Yesterday’s decision in M&K Employee Solutions v. Trustees of the IAM National Pension Fund was pretty much exactly what you would have expected given the argument: a brisk rejection of the idea that the Employee Retirement Income Security Act of 1974 obligates actuaries to use out-of-date assumptions when they work on pension plans.
The case involves a multiemployer pension plan, a common arrangement in which a group of employers in a particular industry band together, collectively agreeing to provide specifically defined benefits to all covered employees. A natural question under those arrangements is what happens when one employer decides to leave the group. Under ERISA, the departing employer must make a payment to the plan equal to the employer’s share of any benefits attributable to past work that are unfunded, based on an actuary’s calculation “as of” the “measurement date,” the last day of the year before the employer withdraws.
Because the calculation necessarily is made after the date of the employer’s withdrawal, but “as of” the “measurement date” in the preceding year, the statute contemplates a gap between the state of contributions and obligations that set the departing employer’s responsibility and the date on which the responsibility is calculated. The issue in this case is whether the background economic assumptions – in particular the discount rate of interest that is crucial to the amount of liability – are supposed to be accurate on the date of calculation or based on assumptions the actuary was using during the preceding year (before the employer withdrew). The question often matters a lot. In this case, for example, the departing employer owed more than three times as much under the interest rate that was current on the date the actuary made the calculation as it would have owed under an interest rate set the previous year.
Justice Ketanji Brown Jackson’s brisk opinion for a unanimous court is squarely on the side of accuracy as of the date that the actuary in fact makes the calculation. Jackson’s take on the statute is that the requirement to make the calculation “as of” the measurement date “means two things. First, the hard data about the plan that feeds the … calculation must be fixed on the measurement date. Second, … the actual … calculation can be performed after the measurement date.” For her, “the key question is whether actuarial assumptions [like the proper discount rate] are akin to the facts about the plan that must be fixed on the measurement date, or whether they are a part of the … calculation itself and can therefore be selected after the measurement date.”
Once she has posed that as the question for decision, the case is pretty much over. Jackson explains that “actuarial assumptions … are not factual inputs. Instead, they are predictive judgments about a plan’s anticipated future performance—tools actuaries use to calculate the plan’s [unfunded future obligations].” In practice, she points out, “actuarial assumptions are adopted for the purpose of a particular calculation or measurement; they are not generally ‘in effect’” for some particular time period. In short, “[b]ecause actuarial assumptions are tools used to calculate [unfunded future obligations] rather than hard data about the plan, they cannot be ‘frozen’ on the measurement date.” Thus, Jackson concludes, the statutory “as of” requirement only “sets the reference point for the factual inputs into the … calculation. It has no bearing on when actuaries must select the tools, including assumptions, they use to calculate a plan’s [unfunded future obligations].”
Jackson buttresses her conclusion by pointing out that the statute requires only that the actuary’s assumptions must be “reasonable,” “tak[e] into account the experience of the plan and reasonable expectations,” and “offer the actuary’s best estimate of anticipated [future] experience under the plan.” It did not, though, directly specify that actuaries should select assumptions as of any particular date. For other calculations under the statute, in contrast, Congress did much more to specify the relevant assumptions. Congress’ failure to specify the relevant assumptions here, Jackson “presume[s,] is intentional.”
In the grand scheme of ERISA litigation, I doubt this will be an important decision. The justices needed to decide it because courts in New York were applying a contrary rule, but it seems unlikely to shed light on the general provisions governing plan administration that spark the great bulk of ERISA litigation.
Recommended Citation: Ronald Mann, Justices agree that actuaries can use up-to-date assumptions in assessing costs of leaving a multi-employer pension plan, SCOTUSblog (May. 22, 2026, 10:00 AM), https://www.scotusblog.com/2026/05/justices-agree-that-actuaries-can-use-up-to-date-assumptions-in-assessing-costs-of-leaving-a-mul/
