Lockheed Martin Corp., Bethesda, Md., settled more than $500 million in projected benefit obligations in its U.S. defined benefit plans through lump-sum payments to terminated vested participants, the company said in its latest 10-K filing.
In Monday’s filing, Lockheed Martin said it made lump-sum settlement payments in 2014 totaling $427 million to terminated vested participants who have yet to retire from its defined benefit pension trust, reducing its liabilities by $529 million.
About 37,000 former salaried and union employees were sent the offer at the end of the third quarter, and about 11,000 participants accepted it, said Dan Nelson, Lockheed Martin spokesman, in an e-mail.
The lump-sum payments are the latest move in the company’s efforts to derisk its U.S. defined benefit plan. In July, the company announced it would freeze its pension plan in early 2016 and start shifting active salaried workers to an enhanced defined contribution program.
Regarding potential future actions, Mr. Nelson said, “While we don’t have any specific actions planned, Lockheed Martin is always looking to balance offering competitive benefits to our employees with managing the rising costs of our retirement programs.”
As of Dec. 31, the plan had assets of $34.67 billion and a PBO of $45.88 billion, for a funding ratio of 75.6%. The company contributed $2 billion to the plans in 2014.