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On July 21, 2026, the Department of Labor filed an amicus curiae brief with the Second Circuit Court of Appeals siding with defendant plan sponsor/sponsor fiduciaries in Doherty et al. v. Bristol-Myers Squibb Co., et al., a class action challenging Bristol-Myers Squibb’s pension risk transfer (PRT) of defined benefit plan liabilities and assets to Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York as a violation of ERISA’s fiduciary prudence and loyalty standards. The brief, another in a series of amicus briefs siding with defendants in ERISA fiduciary litigation, is interesting in a number of respects – critically, in how the (current) DOL views fiduciary obligations in connection with a pension risk transfer (PRT) and the requirements of Interpretive Bulletin 95-1.
As with other Trump 2.0 DOL amicus briefs, however, probably the most significant news here is that DOL is intervening on the side of the sponsor and sponsor-fiduciaries.
In this note, we review DOL’s amicus brief.
DOL’s brief argues that the Constitutional injury-in-fact standing requirement sets a much higher bar than just alleging that there may be some questions about a carrier’s long-run financial strategy. There must be “a certainly impending risk that the [alleged] breach will prevent [plaintiffs] from receiving their plan benefits.” The facts alleged by plaintiffs do not meet that standard.
In 2018, BMS decided to terminate the Bristol-Myers Squibb Retirement Income Plan, a defined benefit pension plan. BMS hired State Street to “assist in selecting an annuity provider.” State Street ultimately recommended that BMS/the plan purchase a group annuity contract from the Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York (Athene) – “two Bermuda-based reinsurers that conducted their first [pension risk transfer] (PRT) in August of 2017.” BMS agreed to the selection of Athene and transferred $2.6 billion in annuitized pension benefits to it. With respect to the transaction, BMS retained $800 million in surplus.
Plaintiffs (former plan participants) sued, claiming violations of ERISA’s fiduciary and prohibited transaction rules.
The case is on interlocutory appeal to the Second Circuit from a decision by the United States District Court for the Southern District of New York denying defendants’ motion to dismiss for lack of standing.
The question of standing-to-sue has been a key issue in the PRT litigation, generally turning on whether the plaintiff has adequately alleged an “injury in fact.” No injury-in-fact = no standing = no lawsuit.
PRT Defendants raising the standing issue rely primarily on the Supreme Court’s decision in Thole v. U.S. Bank, which held that (oversimplifying) where plaintiffs are still receiving promised benefits they have not been injured (“in fact”). The obvious point being that in all the challenges to recent pension risk transfers, plaintiffs are still receiving promised benefits and have shown no real likelihood that they will not continue receiving those benefits.
DOL: the lower court misunderstood Thole specifically and the Constitutional standing requirement generally
DOL’s brief begins by noting that in all recent PRT litigation plaintiffs have sought to justify satisfaction of the Constitution’s injury-in-fact standing requirement by citing “stray language” in Thole that had “nothing to do with Thole’s holding.” Specifically:
Thole mused about how “the plaintiffs’ amici” [in Thole] had surmised that “plan participants in a defined-benefit plan” might have “standing to sue if the mismanagement of the plan was so egregious that it substantially increased the risk that the plan and the employer would fail and be unable to pay the participants’ future pension benefits.”
Plaintiffs in post-Thole PRT litigation have “exploited” this language “quickly and mercilessly” to argue that PRTs to allegedly risky annuity carriers constitute an injury-in-fact. In this case, plaintiffs, in support of their claim that the BMS-Athene PRT represented such egregious mismanagement, pointed to Athene’s (allegedly) low surplus and surplus-to-risk ratio, Athene’s use of an off-shore reinsurance vehicle, subject to a more relaxed (Bermuda) regulatory regime, private equity ownership of Athene, and the fact that Athene has not “been tested through a full economic cycle and [has] never weathered a recession.”
And the lower court adopted this analysis in denying defendants’ motion to dismiss.
In its brief, DOL argues that, to the contrary, Thole “faithfully applied” prior Supreme Court standing decisions holding that any such future “threatened injury must be certainly impending to constitute injury in fact” (emphasis added), and that “[a]llegations of possible future injury,” in contrast, “are not sufficient.” Plaintiffs in Bristol-Myers Squibb, DOL argues, have not met this “certainly impending” standard with respect to the Athene PRT.
The lower court also found that the “eject[ion] from the ambit of ERISA and its protections” resulted in the “diminished value” of plaintiffs’ benefits and thus constituted an independent injury providing a basis for standing. DOL’s brief argues that ERISA clearly provides for pension risk transfer transactions and that arguing that they result in a legally remedial injury “is no more than a policy disagreement with Congress’s prerogative that masquerades as an injury.”
Finally, as DOL brief states, DOL’s “Interpretive Bulletin 95-1 … was a hotly debated point of contention among the parties before the district court,” and DOL asks the Second Circuit to clarify its application.
IB 95-1, DOL explains, “advises fiduciaries to ‘take steps calculated to obtain the safest annuity available, unless under the circumstances it would be in the interests of participants and beneficiaries to do otherwise.’ … In so doing, IB 95-1 does little more than restate a fiduciary’s general duty of loyalty and process-based duty of prudence; then, it applies those duties to the specific PRT context.”
IB 95-1 “states that a fiduciary should consider (among other things, such as cost savings) … six factors when selecting an annuity provider:.”
The quality and diversification of the annuity provider’s investment portfolio;
The size of the insurer relative to the proposed contract;
The level of the insurer’s capital and surplus;
The lines of business of the annuity provider and other indications of an insurer’s exposure to liability;
The structure of the annuity contract and guarantees supporting the annuities, such as the use of separate accounts;
The availability of additional protection through state guaranty associations and the extent of their guarantees.
DOL argues that it is up to the fiduciary to decide what weight to give each of these factors, so that “So long as the process is followed … different fiduciaries may end up opting for different annuity providers.”
As DOL acknowledges, there are conflicting views of what IB 95-1’s safest available annuity rule actually requires. The current DOL’s view, as expressed in this brief, is about
as positive for sponsors and sponsor fiduciaries as any currently on offer. But this is only a brief, and DOL’s view is only (at this point) one among many opinions.
This is an important case on an issue that is critical to any DB plan sponsor considering settling liabilities via a PRT. For those sponsors, the position described in DOL’s amicus brief is a positive sign. Indeed, in its brief, DOL argues that the ability of sponsors to do PRTs, without the fear of “vexatious litigation,” is essential to the long-run viability of the voluntary private employer retirement plan system.
We will continue to follow this issue.
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