Insights
Kent Mason Comments on Uptick in Litigation Surrounding the Pension Risk Transfer Market with Pensions & Investments
Davis & Harman Partner Kent Mason was recently featured in a Pensions & Investments article and was quoted as a legal expert weighing in on increased litigation against plan fiduciaries regarding their duty to select the safest available annuity option during a pension liability buyout.
P&I reported that Verizon and its independent fiduciary, State Street Global Advisors, face a lawsuit alleging that the plan fiduciaries selected the “cheapest available annuity provider,” as opposed to the “safest available” annuity provider as outlined by Interpretive Bulletin 95-1. The lawsuit follows additional complaints filed against firms including AT&T Corp., Lockheed Martin Corp., and General Electric Co., which all allege fiduciary violations related to the selection of the safest available annuity option.
Kent Mason was quoted to say that he sees no merit in the lawsuit, and while there is disagreement within the industry whether Athene-related litigation will be limited to that insurance company, the new lawsuit shows that PRT litigation will not be limited to one insurance company.
Kent Mason is further quoted to say:
“Since the first suit was brought, if these suits survive the motions to dismiss, the suits will clearly spread well beyond Athene and are a material threat to the entire PRT business. . .This is not because the suits have any merit. Rather, it is because lawsuits are a business from the perspective of the plaintiffs’ firms; if they can survive a motion to dismiss and get a settlement, they will keep suing and suing, as we have seen in the defined contribution fee area.”
A link to the full article can be found here
