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Pension Risk Transfer

Lockheed Martin transfers $2.6 billion in pension risk

Lockheed Martin Co., Bethesda, Md., disclosed in an 8-K filing with the SEC on Tuesday it has purchased two group annuity contracts from Prudential Insurance Co. of America and Athene Annuity and Life Co. totaling $2.6 billion.

The Prudential contract is a $1.8 billion buyout that affects about 32,000 U.S. retirees and beneficiaries in the defense and aerospace company's defined benefit plans, Prudential said in its news release.

The Athene contract is an $800 million buy-in affecting about 9,000 U.S. retirees and beneficiaries, in which the plan will continue to pay benefits to be reimbursed by Athene.

As of Sept. 30, Lockheed Martin's U.S. defined benefit plan assets totaled $35.16 billion in assets, according to Pensions & Investments data. Before Lockheed Martin's expected $5 billion in pension contributions to be made in 2018, the plans' funding ratio as of Dec. 31, 2017, was 68%, according to the company's most recent 10-K filing. As of that date, the company reported $33.1 billion in total DB plan assets and $48.7 billion in projected benefit obligations.