By RTT News,
July 01, 2014, 08:37:00 AM EDT
(RTTNews.com) - Defense contractor Lockheed Martin ( LMT ) said it would freeze its salaried defined benefit pension plan and transition employees to an enhanced defined contribution retirement plan. This change would take effect in a two-step approach, starting on January 1, 2016 with the freeze of pay-based benefits and concluding with the freeze of service-based benefits on January 1, 2020. The plan is expected to be fully frozen with effect from January 1, 2020.
When the freeze is complete, majority of Lockheed Martin salaried employees, including about 25,000 not in the pension plan, would have transitioned to a retirement plan, offering up to 10 percent of employees' salary annually in company contributions, the company stated.
While the salaried pension plan was closed to new participants in 2006, around 48,000 employees of Lockheed Martin's 113,000 employees are participating. An additional 250,000 retirees and former employees are in the plan. Retirees already collecting benefits and former employees with a vested benefit would remain unaffected by this change. Current and former employees would also keep all benefits already earned in their pension plan to date.
These changes are anticipated to have no impact on second-quarter 2014 earnings. Full-year 2014 expectations for pension expense calculated under Financial Accounting Standards would be updated and communicated when the company reports second quarter results on July 22, 2014.
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