Seyfarth Synopsis: Another court has found that actuaries who set discount rates for withdrawal liability purposes that are not based upon their "best estimate of anticipated experience" for investments under the plan-in this case, basing the rate assumption only on estimated returns for 40% of the Plan's assets in low risk fixed income investments-cannot withstand judicial scrutiny.
Yet another multiemployer pension plan's withdrawal liability interest rate assumption has been shot down by the courts, this time by the Federal District Court for the District of Columbia in Employees' Retirement Plan of the National Education Association v. Clark County Education Association, Case No. 20-3443 (RDM), 2023 BL 62912 (D.D.C. Feb. 27, 2023), due to the actuary's failure to adequately justify his decision to use a lower interest rate than that used for funding obligation purposes. This case is worth noting, as it interprets the D.C. Circuit Court's decision in United Mineworkers of America 1974 Pension Plan v. Energy West Mining Co., 39 F.4th 730 (D.C. Cir 2022), which struck down the use of PBGC plan termination rates for withdrawal liability purposes.
For background, the Clark County Education Association ("CCEA") was a contributing employer to the Employees' Retirement Plan of the National Education Association of the United States (the "Plan"), a multiemployer pension plan. CCEA withdrew from the Plan in 2018, and the...
