Risk transfer litigation: more conflicting court decisions

In this article we provide a brief note on two recent, conflicting decisions in ongoing Athene-related pension risk transfer (PRT) litigation. We refer readers to our earlier articles on the recent Doherty v. Bristol-Myers Squibb Co. decision, and on earlier PRT decisions, for background.

Piercy et al. v. AT&T Inc. et al.

On September 30, 2025, the United States District Court for the District of Massachusetts issued its decision in Piercy et al. v. AT&T Inc. et al. Generally following the recommendations of the magistrate to whom the court had referred the case, the court denied defendants’ motion to dismiss on standing but granted their motion to dismiss on the grounds that plaintiffs had failed to adequately state a claim under ERISA.

Standing, yes …

With respect to standing, the court found that the alleged diminished value of the Athene annuity (versus the ERISA-covered/employer backed pension) did give plaintiffs standing to sue:

As the Magistrate Judge points out, there would be little question as to whether an annuity recipient is harmed if he or she received a riskier product than was purchased. That the annuities at issue here cannot be resold is not controlling, nor is the fact that they were purchased by a fiduciary. Plaintiffs received an inferior financial benefit than that to which they were entitled, a harm that bears a "close relationship" to harms "traditionally recognized" as giving rise to suit. … While a secondary market may provide a basis for measuring that harm, the lack thereof does not automatically foreclose its proof.

Viable claim, no …

The magistrate had, however, found plaintiffs had failed to adequately plead the defendants had breached ERISA’s fiduciary rules because they had failed to allege that “’a prudent fiduciary in the defendant's position could not have concluded that’ Athene was a suitable annuity provider (citing [the Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer).” (Emphasis added.) Plaintiffs objected to this allegedly “heightened pleading standard.” The court rejected plaintiffs’ argument, holding that “[d]emonstrating that a prudent fiduciary would have acted differently than defendants is consistent with showing that a prudent fiduciary could not have acted as defendants did.”

Schoen v. ATI

On October 7, 2025, The United States District Court for the Western District of Pennsylvania issued its decision in Schoen, et al. v. ATI, Inc., et al., granting defendants’ motion to dismiss on the grounds that plaintiffs did not have standing to sue.

The court, relying primarily on the Supreme Court’s decision in Thole v. U.S. Bank (which has featured in all recent pension risk transfer litigation), found that the transfer of plaintiffs’ pension benefits to Athene did not result in an “injury in fact.” Specifically, the court found that:

• Plaintiffs are receiving the same benefit payments from Athene (after the PRT) as they were from the plan (before the PRT).

• Notwithstanding conflicting opinions in other courts (including the Piercy decision discussed above and the recent decision in Doherty v. Bristol-Myers Squibb Co.), standing (that is, “injury in fact”) cannot, under Thole, be predicated on the “diminished value” of the Athene annuity (resulting from the loss of ERISA protections and (alleged) increased risk of default). In this regard, the court found that the absence of a “market for pension benefits” (that would make the alleged diminished value explicit) added weight to this conclusion.

• To justify standing on the basis of “a substantial risk of future harm,” plaintiffs must show “a concrete, impending injury.” Alleging that Athene is more risky than other carriers is insufficient: that is, “risk of future harm” is not a relative standard.

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To summarize, here is where we are with these suits to date: All of the PRT lawsuits that we are aware of have involved very large defined benefit plans. All but one has involved Athene. And while the opinions of the District Courts have varied, all have relied on the Supreme Court’s decision in Thole in determining Plaintiffs’ standing to bring suit. Plan sponsors considering PRT transactions will want to consider all of this carefully when deciding whether to and with whom to enter into such transactions.