Court Opinion

ID: 6498780
Source: CourtListenerOpinion
Date Created: 2022-07-08 17:00:45.523708+00
Date Added: 2024-06-11T09:09:54.295697
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 25, 2021                 Decided July 8, 2022

                        No. 20-7054

UNITED MINE WORKERS OF AMERICA 1974 PENSION PLAN, ET
                       AL.,
                    APPELLEES

                             v.

             ENERGY WEST MINING COMPANY,
                     APPELLANT

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:18-cv-01905)

    Yaakov M. Roth argued the cause for appellant. With him
on the briefs were Sherif Girgis, Gregory J. Ossi, Mark H.M.
Sosnowsky, and Christopher R. Williams.

     Bryan Killian argued the cause for appellee. With him on
the brief were John R. Mooney, Paul A. Green, Olga M. Thall,
and Stanley F. Lechner. Charles P. Groppe entered an
appearance.

    Before: RAO and WALKER, Circuit Judges, and SENTELLE,
Senior Circuit Judge.
                               2
    Opinion for the Court filed by Circuit Judge RAO.

     RAO, Circuit Judge: The Multiemployer Pension Plan
Amendments Act (“MPPAA”) requires an employer to pay
“withdrawal liability” if it decides to leave a multiemployer
pension plan. Calculating the amount of money the employer
owes the plan requires an actuary to project the plan’s future
payments to pensioners. As with any financial projection, this
requires making assumptions about the future. The MPPAA
requires the actuary to use “assumptions and methods which,
in the aggregate, are reasonable (taking into account the
experience of the plan and reasonable expectations) and which,
in combination, offer the actuary’s best estimate of anticipated
experience under the plan.” 29 U.S.C. § 1393(a)(1).

     The Energy West Mining Company (“Energy West”)
withdrew from the United Mine Workers of America 1974
Pension Plan (“Pension Plan”) in 2015. In calculating Energy
West’s withdrawal liability, the actuary did not rely on the
Pension Plan’s performance to determine what discount rate to
use, but instead adopted a risk-free discount rate. An arbitrator
upheld the risk-free discount rate and the district court granted
summary judgment to the Pension Plan, enforcing the arbitral
award. We reverse because the actuary’s choice of a risk-free
rate violates the MPPAA’s command to use assumptions that
are “the actuary’s best estimate of anticipated experience under
the plan.”

                               I.

                               A.

    To ensure that employees who were promised a pension
would actually receive it, Congress enacted the Employee
Retirement Income Security Act of 1974 (“ERISA”). See 29
U.S.C. § 1001(a); Pension Benefit Guar. Corp. v. R. A. Gray &
                                 3
Co., 467 U.S. 717, 720 (1984); see generally Pub. L. No. 93-
406, 88 Stat. 829 (codified as amended at 29 U.S.C. §§ 1001 et
seq. and in scattered sections of the Internal Revenue Code).
By the late 1970s, it had become clear that ERISA was failing
to stabilize multiemployer pension plans—those maintained
pursuant to a collective bargaining agreement between multiple
employers and a union.1 R. A. Gray, 467 U.S. at 721–22; see
also 29 U.S.C. § 1002(37)(A) (defining multiemployer plan).
Like single employer plans, multiemployer plans had to meet
minimum funding standards, which require employers to
contribute annually to the plan whatever is needed to ensure it
has enough assets to pay for the employees’ vested pension
benefits when they retire. See Milwaukee Brewery Workers’
Pension Plan v. Jos. Schlitz Brewing Co., 513 U.S. 414, 416
(1995). Unlike employers managing a single employer plan,
however, employers in multiemployer plans could withdraw
without triggering the plan-termination provisions of ERISA
and thereby avoiding obligations to make ongoing
contributions.2

    If a multiemployer plan was financially stable, then
ERISA worked. But if a plan became financially troubled, large
contributions would be needed to meet minimum funding
standards, incentivizing employers to withdraw and

1
  Multiemployer plans are used mostly in industries where there are
hundreds or thousands of small employers going in and out of
business and where the nexus of the employment relationship is the
union that represents employees who typically work for many of
those employers over the course of their career. See Concrete Pipe
& Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal.,
508 U.S. 602, 606 (1993).
2
  If an employer withdrew from a plan, the benefits its employees
earned while the employer was part of the plan would remain on the
plan’s books.
                                4
precipitating a death spiral for the plan. See id. at 416–17.
Every employer withdrawal would shrink a plan’s contribution
base, forcing the remaining employers to make even larger
contributions and increasing their incentive to withdraw.
ERISA’s only check on this incentive was that if a plan
terminated within five years of an employer’s withdrawal, that
employer would be liable for its share of the unfunded vested
benefits. 29 U.S.C. § 1364 (1976); Milwaukee Brewery
Workers’ Pension Plan, 513 U.S at 416. Despite this risk,
however, employers chose to withdraw, causing “a significant
number of [multiemployer] plans” to experience “extreme
financial hardship.” R. A. Gray, 467 U.S. at 721.

    In response, Congress enacted the Multiemployer Pension
Plan Amendments Act of 1980, Pub. L. No. 96-364, 94 Stat.
1208. The MPPAA “transformed what was only a risk (that a
withdrawing employer would have to pay a fair share of
underfunding) into a certainty” by requiring employers to pay
“a withdrawal charge” upon their complete or partial
withdrawal from a plan. Milwaukee Brewery Workers’ Pension
Plan, 513 U.S. at 417; see 29 U.S.C. § 1381(a). Specifically, a
withdrawing employer must pay the plan its proportional share
of the plan’s “unfunded vested benefits,” 29 U.S.C.
§ 1381(b)(1), which is “the difference between the present
value of the plan’s vested benefits and the present value of its
assets,” Connors v. B & H Trucking Co., 871 F.2d 132, 133
(D.C. Cir. 1989); see 29 U.S.C. § 1393(c) (laying out this
calculation).

     An actuary must make numerous assumptions to calculate
an employer’s withdrawal liability. For example, to project the
plan’s vested benefits, the actuary must make assumptions
about how long employees will work and how long retirees will
live. The actuary also must make an assumption about the
discount rate, i.e., the rate at which the plan’s assets will earn
                                 5
interest.3 The discount rate is the weightiest assumption in the
overall withdrawal liability calculation. See Combs v. Classic
Coal Corp., 931 F.2d 96, 101 (D.C. Cir. 1991) (explaining that
an “erroneously low” discount rate, without appropriate
offsetting assumptions, might “destroy the validity of the entire
calculation” of unfunded vested benefits).

     In the absence of a relevant regulation, an actuary must
calculate withdrawal liability using assumptions “which, in the
aggregate, are reasonable (taking into account the experience
of the plan and reasonable expectations) and which, in
combination, offer the actuary’s best estimate of anticipated
experience under the plan.” 29 U.S.C. § 1393(a)(1); see also
id. § 1393(a)(2) (allowing the use of assumptions set forth in
Pension Benefit Guaranty Corporation (“PBGC”) regulations).

     ERISA and the MPPAA lay out a system to adjudicate
disputes over withdrawal liability. The pension plan is
responsible for initially determining an employer’s withdrawal
liability. Id. § 1382(1). If an employer wants to contest the
plan’s determination, it must first do so through arbitration. Id.
§ 1401(a)(1). In those and all subsequent proceedings, a plan’s
determination of unfunded vested benefits “is presumed correct
unless a party contesting the determination shows by a
preponderance of the evidence that” either “(i) the actuarial
assumptions and methods used in the determination were, in

3
  Because of the time value of money, a plan does not need to have
$100,000 on hand in order to pay $100,000 in the future. The money
the plan has on hand will be invested and earn interest; how much
interest the assets will earn determines how much the plan must have
on hand at the time the employer withdraws. The discount rate is the
amount of interest the actuary assumes the plan’s assets will earn,
which is used to convert the stream of future payments to employees
into the present-day amount of assets needed to make those
payments.
                               6
the aggregate, unreasonable (taking into account the experience
of the plan and reasonable expectations), or (ii) the plan’s
actuary made a significant error in applying the actuarial
assumptions or methods.” Id. § 1401(a)(3)(B). After
arbitration, any party can seek “to enforce, vacate, or modify
the arbitrator’s award” in district court. Id. § 1401(b)(2). The
court must apply a “presumption, rebuttable only by a clear
preponderance of the evidence, that the findings of fact made
by the arbitrator were correct.” Id. § 1401(c).

                               B.

     The United Mine Workers of America 1974 Pension Plan
is a multiemployer pension plan. Energy West was a
participating employer in the Pension Plan but withdrew after
closing its Utah mine in 2015. At the time of Energy West’s
withdrawal, the Pension Plan was projected to become
insolvent as early as 2022. Needless to say, the Pension Plan
had a lot of unfunded vested benefits, requiring Energy West
to pay withdrawal liability.4

      The job of calculating Energy West’s withdrawal liability
fell to William Ruschau, the Pension Plan’s actuary. Ruschau
testified that he used the Pension Plan’s prior experience as a
guidepost for most of his assumptions but that he did not
consider the Pension Plan’s historic investment performance to
inform his discount rate assumption. Instead he “use[d] a
reasonable risk-free interest rate,” which is equivalent to
assuming the plan would “buy[] an annuity to settle up the
4
  The Pension Plan’s financial problems were mitigated greatly by
the Bipartisan American Miners Act of 2019, but that infusion of
money “shall be disregarded … for purposes of determining [an]
employer’s withdrawal liability.” Pub. L. No. 116-94, div. M,
§ 102(a)(3), 133 Stat. 2534, 3092 (codified at 30 U.S.C.
§ 1232(i)(4)(E)).
                                 7
employer’s share of the unfunded vested benefits.” His
justification for using risk-free rates was that when an
employer withdraws from a plan, it no longer bears any risk
associated with that plan’s investment performance.

     The choice of a risk-free rate made a material difference.
If Ruschau had used a discount rate assumption based on the
Pension Plan’s historic investment performance—around
7.5%—Energy West’s withdrawal liability would have been
about $40 million. United Mine Workers of Am. 1974 Pension
Plan v. Energy W. Mining Co., 464 F. Supp. 3d 104, 111
(D.D.C. 2020). Instead, Ruschau used a discount rate
assumption of 2.71% for 2015 to 2035 and 2.78% for all years
thereafter, based on the rates the PBGC projected risk-free
annuities will earn. See id. Applying that discount rate, Energy
West’s withdrawal liability was over $115 million. See id. at
120.

    Energy West disagreed with the discount rate assumption
and pursued arbitration.5 It contended that the risk-free PBGC
rate was an inappropriate choice for the discount rate
assumption because (1) the actuary was required to “use the
same or very similar rate for both withdrawal liability and
[minimum] funding purposes,” and (2) risk-free rates are not
the “best estimate of anticipated experience under the plan”
because they are not based on past or projected investment
performance.

    The arbitrator rejected both arguments. He agreed with the
Pension Plan that using risk-free rates to calculate withdrawal

5
  Energy West also contended that ERISA’s 20-year cap on
withdrawal liability payments applied to it, but does not appeal the
decisions of the arbitrator and the district court holding otherwise.
See id. at 120–25.
                               8
liability was reasonable, even though they were not used to
calculate minimum funding, because withdrawal liability,
unlike minimum funding, acts “as a settlement of the
employer’s obligations.” In reaching this conclusion, the
arbitrator placed great weight on Actuarial Standard of Practice
27, Section 3.9(b), which states that “[a]n actuary measuring a
plan’s present value of benefits on a … settlement basis may
use a discount rate implicit in annuity prices or
other … settlement options.” ACTUARIAL STANDARDS BOARD,
ACTUARIAL STANDARD OF PRACTICE NO. 27: SELECTION OF
ECONOMIC ASSUMPTIONS FOR MEASURING PENSION
OBLIGATIONS § 3.9(b) (2013) (“ASOP 27”). The arbitrator read
this section as approving the use of risk-free rates to calculate
withdrawal liability on the theory that an employer’s
withdrawal constitutes a settlement. He concluded that “almost
by definition an actuary who applies the guidance of the
actuarial standards of practice is using a combination of
methods and assumptions that would be acceptable to a
reasonable actuary.”

     Before the district court, Energy West sought to vacate,
and the Pension Plan sought to enforce, the arbitration award.
The court granted summary judgment to the Pension Plan and
entered an order enforcing the arbitration award. See United
Mine Workers of Am. 1974 Pension Plan, 464 F. Supp. 3d at
125. The court rejected Energy West’s contention that the
discount rate assumptions for minimum funding obligations
and withdrawal liability had to be identical under the MPPAA.
Pointing to the statute’s different language in the minimum
funding section—requiring that “each” assumption be
reasonable—and the withdrawal liability section—requiring
that the assumptions be reasonable “in the aggregate”—the
court held that different assumptions were permissible under
the statute. See id. at 112–15. The court also rejected Energy
West’s contention that the use of risk-free rates was
                               9
unreasonable because it was not the “best estimate of
anticipated experience under the plan.” The court held that
language meant only that the actuary must independently
calculate withdrawal liability and that it did not impose any
substantive requirements on the assumptions. Id. at 116–20.
Energy West appealed.

                              II.

     We review the district court’s grant of summary judgment
de novo, which means, in essence, we are reviewing the
arbitrator’s decision. Combs, 931 F.2d at 99. The arbitrator’s
findings of fact are presumed correct unless they are rebutted
“by a clear preponderance of the evidence,” 29 U.S.C.
§ 1401(c), and the arbitrator’s legal determinations are
reviewed de novo, see I.A.M. Nat’l Pension Fund Benefit Plan
C v. Stockton TRI Indus., 727 F.2d 1204, 1207 n.7 (D.C. Cir.
1984).

                              A.

     When calculating withdrawal liability, the MPPAA
mandates that actuaries use “assumptions and methods which,
in the aggregate, are reasonable (taking into account the
experience of the plan and reasonable expectations) and which,
in combination, offer the actuary’s best estimate of anticipated
experience under the plan.” 29 U.S.C. § 1393(a)(1). Energy
West concedes that the “Aggregate Reasonableness
Requirement” generally leaves the actuary with discretion to
use his professional judgment about what assumptions are used
to calculate withdrawal liability. The dispute here centers on
whether the “Best Estimate Requirement” fetters that
discretion. Energy West maintains that the Best Estimate
Requirement mandates using assumptions based on the plan’s
particular characteristics. The Pension Plan, on the other hand,
asserts that the Best Estimate Requirement requires that the
                               10
assumptions be developed independently by the actuary but
otherwise imposes no substantive requirements on the
assumptions made.

     Energy West is correct that the actuary must make
assumptions based on the plan’s particular characteristics when
calculating withdrawal liability. This follows directly from the
words of the statute. The MPPAA specifies that the
assumptions must be “the actuary’s best estimate of anticipated
experience under the plan.” Id. (emphasis added). Congress
directed what the actuary must estimate when making
assumptions used to calculate withdrawal liability, namely a
plan’s anticipated future liabilities and asset returns. Such
predictions necessarily turn on a plan’s characteristics.

     The district court interpreted the Best Estimate
Requirement to require only that the assumptions be made by
the actuary; however, such an interpretation disregards the
requirement that the actuary estimate the “anticipated
experience under the plan.” Id. “It is our duty to give effect, if
possible, to every clause and word of a statute.” Duncan v.
Walker, 533 U.S. 167, 174 (2001) (cleaned up). To give effect
to every word of the Best Estimate Requirement, we interpret
it to lay down both a procedural rule that the assumptions be
made by the actuary and a substantive rule that the assumptions
reflect the characteristics of the plan.

     As applied to the discount rate assumption, using the
plan’s particular characteristics means the actuary must
estimate how much interest the plan’s assets will earn based on
their anticipated rate of return. An actuary cannot base the
discount rate “on investments that the plan is not required to
and might never buy, based on a set formula that is not tailored
to the unique characteristics of the plan.” Sofco Erectors, Inc.
v. Trustees of Ohio Operating Eng’rs Pension Fund, 15 F.4th
                                11
407, 421 (6th Cir. 2021) (cleaned up). Thus, risk-free rates
might be appropriate if a plan were invested in risk-free assets,
or perhaps if it planned to invest the withdrawal liability
payments in risk-free assets. But if the plan is currently and
projects to be invested in riskier assets, the discount rate used
to calculate withdrawal liability must reflect that fact.

     This interpretation of the Best Estimate Requirement is
reinforced by comparison to other sections of ERISA.
Congress has tailored the calculation of liabilities, providing
distinct actuarial specifications for different circumstances. For
example, benefits must be paid “in the form of an annuity”
upon the “[t]ermination of a multiemployer plan,” which can
occur when every employer withdraws from the plan. 29
U.S.C. § 1341a(a)(2), (c)(2). When a plan terminates, PBGC
regulations require that actuaries use a proxy for risk-free rates
to value employees’ benefits. See 29 C.F.R. § 4281.13(a)
(instructing actuaries to use the “interest assumptions” in the
rate table for annuities). Similarly, ERISA directs actuaries to
calculate minimum funding requirements “without taking into
account the experience of the plan” when determining whether
a plan has hit its full-funding limitation. 29 U.S.C.
§ 1084(c)(6)(E)(iii)(I). Such meaningful variation only bolsters
the requirement to read the statute to mean what it says. When
calculating withdrawal liability, actuaries must select a
discount rate based on the plan’s actual anticipated investment
experience. Accord Sofco Erectors, 15 F.4th at 422.

     Although the discount rate is only one of the assumptions
used “in combination,” 29 U.S.C. § 1393(a)(1), to calculate the
withdrawal liability, it is the most impactful, see Combs, 931
F.2d at 101. Therefore, if the actuary selects a discount rate that
is not the “best estimate of anticipated experience under the
                                  12
plan,” this error will usually render the calculation contrary to
the MPPAA.

     We find unpersuasive the Pension Plan’s argument that the
Best Estimate Requirement does not impose any substantive
requirements on the assumptions but instead requires only that
the assumptions come from the actuary. The Pension Plan
relies on a series of out-of-circuit cases interpreting the Internal
Revenue Code’s then-identical Best Estimate Requirement.6
But the cases the Pension Plan cites involved a distinct question
about whether the Best Estimate Requirement meant that the
actuary had to choose a single “best” estimate, or rather could
choose within a “reasonable” range of estimates. Other circuits
have concluded that the actuary may choose within a
reasonable range, because if the Best Estimate Requirement
meant an actuary had to pick the single point assumption that
he thought was “the most likely result,” then the requirement
that the assumptions be “reasonable” would be “superfluous.”
Vinson & Elkins v. Comm’r, 7 F.3d 1235, 1238 (5th Cir. 1993);
see also Wachtell, Lipton, Rosen & Katz v. Comm’r, 26 F.3d
291, 296 (2d Cir. 1994) (explaining the statute “is not violated
when an actuary chooses an assumption that is within the range
of reasonable assumptions, even when the assumption is at the
conservative end of that range”); Citrus Valley Ests., Inc. v.
Comm’r, 49 F.3d 1410, 1415 (9th Cir. 1995) (same); Rhoades,

6
  26 U.S.C. § 412(c)(3) (1994) (“For purposes of this section, all
costs, liabilities, rates of interest, and other factors under the plan
shall be determined on the basis of actuarial assumptions and
methods … which, in the aggregate, are reasonable (taking into
account the experiences of the plan and reasonable expectations),
and … which, in combination, offer the actuary’s best estimate of
anticipated experience under the plan.”).
                               13
McKee & Boer v. United States, 43 F.3d 1071, 1075 (6th Cir.
1995) (same).

     The Pension Plan relies on the fact that, in reaching this
holding, these circuits concluded the Best Estimate
Requirement is “procedural,” meaning that the estimate must
be the actuary’s alone. See Citrus Valley, 49 F.3d at 1414;
Rhoades, 43 F.3d at 1075; Wachtell, 26 F.3d at 296; Vinson &
Elkins, 7 F.3d at 1238. But these cases generally did not hold
that the Best Estimate Requirement was only procedural. See
Wachtell, 26 F.3d at 296 (“[T]he ‘best estimate’
requirement … is principally designed to [e]nsure that the
chosen assumptions actually represent the actuary’s own
judgment rather than the dictates of plan administrators or
sponsors.”) (emphasis added); Citrus Valley, 49 F.3d at 1414
(quoting Wachtell); Rhoades, 43 F.3d at 1075 (same).

     Rather, these cases analyzed only the first half of the Best
Estimate Requirement—that the assumption be “the actuary’s
best estimate.” As to the requirement that the assumptions be
the “best estimate of anticipated experience under the plan,”
these courts were either silent, see Vinson & Elkins, 7 F.3d at
1237–39, or explicitly clarified that they were not reading it out
of the statute, see Wachtell, 26 F.3d at 296 (the statute “is not
violated when an actuary chooses an assumption that is within
the range of reasonable assumptions, even when the
assumption is at the conservative end of that range, provided
the chosen assumption is the actuary’s best estimate of
anticipated plan experience.”) (emphasis added); Rhoades, 43
F.3d at 1075 (quoting Wachtell).

     Nothing in these cases forecloses requiring the actuary to
use the plan’s particular characteristics, which simply follows
from the statutory requirement to determine the “best estimate
of anticipated experience under the plan.” Therefore, these
                                 14
cases do not support the Pension Plan’s argument that the Best
Estimate Requirement does not mean what it says. Accord
Sofco Erectors, 15 F.4th at 422 (holding that Rhoades, 43 F.3d
at 1073–75, does not “suggest[] that actuaries may disregard
the statute’s requirement that they base their estimates on the
‘anticipated experience under the plan’”) (quoting 29 U.S.C.
§ 1393(a)(1)).

     In sum, the MPPAA’s rule that the actuary use
assumptions “which, in combination, offer the actuary’s best
estimate of anticipated experience under the plan” requires the
actuary to choose a discount rate assumption based on the
plan’s actual investments. 29 U.S.C. § 1393(a)(1). While there
may be a reasonable range of estimates, the discount rate
assumption cannot be divorced from the plan’s anticipated
investment returns.

     The arbitrator found, and all agree, that the Pension Plan’s
actuary chose the risk-free PBGC rates based on the theory that
risk-free rates are appropriate for withdrawal liability because
the withdrawn employer no longer bears risk. The discount rate
assumption was not chosen based on the Pension Plan’s past or
projected investment returns. Therefore, the PBGC rate
assumption was not the actuary’s “best estimate of anticipated
experience under the plan.”

                                 B.

     The Pension Plan gives two reasons why the arbitration
award should not be vacated even if Energy West’s
interpretation of the Best Estimate Requirement is correct.
First, the Pension Plan asserts that using risk-free rates to
calculate withdrawal liability is proper under ASOP 27,7 and

7
  Specifically, the Pension Plan points to Section 3.9(b), which says
to “use a discount rate implicit in annuity prices” when “measuring
                                15
that “[t]he Best Estimate Requirement does not override
actuarial standards of practice.” But the MPPAA, not ASOP
27, is the law. We also note that the standard actuarial practices
recognize that legal requirements supersede any professional
norms. See ASOP 27 § 1.2 (“If a conflict exists between this
standard and applicable law (statutes, regulations, and other
legally binding authority), the actuary should comply with
applicable law.”). In other words, an unlawful assumption
violates professional norms and is therefore “unreasonable.”8
Whatever the merits of the actuary’s theory, it cannot displace
the Best Estimate Requirement.9

     Second, the Pension Plan asserts that a violation of the
Best Estimate Requirement is not a valid ground for vacating
an arbitration award under the dispute resolution provision of
the MPPAA. The statute specifies that “[i]n the case of the
determination of a plan’s unfunded vested benefits for a plan
year, the determination is presumed correct unless a party
contesting the determination shows by a preponderance of
evidence that ... the actuarial assumptions and methods used in
the determination were, in the aggregate, unreasonable (taking

a plan’s present value of benefits on a defeasance or settlement
basis.” We express no opinion on the Pension Plan’s argument that
withdrawal liability is an occasion where benefits are properly
measured on a “defeasance or settlement basis.”
8
  This remains true regardless of how widespread the unlawful
practice is among the profession. Cf. The T.J. Hooper, 60 F.2d 737,
740 (2d Cir. 1932) (L. Hand., J.) (“[I]n most cases reasonable
prudence is in fact common prudence; but strictly it is never its
measure[.]”).
9
  Under the MPPAA, the only alternative to the Best Estimate
Requirement for calculating withdrawal liability is a PBGC
regulation prescribing actuarial assumptions and methods. 29 U.S.C.
§ 1393(a)(2). But there is no relevant regulation here.
                              16
into account the experience of the plan and reasonable
expectations).” 29 U.S.C. § 1401(a)(3)(B). The Pension Plan
contends that because the dispute resolution provision does not
specify that the presumption of correctness can be overcome
by showing that the assumptions were not the “best estimate of
anticipated experience under the plan,” such a showing cannot
be grounds to vacate the arbitration.

     We disagree. The dispute resolution provision permits
vacating an arbitration award if the actuarial assumptions were
unreasonable in the aggregate “taking into account the
experience of the plan.” Id. § 1401(a)(3)(B)(i). The Aggregate
Reasonableness Requirement, both for dispute resolution and
for withdrawal liability in Section 1393(a)(1), does not just
require assumptions that are reasonable in the abstract; it
requires assumptions that are reasonable relative to the plan,
taking the plan’s experience into account. If the actuary is not
basing the assumptions on the plan’s characteristics, the
assumptions will not be reasonable “taking into account the
experience of the plan.” In other words, not only must the
actuary’s assumptions be reasonable, they must be aimed at the
right calculation, namely the predicted future of the plan.

    Here the discount rate assumption used to calculate
unfunded vested benefits did not take into account the
experience of the plan and therefore was not a reasonable
assumption. Thus, Energy West raised a valid ground for
vacating the arbitration award.

                             ***

    The arbitration award must be vacated because in
determining the withdrawal liability for Energy West, the
actuary failed to use a discount rate that reflected the Plan’s
                              17
characteristics and was the “best estimate of anticipated
experience under the plan.”

                             III.

    Having decided that the arbitration award must be vacated,
we nonetheless address Energy West’s argument that the
discount rate assumption used for withdrawal liability and
minimum funding must be the same because a resolution of this
question is relevant to the scope of acceptable calculations of
Energy West’s withdrawal liability. We hold that the
assumptions need not be identical but must be similar because
they both must be “the actuary’s best estimate of anticipated
experience under the plan.”

     The current provisions governing the assumptions for
minimum funding and withdrawal liability are similar, but not
identical. When the MPPAA was enacted, an identical rule
applied to actuarial assumptions used to calculate a plan’s
minimum funding obligations and an employer’s withdrawal
liability. Compare 29 U.S.C. § 1082(c)(3) (1982), with id.
§ 1393(a)(1). In the Pension Protection Act of 2006, Congress
tweaked the rule for calculating minimum funding obligations,
but left the language regarding withdrawal liability
assumptions unchanged. See Pub. L. No. 109-280, § 201, 120
Stat. 780, 862 (codified at 29 U.S.C. § 1084(c)(3)). This means
that for withdrawal liability, actuaries must use “actuarial
assumptions and methods which, in the aggregate, are
reasonable (taking into account the experience of the plan and
reasonable expectations) and which, in combination, offer the
actuary’s best estimate of anticipated experience under the
plan.” 29 U.S.C. § 1393(a)(1). For minimum funding, on the
other hand, actuaries must use “actuarial assumptions and
methods—(A) each of which is reasonable (taking into account
the experience of the plan and reasonable expectations), and
                              18
(B) which, in combination, offer the actuary’s best estimate of
anticipated experience under the plan.” Id. § 1084(c)(3).

     Both provisions require using assumptions that reflect “the
actuary’s best estimate of anticipated experience under the
plan.” For the reasons given above, this Best Estimate
Requirement means that, for both calculations, the assumptions
must be based on the actual characteristics of the plan. The
discount rate specifically must reflect the interest the plan’s
assets are projected to earn. Because the discount rate
assumptions for calculating withdrawal liability and minimum
funding must be estimates of the same thing, they will
invariably be similar. It is difficult, for example, to imagine
they could diverge by nearly five hundred basis points, as they
did here.

     But it does not follow that the discount rates must be
identical. The Best Estimate Requirement does not mandate
adopting any single numerical assumption. As other circuits
have held, there is an “acceptable range.” Citrus Valley, 49
F.3d at 1415. And that must be so because if the Best Estimate
Requirement forced actuaries to use the single most accurate
estimation for each assumption, the requirement that the
assumptions be reasonable would be “superfluous.” Vinson &
Elkins, 7 F.3d at 1238. Nothing in the statutory text indicates
the assumptions for minimum funding and withdrawal liability
must fall at the same point in the acceptable range of estimates
based on the plan’s characteristics. The assumed discount rates
must be similar, even if not always the same.

     This conclusion is supported by the somewhat different
statutory language governing the assumptions for minimum
funding and withdrawal liability. For withdrawal liability,
actuaries must use assumptions “which, in the aggregate, are
reasonable.” 29 U.S.C. § 1393(a)(1). Because the assumptions
                               19
must be reasonable “in the aggregate,” it may be possible for
one unreasonable assumption to offset another, leading to an
overall reasonable withdrawal liability calculation. Combs, 931
F.2d at 101.10 For minimum funding, on the other hand,
actuaries must use assumptions “each of which is reasonable.”
29 U.S.C. § 1084(c)(3). Since “each” assumption must be
reasonable, there is no possibility of offsetting assumptions for
minimum funding calculations. Thus, the different statutory
requirements suggest the possibility at least that different
assumptions could be used for each calculation, so long as both
assumptions are based on the plan’s actual characteristics.

     Energy West maintains that the Supreme Court held the
assumptions used to calculate minimum funding and
withdrawal liability must be identical in Concrete Pipe, 508
U.S. at 615–36. Concrete Pipe, however, did not so hold. In
considering the constitutionality of a provision of the MPPAA,
the Court explained that “[t]he statutory requirement (of
actuarial assumptions and methods—which, in the aggregate,
are reasonable) is not unique to the withdrawal liability context,
for the statute employs identical language in” the minimum
funding context. Id. at 632 (cleaned up). When Concrete Pipe
was decided, the provisions for minimum funding and
withdrawal liability were still identical. Compare 29 U.S.C.
§ 1082(c)(3) (1988), with id. § 1393(a)(1). As the Court
explained, that identical language “tends to check the actuary’s
discretion” because “[u]sing different assumptions for different
purposes could very well be attacked as presumptively

10
  Nothing in the record suggests, nor does any party contend, that
there were offsetting assumptions in this case.
                              20
unreasonable both in arbitration and on judicial review.”
Concrete Pipe, 508 U.S. at 633 (cleaned up).

     The Court’s reasoning suggests that actuaries must
typically use the same discount rate assumption. But the Court
stopped short of holding that the statute required actuaries to
use identical rates, even when the statutory provisions for
withdrawal liability and minimum funding were identical. To
hold that using different assumptions “could very well be
attacked as presumptively unreasonable” is not to hold that that
the assumptions must be the same as a matter of law. Id.
(cleaned up); see N.Y. Times Co. v. Newspaper & Mail
Deliverers’—Publishers’ Pension Fund, 303 F. Supp. 3d 236,
254 (S.D.N.Y. 2018). Moreover, even if Concrete Pipe had
held the assumptions must be identical, after the 2006
amendment to the minimum funding provision that holding
may no longer be good law. See Manhattan Ford Lincoln, Inc.
v. UAW Local 259 Pension Fund, 331 F. Supp. 3d 365, 389–90
(D.N.J. 2018).

     Our holding that the discount rates used to calculate
minimum funding and withdrawal liability must be similar
accords perfectly with Concrete Pipe, because both rates must
be the actuary’s “best estimate of anticipated experience under
the plan.”

                             ***

     To calculate Energy West’s withdrawal liability from the
Pension Plan, the actuary was required to base his assumptions
on the Plan’s actual characteristics. Because the actuary failed
to do so, we reverse the judgment of the district court and
remand for vacatur of the arbitration award. When the actuary
calculates Energy West’s withdrawal liability, the discount rate
                             21
assumption must be similar, but need not be identical, to the
discount rate assumption used to calculate minimum funding.

                                                 So ordered.