Court Affirms Segal Blend for Withdrawal Liability

This Update reviews a July 3, 2018 decision by the United States District Court for the District of New Jersey in Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund (the Manhattan Ford decision), a case that addressed the calculation of withdrawal liability using the Segal Blend method. In its opinion, the court granted the pension fund’s motion for summary judgement. In doing so, it upheld the arbitrator’s findings that the use of funding assumptions is not required in calculating withdrawal liability and that Manhattan Ford Lincoln, Inc. failed to demonstrate that the actuary’s selection of the Segal Blend rate for purposes of that calculation was unreasonable. This decision is consistent with every other decision handed down in similar cases except for one since 1980 when withdrawal liability became part of the Employee Retirement Income Security Act (ERISA).