Boeing is joining the ranks of companies that are phasing out employee pension plans in favor of defined contribution plans. New hires at the aerospace company will likely be offered a 401(k) retirement plan instead of the pension plan that is in place now. Boeing’s pension liability currently stands at $75 billion, only a third of which is funded.
But Boeing is not alone in this; according to PRC Executive Director Olivia S. Mitchell, “today we have the highest level of corporate underfunding that we’ve seen in history. Quite frankly, the last 5-6 years have been terrible. The stock market took a big hit in 2008 and corporate pensions lost maybe a third of their asset value.”
Though the decision is not final, Boeing’s engineering union has dropped the demand for pensions, and it appears that an agreement might be within reach as talks resume.
Read more here.