A Massachusetts federal magistrate judge has recommended dismissal of a proposed class action brought by AT&T retirees, marking a significant development in the ongoing AT&T pension case ruling.
U.S. Magistrate Judge Paul G. Levenson issued a report and recommendation advising the U.S. District Court for the District of Massachusetts to dismiss all claims filed under the Employee Retirement Income Security Act (ERISA). The case centers on allegations that AT&T Inc. and State Street Global Advisors Trust Co. exposed retirees’ pensions to unnecessary risks through an $8 billion pension risk transfer (PRT).
The retirees, who filed suit in 2024, claimed that AT&T and its affiliates violated ERISA fiduciary duties of loyalty and prudence by transferring federally regulated pension benefits into annuity insurance contracts managed by Athene. While Athene was not named as a defendant, State Street allegedly recommended the company to AT&T.
Judge Levenson acknowledged that the retirees had adequately alleged standing but concluded that the complaint failed to establish viable claims under ERISA. He found no evidence of conflicts of interest or imprudent decision-making in AT&T’s selection of Athene as annuity provider. The judge further ruled that allegations of prohibited transactions lacked sufficient factual support.
Importantly, Judge Levenson declined to apply the U.S. Supreme Court’s recent decision in Cunningham v. Cornell University as precedent for this case, emphasizing that not all transactions with third parties constitute prohibited transactions under ERISA.
The recommendation, if adopted by a district judge, would end the consolidated class action lawsuit against AT&T and State Street.
Legal representation in the matter includes:
