February 1, 2019

Sikorsky parent “de-risks” $2.6 billion in pension obligations

PHOTO | Contributed
PHOTO | Contributed
Sikorsky's CH-53K King Stallion helicopter is produced in Connecticut.

Defense giant Lockheed Martin, which acquired Stratford's Sikorsky for $9 billion just over three years ago, said it has inked deals to shift $2.6 billion in retiree pension obligations to Prudential and Athene.

The bulk of the obligations, $1.8 billion, will be assumed by Prudential, which has its retirement division in downtown Hartford, with the remainder going to Iowa-based Athene.

Under the deals, the two financial-services providers have each issued a group annuity contract covering a total of 41,000 Lockheed employees.

Such de-risking arrangements have become increasingly common, as companies with defined benefit pensions look to reduce costs and hedge against the risks of market volatility and beneficiaries living longer, according to Prudential and Athene.

Prudential touts itself as the global leader in de-risking deals. It's won business from companies including The Hartford, General Motors, Verizon, Motorola and Bristol-Myers Squibb. Prudential said it's paying a total of more than $10 billion per year in pension payments to more than 1 million retirees, under its de-risking arrangements.

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