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Lockheed Martin Corp. has moved another 20,000 retirees andbeneficiaries and about $1.9 billion in pension obligations to MetLife, the latest in asuccession of risk transfer deals and discretionary plancontributions the defense contractor has used to shift mostsalaried employees to a 401(k) plan.

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Under terms of the deal, the monthly benefits to the retireeswill not change, but MetLife will be responsible for administeringthe checks, not Lockheed, according to a statement from theinsurance company.

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In 2006, Lockheed's plan for salaried employees was frozen tonew hires. In 2014, the company amended several of itsnon-union pension plans, comprising a majority of its pensionobligations, to implement a two-stage freeze of retirementbenefits.

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In 2016, the company froze the pay-based component of itsbenefits formula, meaning pay increases after the end of 2015 couldnot be used to calculate benefits.

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In January of this year, the service-based component of theformula was frozen so that pension credits could not be earned fromtime worked after the end of 2019, according to regulatory filingswith the Securities and Exchange Commission.

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To implement the freeze, the company made a $5 billioncontribution to its pensions in 2018 after enactment of the TaxCuts and Jobs Act in 2017, which allowed Lockheed to write down theinvestment at the previous corporate tax rate of 35 percent.

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In 2019, Lockheed transferred $1.8 billion in pensionobligations for about 32,000 retirees to Prudential in a buy-outdeal. It also executed a buy-in deal with Athene, comprising $800million in obligations to 9,000 retirees.

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The Lockheed Martin Salaried Employee Retirement Program had184,235 participants, according to its 2018 Form 5500 filing.

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Of that group, 76,685 were retirees or beneficiaries receivingpension checks.

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So far, Lockheed has transferred the pension obligations of61,000 retirees and beneficiaries from its books. There arecurrently about 40,000 active employees participating incompany-sponsored pension plans. Future risk transfer deals arelikely, but none are yet planned, a company spokesperson said.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.