Bristol-Myers Squibb completed the transfer in a full termination of its pension plan to Athene Annuity & Life Assurance. Then last year, the pharmaceutical company – and its independent fiduciary State Street Global Advisors Trust – were hit with a class action lawsuit, filed by former employee Charles Doherty on behalf of 24,000 plan members. The suit alleges that Bristol-Myers stood to gain from the PRT deal by paying less than it would have with “safer” annuities.

Now, industry groups are urging the court to dismiss Bristol-Myers’s lawsuit, according to the ERISA Industry Committee. ERIC, along with coalition allies, American Benefits Council and Committee on Investment of Employee Benefit Assets, filed an amicus brief in the U.S. District Court of the Southern District of New York to dismiss Doherty v. Bristol-Myers Squibb. 

In its brief, ERIC, which represents 100 of the nation’s largest employers, asserts that “ERISA expressly permits pension risk transfers, and the alleged ‘harms’ Plaintiffs plead are natural consequences of every pension risk transfer, regardless of which insurer is involved … Ultimately, Plaintiffs have experienced no harm from the transaction they challenge.” according to the brief.

Although ERISA permits the practice of transferring pension plan assets to an annuity arrangement, the Plaintiffs alleged that this “pension risk transfer” transaction breached ERISA’s fiduciary duties because the insurance company chosen for the transaction was not the “safest” annuity provider, according to ERIC.

Related: Surge in pension risk transfer lawsuits, as private equity pursues annuity assets

Since 2023, Lockheed Martin, AT&T, Alcoa, GE, Weyerhaeuser Company and Lumen Technologies have been sued by employees in class action PRT lawsuits. "These PRT lawsuits are based on the unquestioned fiduciary duty of the employer that already exists under ERISA," said Jerry Schlichter, founder of Schlichter Bogard, who is as a pioneer in legal action against 401(k) and 403(b) plan sponsors on behalf of retirees and savers.

“They all have Athene taking over their former pension obligations, and Athene is owned by a private equity firm with an in-house reinsurer based offshore, rather than a traditional life insurance company that is not owned by an offshore private equity firm," said Schlichter.

“These complaints are entirely baseless attempts by class action attorneys to enrich themselves at the expense of retirees," according to a spokesperson for Athene. "Every pension group annuity participant whose benefits have been guaranteed by Athene has received and will receive their promised benefits in full. In each pension group annuity transaction for which Athene has been selected, there has been a robust review process carried out by a fiduciary and their independent advisers who are experts at assessing insurer safety. Athene operates from a position of outstanding financial strength, and is a safe and secure provider of annuity benefits. We are properly reserved, and have excellent capitalization and strong credit ratings, with a recent rating upgrade to A+ by AM Best."

“Like the 401(k) fee class actions that came before them, this new wave of pension risk transfer litigation appears to be the next proverbial pot of gold for the Plaintiffs’ bar,” said Tom Christina, Executive Director of the ERIC Legal Center. “If meritless claims like this advance beyond swift dismissal, there is significant risk the floodgates will burst open, and plaintiffs’ firms will get a big payday while employers and employees will be faced with big legal bills and an even bigger threat to the retirement system we know today. This would be devastating to plan sponsors and, in turn, to the participants who rely on them for jobs and benefits.”