Timberland Company Targeted in Latest PRT Lawsuit

Law firm Schlichter Bogard LLP has filed another lawsuit targeting a large employer for conducting a pension risk transfer with Athene Annuity and Life Co., arguing that the insurance provider is “risky” and has an opaque business structure.

In Maneman et al. v. Weyerhaeuser Co. et al., former employees of the Weyerhaeuser Co.—one of the world’s largest timberland companies, based in Seattle—accused the firm, as well as its annuity committee and independent fiduciary State Street Global Advisors Trust Co., of breaching its fiduciary duties under the Employee Retirement Income Security Act by not selecting the “safest annuity available” following the company’s January 2019 PRT deal with Athene.

The lawsuit was filed on December 12 in the U.S. District Court for the Western District of Washington at Seattle.

In 2019, Weyerhaeuser entered into an agreement to transfer $1.5 billion of its pension obligations to Athene, impacting about 28,500 U.S.-based retirees and their beneficiaries. According to the lawsuit, this transfer affected more than 52% of plan participants.

As of December 31, 2018, the pension plan covered approximately 54,659 total participants and beneficiaries and held approximately $4.1 billion in assets. Athene began making pension payments to Weyerhaeuser retirees on May 1, 2019.

As with many of Schlichter’s lawsuits, the plaintiffs accused Athene of being a “highly risky private equity-controlled insurance company with a complex and opaque structure.” The lawsuit also accuses Athene of issuing annuities that generate higher expected returns and profits for Athene and its affiliates by investing in lower-quality, higher-risk assets instead of the traditional mix of quality assets to support future benefit obligations.

“Because the market devalues annuities when accounting for such risk, it is likely that Weyerhaeuser saved a substantial amount of money from selecting Athene instead of an annuity from a traditional life insurer,” the lawsuit alleges. “In transferring plaintiffs’ pension benefits to Athene, [Weyerhaeuser] put the future retirement benefits owed to Weyerhaeuser retirees and their beneficiaries at substantial risk of default.”

In addition, the complaint claims Weyerhaeuser failed to prudently discharge its fiduciary duties in monitoring State Street. While the company hired State Street as an independent fiduciary to select Athene, Weyerhaeuser maintained full responsibility because it appointed fiduciaries to monitor State Street to ensure that it carried out its fiduciary obligations, the lawsuit alleges.

State Street did not immediately respond to a request for comment.

In 2024 alone, Schlichter Bogard has represented plaintiffs in filing complaints against General Electric Co., AT&T Inc., Lockheed Martin and Alcoa Corp., each claiming that the employers and their independent fiduciaries failed to pick the safest annuity provider available for the PRT deals when choosing Athene.

A spokesperson from Athene stated, “These complaints are entirely baseless attempts by class action attorneys to enrich themselves at the expense of retirees. Every pension group annuity participant whose benefits have been guaranteed by Athene has received and will receive their promised benefits in full. In each pension group annuity transaction for which Athene has been selected, there has been a robust review process carried out by a fiduciary and their independent advisers who are experts at assessing insurer safety. Athene operates from a position of outstanding financial strength and is a safe and secure provider of annuity benefits. We are properly reserved, and have excellent capitalization and strong credit ratings, with a recent rating upgrade to A+ by AM Best.”

Separately, the ERISA Industry Committee, an industry association that represents the employee benefits interests of large employers, last month filed an amicus brief supporting General Electric’s motion to dismiss the case involving its PRT with Athene. In its brief, ERIC argued that the plaintiffs did not identify an instance in which Athene has paid any annuity recipients under any plan less than they would have received under their ERISA-governed pension plan. ERIC also filed a brief supporting AT&T’s motion to dismiss a case involving a PRT with Athene.

To “remedy the fiduciary breaches” they allege in the Weyerhaeuser suit, the former employees are seeking the disgorgement of the sums involved with the “improper” transactions, the posting of security to assure receipt by plaintiffs and class members of their “full retirement benefits and the monetary value of the reduced market value of Athene’s annuities relative to the value of an ERISA-compliant annuity.”

The plaintiffs also requested a jury trial and, alternatively, an advisory jury.

A spokesperson at Weyerhaeuser said, “We can’t comment on specifics of pending litigation, but we don’t believe these cases have any merit and intend to defend vigorously.”

Weyerhaeuser’s legal representatives were not identified in the legal filing.