Boeing's long-lost pension is at the center of broken-down strike talks
As the Boeing (BA) machinists’ strike stretches on, negotiations have hit an unexpected snag that goes beyond debates over current wages. The International Association of Machinists and Aerospace Workers, the union representing the striking employees, is also seeking to restore a retirement benefit that ended a decade ago.
“While conversations were direct, we did not make progress on the pension issue,” the union said in an update to membership on Friday. “The company remains adamant that it will not unfreeze the defined benefit plan.”
After the 30,000-plus workers represented by the IAM went on strike earlier this month following the rejection of a contract that would have given them 25% raises. The union was seeking a 40% increase, and a since-rejected “best and final offer” of a 30% bump was deemed “a blatant show of disrespect” because the company didn’t seek to negotiate it first.
Meanwhile, beneath the surface of wage negotiations, a push to revive defined-benefit pensions has emerged. These retirement plans, which provide guaranteed payouts to long-serving employees after retirement, were part of Boeing’s benefits package until 2014. That year, a contract extension shifted workers to defined-contribution plans like 401(k)s.
Major corporations like Boeing started shifting away from pensions because making sure all those workers got their promised retirement pay was a significant liability. Defined-contribution plans put that risk on the workers themselves instead because they’re the ones primarily responsible for building their nest eggs. Though many employers do partially match employee contributions — Boeing’s “best and final offer” included a 100% match of the first 8% an employee’s pay put aside plus 4 more percentage points — the union wants a return to the certainty of the earlier era.
Additionally alleging that “the company also would not engage substantively about other issues that the membership has made clear remain top priorities, like higher pay, quicker wage progression, and more PTO,” the IAM said that “talks broke off, and we have no further dates scheduled at this time.”
