DOL Urges Dismissal of Lockheed Martin PRT Case

The Department of Labor entered the ongoing legal fight over pension risk transfer transactions, filing an amicus brief with the U.S. 4th Circuit Court of Appeals in a case involving Lockheed Martin.

The filing is part of a broader DOL effort to rein in what it described as “regulation by litigation” that threatens the employers trying to transfer to an insurer the obligations owed under Employee Retirement Income Security Act-governed defined benefit pension plans.

In the DOL’s brief, filed January 9, the department urged the 4th Circuit to reverse a lower court ruling and dismiss the case for lack of standing, arguing that participants who continue to receive their full pension benefits cannot sue simply because a plan sponsor transferred responsibility for their pensions to an annuity provider.

According to a DOL announcement, the filing represents the first time the department has offered a public position on pension risk transfers since “a wave of class action lawsuits began in 2024” and signals a broader effort by the agency to defend employer flexibility under ERISA. 

The DOL also stressed that its decision to push back against litigation is intended to prevent companies from being discouraged from offering pensions at all.

According to the DOL, ERISA expressly allows employers to de-risk defined benefit plans by transferring liabilities to an insurer, and the decision to do so is a “settlor” function that does not itself trigger fiduciary duties.

Fiduciary obligations apply only to the process of selecting an annuity provider, according to the DOL’s brief, and courts should defer to plan fiduciaries who follow a prudent, loyal process, rather than second-guessing outcomes in hindsight.

“The Department acted today to protect the voluntary employee benefit system as Congress intended,” Deputy Secretary of Labor Keith Sonderling said in a statement. “The ability to engage in PRTs is necessary to ensure that employers will continue to offer quality retirement benefits to American employees in the first place.”

Assistant Secretary of Labor for Employee Benefits Security Daniel Aronowitz added in a statement that ERISA is a “law of process,” not results. “ERISA does not allow hindsight second-guessing or Monday-morning quarterbacking of discretionary fiduciary decisions,” he said.

The Lockheed Case

In the case, participants filed an initial complaint against two Lockheed Martin defined benefit plans after the company transferred plan liabilities to insurer Athene Annuity and Life Co. and Athene Annuity & Life Assurance Co. of New York on two occasions as part of a pension risk transfer. Although the plaintiffs acknowledge they continue to receive all promised benefits, they allege the company breached its fiduciary duties by selecting an annuity provider they claim was not the “safest available,” as is required.

The U.S. District Court for the District of Maryland denied Lockheed’s motion to dismiss in April 2025 and allowed the case to proceed, concluding that the plaintiffs had narrowly alleged standing by claiming the transaction increased the risk of future nonpayment. Lockheed appealed, and the 4th Circuit agreed to hear the case.

In its amicus brief, the DOL argued that the district court misread Supreme Court precedent, including Thole v. U.S. Bank, and improperly allowed speculative future risk to substitute for a concrete injury. The department stated that the plaintiffs lack Article III standing because they have received all the benefits owed to them and do not allege any “certainly impending” default.

The DOL also used the brief to clarify what the agency called its long-standing guidance on annuity selection, Interpretive Bulletin 95-1, emphasizing that fiduciaries may reasonably conclude that more than one insurer can satisfy the “safest available” standard based on a balanced, fact-specific process.

Lockheed completed two pension risk transfers, both to Athene. In 2021, the company transferred $4.9 billion in pension obligations and plan assets for 18,000 beneficiaries; and in 2022, it transferred an additional $4.3 billion in obligations for 13,600 beneficiaries.

The DOL Briefs Continue

The Lockheed filing is the latest in a series of amicus briefs the DOL has submitted in recent months to shape ERISA litigation, as Aronowitz pledged to do in his confirmation hearings last June and as Sonderling reiterated in remarks this week. The department has also weighed in on two unique cases involving retirement plan forfeitures, which had also been receiving an increase of legal complaints. As in the pension risk transfer brief, the DOL sided with employers.

Together, the briefs reflect a more assertive posture seeking to influence the courts, particularly to tackle what the agency has repeatedly referred to as “regulation by litigation.”

“When left unencumbered, PRTs benefit employers and participants/beneficiaries alike, which is why ERISA provides for them,” the brief stated “When PRT decisions are forced through the crucible of federal-court litigation, however, those upsides are (at best) obstructed or (at worst) obliterated.”