Boeing deal with professional union freezes pension fund at end of 2018Reprints
Boeing Co. engineers and technical workers represented by the Society of Professional Engineering Employees in Aerospace on Wednesday ratified a six-year contract agreement that freezes defined benefit accruals for members effective Dec. 31, 2018, while providing for special 401(k) contributions.
The new contract agreement was ratified by a 71.1% vote of members of the union’s professional engineers unit and 73.2% vote of members of the technical unit of SPEEA, Local 2001 of the International Federation of Professional and Technical Engineers. The vast majority of the 14,100 professional engineer members of 6,000 technical worker members of the union work in the Puget Sound, Washington, area with the remaining members in California, Oregon, Utah and Florida, said Bill Dugovich, SPEEA communications director. The new contract takes effect retroactive to Feb. 11 through Oct. 6, 2022.
SPEEA members accounted for 13% of Chicago-based Boeing’s total workforce of 161,400 as of Dec. 31, according to the company’s 10-K filing.
The Boeing Co. Employee Retirement Plan was closed in 2012 to professional engineers represented by the union hired after March 1, 2013, and technical worker members hired after March 21, 2013, following separate agreements with professional engineers and technical workers based in Puget Sound, Wash., and other locations.
The new contract provides for Boeing to make special contributions to the 401(k) plan for professional and technical union members moving from the defined benefit plan. Boeing will contribute 9% of a participants eligible pay in 2019, 8% in 2020 and 7% in 2021. Afterward, the company will contribute 3% to 5% based on age.
For members hired after the March 2013 dates, Boeing will contribute 6% to 8% in each of 2019, 2020, 2021 and 3% to 5% afterward.
Boeing and SPEEA on Jan. 13 reached a tentative agreement to replace the contract, which was to expire Oct. 6, 2016.
Boeing had $56.5 billion in defined benefit assets as of Dec. 31 and $44.7 billion in defined contribution assets as of Sept. 30.
A Boeing spokesman, said the new contract “is very much in line with our approach of reducing risk in the long term and shifting to defined contribution plans for our employees.”
Barry B. Burr writes for Pensions & Investments, a sister publication of Business Insurance.