General Dynamics announces $673 million pension buyout

General Dynamics Corp., Reston, Va., purchased a group annuity contract to transfer $673 million in U.S. pension plan liabilities to two insurance companies.

The aerospace and defense company disclosed the October purchase of the annuity contracts in its 10-K filing with the SEC on Feb. 7.

General Dynamics did not disclose the names of the insurance companies, which now share the responsibility of paying benefits to about 16,000 retirees and beneficiaries.

The transaction was completed using pension plan assets, according to the filing.

It is the second pension buyout transaction completed by the company in the past several years. In October 2021, the company purchased a contract from one undisclosed insurer to transfer about $550 million in U.S. pension plan liabilities. The transaction gave the insurer the responsibility of paying benefits to about 21,000 retirees and beneficiaries.

As of Dec. 31, General Dynamics' global pension plan assets totaled $10.5 billion, while projected benefit obligations totaled $12.2 billion, for a funding ratio of 86.1%, according to the 10-K filing.

The filing did not provide separate information for U.S. and non-U.S. plans.

BlackRock is the outsourced CIO for the company’s pension plans.