Washington, D.C., January 24, 2025 – The ERISA Industry Committee (ERIC) and coalition allies (the amici) filed an amicus brief in the U.S. District Court of the Southern District of New York (the court) to dismiss Doherty v. Bristol-Myers Squibb (Doherty). In its brief, the amici asserted that the Plaintiffs lack standing and argued there was no viable claim for relief.
This case is part of a growing trend in class action litigation, where the trial bar targets routine transactions involving the administration of pension plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). In Doherty, the Plaintiff is challenging a transaction in which a defined benefit pension plan maintained by Bristol-Myers Squibb purchased annuity contracts from an insurance company by transferring assets to the insurer, which agreed to be liable for payment of the former employees’ pension benefits. 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.
“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.”
ERISA specifically allows for annuitization of plan benefits, including through removal from ERISA-governed plans. Pension risk transfers, like the one at issue in Doherty, are an important aspect of our voluntary retirement system, and allow plan sponsors to establish and offer defined benefit pension plans while simultaneously balancing their ability to make decisions to control costs and mitigate risk to plan participants.
ERIC was joined by the American Benefits Council and the Committee on Investment of Employee Benefit Assets Inc. on the brief. Seyfarth Shaw LLP prepared the amicus brief, which is available here.
