Trustees of the IAM National Pension Fund v. Ohio Magnetics, Inc., No. 23-7028 (D.C. Cir. 2024)
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This case involved the interpretation of two provisions of the Multiemployer Pension Plan Amendments Act (“MPPAA”), part of the Employee Retirement Income Security Act of 1974 (“ERISA”). The appellants, M&K Employee Solutions, LLC and Ohio Magnetics, Inc., were employers that had withdrawn from the IAM National Pension Fund, a multiemployer pension plan (“MPP”). The issues before the United States Court of Appeals for the District of Columbia Circuit were: (1) whether the Fund’s actuary could set actuarial assumptions for calculating the employers' withdrawal liability after the measurement date based on information available as of the measurement date; and (2) for M&K, whether it was entitled to the "free-look" exception which allows an employer to withdraw from a plan within a specified period after joining without incurring withdrawal liability.
On the first issue, the court affirmed the district court's rulings that the actuary could set actuarial assumptions after the measurement date, as long as the assumptions were based on the information available as of that date. The court held that this interpretation aligned with the best estimate of the plan’s anticipated experience as of the measurement date and was consistent with the policy of the MPPAA to protect multiemployer pension plans and their beneficiaries.
On the second issue, the court held that M&K was entitled to the free-look exception. The court found that M&K had partially withdrawn from the Fund during the 2017 plan year, had an obligation of fewer than five years at the time of its partial withdrawal, and therefore met the requirements of the free-look exception.
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