The Employee Retirement Income Security Act (ERISA); Withdrawal from a multiemployer pension fund; Calculation of “withdrawal liability”; 29 USC §§ 1381(b)(1) & 1393(a)(1); Investment return prediction (referred to as the withdrawal interest rate); The best estimate test; Whether defendant-Pension Fund illegally calculated plaintiff’s withdrawal liability; Sofco Erectors, Inc v Trustees of OH Operating Eng’rs Pension Fund; Arbitrator’s choice of remedy; Request for attorney fees & costs under FedRAppP 38 & § 1451(e)

[This appeal was from the ED-MI.] The court held that defendant-Pension Fund’s actuary’s estimate of plaintiff-Ace-Saginaw’s withdrawal liability violated ERISA § 1393(a)(1) because it was not “the actuary’s best estimate of anticipated experience under the plan.” And in an issue of first impression in this circuit, the court held that when recalculating the withdrawal liability on remand, the actuary “may deviate from the assumptions and methods used to calculate minimum funding for the relevant plan year.” Ace sought to partially withdraw from defendant, a multiemployer pension fund. To do so, the Fund’s actuary (F) had to calculate Ace’s “withdrawal liability,” and this required a calculation of the “withdrawal interest rate” (a prediction of the Fund’s investment return). Based on a calculation using a 2.27% withdrawal interest rate, F told Ace it owed $16,386,924, but Ace thought it should owe $6,297,833, using a 7.75% rate. Ace sued over the discrepancy, and the dispute went to arbitration. The arbitrator concluded that the Fund’s 2.27% rate violated § 1393(a)(1) because it was not “the actuary’s best estimate of anticipated experience under the plan.” The arbitrator ordered the Fund to recalculate using a “rate that complies with §1393(a)(1).” The district court agreed and granted Ace summary judgment but denied its request to change the arbitrator’s remedy and instead use its 7.75% rate. On appeal, the court held that the Fund failed to show that its 2.27% rate constituted the actuary’s “best estimate,” and that he was “driven by concerns inappropriate for his actuarial role.” The court noted it is not the actuary’s role to consider “policy issues. Congress made the applicable policy choices when it enacted § 1393.” As to the arbitrator’s choice of remedy, as a matter of first impression, the court affirmed “the district court’s decision to give the Fund another chance to calculate Ace’s withdrawal liability.” It noted that it has “found it reasonable for an actuary to use the same interest rate assumption for calculating minimum funding and withdrawal liability. But it is also permissible for the two assumptions to diverge.” It stated that the discretion to deviate from the assumptions “is limited to differentiating factors that improve the accuracy of the withdrawal liability calculation[.]” Finally, the court denied Ace’s request for attorney fees. Affirmed and remanded.