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🗞️ DOL Defends Lockheed Martin in Pension Transfer Battle

DOL filed first public position on pension risk transfers since 2024 litigation wave, supporting Lockheed Martin and stating plaintiffs lack standing when they continue receiving full benefits despite annuity provider changes.

onthelaborfront

12 Jan 2026 — 3 min read

The U.S. Department of Labor filed an amicus brief in Konya v. Lockheed Martin (No. 25-2061, 4th Circuit) on January 9, 2026, clarifying legal standards for pension risk transfers (PRTs)—transactions where companies transfer pension liabilities to annuity providers.

The brief represents the DOL's first public position since class action litigation surged in 2024, with multiple lawsuits targeting companies that transferred pension obligations to Athene Annuity and Life Company, a private equity-backed insurer. Plaintiffs in these cases allege plan sponsors violated ERISA by selecting Athene instead of "safer" traditional insurers, despite continuing to receive all promised benefits.

The DOL argues that fiduciaries enjoy discretion as long as they demonstrate prudence and loyalty during the PRT process. The brief distinguishes between settlor functions (business decisions to conduct PRTs) and fiduciary functions (selecting annuity providers), emphasizing that only the latter triggers ERISA fiduciary duties. According to the DOL, plaintiffs lack Article III standing because they have received all owed benefits with no evidence of impending default.

Lockheed Martin transferred approximately $9.2 billion in pension obligations to Athene through two transactions in 2021 ($4.9 billion for 18,000 beneficiaries) and 2022 ($4.3 billion for 13,600 beneficiaries). The litigation reflects broader concerns about private equity-backed insurers, with plaintiffs citing Athene's investment in higher-risk assets and reliance on Bermuda-based reinsurance subsidiaries.

The DOL emphasized that unrestricted PRTs benefit both employers and participants, and that litigation threatens to chill employers from offering defined benefit plans. Deputy Secretary Keith Sonderling stated that ERISA "expressly provides an off-ramp for employers making the business decision to annuitize their defined benefit obligations." Assistant Secretary Daniel Aronowitz added that ERISA "does not allow hindsight second-guessing or Monday-morning quarterbacking of discretionary fiduciary decisions."

The brief also addresses Interpretive Bulletin 95-1 (IB 95-1), DOL guidance from 1995 requiring fiduciaries to obtain the "safest annuity available." The DOL clarified that plaintiffs misinterpret this guidance, which provides principles-based standards rather than absolute requirements. The DOL recently reported to Congress on whether IB 95-1 needs updating under SECURE 2.0 Act requirements, acknowledging stakeholder concerns about private equity ownership and offshore reinsurance but determining that further public input is needed before making changes.

The case has attracted significant amicus support for Lockheed Martin, including briefs from ten states (Iowa, Alabama, Arkansas, Idaho, Indiana, Louisiana, Montana, Nebraska, Oklahoma, and Texas) arguing that plaintiffs lack standing and that state insurance regulators adequately oversee annuity providers. The ERISA Industry Committee, American Benefits Council, and Committee on Investment of Employee Benefit Assets filed a joint brief contending that retirees' claims rest on "speculative" allegations.

The DOL's position marks a broader effort to counter "regulation by litigation" in ERISA cases, having recently filed similar employer-friendly amicus briefs in retirement plan forfeiture disputes. The agency seeks to maintain what it describes as the "delicately calibrated balance Congress established between federal and state regulatory prerogatives."

Key Points

First DOL Position: January 9, 2026 amicus brief marks DOL's first public stance on PRTs since 2024 litigation wave
Standing Argument: DOL asserts plaintiffs lack Article III standing when receiving full benefits without evidence of imminent default
Settlor vs. Fiduciary: Decision to conduct PRT is settlor function (business decision); only provider selection triggers fiduciary duties
Discretionary Deference: ERISA prohibits "hindsight second-guessing" of fiduciary decisions made through prudent, loyal processes
Litigation Concerns: DOL warns excessive litigation could deter employers from offering defined benefit plans
IB 95-1 Clarification: Plaintiffs misapply 1995 guidance on "safest available annuity" which provides principles-based rather than absolute standards
Broad Support: Ten states and major employer groups filed amicus briefs supporting Lockheed Martin
Market Impact: PRT market continues growth with Q3 2024 buy-in sales jumping 328% to $4.3 billion
Athene Controversy: Multiple lawsuits target private equity-backed insurer Athene for alleged higher-risk profile
Court Split: March 2025 saw Alcoa case dismissed for lack of standing while Lockheed case allowed to proceed