Lockheed Martin transfers $900M in pension obligations to insurers

Lockheed Martin Corporation (NYSE: LMT) executed buy-out conversions of group annuity contracts on December 16, 2025, transferring approximately $900 million of pension obligations from its defined benefit pension plans to insurance companies.

The conversions affect approximately 9,000 U.S. retirees and beneficiaries, with no additional costs or funding contributions required by Lockheed Martin. The insurance companies will assume legal responsibility for paying and administering retirement benefits, while benefit payments will remain unchanged in nature, amount, and timing.

Under the original group annuity contract terms, Lockheed Martin's pension plans retained payment obligations to retirees while insurance companies reimbursed the plans. The contracts included an option for the company to transfer obligations to insurers at its discretion.

The company expects to recognize a non-cash, non-operating pretax settlement charge of approximately $480 million in the fourth quarter of 2025. This charge reflects accelerated recognition of actuarial losses previously included in stockholders' equity.

The estimated charge was not included in Lockheed Martin's financial outlook released on October 21, 2025, according to the company's statement.

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