Iowa Attorney General Brenna Bird, joined by counterparts from eight other states, urged a federal appeals court to toss a lawsuit challenging Lockheed Martin’s pension risk transfer to Athene Holdings.
In an amici curiae brief filed with the U.S. Court of Appeals for the Fourth Circuit, the attorneys general argued the plaintiffs lack standing because they cannot show an actual injury tied to the transaction.
According to the filing, speculative concerns about future pension risk don’t meet the legal threshold.
The lawsuit claims Lockheed Martin violated fiduciary duties by transferring pension obligations to Athene, which plaintiffs describe as a risky insurer because of its private equity ownership and offshore structure. They argue Lockheed should have selected a carrier viewed as less risky.
The states pushed back hard. The brief said the employees “lack an injury at all,” adding that pension risk transfers remain tightly regulated at the state level and have not resulted in benefit losses for retirees.
According to the filing, not a single pensioner has lost benefits due to a pension risk transfer in decades.
Athene closed the $4.9 bn transaction with Lockheed Martin in 2021, at the time the largest pension risk transfer completed by the retirement services firm.
Under the deal, Lockheed transferred $4.9 bn in pension obligations to Athene subsidiaries, which assumed responsibility for annuity payments to roughly 18,000 retirees already receiving benefits.
The Iowa-led brief emphasized that insurers like Athene operate under what it called robust state oversight, including risk-based capital requirements that make life insurer insolvencies rare.
Allowing the lawsuit to proceed, the filing argued, would imply states are failing to regulate insurers properly.
Attorneys general from Alabama, Arkansas, Idaho, Indiana, Louisiana, Montana, Nebraska, Oklahoma, and Texas joined the brief.
Similar lawsuits targeting pension risk transfers involving Athene and other insurers have been dismissed in recent months. Athene has not been named as a direct defendant in those cases.
An Athene spokesperson said the states’ filing reinforces the company’s long-standing position that such claims lack merit.
The spokesperson described pension risk transfers as safe and said Athene maintains $35 bn in regulatory capital alongside strong credit ratings backing its obligations.
According to LIMRA data cited by Beinsure, U.S. pension risk transfer activity cooled in the third quarter. Overall PRT sales fell 32% year over year, though single premium buy-in volume jumped 328% to $4.3 bn.
Total new PRT premium reached $10.6 bn for the quarter, well above the previous three months but below last year’s pace.
