The ongoing strike by 33,000 members of the International Association of Machinists (IAM) at Boeing has reignited a contentious issue: the loss of traditional pension plans for union members, which was implemented in 2014, CNN reports.
This loss has created significant frustration among workers, who feel that their retirement security has been compromised.
The ACCC claims that Boeing’s decision to shift from traditional pensions, which provided guaranteed monthly payments, to 401(k) plans has transferred the financial risks of retirement from the company to its employees. This change has been a common trend in many industries, where defined benefit plans are increasingly rare. Currently, only about 8% of US workers have access to traditional pensions, down from 39% in 1980, while participation in 401(k) plans has risen to 50%.
Boeing’s union members voted overwhelmingly against a tentative labor agreement that would have increased contributions to their 401(k) plans but did not restore the lost pension plans. The sentiment among many union members reflects a deep-seated resentment over the pension loss, which has not been fully addressed in recent negotiations.
Jon Holden, president of the largest union local at Boeing, stated that many members still feel the impact of losing their pensions. Despite the company’s offer to enhance 401(k) contributions by up to $10,800 per year, the IAM leadership has indicated that this does not sufficiently meet the needs of its members.
The union’s demand for the restoration of traditional pension plans has parallels in other industries. However, no American union has successfully reinstated a closed pension plan. For example, while the United Auto Workers achieved significant gains in its recent negotiations, it did not secure the restoration of pensions for newer employees.
