from multiemployer pension plans.

    Questions as Framed for the Court by the Parties

    Whether 29 U.S.C. § 1391’s instruction to compute withdrawal liability “as of the end of the plan year” requires the plan to base the computation on the actuarial assumptions most recently adopted before the end of the year, or allows the plan to use different actuarial assumptions that were adopted after, but based on information available as of, the end of the year.

    Facts

    Four employers, M & K Employee Solutions, LLC, Ohio Magnetics, Inc., Phillips Liquidating Trust, and Toyota Logistics Services, Inc. (collectively “the Employers”), withdrew from the IAM National Pension Fund at different times in 2018. The IAM National Pension Fund is a multiemployer pension plan that supplies retirement benefits to employees who are covered by collective bargaining agreements with the International Association of Machinists and Aerospace Workers, an AFL-CIO-affiliated labor union. The IAM National Pension Fund used December 31, 2017, the end of the regular calendar year, as its date to determine withdrawal liability, or the amount of money each company owed for withdrawing from the fund.

    The Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), enacted as part of the Employee Retirement Income Security Act (“ERISA”), established withdrawal liability. Withdrawal liability givesmultiemployer pension funds the financial stability they previously lacked, reducing their risk of insolvency in the event of an employer’s withdrawal and ensuring retirees receive a pension. The MPPAA set rules on how to calculate withdrawal liability and gave the Pension Benefit Guaranty Corporation (“PBGC”) broad authority over the plan. Withdrawal liability, under 29 U.S.C. § 1391, is calculated as the withdrawing employer’s “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.”

    In November 2017, several weeks prior to the December 31 cutoff date for calculating withdrawal liability, the IAM National Pension Fund’s actuary valued the pension fund using a 7.5% interest rate and did not include any charges for future administrative expenses. In January 2018, however, the Trustees of the IAM National Pension Fund (“the Trustees”) approved a new plan in which the actuary lowered the fund’s interest rate to 6.5% and began charging companies for administrative costs. The Trustees went from needing to pay $935 million in promised pensions to over $3 billion. To account for this underfunding,the pension fund more than tripled the employers’ withdrawal liability.

    To challenge the higher withdrawal liabilities, calculated with actuarial assumptions the Trustees adopted after December 31, 2017, the Employers tried to resolve their conflict in arbitration. Four arbitrators ruled in favor of the Employers, finding that the Trustees violated § 1391 by calculating the Employers’ withdrawal liability with actuarial assumptions endorsed after the valuation date, or “the last day of the year before the employer’s withdrawal.” The arbitrators partially relied upon National Retirement Fund v. Metz Culinary Management, Inc., in which the Second Circuit held that pension funds must calculate an employer’s withdrawal liability using the “assumptions their actuaries endorsed as of the valuation date.”  

    The Trustees challenged the four arbitration outcomes in the United States District Court for the District of Columbia. Three actions, in which the Trustees sued Ohio Magnetics, Inc., Phillips Liquidating Trust, and Toyota Logistics Services, Inc., were consolidated into one case. The fourth action, in which the Trustees sued M & K Employee Solutions, LLC, proceeded separately. The Trustees prevailed in both cases, as the district courts found that the arbitrators mistakenly applied the Metz decision. The district courts vacated the arbitrators’ awards, remanding the cases to the arbitrators, and the Trustees appealed.

    The United States Court of Appeals for the D.C. Circuit consolidated the two district court cases and affirmed their decisions. The court of appeals agreed that the plan’s actuary could adopt assumptions to calculate withdrawal liability after the valuation date of December 31, 2017, provided that the information the actuary based the assumptions on was available as of December 31, 2017.

    The Employers petitioned the Supreme Court of the United States for a writ of certiorari, which the Court granted on June 30, 2025. 

    Analysis

    THE BRIGHT-LINE RULE

    The Employers argue that the plain text of 29 U.S.C. § 1391 contemplates a bright-line rule that requires a multiemployer pension plan’s actuary to calculate its unfunded vested benefits, or the plan’s underfunding, as of the end of the year, before the year a given employer withdraws from the plan. The Employers first cite the statutory text of § 1391 to support this bright-line rule. The Employers note that § 1391 enables four ways of calculating withdrawal liability, all of which require totaling “unfunded vested benefits” “as of the end of the plan year preceding the plan year in which the employer withdraws.” The Employers offer illustrations of all four methods of calculating withdrawal liability to support their contention that under all provisions of the statute, the plain text requires this bright-line rule of calculating unfunded vested benefits as of the year before the employer withdraws from the plans. As one example, the Employers sketch out the “‘rolling-5’ method.” This method explicitly ties withdrawal liability to the end of the prior year, which directly aligns with the Employers’ read of § 1391.

    The Employers further contend that the Court expressly recognized this bright-line rule in Milwaukee Brewery Workers’ Pension Plan v. Joseph Schlitz Brewing Co.The Employers highlight that in Milwaukee Brewery, regardless of whether an employer withdrew from the plan on January 1, 1981, or on December 31, 1981, the Court noted that the “as of” date for calculating the unfunded vested benefits of the plan would be December 31, 1980. Then, the Employers argue that this rule requires the underlying actuarial assumptions used to calculate the benefits to coincide with the same day used to calculate the benefits more broadly. Again, the Employers refer to the plain text of the statute for support. The Employers argue that because § 1391 requires knowing the value of both the vested benefits and the value of the plan’s assets on the prior year-end date in addition to the unfunded vested benefits, the complexity in calculating those numbers straightforwardly requires aligning the date in which the actuarial assumptions underlying the unfunded vested benefits are frozen in time with the same date as the rest of the required numbers. The Employers point to the interest-rate assumption as an example. Because changing the date of the interest-rate assumption underlying the unfunded vested benefits can meaningfully alter the total calculated benefits, the Employers argue that the total unfunded vested benefits rely on the interest-rate assumption, which means the assumptions must be tied directly in time to the total amount. Thus,the Employers argue that if the actuarial assumptions were altered after the year-end date, then the total unfunded vested benefits could not be calculated in accordance with the bright-line rule that requires the unfunded vested benefits to be totaled as of the year-end.

    The Trustees directly contest the Employers’ bright-line rule by pointing out that 29 U.S.C. § 1393, rather than § 1391, defines the statutory requirements for actuarial assumptions. The Trustees note that the plain text of § 1393 contains nothing related to the valuation date nor any deadline that mandates when actuarial assumptions must be decided. The Trustees contend that the statute’s silence is intentional because Congress expressly chose to include deadlines in another withdrawal liability-related statute, 29 U.S.C. § 1394, yet chose not to include deadlines in § 1393. The Trustees highlight how the text of § 1393 requires actuaries give their “best estimate of anticipated experience under the plan.” Then, the Trustees argue that if the actuarial assumptions had a deadline imposed by the bright-line rule, this would preclude actuaries from using assumptions that give their “best estimate” of a plan’s anticipated experience and directly contravene the text of the § 1393.

    Next, the Trustees argue that the term “as of” in § 1391 does not mandate the bright-light rule. The Trustees note that § 1391(b) does not contain the words “as of” in the statute at all. Because § 1391(b) instructs the way the unfunded vested benefits were calculated in this case, and since the Employers relied on the words “as of” to justify the bright-line rule, the Trustees argue that the interpretation of “as of” to require the bright-line rule is completely inapplicable to this case. Then, the Trustees highlight that in provisions of § 1391 in which “as of” is used, the phrase only requires that an actuary calculate the unfunded vested benefits as of the valuation date at some point in the future rather than literally doing the work by that date. The Trustees contend that, under this reading of “as of,” actuaries are empowered to calculate the underlying assumptions after the valuation date because the inclusion of “as of” considers that the actuaries will calculate the unfunded vested benefits after the valuation date. The Trustees point to the Actuarial Standards of Practice, which reinforce this reading of “as of.” As a matter of logic, the Trustees further note that the valuation date cannot be calculated before the “as of” date because actuaries need to rely on information “as of” that date. Thus, the Trustees argue that the only possible dates for calculating the underlying actuarial assumptions using information “as of” the valuation date must be after that date.

    INFORMATION USED BY ACTUARIES

    The Employers contend that Congress intentionally barred changing the withdrawal-liability method of calculation after an employer chooses to withdraw from a multiemployer pension plan. The Employers note that, in other sections of the ERISA statute, plans are required to file detailed reports so employers can assess their withdrawal liability.The Employers point to legislative history to suggest that, over the course of the statute’s life, Congress has increased what multiemployer pension plans are required to disclose regarding potential withdrawal liability. The Employers note that this information, which Congress has continually added to since the law’s original passage, would have little to no use if the actuaries could use assumptions that deviate from the valuation date.

    The Employers further argue that the court of appeals’ rule is not supported by the statute’s language. The court of appeals, according to the Employers, allowed underlying assumptions to be “based” on all information as of the valuation date and nothing after that date. However, the Employers assert that this rule, which distinguishes when information becomes available instead of when actuarial assumptions may be set to calculate withdrawal liability, is unsupported by §§ 1391 and 1393 and is impractical. The Employers offer a hypothetical to illustrate the problem with the distinction drawn by the court of appeals. If an actuary were asked after the COVID-19 pandemic to give a valuation of the video-calling software Zoom, the Employers assert that an actuary could not honestly assess Zoom’s value without implicitly factoring in the impact of future events. The Employers suggest that the court of appeals’ rule asks actuaries to do just this.

    The Trustees counter that the required disclosures by plans would still not enable employers to know the full scope of their withdrawal liability. The Trustees contend that the assumptions an actuary uses are never part of the disclosures by plans because they cannot be known until the actuaries select them when the withdrawal liability is calculated. The Trustees address the required disclosures Congress has added since the law was first passed and note that none of these disclosures have bearing on which assumptions the actuaries will use to calculate the unfunded vested benefits. The Trustees add that Congress did not contemplate that employers would have advance notice of which assumptions the actuaries would use to calculate the total unfunded vested benefits. Thus, under the standard that the Employers suggest, the Trustees argue that actuaries would be forced to make decisions based on information that is outdated by a year.

    The Trustees then address the court of appeals’ ruling on what information an actuary can use to calculate withdrawal liability by arguing that it is outside the scope of this Court’s review. Because the Court is being asked to decide only the date on which the statute requires actuaries calculate assumptions instead of “the universe of information” an actuary can use when assessing value on that date, the Trustees contend that the court of appeals’ decision on this matter is unnecessary to examine. Moreover, the Trustees add that circuits are not split on this issue of what information an actuary can use, so it should not be reviewed by the Supreme Court. Finally, the Trustees add that the facts in this case are not currently thorough enough for the Court to answer this question even if it were within the scope of its review.

    Discussion

    PREDICTABILITY

    The U.S. Chamber of Commerce (“the Chamber”), in support of the Employers, argues that employers must be able to estimate their withdrawal liability to make informed decisions with respect to their participation in multiemployer pension plans.  The Chamber contends that the Employer’s proposed bright-line rule would provide future employers with the predictability necessary to estimate their withdrawal liability, allowing them to make informed business decisions, including the decision to withdraw.  If the Supreme Court affirmed the court of appeals’ decision, the Chamber asserts that future employers would be discouraged from joining multiemployer pension plans, weakening the funds’ stability. The HR Policy Association highlights that this concern is not hypothetical; currently, more employers withdraw from, rather than join, multiemployer pension plans.  

    Conversely, the National Coordinating Committee for Multiemployer Plans (“NCCMP”), in support of Trustees, asserts that the Employers’ bright-line rule for actuarial assumptions would create predictable conditions for employers who withdraw from the multiemployer plan while leaving the remaining employers, plan participants, and plan beneficiaries open to greater uncertainty.  The Pension Rights Center (“PRC”), in support of the Trustees, adds that a range of business concerns would result if actuaries estimated withdrawal liability using outdated data since many decisions, including mergers and acquisitions, require withdrawal liability estimates. Contrary to the Chamber’s position, PRC argues that these business concerns would be best addressed by a predictable national rule allowing actuaries to select actuarial assumptions to calculate withdrawal liability after the valuation date with more complete information.  

    RISK ALLOCATION AND FAIRNESS

    The Chamber, in support of the Employers, argues that if employers bear the risk of unpredictable liability, this risk will impair employers’ ability to bargain with employees in good faith during the collective bargaining process. Specifically, the Chamber notes that employers will likely offer lower wages and fewer benefits when bargaining with employees to reserve money for potentially significant pension plan withdrawal fees. The HR Policy Association, in support of the Employers, adds that forcing employers to bear the risk of unpredictable withdrawal liability frustrates the purpose of ERISA, which explicitly intends to continue and maintain pension plans “for the benefit of their participants.” The HR Policy Association notes that unpredictable liability discourages employer participation, making pension plans potentially unsustainable for participants.  

    Further, Professor James Naughton, in support of the Employers, argues that the Employers’ bright-line rule is “essential to preserv[ing] integrity and fairness.” Naughton asserts that a bright-line rule would prevent “post hoc assumption changes,” ensuring that pension plan actuaries do not act manipulatively to force employers to pay more than they expected. Naughton highlights a misalignment of incentives between actuaries and pension funds, noting that actuaries, despite their fiduciary duties, are not “immune from client pressure” and may be pressured to manipulate assumptions to substantially increase withdrawal liability.

    NCCMP, in support of the Trustees, counters that under the Employers’ proposed actuarial calculation system, employers who remain after others withdraw would assume all of the risks of shifting interest rates, market declines, wobbling industries, and a now underfunded pension plan. When employers who withdraw “get a better deal” than employers who choose to remain, NCCMP contends that this creates a fundamentally unfair position for the plan’s remaining participants and beneficiaries.  AARP and the AARP Foundation (collectively “AARP”), in support of the Trustees, add that if actuaries are unable to accurately estimate pension plans’ underfunding because they are using outdated information, retirees will bear the risks. AARP highlights that retirees who rely on pensions to pay for food, housing, and healthcare already face, and will continue to face, reduced monthly benefits when their pension plans are unstable, leaving many retirees economically insecure.

    PRC, in support of the Trustees, further counters that there is no major concern that actuaries will act manipulatively to “oppress withdrawn employers” if they are allowed to calculate withdrawal liability with actuarial assumptions adopted after the valuation date. PRC notes that actuaries are subject to professional standards laid out by the Actuarial Standards of Practice, along with a Code of Professional Conduct. Additionally, PRC highlights that withdrawal liability calculations by actuaries remain subject to judicial review.

    Conclusion

    Authors

    Written by:    Andrew R. Davis and Cameron T. Hines

    Edited by:      Alexandra “Lexie” Kapilian

    Additional Resources