A federal judge dismissed a lawsuit brought by former General Electric employees challenging the company’s decision to transfer pension obligations to Athene Annuity Life Co., ruling that the plaintiffs lacked standing to sue under federal law.
Bueno et al. v. General Electric Co. et al., originally filed in July 2024 in U.S. District Court for the Northern District of New York, alleged that General Electric Co. and related fiduciaries violated the Employee Retirement Income Security Act when they selected Athene as the annuity provider for a $1.7 billion partial pension risk transfer. The plaintiffs argued Athene was “not the safest annuity choice available” and that the decision diminished the value of their promised benefits.
U.S. Senior District Judge Glenn T. Suddaby granted motions to dismiss from GE and Fiduciary Counselors, Inc., finding that the plaintiffs had not established an “injury in fact.” Suddaby emphasized that beneficiaries in a defined benefit plan “have no equitable or property interest in the assets of the plan itself, only the amount of the vested benefits that they are entitled to receive.”
The decision noted that the plaintiffs continue to receive all payments owed to them under the insurer-provided annuity and did not allege any imminent risk of nonpayment.
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Previous court rulings that dismissed complaints regarding pension risk transfers also stated that the plaintiffs did not receive lower payments as a result of the transfer.
Suddaby also rejected a claim that the loss of ERISA and Pension Benefit Guaranty Corporation protections constituted a legal injury, writing that “any loss of ERISA protections as a result of a [pension risk transfer] cannot be considered to be a legal injury because ERISA explicitly permits employers to terminate their pension plans through a [pension risk transfer.]”
The ERISA Industry Committee filed an amicus brief in the case, arguing that annuities are lawful and are often a more secure alternative to employer-run pension plans. A separate brief, from the Pension Rights Center, contended that the plaintiffs faced real harm from being moved into a riskier annuity structure, according to court documents.?
Earlier this month, ERIC and other employer groups filed an amicus brief in a separate pension risk transfer case involving Athene, urging that court to dismiss that case.
Bueno was dismissed without prejudice, leaving open the possibility that the plaintiffs could attempt to refile if they can allege a concrete injury in the eyes of the court.
“We are really pleased with the decision dismissing the complaint in Bueno v. GE. The decision is very thorough and covers all the bases,” said Tom Christina, executive director of the ERIC Legal Center, in a statement. “Let’s hope it signals the end of these groundless pension risk transfer cases.”
In response to the ruling, a spokesman for Athene said, “In dismissing the case, the court rejected every theory of standing as ‘without merit,’ affirming what we have said all along,” in a statement.
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Tags: ERISA, Pension Risk Transfer
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