Business

Boeing freezes pensions for 68,000 employees

  • 7 March 2014
  • From the section Business
Boeing Dreamliner Image copyright Reuters
Image caption Boeing says the move will curb the "unsustainable growth" of its long-term pension liability

US aerospace company Boeing has frozen defined-benefit pensions for 68,000 employees, including management and executives.

From January 2016, the funds paid out by new Boeing pensions will be market-dependent.

The switch affects non-unionised employees and follows a pension deal struck with unions in January.

Boeing said the move would curb the "unsustainable growth" of its long-term pension liability.

Pensions for most Boeing employees will move from defined benefits, such as a fixed final-salary scheme, to a defined contribution scheme from 1 January 2016.

People on the original scheme will receive benefits for contributions to the end of 2015, while benefits accrued from the beginning of 2016 will be under the new scheme.

The pension switch, which affects non-unionised employees, follows a deal that was narrowly accepted by unionised Boeing workers in Seattle in January.

Under the deal, workers voted to accept the change to their pensions as part of an agreement that Boeing would assemble 777X jets in Washington state.

Large US companies that have changed pension schemes to minimise costs include General Motors, which announced plans to reduce its pension burden by $26bn (£17bn) in June 2012.

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