Controversial Pension Liability Method Rejected by Appeals Court

Sept. 28, 2021, 4:59 PM

A common but controversial method for calculating pension withdrawal liability hit a speed bump on Tuesday, when the Sixth Circuit became the first federal appeals court to issue a major ruling rejecting a pension fund’s use of the “Segal Blend.”

The Trustees of the Ohio Operating Engineers Pension Fund’s reliance on the Segal Blend in the course of assessing more than $800,000 in withdrawal liability against Sofco Erectors Inc. violates the Employee Retirement Income Security Act, because the statute requires that the interest rate used for withdrawal liability calculations be based on the “anticipated experience under the plan,” the U.S. ...

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