XPost: alt.society.labor-unions, talk.politics.guns, sac.politics   
   XPost: or.politics   
   From: stalin@boeing.ru   
      
   New York   
   CNN   
     —   
   One of the most painful issues dividing labor and management in the   
   strike at Boeing is the loss of the traditional pension plan for union   
   members in 2014.   
      
   The dispute has echoes of past labor disputes at Boeing, and at other   
   companies, where workers have lost what used to be a key part of their   
   retirement security. Employers have made, and won, demands to shift the   
   risks associated with their workers’ retirements from their own bottom   
   lines, to the retirees themselves.   
      
   Now unions are pushing back, demanding the return of traditional pension   
   plans their members lost in past concession deals. That’s one of the   
   reasons 33,000 members of the International Association of Machinists   
   went on strike Friday after 95% voted against the tentative labor deal   
   that would have increased the money Boeing paid into their 401(k) but   
   would not have restored the traditional pension plan they lost 10 years   
   ago. Restoring pension plans was an initially stated goal of the IAM,   
   but they were not in the deal reached and rejected last week.   
      
   Jon Holden, the president of the largest union local at Boeing, said   
   right after the vote to go on strike Thursday night that it wasn’t any   
   one issue, but that “I know that many members haven’t healed from that   
   wound” of losing the pension plans.   
      
   But the fact is that the traditional pension plans, once a staple of the   
   retirement of many workers, have become exceedingly rare in the modern   
   American workplace. And once a company drops traditional pensions plans   
   to shift employees to a 401(k) type of retirement account, they are   
   almost always gone for good.   
      
   While other unions have also sought to have lost pension plans restored,   
   as the United Auto Workers union did during its successful strike at   
   General Motors, Ford and Stellantis last fall, no American union has   
   ever succeeded in bringing them back. Even though the auto strike   
   produced a deal with record pay raises and other gains for the UAW, it   
   did not restore pension plans to workers hired since 2007.   
      
   Employers frequently argue that employees and retirees can be better off   
   with a 401(k) type of retirement plan, especially if their investments   
   do well. During the UAW strike at the three unionized American   
   automakers last fall, Ford CFO John Lawler called the traditional   
   pension plans being sought by the union “a plan of the past.”   
      
   Pension plans vs 401(k)’s   
   The types of retirement plan available for American workers basically   
   fall into two categories. First, a traditional pension plan that pays   
   retirees, or their survivors, a fixed amount of money every month until   
   they die, known as a defined benefit plan. The other is an individual   
   retirement account, such as a 401(k) plan, in which the employer makes   
   contributions, typically matching a portion of a worker’s own pre-tax   
   contributions to the accounts. Those are known as defined contribution   
   plans. In that case, retirees can decide about the amount withdrawn from   
   the account, as frequently as they want — at least until they run out of   
   assets.   
      
   Defined benefit plans are only available to about 8% of workers at US   
   businesses today, according to data from the Employee Benefit Research   
   Institute, down from 39% in 1980. The decline has greatly mirrored the   
   decline in union membership at businesses, from about 17% in 1983 to 6%   
   in 2023.   
      
   Meanwhile, individual retirement accounts such as 401(k) plans have   
   risen from only 19% of business employees to 50% today. In fact almost   
   all private sector workers covered under traditional pension plans also   
   have access to some kind of defined contribution plan as well. Far less   
   than 1% have only a traditional pension plan.   
      
   One of the few remaining sectors of the economy where pensions dominate   
   is government work. Traditional pension plans are still available for   
   about 80% of public sector workers who work at some level of government,   
   said Craig Copeland, director of wealth benefits research at EBRI. But   
   even in those cases, the pension benefits aren’t as good as they used to   
   be, he said.   
      
   Rank-and-file union membership at Boeing only narrowly approved new   
   contract terms in 2014 that took away pensions for anyone hired after   
   the contract ratification and froze benefits that members had already   
   accrued in the plan.   
      
   They did so because Boeing had threatened to build its next jet, the   
   777X, at an out-of-state nonunion plant it said it was considering, if   
   the deal was not passed. The members voted 2-to-1 to reject a similar   
   offer the previous fall, then approved the offer in a second vote by   
   with only 51% voting in favor.   
      
   Boeing soon moved to end traditional pensions for its nonunion workers   
   as well.   
      
   The loss of that pension plan 10 years ago is a major reason   
   rank-and-file members at Boeing nearly unanimously rejected the   
   tentative agreement put on the table this time, even with the company   
   offering to increase its contributions to the 401(k) plans by up to   
   $10,800 a year.   
      
   “The company absolutely needs to address the issue of retirement   
   security. The offer on the table didn’t go anywhere near what our   
   members expect and demand,” said Brian Bryant, the international   
   president of the IAM, in an interview Wednesday with CNN.   
      
   Bryant stopped short of saying that only a return of the traditional   
   defined benefit pension plan would satisfy members though, although he   
   added, “They’re definitely going to have to show something of the same   
   value to workers as the defined benefit plans.”   
      
   Why traditional pensions are now so rare   
   Employers prefer 401(k) types of retirement plans, rather than the   
   traditional pensions because it shifts the risks from the company to the   
   workers. Under those pension plans the company agrees to make   
   contributions into the plans, and those contributions are used to buy   
   assets such as stocks and bonds. The contributions and the return on   
   those assets are used to pay the benefits that are promised to the   
   retirees. If returns are good, a company might not need to make   
   additional contributions. But if plan assets lose value, the employer   
   needs to come up with the additional contribution to pay the promised   
   pension benefit.   
      
   But in plans such as a 401(k), those contributions, and the pay-outs,   
   and the risk of the market, are entirely on the individual. If the value   
   of retirement savings and investments in a 401(k) fall in value, the   
   worker is the one who loses out, even if they’ve made steady   
   contributions throughout their working life. Also, a retiree can outlive   
   their assets in a defined contribution retirement account, whereas under   
   a defined benefit plan, the plan has an obligation to pay only as long   
      
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