Under the new plan, Boeing said it will contribute an amount from 3% – 5% of a new employee’s pay (depending on age), regardless of whether the employee contributes to the plan. The company will also match employee contributions dollar for dollar for the first 4% of pay the employee contributes and $0.50 cents for the next 4%, according to the announcement.
Both company contributions will be fully vested immediately.
“This new approach addresses new employee preferences for retirement programs that offer flexibility and portability and responds to market trends and practices of peer companies. At the same time, it allows us to better manage our retirement plan expenses and reduce financial risk,” said Rick Stephens, senior vice president, Boeing Human Resources and Administration, in the announcement.
The change will not affect Boeing’s current employees, former employees, or retirees who participate in the company’s existing savings and pension plans.
The company said it has negotiated a similar new hire retirement program with several of its unions and will continue discussions during future negotiations (See Boeing Attempt to Drop Pension for New Hires Sparks Conflict ).