the next case on the calendar is national retirement fund the mets colon area management may please the court yacov roth representing mit scullery management your honour's to calculate withdraw liability a plan actuary has to assess the sufficiency of the plan's current assets to pay benefits that will be owed by the plan in the future ten twenty thirty years in the future and so a key actuarial assumption the one that actually makes the most difference to the end result is the time value of money what is the interest rate or discount rate that we're going to use to translate these present values into future values or vice versa this fund for many years through two thousand and thirteen through its actuaries at a firm called bach used the norm approach to answering that question which is they looked at the anticipated investment experience of the plan over the long term and that's what they used to discount the benefits to the present value and that makes perfect sense because if the plan expects that one hundred dollars in its assets today will be worth one hundred fifty dollars in ten years as a result of growth through investment then an obligation to pay one hundred fifty dollars in pension benefits in ten years should be valued at one hundred dollars today and that's what buck did and they did that not only for withdrawal he question here is whether you whether the fund can set the interest assumption  after the measurement the question is is what is the assumption which assumptions apply to the calculation of the argument much that the fine couldn't make that calculation the rate doesn't become the rate by inertia it actually has to be set so the dish but aren't those legal questions subject to do you know that's really want to ask ok yeah there's a legal question and there's a factual question the legal question is which day do you look to to determine which assumptions to apply and then the factual question is what were the assumptions that were in place on that date so i think there's both pieces to it here what i  place the plans approach that was in place in two thousand and thirteen is the approach that has to be used to calculate the unfunded vested benefits for purposes of meths is withdrawal and i think it's dutchman doesn't have any qualifications and says the interest rate assumption we use we use for fun minimum funding purposes which is this other set of rules under us up for withdraw liability for various other purposes is seven and a quarter percent now it's true that calculations that buck did within the two thousand and thirteen year would have been done as of two thousand and twelve but that doesn't change the fact that buck's approach was we look to the investment return assumption when we're trying to present value the benefits the future benefits and that approach was in place throughout two thousand and thirteen and it was not changed until horizon this new firm that took over for tw fourteen said essentially as a policy matter we were going to do something different something that is quite novel actually in that in this field which is we don't care what the plan is going to earn on its on its investments know we agree they're going to earn seven and a quarter percent per year on average over the long term we don't care we're going to peg this arbitration though right this is well i do i think i think that's right there is and i think it's important for the court to understand there is also this separate reasonable and the best estimate of anticipated experience under the plan this doesn't even purport to be anticipated experience under the plan and you can look at the memo that horizon wrote when it made this change has nothing to do with anticipated experience the anticipate experience remains seven a quarter percent growth what they said was we're going to use this essentially risk free three percent rate instead because we want to target employers from withdrawing in terms of what it is statute so far as i can tell is silent as to when the assumptions and you have to go backwards to the measurement date but it's silent as to when the assumptions and methods must be set for that the proceeding yeah i  think the legal question is what does it mean to do the calculation as of the measurement date right so the statute does say that i think everyone agrees the calculate the measurement has to be done as of the last day of the prior planning here and our position is just ok if you're looking at the last day of the play or prior planning or you want to look at the sort of the facts the state of the world as it stood at that time and the assumptions that the information with respect to the state of the world as of that day doesn't become avail later i agree with that your honor and so it makes sense that you would look at it later i agree with that and i don't disagree i don't disagree with that you're on you're looking back to trying to put yourself in the position you were in at that time and it may be that things happened at the end of the year that you have to incorporate because you're trying to figure out what was really that the what were really the facts as of that date but with respect to this actuarial sumption first of all there was no change and we know that because the fifty five hundred that was filed was filed in november of two thousand and fourteen many months after the end of the plan year and the actuaries didn't say well the rate was seven and a quarter until december first and then something happened and so we changed it they said it's seven and a quarter percent for the entire year and so there's no issue here that this report was sort of focused on what would happen if there were some development at the end of the year that would require revisiting the assumptions but there was no such development here in the fifty five hundred makes that very clear that's page one ninety four of the appendix again this is filed after the fact it's looking back on it saying for the entirety of the plan a year seven and a quarter percent is our approach and it wasn't until many months later when horizon said ok we're starting in two thousand and fourteen we are the plan actuaries we want to do things differently and that may be fine it's actually not fine for the reason i said earlier but assuming that that's fine if that has to be applied prospect of le to withdrawals that occur in the something plan here and to read the statute any other way yes to follow up on judge livingston's question from earlier when was the the rates i mean had sat the rate for the calculation that applied here that is met as withdrawal well what buck did was buck said for two thousand thirteen we are the plan actuaries and this is our approach our approach is we want to figure out how much the plan is going to earn on its investments and we're going to use that withdraws in may of two thousand and fourteen right in the actuarial valuation that they published and then they re upsetting in november two thousand and thirteen what the rate will be as of december thirty one two thousand well let me add and then they reaffirmed in the fifty five hundred which was filed in november two thousand and fourteen that this extended through the entirety of the plan year so what they were dozens and there they're setting it in late two thousand and fourteen as well we'll know because they were saying that as of two thousand and thirteen in other words for the and thirteen nothing changed nothing happened that would cause us to change this is something that had been in place for many years and so i think it's important that the these two filings by bach book and the measurement date right we have november two thousand and thirteen the actor evaluation says this is our approach at seven a quarter and then we have november two thousand and fourteen when they're publishing the this official filing that sets forth the plan assumptions and they say you know it's it was seven a quarter for the entirety of the plan or so there's no argument that anything changed before the measurement date and as a result if we're looking at the measurement date and that's the date where we want to fix the assumptions to ensure that we don't have retroactivity problems are due process problems and seven a quarter is the rate that has to be used thank you your owners morning hundreds of ronald richmond chilled to rock and sable for the national retirement fund it is not correct to say that buck set the rate him for the measurement date of twelve thirty one thirteen as the district court judge recognized in fact if you look at the the fifty five hundred that was file because they did the actuarial valuation for two thousand and thirteen because it was a lot cheaper to do it that way what they did is take the exact paragraph that appears in their actuarial valuation of two thousand and thirteen on actuarial some sions interest in fact all of the assumptions are exactly the same from that appear in the  november two thousand and thirteen it's from the actual it is to the board of trustees the national time and fund and in the very first paragraph the book says the valuation results presented in this report for the plan year beginning january one two thousand and thirteen the unfunded vested benefits reported for withdrawal liability purposes are measured as of december thirty one two thousand and twelve the determination of the contribution requirements and limits for the two thousand and thirteen plain year and the determination of the plans unfunded vested liability as of december thirty one two thousand and twelve fifth paragraph on that page says for withdrawal i believe purposes the unfunded vested benefit viability at december thirty one two thousand and twelve was one point five billion versus one point four billion at the end of the prior year all focused on a measurement date of december thirty first the arbitrator said and i think this is a quote from his opinion the funds assertion that the fund actuary had not made any interest rate assumption determination as of december thirty first two thousand and thirteen is rejected your argument is that that is not a factual conclusion that is not a factual conclusion because the arbitrator's conclusion was a legal conclusion what the what the arbitrator said that absent an affirmative selection before the end of the year before december thirty first of two thousand and thirteen then the old rate for twelve thirty one twelve would roll over i'd call it the the rollover theory and so under the arbitrator's rollover theory the assumption used to calculate withdraw liability for patrols occurring in two thousand and fourteen must be adopted before two thousand and fourteen i understand this correctly it let's assume i understand this is not with what you say happened but if the rate had been set in january or february if the horizons predecessor and said yes we're still working here and this is the rate it would have been improper in june to say we're going to have a new rate to establish that in october and apply it retroactively as long as we're speaking about january february of two thousand and fourteen yes that is correct and the reason for that is simple is that when we look at forty two thirteen of the statute that sets that talk it calls for the actuaries best estimate and if it actually makes a best estimate in january or february of two thousand and fourteen that's as of a measurement date of twelve thirty one thirteen that's their best estimate and it would be inappropriate for the actuary to change that the actuary took from appointments in october to falling to come up with because of the data that comes into a pension plan which is not only participant data that comes in that takes in many cases months this is a plan with four hundred but four hundred twenty five thousand participants t months for that data to come in and the other part has to do with the assets of a plan this is a large plan and like many large plans it has investments in private equity and other prague and investments for which the value is actually not to terminate for some period of time so it does take a period and can take a significant period of time however there is an incentive for the plan to actually assess which are all liability as soon as you can because this assumes you can assess what your liability is as soon as you can collect it you can collect it without assessing it in addition there is a section of them that's forty two nineteen which provides that the the plan has an obligation to assess which are all liability as soon as practicable so it is not that the  court in oregon meant the mets as counsel agreed that the rates that there was a seven or a quarter rate in effect on twelve thirty one twelve  and that what the arbitrator concluded was that that raid just rolled over because no new rate was chosen a chosen and we look at the statute which is your honor snow is a very comprehensive of the statute provides that the fund has to assess which are liability as soon as practicable and obviously that would depend on the circumstances so there is not a specific date but you can't be in a position of assessing which are all liability and therefore the opportunity to collect it without actually having assumptions to calculate that liability with respect three cases in their reply brief in which court someone in this in this district raised a question that they actually sent back to the arbitrator for additional information arbitrator to make a final judgment and in making a final judgment although the district court could have the face if they needed some facts and they didn't in this case could have gone back to the court and said  sorry to the arbitrator and said look we need some additional facts here for us to make our decision here but that was not necessary in this case and and  what happens is that the arbitrator no longer has jurisdiction now the mets can go back to the aaa and start another arbitration say here is the arbitrator didn't exhaust his function was clear on the record that with the district court's determination if that determination is up how do you remains back to the arbitrator well the the  a this is a situation in which the it was unclear from the arbitrator's award about who who the award was against and the court did not so if we want to do the measurement as of twelve thirty one thirteen the assumption that was in place at that time was seven and a quarter percent and the notion that that was somehow limited to two thousand and thirteen withdrawals as opposed to two thousand and fourteen withdrawals  i think just misunderstands the whole approach that buck had which was we use one rate for everything it's the rate that is drawn from our anticipated investment experience and if we don't care whether it's twenty thirteen or twenty fourteen that's our approach and that approach was unquestionably in place for the entirety of the plan here and at worst your honour's that is a factual question as to the scope and the nature of the box assumption and the arbitrator with decades  experience in this field drawing on his inferences from the documents and his understanding of the actuarial profession rejected the funds argument which he characterized as a factual argument on page thirty of the appendix and then resolved it on page thirty seven if his reasoning is the rolling over theory then that becomes a legal question doesn't it i don't i don't think so because i think that was based on his understanding of how actuaries work and the way in which they do their job and the fact that look  actuaries don't wake up every morning and re evaluate every assumption from first principles they have an approach they apply it and if something changes they revisit it and i think he said that nothing happened that caused them to revisit it and therefore it remained in effect through twelve thirty one thirteen if i could just quickly address the remained point i just don't understand this argument the yes he issued a final judgment because he resolved a preliminary issue that resolved the case but there were other preserved arguments and if the if i hope i've convinced you that to reinstate the orbit i have and he was equivocal as to whether he wasn't worth your again he well he was equivocal because the district didn't remand it back to him and  in the exchange he basically said it will be what it will be or something to that effect well you know i think he was not retaining jurisdiction because from his perspective he had finished with the case but if and to the extent that this co disagrees with his or rejects his initial reasoning there are all these other arguments that have not been addressed by anyone that have to be addressed and we can't just go and start a new arbitration because there are time limits that have long since expired and so it would a i think a very problematic due process issue if those arguments somehow disappeared just because he didn't have to reach them the first go round so again i hope we've convinced you that the arbitrators award should be reinstated on his own terms but absent that i think remained is the only appropriate disposition there's no authority out there saying that remained is improper in this situation and we've cited numerous cases that have done it in fact this is very routine  questions thank you very much thank you beth we'll take it under submission