In its 2017 full-year results, defense contractor Lockheed Martin said it will make contributions of $5 billion to its qualified defined benefit pension plans in 2018, including required and discretionary contributions.
It is the largest announced voluntary pension contribution so far in 2018, and is one of the largest pension contributions in recent years.
The boost in funding comes as a result of the expected savings from the recently passed Tax Cuts & Jobs Act, and from strong 2017 sales of $51 billion. The company said that as a result of the contribution, it doesn’t anticipate any material qualified defined benefit funding will be required until 2021.
Lockheed also said that as of the beginning of the year, it adopted Accounting Standard Update (ASU) No. 2017-07, “compensation-retirement benefits,” which changed the income statement classification of certain components of net periodic benefit cost for the defined benefit pension, and other postretirement plans.
Companies with defined benefit pension plans are expected to step up their discretionary contributions to their corporate pensions in 2018 to take advantage of lower tax rates. Last week, at least 14 publicly traded companies announced recent or impending contributions totaling nearly $8.5 billion.