Labor Department backs pension risk transfers in Bristol-Myers Squibb appeal
The U.S. Department of Labor filed an amicus brief in Doherty v. Bristol-Myers Squibb, urging the Second Circuit to reject claims that the company breached ERISA by transferring pension liabilities to an annuity provider.
The U.S. Department of Labor filed an amicus brief July 21 in Doherty v. Bristol-Myers Squibb, telling the U.S. Court of Appeals for the Second Circuit that pension risk transfers can be permissible under the Employee Retirement Income Security Act when employers follow established standards.
The department said ERISA allows employers to transfer defined benefit liabilities to an annuity provider. It argued that litigation over those transfers could discourage employers from using a process Congress expected them to rely on for long-term pension obligations.
According to the department’s release, the plaintiffs say Bristol-Myers Squibb chose an annuity provider that was not the safest available and breached fiduciary duties under ERISA. The department’s brief takes the opposite view, saying the plaintiffs lack standing because they have received all benefits they are entitled to and there is no evidence those benefits are at risk.
The department described pension risk transfers, also called derisking, as a way to move defined benefit pension liabilities to an annuity provider. It said the sponsor of the plan, not the plaintiffs, has authority to enter into that kind of transaction. The department also said Congress intended employers to rely on annuity providers to cover long-term pension obligations.
This is the department’s second amicus brief on the topic in 2026, according to the release. In January, it filed a similar brief in Konya v. Lockheed Martin.
The department said pension risk transfers can benefit employers and beneficiaries if they are not disrupted, and it warned that continued litigation could deter employers from derisking their plans. It also said the legal fight could upset the balance Congress established between federal and state regulation.
The release did not say when the Second Circuit will act on the brief or when the underlying dispute may move next.
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Editorial note: This article was prepared with AI assistance and includes source attribution for reader review.
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