Boeing’s non-union employees participating in the company’s DB plans will be transitioned to a company-funded DC plan.
Beginning Jan. 1, 2016, the company will make cash contributions each pay period to employees’ retirement savings through a new DC component of the 401(k) plan. All benefits earned in the current traditional pension plan prior to the transition will be paid to employees in retirement, and the company will continue to match employee savings in an existing 401(k) plan.
The transition covers roughly 68,000 employees, including managers and executives, who participate in the main Boeing and subsidiary DB plans. Retirees already receiving pension benefits are not affected by this change.
“Our objective in making this transition is twofold: continue providing an attractive, market-leading retirement benefit contributing to employees’ retirement security, while also assuring our competitiveness by curbing the unsustainable growth of our long-term pension liability,” says Tony Parasida, senior vice-president of HR and administration.
All non-union employees hired since 2009 and new hires of 28 unions have been moved to DC plans, which Boeing says will help it to better predict and manage financial risks.
Similar changes were also included in contract extensions ratified this year by members of the company’s biggest union, the International Association of Machinists and Aerospace Workers (IAM) District 751 in Seattle and IAM District 837 in St. Louis.
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