Latest Court Decision Affirms Use of the “Segal Blend” to Calculate Withdrawal Liability

(7/10/18) —  On July 3, 2018, the United States District Court for the District of New Jersey handed down a decision in Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund (the Manhattan Ford decision). That case concerned how withdrawal liability is calculated.

The withdrawing employer had argued that funding assumptions should have been used for the calculation. The actuary used what is commonly referred to as Segal Blend method, which involves two separate liability calculations blended to form the final result. The Segal Blend method more accurately reflects that the withdrawing employer is making a final settlement of obligations and includes a risk premium payment as part of that settlement. An arbitrator found that the use of funding assumptions is not required in calculating withdrawal liability. The court concluded use of the Segal Blend method by the pension fund’s actuary was appropriate. The decision is summarized in Segal Consulting’s July 6, 2018 Update.

“It’s significant that the court granted the pension fund’s motion for summary judgement,” observed David Brenner, Senior Vice President and National Director of Multiemployer Consulting. He added, “That means the judge concluded that there were no triable issues or facts raised by the withdrawing employer.”

Diane Gleave, Senior Vice President and Actuary, noted, “This decision is consistent with every other decision handed down in similar cases except for one: the Southern District of New York Court’s decision in The New York Times Company v. Newspaper and Mail Deliverers’-Publishers’ Pension Fund, which is being appealed.”

To speak with Mr. Brenner or Ms. Gleave about the Manhattan Ford decision or the Segal Blend of calculating withdrawal liability, please contact Erin Burns.

*      *     *

The Segal Group (www.segalgroup.net) is a private, employee-owned consulting firm headquartered in New York and with more than 1,000 employees throughout the U.S. and Canada. Members of The Segal Group include Segal Consulting, Sibson Consulting, Segal Select Insurance Services, Inc. and Segal Marco Advisors.

Share this page

Media Inquiries

To arrange interviews with experts, discuss story ideas or trend issues, please contact:

Erin Burns
VP, Public Relations
Contact Erin