SEATTLE -- Chicago-based Boeing Co. said Thursday it is freezing the traditional defined-benefit pensions for 68,000 nonunion employees - including managers and executives - starting in 2016.
The Chicago-based aerospace company said in a statement that the employees will transition to a company-funded defined contribution retirement plan, effective Jan. 1, 2016. They will have a 401(k)-style retirement plan similar to what union machinists approved in a contentious contract-extension vote earlier this year.
Nonunion Boeing employees hired since 2009 have not had a traditional defined pension plan. Thursday's announcement applies to those who started working for the company earlier, KING reported .
In its statement, Boeing said it would make contributions each pay period to nonunion employees' retirement savings through the 401(k) plan. All benefits earned in the traditional pension plan will be paid to current and already-retired employees, and the company said it would also continue to match employee savings in an existing 401(k) plan.
Tony Parasida, Boeing's senior vice president of human resources and administration, said making the switch would help address the "unsustainable growth" of the company's long-term pension liability.
On Jan. 3, Boeing machinists in the Seattle area narrowly approved a contract in which they conceded some benefits in order to secure assembly of the new 777X jet in Washington state.
Machinists approved an eight-year contract extension with a slim 51 percent vote in favor. Opponents of the contract opposed the idea of freezing the pension and moving workers to a defined-contribution savings plan. They also criticized increased health care expenses and slower wage growth.
Local union officials had urged their 30,000 members to oppose the deal, arguing that the proposal surrendered too much at a time of company profitability.