Boeing: No more pension for non-union workers
Mar 6, 2014, 12:09 PM | Updated: Mar 7, 2014, 6:49 am
A big change is coming for 68,000 non-union Boeing employees and executives, after the company announced Thursday it would end its pension plan and transition to a defined-contribution plan.
The move takes effect January 1, 2016, and is part of Boeing’s effort to reduce the growing costs of its pension plans.
The new plan includes managers and executives, including CEO Jim McNerney, whose own pension was a point of contention during a recent contract dispute over the new 777X. The employees will keep what they have earned in their pensions through December 31, 2015, and then switch to the new plan.
“We wanted to give people time to be able to plan for that so they can think about their retirement,” said Boeing spokesman John Dern.
The change to a 401k-style plan mirrors the change narrowly accepted by more than 30,000 members of Boeing’s Machinists union in exchange for the company awarding the 777X to Washington state and Everett.
Boeing says the program roughly covers 68,000 employees, and would go all the way to the top, covering McNerney, who’s own large pension was frequently pointed out by Machinists opposed to Boeing’s offer to win the 777X.
The change comes as little surprise. Non-union Boeing employees hired since 2009 have not had a traditional defined pension plan, so Thursday’s move only applies to those who started working for the company in 2009 and earlier.
Under the new plan, the company will provide 9 percent of their eligible income in 2016, 8 percent of income in 2017 and 7 percent of income in 2018 to a 401k plan. Starting in 2019, the company will contribute 3 percent to 5 percent of eligible income, depending on age.
