Verizon’s PRT Case Dismissed in New York

A federal judge in New York dismissed a complaint accusing Verizon and its advisers of violating the Employee Retirement Income Security Act through a $5.7 billion pension risk transfer.

In a January 8 opinion in Dempsey et al. v. Verizon Communications Inc. et al., U.S. District Judge Alvin Hellerstein ruled that retirees lacked Article III standing to challenge Verizon’s decision to terminate two defined benefit pension plans by purchasing group annuities from Prudential Insurance Co. of America and RGA Reinsurance Co.

Hellerstein, a senior U.S. district judge, held that the plaintiffs lacked standing, since they did not show “substantial risk of imminent harm” as a result of the pension risk transfer.

In addition, Hellerstein wrote that the plaintiffs failed to plausibly allege breaches of fiduciary duty or prohibited transactions under ERISA, thereby clearing Verizon and independent fiduciary State Street of liability and closing the case with prejudice, meaning the case cannot not be refiled in the same court.

“Plaintiffs must plausibly allege that no reasonable fiduciary would have selected the annuity providers,” Hellerstein wrote.

The complaint, filed in December 2024 by former Verizon employees and retirees, alleged—as have several other pension risk transfer complaints—that the company exposed participants to heightened risk by transferring roughly $5.7 billion in plan assets to insurers in March 2024, while writing off approximately $5.9 billion in pension liabilities. The plaintiffs argued that the transaction endangered their lifetime benefits by moving them out of ERISA’s protections and into the state-regulated insurance system that governs annuity providers.

Hellerstein rejected those arguments, leaning heavily on the Supreme Court’s 2020 decision in Thole v. U.S. Bank, which held that participants in DB plans generally lack standing, absent a concrete reduction in promised benefits. Because Verizon retirees continue to receive the same monthly payments as they had before the annuitizations and alleged only speculative future harm tied to a possible insurer insolvency, the court found no cognizable injury.

The ruling came just one day prior to the Department of Labor’s amicus brief filing in a separate pension risk transfer complaint in which the department sided with the employer, Lockheed Martin. The DOL argued in that filing that ERISA does not prohibit properly executed annuity transactions and that speculative risk allegations are insufficient to sustain fiduciary breach claims. In its brief, the DOL similarly cited Thole v. U.S. Bank and took aim at the negative effects PRT litigation has had on DB pension plans.

In some ways, pension risk transfer cases have already slowed down. According to Davis & Harman, a firm representing employers in ERISA cases, 12 PRT lawsuits were filed in 2024, with three later consolidating. In 2025, only one PRT lawsuit was filed.

In the DOL’s Lockheed amicus brief, the department argued that when pension risk transfers are forced into litigation, the “upsides are (at best) obstructed or (at worst) obliterated.”