Striking Boeing workers in Washington have set their sights on the revival of traditional pension plans—an ambitious demand in an economic climate where corporations have largely transitioned to retirement plans that shift financial responsibility onto employees. This demand, made more than a decade after Boeing discontinued the pension structure, reflects broader shifts as unions across industries revisit old-fashioned benefit models.
At the heart of this movement are Boeing’s 33,000 striking employees, represented by lead negotiator Jon Holden, who hinted at compromise as the possibility of a fully restored pension appears slim. “Exploring other defined-benefit options is on the table,” Holden remarked, signaling that workers might consider alternative retirement solutions.
The strike places new CEO Kelly Ortberg in a challenging position, tasked with balancing quick strike resolution against the financial implications of revisiting pension plans. Experts suggest that if Boeing concedes, it might opt for a defined-contribution model like a 401(k) plan, where costs are capped and not carried as future liabilities. Such plans have gained popularity in recent decades as they shift the financial planning burden onto employees.
Notably, similar demands emerged in recent labor disputes with auto industry giants Ford, General Motors, and Stellantis. The United Auto Workers managed to secure increased employer contributions to 401(k) accounts in a recent deal, suggesting a viable alternative to the fixed benefits model Boeing workers seek.
Defined-benefit plans, which guarantee set retirement payouts based on factors like salary and tenure, were once the backbone of U.S. retirement security but have gradually fallen out of favor. Only 18% of U.S. workers held such plans by 2022, down from 62% in 1983. Boeing’s own shift away from pensions in 2014 aimed to stabilize its financials as it launched production of its 777X jetliner.
Boeing’s refusal to reintroduce pensions, citing the financial strain on its balance sheet, underlines the delicate financial landscape it faces. With credit ratings on edge and cash reserves dwindling, the company’s decision to steer clear of liabilities from defined-benefit plans comes as no surprise to industry analysts.
Still, recent labor strikes reflect a renewed desire among workers to revive pension structures, as seen with the United Auto Workers and the International Longshoremen’s Association. Although successes have been limited, the re-emergence of pensions as a bargaining chip underscores a trend that may shape future labor negotiations.
