Supreme Court Allows Post-Date ERISA Assumptions, Lifting Liability in 1 Case to $6.2 Million
Updated
Updated · Jackson Lewis · May 26
Supreme Court Allows Post-Date ERISA Assumptions, Lifting Liability in 1 Case to $6.2 Million
3 articles · Updated · Jackson Lewis · May 26
Summary
M & K Employee Solutions lets multiemployer pension plans use actuarial assumptions chosen after the ERISA measurement date when calculating employers’ withdrawal liability.
The court said those assumptions are forward-looking “predictive judgments,” not fixed historical data, and ERISA sets no deadline requiring them to be adopted before the measurement date.
In the IAM National Pension Fund dispute, lowering the withdrawal-liability interest rate to 6.5% from 7.5% helped drive unfunded vested benefits to $3 billion from $500 million, with one employer’s bill rising to $6.2 million from $1.8 million.
The ruling resolves a split between the D.C. and Second Circuits but is narrow: employers still can challenge the reasonableness of assumptions in arbitration, including the key interest-rate assumption.