Docket Report: M&K Employee Solutions v. IAM National Pension Fund

Suppose a statute says that how much you owe your employees’ pension plan will be measured “as of” a specific date. After that date, the pension plan updated an assumption, resulting in measured liability that exceeded the initial measurement. The statute also calls on the pension plan to use the “best” actuarial estimate. Is updating an assumption after the statutory measurement date permissible? That is basically what is at issue in M&K Employee Solutions. The district court and DC Circuit held that the pension plan could update its assumption (in this case, lowering the discount rate, which increased the employer’s liability… hence the suit). The DC circuit had an interesting restriction on these updates. The plan could update assumptions so long as “based on the body of knowledge available up to the measurement date.” This suggests that if, say, some event transpired after the measurement date—such as a change in Fed personnel, war, pandemic, etc—that emergent info could not be used. However, they might allow a re-weighting or re-analysis of factors that existed at the time of the measurement date. It is easy to see how this might become a messy factual fight. E.g., did you re-weight existing then-factors based on new information? But that is where the DC Circuit leaves us. The Supreme Court granted cert, and the employer wants the Court to say that the “as of” language freezes facts and analysis on the measurement date. Argument did not seem to go well for the employer, and my human guess is that the Court will affirm the DC Circuit. That said, the bot predicts that the Court will reverse in a reasonably close decision (about 60 percent probability of reversal). We will see.