Boeing strike continues as pension benefits stall

As Boeing (nay) the car strike continues, negotiations have hit an unexpected snag that goes beyond current wage debates. The International Association of Machinists and Aeronautical Workers, the union representing the striking employees, is also seeking to restore a retirement benefit that ended a decade ago.

“Although the conversations have been direct, we have not made progress on the issue of pensions,” the union said a membership upgrade Friday. “The company remains adamant that it will not unlock the defined benefit plan.”

After the more than 30,000 workers represented by the IAM went on strike earlier this month following the rejection of a contract that would have giving them 25% raises.. The union sought a 40% increase, and it has since been rejected “the best and final offer” with an increase of 30% was considered “a blatant display of disrespect” because the company did not seek to negotiate it first.

Meanwhile, beneath the surface of wage negotiations, there has been a push to revive defined benefit pensions. These retirement plans, which provide guaranteed payments to long-serving employees after retirement, were part of Boeing’s benefits package until 2014. That year, a contract extension moved workers to defined contribution plans such as 401(k)s.

Major corporations like Boeing began to move away from pensions because making sure all those workers received the promised retirement pay was a significant liability. Defined contribution plans place this risk on the workers themselves, since they are primarily responsible for building their nest eggs. Although many employers partially match employee contributions—Boeingthe best and final offer” included a 100% match of the first 8% of an employee’s salary set aside plus another 4 percentage points — the union wants a return to the certainty of the previous era.

Additionally, arguing that “the company would not substantially engage on other issues that members have indicated remain top priorities, such as higher wages, faster salary progression and more PTO,” The IAM said “discussions have broken down and we have no further dates scheduled at this time.”