BOEING’S decision to transition 68,000 nonunion employees from a traditional pension to a defined-contribution retirement plan is both smart politics and smart business.
Politically, the region’s largest private employer had to move swiftly regarding nonunion benefits after squeezing the Machinists union in January to accept a pension freeze and similar transition, as 777x work hung in the balance. Boeing stopped offering pensions to new nonunion employees in 2009, but for the sake of equity it had to match the concessions it asked of unionized workers.
On the business side, Boeing’s drift away from pensions reflects economic reality and an undeniable trend across all industries. About 16 percent of private-sector American workers have pensions, while about 70 percent of workers with retirement plans are solely covered by 401(k)-style plans.
Despite $1.5 billion in pension contributions last year for 169,000 workers, Boeing, like other employers, is only a bear market away from a crushing underfunded pension liability.
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Boeing’s engineers union is likely next to face the pension squeeze, when its contract is up for renegotiation in 2016. As the union executive director told The Seattle Times’ Dominic Gates, “The handwriting is on the wall.”
Editorial board members are editorial page editor Kate Riley, Frank A. Blethen, Ryan Blethen, Sharon Pian Chan, Lance Dickie, Jonathan Martin, Thanh Tan, William K. Blethen (emeritus) and Robert C. Blethen (emeritus).