Sixth Circuit Holds ERISA’s Actuarial Equivalence Requirement Bars Use of Unreasonably Outdated Mortality Assumptions

In Reichert v. Kellogg Co., No. 24-1442, —F.4th—-, 2026 WL 734673 (6th Cir. Mar. 16, 2026), the Sixth Circuit addressed an increasingly litigated issue in ERISA pension cases—whether defined benefit plans may rely on outdated actuarial assumptions when converting single life annuities (SLAs) into joint and survivor annuities (JSAs). Reversing two district court dismissals, the court held that ERISA’s actuarial equivalence requirement imposes substantive limits on the assumptions plans may use, including a prohibition on unreasonably outdated mortality tables.

The plaintiffs were retired, married participants in defined benefit pension plans sponsored by Kellogg and FedEx. Each elected to receive benefits in the form of a joint and survivor annuity, as required under ERISA § 1055. They alleged that the plans used decades-old mortality tables—based on data from the 1960s and 1970s—to convert their SLAs into JSAs. Because those tables assumed shorter life expectancies than modern data supports, the plans’ conversion factors reduced monthly payments, resulting in lower benefits than participants would receive under actuarially equivalent assumptions.

The district courts dismissed the complaints, concluding that ERISA does not require plans to use any particular mortality tables or actuarial inputs. In their view, § 1055(d)’s requirement that a qualified joint and survivor annuity be the “actuarial equivalent” of a single life annuity imposes no substantive constraint on the choice of assumptions.

The Sixth Circuit rejected that interpretation. Writing for the majority, Judge Stranch framed the central question as whether ERISA’s actuarial equivalence requirement permits plans to rely on assumptions that are materially disconnected from current reality. The court answered in the negative.

The court began with the statutory text, emphasizing that § 1055(d) requires a QJSA to be the “actuarial equivalent” of the SLA payable over the participant’s lifetime. Although ERISA does not define “actuarial equivalent,” the court treated the phrase as a term of art rooted in actuarial science. Drawing on pre-ERISA actuarial literature and case law, the court explained that actuarial equivalence requires equality in present value, which in turn depends on using assumptions—particularly mortality rates—that appropriately reflect the expected lifespan of the relevant population.

From that premise, the court concluded that actuarial equivalence necessarily incorporates a reasonableness constraint. If mortality assumptions are materially outdated and fail to reflect current life expectancy, the resulting annuity forms cannot have equivalent present values. Thus, while ERISA does not mandate specific tables, it does require that assumptions fall within the range of professional acceptability.

The court also found support in Treasury regulations interpreting parallel provisions of the Internal Revenue Code, which reference “reasonable actuarial factors.” Although not controlling, the court viewed those regulations as reinforcing the conclusion that actuarial equivalence requires reasonable, up-to-date assumptions.

Importantly, the court rejected the defendants’ argument that § 1055(d) is purely procedural or disclosure-based. Accepting that position, the court reasoned, would effectively render the actuarial equivalence requirement meaningless by allowing plans to manipulate assumptions to produce any desired outcome. ERISA’s structure and purpose—particularly its goal of protecting promised benefits and ensuring income streams for surviving spouses—counseled against such an interpretation.

Applying this framework, the court held that plaintiffs plausibly alleged violations of § 1055 by asserting that the plans relied on mortality tables derived from decades-old data that do not reflect modern longevity. At the pleading stage, those allegations were sufficient to state a claim that the JSAs were not actuarially equivalent to the SLAs participants would otherwise receive. The court likewise allowed related breach of fiduciary duty claims to proceed. The Sixth Circuit reversed and remanded both cases for further proceedings, leaving factual questions regarding the reasonableness of the assumptions for later stages of litigation.

Judge Nalbandian dissented, taking a strict textualist approach. He argued that ERISA does not impose a reasonableness requirement and that “actuarial equivalence” simply requires mathematical equality under whatever assumptions a plan chooses. In his view, Congress’s decision to include explicit reasonableness language in other ERISA provisions—but not in § 1055—foreclosed the majority’s interpretation.