Athene completes is largest ever PRT transaction with Lockheed Martin

Athene Holding has closed a pension risk transfer (PRT) transaction with Lockheed Martin, the global security and aerospace firm, in what was Athene's largest single PRT transaction to date.

The transaction saw Lockheed Martin transfer $4.9 billion in pension obligations to Athene. Athene's wholly-owned subsidiaries, Athene Annuity and Life Company (AAIA) and Athene Annuity & Life Assurance Company of New York (AANY) will provide annuity benefits for approximately 18,000 participants of Lockheed Martin's pension plan who are currently receiving benefits.

AAIA and AANY have each committed to issuing a group annuity contract to Lockheed Martin and individual annuity certificates to applicable participants.

Athene used its strategic capital vehicle, Athene Reinsurance Co-investment (ACRA), to support the completion of this transaction.

This was Lockheed’s second PRT with Athene, following a deal in 2018 in which Athene insured approximately $800 million in pension obligations for more than 9,000 of Lockheed Martin’s retirees and their beneficiaries.

Sean Brennan, executive vice president of PRT and reinsurance at Athene, said: "As a leader in the PRT market, Athene has a track record of completing large-scale transactions that help plan sponsors meet their pension obligations while providing income security for their plan participants and their spouses and beneficiaries. Given Athene's deep expertise in the long-term management of retirement benefits, the plan participants covered by this transaction can be confident they will receive the same pension benefit, on the same schedule, as what they currently receive."

Bill Wheeler, president of Athene, said companies are placing increasing emphasis on reducing pension risk to focus on their core business, as the macro environment improves.

“Athene remains well-positioned to provide plan sponsors with customised solutions that achieve their desired de-risking objectives while ensuring the financial security of their plan participants,” he said.

The US PRT market has seen a significant increase in transaction volume beginning in the second half of 2020 and continuing into 2021. The pace of industry activity suggests that 2021 will be the highest year on record for the US market, Athene said.