MetLife Inc. announced that it has entered into an agreement with Lockheed Martin Corp. to provide annuity benefits through its subsidiary, Metropolitan Tower Life Insurance Co., to approximately 20,000 retirees and beneficiaries in Lockheed Martin’s defined benefit (DB) plans, representing pension obligations of approximately $1.9 billion.
Lockheed Martin, through its master retirement trust, purchased a group annuity contract from Metropolitan Tower Life Insurance Co. in December. The transaction will not change the amount of the monthly pension benefit received by the corporation’s retirees and beneficiaries. Metropolitan Tower Life Insurance Co., rather than Lockheed Martin, will be responsible for making these monthly payments.
The company previously implemented a pension buyout for part of its pension obligations and a pension buy-in for another part. In the buy-in transaction, Lockheed Martin continues to pay benefits to certain retirees and beneficiaries, but is reimbursed for those payments from Athene Holding.
In 2014, the company froze its salaried DB plan and transitioned employees to an enhanced defined contribution (DC) plan.
Regarding the deal with MetLife, Ken Possenriede, executive vice president and chief financial officer of Lockheed Martin, said, “This agreement will allow Lockheed Martin to focus on its core mission and mitigate financial risk associated with market volatility, while leveraging MetLife’s expertise managing transferred pension liabilities to ensure a seamless transition for retirees and beneficiaries included in the transaction.”
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