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Supreme Court Unanimously Upholds Financial Stability in Multiemployer Pension Plans
The decision supports AARP Foundation’s push to protect retirement security for older workers.
Key takeaways
- Employers that leave multiemployer plans must still cover their fair share of funding.
- The decision affirms concerns that underpayment risks weakening plans and retirees’ security
- The Supreme Court’s unanimous decision aligns with AARP Foundation’s position on protecting retired workers.
The key takeaways were created with the assistance of generative AI. An AARP Foundation editor reviewed and refined the content for accuracy and clarity.
In a unanimous, 9-0 decision, the U.S. Supreme Court addressed protections for workers and retirees by clarifying how pension costs may be calculated when employers leave multiemployer pension plans — retirement plans created through a collective bargaining agreement between a labor union and two or more unrelated employers, typically within the same industry (such as construction, trucking or entertainment). In M & W Employee Solutions v. Trustees of the IAM National Pension Fund, the Court ruled that actuaries may use reasonable, up‑to‑date assumptions when calculating a company’s withdrawal liability.
What does that mean in plain terms? When a company exits a pension plan created by a group of employers, it still owes its share of the plan’s funding gap. This ruling says experts can use the best available data — not outdated numbers — to figure out that amount.
That’s exactly what AARP & AARP Foundation argued in their amicus brief. AARP and AARP Foundation said pension math should reflect real-world conditions to keep plans strong and accurate. The brief also warned that allowing companies to underpay when they exit a pension plan could weaken pension systems and put millions of retirees at risk.
The Supreme Court agreed. It found that the law doesn’t force actuaries to stick to old assumptions, as long as their estimates are reasonable and based on what they expect will happen in the future.
For older adults, this is more than a technical win — it’s about protecting the benefits they’ve earned for their hard work. Stronger, better-funded pension plans mean greater security in retirement for millions of older adults.
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