Summary
This 8-K filing from Lockheed Martin Corporation, dated July 1, 2014, announces significant changes to its salaried employee retirement plans. The company's defined benefit pension plans, including the Lockheed Martin Corporation Salaried Employee Retirement Program (LMRP) and the Supplemental Pension, will be frozen in two stages. The pay-based component will cease accrual on January 1, 2016, and the service-based component will freeze on January 1, 2020. In parallel, Lockheed Martin is transitioning employees to an enhanced defined contribution retirement plan. Starting January 1, 2016, salaried employees and named executive officers will receive an increased company contribution to their 401(k) plans. This transition aims to reduce long-term pension liabilities and align with evolving retirement benefit structures. The company anticipates no material impact on its second quarter 2014 earnings or 2014 full-year earnings per share from these changes.
Key Highlights
- 1Lockheed Martin is freezing its defined benefit pension plans (LMRP and Supplemental Pension) for salaried employees.
- 2The freeze will occur in two stages: pay-based component frozen Jan 1, 2016; service-based component frozen Jan 1, 2020.
- 3Employees will transition to an enhanced defined contribution retirement plan starting Jan 1, 2016.
- 4The enhanced defined contribution plan includes increased company automatic contributions, rising to a total of up to 10% of eligible pay plus company match by January 1, 2020.
- 5Named executive officers and other salaried employees are eligible for these changes.
- 6The company expects no material impact on Q2 2014 earnings or 2014 full-year EPS due to these plan changes.
- 7Full year 2014 FAS pension expense estimates will be updated and communicated on July 22, 2014.