The ERISA Industry Committee has filed an amicus brief supporting General Electric Co.’s motion to dismiss a lawsuit related to pension buyout transactions.
The brief, filed Nov. 13 in U.S. District Court in New York, said “plaintiffs do not allege that they have been denied benefits or that their benefits will be reduced in anyway” and “the case should end there,” according to the court filing.
The ERISA Industry Committee is a nonprofit group representing large employers in their role as plan sponsors.
Former GE employees filed a lawsuit June 28 alleging GE violated the Employee Retirement Income Security Act of 1974 and “investing in lower-quality, higher-risk assets without the traditional mix of quality assets to support future benefit obligations,” according to the filing.
GE announced in December 2020 that it had purchased group annuity contracts from two Athene Holdings subsidiaries to transfer $1.7 billion in pension fund liabilities, representing the benefits of about 70,000 retirees and beneficiaries.
A number of lawsuits have been filed in 2024 by former employees of firms, including Alcoa Corp., AT&T Inc., Bristol-Myers Squibb Co., Lockheed Martin Corp., and Lumen Technologies Inc., all of which have completed pension buyout transactions with Athene and/or Athene subsidiaries.
The lawsuits allege that Athene’s product does not represent the safest annuity available as a “risk-taking insurer” owned by alternative investment firm Apollo Global Management, and by engaging in the transactions with the firm, the defendants have violated their ERISA fiduciary duties.
Athene and those subsidiaries are not defendants in any of the lawsuits.
The Nov. 13 brief from the ERISA Industry Committee said: “Despite repeated claims of the increased ‘risks’ and supposed harms caused by the selection of Athene, plaintiffs do not identify a single instance in which Athene has paid any annuity recipients under any plan less than they would have received under their ERISA-governed pension plan.”
In the brief, the committee said plaintiffs failed to point out in the lawsuit that any insurance company, not only Athene, removes them from backing by the Pension Benefit Guaranty Corp. and the selection of Athene itself does not cause any of the harm that the lawsuit alleges.
An Athene spokesperson said in a statement regarding the multiple lawsuits: “These complaints are entirely baseless attempts by class-action attorneys to enrich themselves at the expense of retirees. 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."
