In a dramatic legal showdown, retired employees of aerospace giant Lockheed Martin have taken legal action, alleging the company committed a grave breach of trust by offloading $9 billion in pension obligations onto a risky annuity provider.
Lockheed Martin sued over pension buyouts : Allegations of Betrayal
The retirees, in a class-action suit filed in Maryland federal court, accused Lockheed Martin of prioritizing its own financial gains over the security of 31,000 beneficiaries’ retirement funds. They contended that the company violated the Employee Retirement Income Security Act by neglecting fiduciary responsibilities and opting for a dubious annuity provider.
Questionable Choices
Lockheed Martin’s decision to select Athene Annuity and Life Co., along with its New York counterpart, Athene Annuity & Life Assurance Co., stirred controversy. The retirees argued that Athene’s ties to private equity and its offshore structure in Bermuda posed significant risks. They emphasized concerns about the lack of financial transparency and Athene’s investment strategies, which they deemed perilous for the retirees’ financial futures.
Lockheed Martin sued over pension buyouts : Loss of Protections
The retirees lamented the loss of protections provided by the Pension Benefit Guaranty Corp. following the pension transfer. They asserted that Lockheed Martin’s actions exposed them to undue risk without adequate compensation, effectively diminishing the value of their pensions.
Timeline of Transfers
The transfer of pension obligations occurred in two transactions: first, in August 2021, involving $5 billion for 18,000 retirees, and then in June 2022, with an additional $4.3 billion for 13,600 retirees. The retirees alleged that these maneuvers primarily served Lockheed Martin’s interests, jeopardizing the financial security of its workforce.
Dodging Responsibility
Critics pointed out that Lockheed Martin had viable alternatives, such as established annuity providers like Prudential or New York Life. However, by opting for Athene, the retirees claimed the company avoided premium payments associated with more reputable providers, further exacerbating the risk to pension holders.
Lockheed Martin sued over pension buyouts : Seeking Justice
The retirees, seeking to represent a class of affected participants dating back to March 13, 2018, estimated at 31,000 members, are determined to hold Lockheed Martin accountable for its actions. Legal representatives for the retirees emphasized the significance of their case, highlighting the need for transparency and accountability in pension management.
Lockheed Martin sued over pension buyouts : Awaiting Response
Despite repeated attempts, neither representatives for the retirees nor Lockheed Martin provided immediate comments on the lawsuit. The legal battle promises to unfold in the coming days, with significant implications for the future of retirement benefits at Lockheed Martin.
Legal Eagles
The retirees are represented by esteemed legal counsel, including P. Matthew Darby of the Darby Law Group LLC, and Jerome J. Schlichter, Sean E. Soyars, and Kurt C. Struckhoff of Schlichter Bogard LLP. Counsel information for Lockheed Martin was not yet available, leaving the aerospace giant to face the allegations without formal representation.
