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Lockheed Martin faces lawsuit over $9.2B pension transfers to Athene

Did Lockheed Martin gamble with retirees' futures? A landmark lawsuit tests the limits of pension risk transfers—and could reshape corporate accountability.

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Lockheed Martin faces lawsuit over $9.2B pension transfers to Athene

Lockheed Martin transferred nearly $9.2 billion in pension obligations to Athene Annuity and Life Co. in two separate deals. The first transfer took place in August 2021, followed by a second in June 2022. Now, a class-action lawsuit has raised questions about the company's choice of annuity provider.

The transfers involved $4.9 billion in 2021 and $4.3 billion in 2022, shifting Lockheed's pension liabilities to Athene. The Iowa-based insurer, with $35 billion in regulatory capital, holds strong credit ratings and fully funds its obligations—covering $200 billion in liabilities with $220 billion in assets.

In March 2024, a group of pension plan participants filed *Konya v. Lockheed Martin Corp.*, accusing the company of breaching fiduciary duties under ERISA. They claim Lockheed failed to select the safest annuity provider when choosing Athene. A Maryland district court rejected Lockheed's request to dismiss the case, prompting an appeal to the U.S. Court of Appeals for the 4th Circuit. Iowa Attorney General Brenna Bird filed a brief supporting Lockheed, arguing in favour of the pension risk transfer. Nine other states—Texas, Arkansas, Oklahoma, Idaho, Alabama, Indiana, Montana, Louisiana, and Nebraska—joined the brief. The legal dispute centres on whether Lockheed acted responsibly in offloading its pension obligations to Athene.

The lawsuit remains active after the district court's denial of Lockheed's dismissal motion. With the case now under appeal, the outcome could set a precedent for how companies manage pension risk transfers. Athene continues to hold the assets, while the legal process determines whether the deal violated fiduciary standards.

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