What is the story about?
What's Happening?
A New York judge has ruled that a lawsuit filed by former Bristol-Myers Squibb employees can continue. The plaintiffs argue that converting their pensions into Athene annuities poses a risk to their retirement earnings. The case, Doherty v. Bristol-Myers Squibb, claims that the company and its fiduciary did not select the safest insurer for a $2 billion pension risk transfer (PRT) deal with Athene Annuity Life Co. The judge denied motions to dismiss the case, stating that the plaintiffs have shown a substantial risk to their benefits.
Why It's Important?
This ruling is crucial as it highlights the legal complexities surrounding pension risk transfers, a growing trend among large corporations. The decision could influence how companies approach PRT deals and the level of scrutiny they face from both employees and regulators. If the plaintiffs succeed, it may lead to stricter standards for selecting insurers in PRT deals, potentially affecting the financial strategies of major corporations and the security of retirees' benefits.
What's Next?
The case may set a precedent for similar lawsuits, as several other companies have faced legal challenges over PRT deals. The differing opinions in similar cases suggest that the issue could eventually reach the Supreme Court. The outcome could lead to changes in how pension plans are managed and transferred, impacting both corporate practices and retirees' financial security.
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